PublishedJanuary 29, 2024

Payment Fight Further Highlights the Need for Funding Transparency

A payment dispute between William Ramey III, a frequent attorney for plaintiffs in patent lawsuits, and the litigation investment entity AiPi Inc. has become one more in a long line of examples where undisclosed litigation investment has gone wrong.  In this case, it revealed that many third-party lawsuit funders appear to misrepresent their involvement in proceedings. 

When Ramey withdrew from over 60 cases—across multiple states—for nonpayment, it became clear that they were all in fact connected to—and in Ramey’s words “controlled” by—the same monetization company, AiPi Inc. Importantly, the only reason why AiPi’s involvement became widely-known was because the attorney who replaced Ramey sought an extension, claiming that Ramey failed to fulfill his duty. Without this infighting, it is possible that AiPi’s role would have remained hidden to the courts, the defendants, and the public.

While AiPi described their role as a type of middleman, responsible for, “matching investors with patent owners,” Ramey’s declarations claim that AiPi did much more than just fund plaintiffs. Instead, they were allegedly a real player behind the scenes, responsible for drafting work products and shaping the legal strategy. 

The litigation investment industry has come under increasing fire for the ethical concerns raised by investors not disclosing their involvement in cases. Bloomberg Law’s reporting on the Ramey conflict points out that AiPi’s actions resemble that of IP Edge, a patent monetization firm that recently had its behavior and that of its lawyers reported to the U.S. Justice Department and the relevant state bars for their apparent involvement in orchestrating lawsuits through a series of shell companies. 

It shouldn’t have taken a funding dispute to reveal what was truly happening behind the scenes of our legal system. Dozens of cases were not only backed, but allegedly shaped and controlled, by a third-party monetization company.  And because many courts do not have or enforce basic disclosure practices, no one would have been the wiser. 

The dispute between Ramey and AiPi draws attention to the fact that we don’t know how often, or to what extent, litigation investors are backing patent infringement cases.  Simple transparency requirements would go a long way toward addressing legitimate ethical concerns and ensuring that policymakers understand the scope and impact of litigation investment entities.

Josh Landau

Patent Counsel, CCIA

Joshua Landau is the Patent Counsel at the Computer & Communications Industry Association (CCIA), where he represents and advises the association regarding patent issues.  Mr. Landau joined CCIA from WilmerHale in 2017, where he represented clients in patent litigation, counseling, and prosecution, including trials in both district courts and before the PTAB.

Prior to his time at WilmerHale, Mr. Landau was a Legal Fellow on Senator Al Franken’s Judiciary staff, focusing on privacy and technology issues.  Mr. Landau received his J.D. from Georgetown University Law Center and his B.S.E.E. from the University of Michigan.  Before law school, he spent several years as an automotive engineer, during which time he co-invented technology leading to U.S. Patent No. 6,934,140.

Follow @PatentJosh on Twitter.

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