As perhaps expected, Delaware Chief Judge Colm F. Connolly has held Texas paralegal and NPE owner Lori LaPray in civil contempt for her failure to make a second in-person appearance before him as has been multiple times previously ordered. In the memorandum explaining his reasoning, Judge Connolly repeats his concern, not whether LaPray herself has engaged in fraud but rather “about the possibility that real parties in interest such as [MAVEXAR LLC] and [IP Edge LLC] may have perpetrated a fraud on the court” through their main monetization strategy, which the Texas firms halted last December. As also telegraphed, LaPray and Backertop Licensing LLC (one of her IP Edge-tied NPEs) have appealed the civil contempt finding, which carries a daily price tag that falls well below the court-estimated cost of the one-day trip from Dallas (where LaPray lives) to Judge Connolly’s Delaware courtroom.

Lori LaPray and Jacob LaPray, the respective sole owners of IP Edge LLC-tied plaintiffs Backertop Licensing LLC and Creekview IP LLC, failed to attend an August 1 hearing addressing the prospect of civil contempt, both responding to the show cause order from Delaware Chief Judge Colm F. Connolly days before. The two LLC plaintiffs—each of which affirmatively filed patent cases in Delaware—and the two LaPrays argued in that written response that Judge Connolly generally “lacks authority to pursue this contempt proceeding”; that “the orders requiring defendants and the LaPrays [sic] are transparently invalid”; and that “the court lacks inherent authority to require theappearance [sic] of [the LaPrays], who live[] more than 100 miles away”. David L. Finger of Finger & Slanina, LLC signed a brief that further argues that “a different judge must be seated to address contempt as the present judge cannot serve as both investigator and judge”. Circumstances here suggest that Backertop, Creekview IP, and the LaPrays may ask the Federal Circuit to intervene should they be held in civil contempt.

Delaware Chief Judge Colm F. Connolly has set an in-person hearing for August 1 at which IP Edge LLC-tied plaintiff Backertop Licensing LLC and its sole owner Lori LaPray “will be afforded the opportunity to show cause for why Ms. LaPray should not be held in civil contempt for failing to comply with” a pair of orders requiring LaPray to appear before the court (in person) last Thursday. New counsel for Backertop David L. Finger of Finger & Slanina, LLC appeared without LaPray, further representing that Jacob LaPray, the sole owner of IP Edge-linked plaintiff Creekview IP LLC would likewise not show up the next day as Judge Connolly had ordered. The August 1 show-cause hearing will also accommodate any arguments from Creekview IP and Jacob as to why the latter should not face civil contempt as well.

Last year, the Federal Circuit made waves with its June 2022 Centripetal Networks v. Cisco decision, which overturned a $2.7B judgment because the district judge discovered his wife’s ownership of stock in the defendant but failed to recuse himself. In recent weeks, some plaintiffs have tried to leverage that opinion in their own litigation—but now, two of those attempts have fallen flat. In the Northern District of California, Judge Yvonne Gonzalez Rogers rejected a motion for recusal from CellSpin Soft Inc., which she hit with a noninfringement ruling this past June, as a meritless “attack on the integrity of the judiciary” that showed a “measure of desperation”. The order came soon after the Patent Trial and Appeal Board (PTAB) denied another such recusal motion, this one from Centripetal Networks, as similarly “lacking in substance” and “baseless”—holding that an administrative patent judge (APJ) owned a small enough interest in joined copetitioner Cisco that he was not required to recuse himself under the applicable regulations.

Last June, the Federal Circuit overturned a bench trial infringement ruling that had led to a $2.7B judgment in Centripetal Networks v. Cisco. The appellate court held that the district judge was disqualified to hear the case after he learned that his wife owned of $5K in the stock of defendant Cisco but then failed to recuse himself. That decision now appears to be having a broader ripple effect: plaintiff Centripetal Networks has raised a similar issue before the Patent Trial and Appeal Board (PTAB), asserting that an inter partes review (IPR) against one of the tried patents has been “tainted” by an administrative patent judge’s (APJ’s) ownership of Cisco stock and other purported financial interests in the company. Meanwhile, in another campaign, plaintiff CellSpin Soft, Inc. has argued that a June 2022 summary judgment of noninfringement should be overturned due to a Northern District of California district judge’s alleged interest in Google, the parent of defendant Fitbit. The Centripetal decision has also been invoked in a closely watched fight over transparency in the courtroom of Delaware Chief Judge Colm F. Connolly, under which certain amici have contended that patent litigants must disclose their ownership/management and funding sources to allow judges to perform a proper conflicts check.

Last month, for the first time in seven years, not a single complaint was filed in any US federal court by a plaintiff obviously tied to Texas patent monetization firm IP Edge LLC, which had previously established a regular pattern of filing roughly 50 patent complaints per month. The “Series of Extraordinary Events” unfolding first before Delaware Chief Judge Colm F. Connolly, but also at the Federal Circuit, would appear to have had more than a little to do with this abrupt pause. Multiple IP Edge-associated plaintiffs saw their Delaware cases land before Judge Connolly, leading to evidentiary hearings and subsequent production orders that triggered four of those plaintiffs to file petitions for writs of mandamus, some asking the Federal Circuit to halt those production orders and others, to vacate—as acts of judicial overreach—Judge Connolly’s standing orders regarding heightened disclosure of party ownership and certain third-party litigation funding. Having previously turned away two of those petitions, this past week the Federal Circuit batted away the second two, as premature, through a pair of nonprecedential orders noting that neither petitioner showed that the Delaware court “has taken any action . . . that is so far outside its authority to warrant the extraordinary remedy of a writ of mandamus”.

Three plaintiffs with apparent links to Texas monetization firm IP Edge LLC recently filed separate petitions for writs of mandamus, asking the Federal Circuit in the short term to order Delaware Chief Judge Colm F. Connolly to cancel evidentiary hearings that had been scheduled for December 10 to consider whether those plaintiffs have complied with the court’s April 2022 standing orders addressing disclosure of comprehensive ownership information, as well as certain third-party litigation funding. Judge Connolly, separately, canceled that evidentiary hearing, and the Federal Circuit has quickly denied one of those petitions. Meanwhile, the same three plaintiffs have continued to file cases in their respective campaigns, Creekview IP LLC hitting RadioShack Online (3:22-cv-02653); Swirlate IP LLC, RAB Lighting (1:22-cv-06660) and Schweitzer Engineering Labs (2:22-cv-00300); and Waverly Licensing LLC, Aukey (2:22-cv-08642) and Impero Electronics (VisionTek Products) (2:22-cv-08642), all outside Delaware. Each of those campaigns has included prior cases filed in other districts as well—districts that require the disclosure of nonparties having an interest in the outcome of the litigation. In the Aukey case, litigation counsel (Garteiser Honea, PLLC) has already (on November 30) had to update Waverly’s disclosure to the Central District of California because the prior version (filed two days earlier) omitted MAVEXAR LLC from the list of parties with a pecuniary interest there. MAVEXAR will by now be well known to those following the “Series of Extraordinary Events” arising out of Delaware. As those events unfold, other counsel for Creekview IP, Swirlate IP, and Waverly may have more due diligence—and cleanup—ahead.

In July 2021, Golba LLC transferred 17 issued US patents to Array IP LLC, a Texas entity apparently associated with monetization firm IP Edge LLC. Last November, Creekview IP LLC launched a device charging campaign over one of those patents, suing five defendants, two in the District of Delaware. This March Waverly Licensing LLC, a third entity apparently associated with IP Edge, joined the fray, asserting a second former Golba patent in seven separate complaints, six of them filed in Delaware. Then April hit. More specifically, Chief Delaware Judge Colm F. Connolly handed down two standing orders aimed at corporate and third-party litigation funding disclosures for litigants in his courtroom. Given the events over the next months, it is no surprise that this past week, during IP Edge’s typical end-of-the-month filing spree, Creekview IP and Waverly Licensing did file more cases, a combined eight more in fact, and that none of those suits was filed in Delaware.

Last week, RPX raised the possibility of IP Edge LLC’s practices—specifically, the naming of Texas residents with seemingly no discernible connections to patent monetization as managers or managing members of most of its LLCs—sliding under the judicial microscope. On September 12, District of Delaware Chief Judge Colm F. Connolly ordered a handful of such individuals to appear, in person, at evidentiary hearings to determine whether a group of apparent IP Edge plaintiffs has complied with his standing order regarding the disclosure of any third-party litigation funding. A similar order has been issued in multiple cases associated with Dynamic IP Deals, LLC (d/b/a DynaIP), Judge Connolly setting an October hearing to determine the accuracy of those plaintiffs’ amended corporate disclosure statements. Perhaps unsurprisingly, voluntary dismissals have been noticed across these cases, ending the court’s jurisdiction over the matters.

Evidence of IP Edge LLC’s frequent practice of naming individuals—seemingly with no discernible connections to patent monetization—as managers or managing members of its various LLCs has long been reported by RPX. Now, with Amazon having recently brought that practice to the attention of Chief Judge Colm F. Connolly, and with a raft of amended disclosures filed on the same day last week by a handful of apparent IP Edge plaintiffs litigating before that same judge, the coming months may see the full extent of that setup, and its bearing on standing, come to light.