Mellaconic IP LLC v. GT Gettaxi Ltd. DC

The rapidly escalating battle over disclosures in Delaware has suddenly hit a wall. In April 2022, Chief Judge Colm F. Connolly issued two new standing orders that required parties before him to reveal information related to funding arrangements and corporate control, thereby pushing many plaintiffs to file new or updated disclosures. Among those plaintiffs were entities associated with Texas monetization firm IP Edge LLC, which have frequently named individuals with no discernible connections to patent monetization as managers or managing members. Yet those relationships soon came under the microscope after Judge Connolly flagged several of its plaintiffs’ disclosures as insufficient and forced a variety of individuals linked to those NPEs to testify in person on November 4 and 10. Those hearings left Judge Connolly with “concern[s]” over the “accuracy of statements” made in the filed disclosures from three of the plaintiffs, and over “whether the real parties of interest are before the Court”—leading him to order those NPEs to disclose a range of information related to their legal representation, corporate ownership and control, assets, and potential liabilities. However, the Federal Circuit has now stayed one of those orders while it considers a mandamus petition from one of the impacted plaintiffs, Nimitz Technologies LLC, leading to stays in cases from the other two.

Earlier this month, Delaware Chief Judge Colm F. Connolly held two hearings to consider whether patent plaintiffs Lamplight Licensing LLC, Mellaconic IP LLC, and Nimitz Technologies LLC (on November 4) and Backertop Licensing LLC (on November 10) have fully complied with new standing orders regarding corporate and third-party litigation funding disclosures. These two hearings are the first in a string of similar hearings scheduled before Judge Connolly through December, although after the Federal Circuit's recent related stay, it is unclear if the additional hearings will proceed. A review of the transcripts suggests that parties and counsel headed toward coming appearances should be prepared for an in-depth examination directed toward a wide range of related issues, including ethical considerations surrounding engagement with a party that litigation counsel has never met, concerns about the corporate form where an LLC maintains no bank account and its sole member receives payments directly deposited into a personal account, the differences between a post office box in Texas and a suite in Delaware, the involvement of third party consultants—here, MAVEXAR LLC, an entity associated with prolific patent monetization firm IP Edge LLC—in running litigation campaigns, and the appearance (in documents reviewed) of unexpected acronyms, like the perhaps not-so-mysterious “NWM”.

Mellaconic IP LLC, an IP Edge LLC plaintiff, has initiated another campaign over a patent picked up from Empire Technology Development LLC. The patent generally relates to communicating requests between separate devices based on the devices’ geographic location. The NPE plaintiff accuses five defendants—GT GetTaxi (d/b/a Gett) (1:20-cv-07091), Lyft (6:20-cv-00786), Uber (6:20-cv-00785), VeriFone (Curb Mobility) (1:20-cv-07089), and Via Transportation (3:20-cv-02543)—of infringement through matching drivers to clients in their respective ridesharing services.