Eastern District of Virginia Judge M. Hannah Lauck has remanded back to state court a case filed there by VLSI Technology LLC, a Fortress Investment Group LLC plaintiff, against Patent Quality Assurance (PQA). PQA had removed the suit to federal court, but Judge Lauck has agreed with VLSI Technology that none of its claims raise a federal question, much less a substantial federal question. The remand back to state court moots several pending motions before Judge Lauck, including a PQA motion to file under seal its corporate disclosure, a document that would have (finally) identified its “owners or members”.

Eastern District of Virginia Judge M. Hannah Lauck ordered Patent Quality Assurance (PQA) to comply fully with a local rule requiring “non-publicly traded entities such as LLCs” to identify its “owners or members”. By the December 17 deadline, PQA filed an updated disclosure, unredacted for the court but with redactions occluding its “owners or members” from public view, filing a concurrent motion to seal its disclosure, not only keeping it permanently from the public, but also asking the court to deny VLSI Technology LLC, the Fortress Investment Group LLC plaintiff in the case, access to who is behind PQA.

Many federal courts adopt local rules imposing, through plain language, strict disclosure requirements on litigants, but those courts often refuse to enforce those rules. Now one has. Eastern District of Virginia Judge M. Hannah Lauck has ordered Patent Quality Assurance (PQA) to comply fully with a local rule requiring “non-publicly traded entities such as LLCs” to identify its “owners or members”. PQA had argued that the rule only required disclosure of “entities”, not “individuals”, because the possibility of a judicial conflict arising with an “individual” is “vanishingly slim”. The court disagreed, ruling that the rule’s text is “clear and unambiguous”. The court-ordered disclosure of who is behind PQA comes in the campaign of VLSI Technology LLC, a Fortress Investment Group LLC plaintiff that, per a new order from Western District of Texas Judge Alan D. Albright, will finally face a trial over defendant Intel’s license defense, in May 2025.

Last week, Intel filed a motion to show cause why VLSI Technology LLC’s recent statements (here and here) have not violated the standing orders of Delaware Chief Judge Colm F. Connolly related to corporate disclosure and third-party litigation funding. VLSI filed those statements concurrently with its own motion to dismiss, stay or transfer Intel’s Delaware declaratory judgment action to the Western District of Texas, where District Judge Alan D. Albright is considering the same parties’ submissions concerning whether Intel’s license defense (allegedly arising after Fortress Investment Group LLC acquired Finjan, Inc. in 2020) to VLSI’s patent infringement claims involves any issue for presentation to a jury. Intel argues that VLSI’s motion to dismiss, stay, or transfer should be denied without prejudice while the court focuses instead on compliance with its standing orders.

In its long-running attempt to litigate whether an earlier license agreement with Finjan, Inc. provides a defense in the multidistrict campaign of VLSI Technology LLC against it, Intel has opened another chapter. After Northern District of California Judge Beth Labson Freeman dismissed Intel’s license counterclaim this past April, Intel has filed a complaint in the District of Delaware seeking a declaratory judgment that it is licensed to VLSI Technology’s entire portfolio (1:24-cv-00803). Last week, both Intel and VLSI Technology apprised Western District of Texas Judge Alan D. Albright of the new complaint, in advance of a July 15, 2024 status conference in one of the three cases before him that have each ben tried to a jury.

Intel has been trying to litigate whether an earlier license agreement with Finjan, Inc. provides a defense in the multidistrict campaign of VLSI Technology LLC against it. Last week, Northern District of California Judge Beth Labson Freeman ruled that a forum selection clause in that license agreement requires any claim be brought in Delaware, the court dismissing the lone remaining license claim for forum non conveniens rather than transferring it to the District of Delaware. Also last week, Intel filed a motion to amend its answer, defenses, and counterclaims in the Western District of Texas to add the license defense there.

The ongoing saga over misconduct at the Patent Trial and Appeal (PTAB) has taken a new turn. In late 2022, USPTO Director Kathi Vidal ruled that two third-party petitioners, OpenSky Industries and Patent Quality Assurance (PQA), had abused the inter partes review (IPR) process by filing petitions that were designed to extract rent-seeking payments from patent owner VLSI Technology LLC. However, while Vidal found OpenSky’s behavior to be so egregious that she ordered it to pay $413K in attorney fees to VLSI, upholding that order earlier this month, she did not award fees against PQA. Now, VLSI has turned to the courts in an attempt to win fees from PQA as well, asserting claims of “abuse of process, fraud, and civil conspiracy” in a recent Virginia state court complaint against PQA and an individual acting as its “authorized representative” that seeks $3.2M in attorney fees stemming from their alleged actions. On March 20, the defendants removed VLSI’s suit to the federal Eastern District of Virginia, in the process identifying a kitchen sink of purported grounds for the complaint’s dismissal.

The multidistrict campaign waged by VLSI Technology LLC against Intel has captured headlines for a variety of reasons in the past several months. In December, the Federal Circuit toppled a $2.2B verdict in the first VLSI case to go to trial—wiping out a Texas jury’s finding of infringement for one patent, reversing and remanding as to damages for a second patent, and also reviving the defendant’s license defense in that case. The full Federal Circuit declined to rehear that decision earlier this month. Meanwhile, also hanging over that proceeding are a set of closely watched inter partes reviews (IPRs) filed by two third parties, OpenSky Industries and Patent Quality Assurance (PQA), that led to the invalidation of both patents from that verdict amidst accusations of gamesmanship from both petitioners. On March 11, USPTO Director Kathi Vidal denied OpenSky’s latest attempt to avoid a $413K attorney fee judgment that she imposed for its abuse of the IPR process—though she did grant a reprieve on timing.

Last week, District Judge Alan D. Albright held a posttrial conference in the third matter filed by VLSI Technology LLC against Intel in that courtroom. There, a West Texas jury returned a verdict in November 2022 finding infringement of two claims from a single patent, to a roughly $950M tune. VLSI has filed a motion for entry of judgment in that case, while Intel has moved for a new trial. However, one week earlier, the Federal Circuit overturned the $2.2B infringement verdict in the first matter to go to trial between the two, throwing out the jury’s infringement of one patent (for insufficient evidentiary support) and ordering a new trial as to damages for infringement of the other. Intel now argues that the Federal Circuit’s decision—regarding an error in the presentation in the damages case and regarding the revival of a previously disallowed license defense—bolsters its call for a new trial in the later matter and precludes VLSI’s request for entry of judgment.

The Federal Circuit has overturned the $2.2B infringement verdict that VLSI Technology LLC won against Intel in March 2021. In a December 4 precedential opinion, the appeals court affirmed a Western District of Texas jury’s finding of literal infringement as to one patent but reversed as to the other, which the jury found infringed under the doctrine of equivalents (DOE)—the court determining instead that VLSI had failed to provide sufficient evidence for that $675M slice of the verdict. As for the remaining $1.5B awarded for the first patent, the court held that VLSI had made a crucial error in its damages case by factoring in the value of noninfringing technology, vacating and remanding for a new trial on that issue. The opinion was also notable for restoring Intel’s license defense based on the 2020 purchase of Finjan, Inc. by Fortress Investment Group LLC, to which VLSI is tied, the Federal Circuit holding that District Judge Alan D. Albright was wrong to reject that defense as futile.