“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.” – CAFC
The U.S. Court of Appeals for the Federal Circuit (CAFC) yesterday denied a petition for writ of mandamus asking the Delaware district court to vacate an order to produce certain documents to ensure compliance with Chief Judge Connolly’s standing orders on initial disclosures in patent litigation cases.
Nimitz Technologies LLC petitioned the CAFC asking it to vacate a November 10, 2022, order by the Delaware court demanding Nimitz produce documents, including communications between Nimitz owner, Mark Hall, his counsel, and patent assertion entity IP Edge and the related entity, Mavexar. Following a failure to timely comply with the standing orders, Nimitz had initially told the court that Hall was the sole owner and LLC member of Nimitz and asserted in a statement that Nimitz “has not entered into any arrangement with a Third-Party Funder, as defined in the Court’s Standing Order Regarding Third-Party Litigation Funding Arrangements.”
Connolly’s standing orders have been the subject of much controversy and are presently being appealed at the CAFC in a separate case. They require up front disclosures from companies in patent cases assigned to Connolly of 1) “the name of every owner, member, and partner of the party, proceeding up the chain of ownership until the name of every individual and corporation with a direct or indirect interest in the party has been identified”; and 2) the identity of any third-party litigation funders.
In the Nimitz case, the district court became aware that Hall may have a connection with IP Edge from exhibits produced in a separate case before it, and consequently ordered both Hall and his counsel to appear at a hearing held on November 4, 2022. There, the court inquired about the relationship between Nimitz and Mavexar and subsequently asked for production of the documents that led to the mandamus petition. The CAFC stayed production of the documents pending the resolution of the petition for mandamus and Judge Connolly issued a memorandum asserting that “The records sought are all manifestly relevant to addressing the concerns I raised during the November 4 hearing.”
The CAFC ultimately found that Nimitz had failed to meet the three requirements for granting mandamus relief: “(1) that there is ‘no other adequate means to attain the relief he desires,’ (2) the ‘right to issuance of the writ is clear and indisputable,’ and (3) ‘the writ is appropriate under the circumstances.’”
While Nimitz argued that Connolly’s order would force it to disclose “highly confidential litigation-related information” protected by attorney-client privilege, the CAFC noted that the district court had provided sufficient reassurance to Nimitz, such as that the records did not need to be docketed or made public and that the court could maintain the records under seal. Thus, Nimitz had failed to show mandamus relief was its only option to protect the material.
While Nimitz was not asking the CAFC to reverse either of Connolly’s Standing Orders, it also had failed to show a “clear and indisputable right” to terminate the district court’s inquiry under those orders, said the appellate court. The CAFC further found that Judge Connolly’s stated concerns for demanding the information were all related to potential legal issues in the case subject to the “principle of party presentation,” or to aspects of proper practice before the court, which district courts have broad discretion over. “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,” explained the CAFC.
The court did not express any opinion as to whether there had been a violation of any legal standards by Nimitz or what remedies would be appropriate.
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