U.S. appeals court asked to halt Del. judge's litigation funding disclosure order

The United States Court of Appeals for the Federal Circuit is seen in Washington, D.C., U.S., August 30, 2020. REUTERS/Andrew Kelly
  • Request for documents "unprecedented" says Nimitz Technologies
  • Correspondence, bank statements confidential, Nimitz says

(Reuters) - Patent-holding company Nimitz Technologies LLC asked a U.S. appeals court on Wednesday to overturn a Delaware federal judge's order to disclose details about the funding of its litigation that it says should be kept secret.

Nimitz called Chief U.S. District Judge Colm Connolly's request to turn over correspondence, bank statements, and other documents related to litigation funding an "inquisition."

It told the U.S. Court of Appeals for the Federal Circuit that the materials were confidential, privileged and irrelevant to its patent infringement lawsuits.

The Federal Circuit on Thursday temporarily paused Connolly's order to give the defendants in the cases a chance to respond.

Nimitz's attorney declined to comment. Judge Connolly's chambers did not immediately respond to a request for comment Thursday.

Connolly issued standing orders in April that require parties in all of his cases to disclose third-party funders and every "owner, member, and partner" of the litigants themselves. The judge has also paused a high-stakes patent dispute between Intel Corp and VLSI Technology LLC after finding Fortress Investment Group-affiliated VLSI failed to disclose sufficient information about its backers.

Nimitz told Connolly in its patent lawsuits against Bloomberg LP, BuzzFeed Inc, and other companies over streaming technology that it did not have any arrangements with third-party funders as defined in one of the orders.

Nimitz said the judge then questioned the company's managing member "in a manner of a prosecuting attorney examining an adverse witness at trial" about its relationship with Mavexar LLC, which Nimitz described as a consultant helping it to license and litigate the patent.

Mavexar could not be reached for comment Thursday.

Nimitz maintained that it did not receive any funding covered by the standing order, which includes funds that would pay off for investors in the event of a litigation win.

It told the Federal Circuit that Connolly's follow-up order to disclose information including all communications between its managing member, attorney and Mavexar was "unprecedented."

"The lack of transparency which the district court was lamenting was the court's personal dissatisfaction with Congress' choice as to what litigants are required to disclose," Nimitz said.

The case is In re Nimitz Technologies LLC, U.S. Court of Appeals for the Federal Circuit, No. 23-103.

For Nimitz: George Pazuniak of O'Kelly & O'Rourke

(NOTE: This story has been updated with details of the Federal Circuit's Thursday order.)

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Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets. Reach him at blake.brittain@thomsonreuters.com