US judge says 'patent monetization' firm IP Edge may have broken law

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27/11/2023 19:16

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      IP Edge failed to disclose role in patent litigation,
judge says
    

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      Judge refers cases to DOJ, USPTO to investigate
    

  
    By Blake Brittain
       Nov 27 (Reuters) -    U.S. District Judge Colm Connolly
on Monday referred Texas-based patent monetization firm IP Edge
and its lawyers to the U.S. Department of Justice, Patent and
Trademark Office and state bar regulators to investigate their
conduct in a series of patent cases in Delaware.
    Connolly said that IP Edge-backed patent plaintiffs Nimitz
Technologies, Mellaconic and Lamplight Licensing concealed that
IP Edge was the "de facto" owner of the patents and that their
attorneys violated professional conduct rules.
    Connolly said there was also evidence that France Brevets,
an investment fund owned by the French government that shut down
last year, had an undisclosed monetary interest in the
litigation, and asked the Justice Department to investigate
whether the failure to disclose it and other interested parties
violated federal law. 
    The judge also referred IP Edge attorneys to the Texas
Supreme Court for allegedly practicing law without
authorization, which could lead to their criminal prosecution in
the state.
    George Pazuniak of O'Kelly & O'Rourke, who represented
Nimitz, told Reuters that the plaintiffs' attorneys "had not
done anything wrong or unethical or unprofessional," and that
the issues were "thankfully being transferred to neutral bodies
for consideration."
    Representatives for IP Edge did not immediately respond to
requests for comment on Monday, nor did attorneys Jimmy Chong
and Andrew Curfman, who represented Mellaconic and Lamplight.
    The plaintiff companies voluntarily dismissed their patent
lawsuits last year. The patents covered a range of technology
related to computers and cellphones. 
    Representatives for the defendants, which included BuzzFeed
and Bloomberg, did not immediately respond to requests for
comment on Monday.
    Connolly had previously ordered all parties appearing in his
court to disclose every "owner, member, and partner" and any
third-party litigation funders. He specifically ordered Nimitz,
Mellaconic IP and Lamplight to turn over relevant documents
based on suspicions that they had tried to hide the involvement
of IP Edge and its affiliate Mavexar.
    Connolly said on Monday that the plaintiffs — all companies
with "relatively unsophisticated" sole owners and no other
employees — were shell companies created to shield
self-described patent monetizer IP Edge from liability.
    "The reality in these cases is that the de facto owner of
the asserted patents — that is, the party that truly controls
and profits from their assertion — is IP Edge," Connolly said,
adding it had gone to "great lengths" to hide its role.
    Connolly said that the companies' attorneys broke their
obligation to give the plaintiffs their "undivided loyalty" by
litigating at IP Edge's discretion.
    "Their loyalty was not to their clients, but rather to IP
Edge," Connolly said.
    Connolly referred the cases to the Justice Department and
Patent and Trademark Office to investigate whether IP Edge broke
federal law or PTO rules by making false statements to a federal
agency.
    
    The cases are Nimitz Technologies LLC v. CNET Media Inc,
Buzzfeed Inc, Imagine Learning Inc and Bloomberg LP; Mellaconic
IP LLC v. TimeClock Plus LLC and Deputy Inc; and Lamplight
Licensing LLC v. ABB Inc and Ingram Micro Inc, U.S. District
Court for the District of Delaware.
    
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