MANAGING IP

Rani Mehta November 10, 2022

Investors and NPEs have mixed feelings on pushes for more disclosure from Delaware and possibly Congress

Calls for more transparency over litigation funding arrangements have got louder in the US lately.

Just last week, Chief Judge Colm Connolly at the District Court for the District of Delaware demanded several plaintiffs come to his court to speak on whether they’d sufficiently disclosed funding information and entity ownership.

In a hearing related to cases filed by Lamplight Licensing, Nimitz Technologies and Mellaconic IP last Friday, November 4, it emerged that the company Mavexar had a connection to all three plaintiffs.

These revelations came as a result of Connolly’s standing orders, issued April 18, one of which requiredlitigation funding disclosures for all cases assigned to him and the other that required certain companies to disclose all parties with stakes in them.

Managing IP also discovered last week that representative Darrell Issa and others would focus on litigation investment transparency if Republicans got a majority in the US House of Representatives – which, several days after the midterm elections, has yet to be confirmed but is still likely.

It’s perhaps not shocking that several funders and non-practising entities aren’t entirely thrilled with these efforts.

Some argue that the focus on litigation funding ties into a broader trend of weakening patent rights, and that the standing orders went beyond what was necessary.

But they also expect that this push for transparency won’t change their strategies much – primarily, they argue, because their own practices are already above board.

Anup Misra, director at Curiam Capital in New York, says the transparency push could even help improve the reputation of the litigation funding industry.

“As people get a peek behind the curtain, they’ll come to the conclusion that funding isn’t really changing how most cases are litigated and realise that it’s not nearly as big of a deal as certain entities are making it out to be,” he says.

Some companies have heard concerns from their funders, however.

Wendy Verlander, CEO of NPE Blackbird Technologies and managing partner of Verlander LLP in Boston, says she works with investors that simply won’t fund cases in Delaware.

She notes that funders don’t have any control over where her company files, but the refusal affects the way it does business.

For the full article, continue reading at Managing IP.