It’s been more than two years since Delaware Chief District Judge Colm F. Connolly introduced a standing order requiring that all parties appearing in his court disclose any third-party funding they are receiving and their ownership interests. Here at Patent Progress, we’ve dedicated several posts to detailing the impact of requiring greater transparency, including in December 2023, when I wrote about the Judge’s decision to refer the lawyers associated with IP Edge LLC and Mavexar LLC to the Justice Department, the U.S. Patent and Trademark Office, and state bar ethics officials.
Unsurprisingly, IP Edge and Mavexar are in hot water again. Late last month, Judge Connolly ordered Dina Gamez, the owner of Swirlate IP LLC and David Bennett, Swirlate’s attorney, to appear in court on Sept. 18 over concerns “that counsel for Swirlate may have failed to comply with the Rules of Professional Conduct; that real parties in interest, such as IP Edge and Mavexar, may have been hidden from the court and the defendants; and that Swirlate, its counsel, and those real parties in interest may have perpetrated a fraud on the court.”
Judge Connolly requested more than 700 pages of documents from Swirlate related to the 49 patent infringement suits that Swirlate filed between April 2020 and November 2022, including any “responsive documents.” The Judge expressed concern over the fact that Bennett said he couldn’t remember if he and Gamez had communicated before the suits were filed.
This is exactly why transparency measures are so important. Without them, the court would have no way of knowing exactly who was involved in, funding, and potentially controlling or influencing this case.
We can’t just rely on Judge Connolly to fix our broken court system. We also need policymakers to address this issue. The Litigation Transparency Act, recently introduced by Congressman Derrell Issa, Chairman of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet Committee, would help do that by requiring funding agreement transparency in all civil cases so that both parties—the defendants and plaintiffs—are held to the same standards.
Judge Connolly put it best when he said that this case “marks the latest chapter in a voluminous history of disturbing matters in this court that have come to light in cases brought by certain LLC plaintiffs.” He’s right. Shining a light on malicious litigation investors—as Judge Connolly has led the way on—is critical for increasing transparency in our courts system.
