By Kelcee Griffis
The Federal Circuit declined to halt a Delaware judge’s probe into the financing of patent litigation in his court, saying the requested disclosures don’t appear frivolous.
The move allows US District of Delaware Chief Judge
“The district court did not seek information simply in order to serve an interest in public awareness, independent of the adjudicatory and court-functioning interests reflected in the stated concerns,” the Federal Circuit wrote in a Thursday order.
The appeals court previously froze Connolly’s order that patent owner Nimitz Technologies LLC disclose documents including bank statements and the content of litigation-related discussions. Nimitz had challenged the case-specific disclosures that Connolly demanded after an evidentiary hearing, as well as his court’s somewhat unique standing orders requiring detailed corporate ownership information and disclosure of third-party funding.
Connolly has appeared intent on unmasking the forces behind several patent owners pursuing infringement claims, who testified that they were approached with “‘investment opportunities’ presented and controlled by” the entities Mavexar and IP Edge in which they’d assume liability for the patents but not pay to purchase them.
According to case documents, Connolly connected Nimitz owner Mark Hall to IP Edge, not through disclosures made in his court but through filings made in another case. IP Edge’s business model includes assigning patents to LLCs, the Federal Circuit order said, and Hall appears to have ties to the entity based on an email address he provided to the US Patent and Trademark Office.
The Federal Circuit said it expresses “no view on whether there has been any violation of the particular legal standards that correspond to the concerns recited by the district court or, if so, what remedies (e.g., against Nimitz, its counsel, or others) would be appropriate.”
The appeals court noted that Nimitz doesn’t challenge the underlying standing orders under which Connolly made his additional information requests, nor has Nimitz been found in violation of the standing orders. Nimitz “will have alternative adequate means to raise such challenges if, and when, such violations are found to occur,” according to the order.
The saga continues to play out at the district court level as well, with Nimitz attorney George Pazuniak moving Thursday to void Connolly’s Nov. 30 opinion that emphasized his “inherent authority” to order the production of evidence.
“Nimitz and its counsel were denied due process” because they didn’t know the opinion was coming and didn’t have a chance to respond to it, Pazuniak said. He also questioned Connolly’s impartiality in the case, saying “the Court has already publicly adjudged Nimitz and its counsel guilty of fraud and unethical conduct.”
The Federal Circuit quoted from the Nov. 30 opinion, specifically from the section questioning Nimitz’s counsel’s conduct, in finding Connolly’s probe into the case is justified.
The case is In re: Nimitz Technologies LLC, Fed. Cir., No. 23-00103, mandamus denied 12/8/22.
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