Chief Judge Colm F. Connolly has referred David R. Bennett of Direction IP Law to “his bar’s disciplinary counsel” given that the record in cases filed in the District of Delaware by Swirlate IP LLC, a plaintiff tied to Texas monetization firm IP Edge LLC, “is very clear that [Bennett] never obtained the informed consent of Swirlate to file and settle lawsuits on its behalf”. Judge Connolly has also expressed the intention to refer the matters filed by Backertop Licensing LLC, another IP Edge-linked plaintiff, to the US Department of Justice, indicating that although the court views Backertop’s sole owner, Texas paralegal Lori LaPray, “to a large extent” as “a victim in this case”, he will only reduce a $53K civil contempt fine (for failure to appear in person before him) to a judgment that he will now bring “to the attention of the Department of Justice” for enforcement because it would be a “terrible message to the folks at IP Edge” to do otherwise.

Since late last year, Delaware Chief Judge Colm F. Connolly has expressed increasing concerns over the activities of multiple litigating plaintiffs linked to IP Edge LLC and a related consulting firm, MAVEXAR LLC: namely, that by failing to disclose those relationships as required in his courtroom, those entities had possibly committed fraud. However, he has stopped short of detailing the possible ramifications of those actions—until now. On November 27, in a blistering, 105-page order, Judge Connolly found that IP Edge had been the “de facto” owner of the patents asserted by its litigating affiliates and held that the entity and its principals should face “consequences” for their improper attempt to “use separate LLCs to insulate themselves” from liability: He has now called upon the Department of Justice (DOJ) and the USPTO to potentially investigate these misrepresentations. Judge Connolly has also teed up potential punishment for some of the individuals involved: He has referred certain attorneys employed by IP Edge (which is not a law firm) to a Texas disciplinary body for the unauthorized practice of law and has referred the LLCs’ local and lead counsel to state disciplinary bodies for improperly treating IP Edge as their true client.

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.

Likening ongoing proceedings before Delaware Chief Judge Colm F. Connolly to a “criminal prosecution”, IP Edge LLC-tied plaintiff Backertop Licensing LLC has apprised the court that Backertop and its sole owner Lori LaPray will not appear, either in person or remotely, at a planned July 20 hearing and that “Backertop has instructed its attorneys not to produce any documents” going forward. The plaintiff did so in an extraordinary document styled as a “Notice of Objection to and Non-Participation in Judicial Inquisition”. In it, Backertop declares that Judge Connolly “has abandoned the adversarial framework that is a hallmark of [the US] legal system and that affords constitutional safeguards to those facing potential sanctions, including criminal prosecution”; that Judge Connolly “has been compelling Backertop and Ms. LaPray to provide testimonial and documentary evidence without advising them of their rights in the face of a possible criminal prosecution”; and that Backertop and LaPray therefore “respectfully decline to participate further” in what they term a “transparently invalid” proceeding. New counsel David L. Finger of Finger & Slanina, LLC filed this document on Backertop’s behalf two days after Judge Connolly denied Backertop’s “motion for reconsideration” of a prior order requiring LaPray to appear in person at the July 20 hearing.

In the spiraling “Series of Extraordinary Events” in Delaware, Chief Judge Colm F. Connolly, in a July 10 memorandum, has denied Backertop’s motion for reconsideration of a prior order requiring Lori LaPray, the sole owner of IP Edge LLC-linked plaintiff Backertop Licensing LLC, to appear in person before him on July 20. LaPray had cited childcare and financial burdens preventing her from traveling to Delaware, in which venue her LLC requested jury trials in multiple affirmative patent cases filed last year. In denying her request to appear telephonically, Judge Connolly unpacks the financial burdens, relaying figures that suggest, among other things, that entities associated with LaPray have paid filing fees in excess of $35K over the past several years—and that the cost of round-trip ground travel from the Philadelphia airport to the Delaware courthouse on the calendared date is just $20 shy of the cost of airfare from Dallas, Texas (where LaPray lives) to Philadelphia, Pennsylvania.

Delaware Chief Judge Colm F. Connolly has held another hearing as part of the “Series of Extraordinary Events” unfolding before him in the wake of his April 2022 standing orders imposing heightened disclosure requirements on litigants in his courtroom. The impetus for this hearing was a set of requests by counsel for IP Edge LLC-linked Backertop Licensing LLC to withdraw from their respective representations. However, Backertop had already made a production under an order requiring it to deliver, for in camera review, a wide-ranging set of information concerning the plaintiff’s ownership/control, assets, and legal representation. With Backertop’s attorneys before him, Judge Connolly denied their motions to withdraw, addressed both the inadequacy of the production made under his prior order, but also brought forward details from that inadequate production: details that highlight where the court’s concerns about the monetization framework of IP Edge-linked entities like Backertop lie.

A Texas paralegal identified as the sole owner of Backertop Licensing LLC—an entity tied to Texas monetization firm IP Edge LLC—has pointedly objected to pressure from Chief Judge Colm F. Connolly to attend an in-person hearing over the failure of Backertop, in litigation that it filed in his court, to comply with the heightened disclosure requirements he imposed there last April. In early May, after that owner indicated that personal and professional obligations would prevent her from making any in-person appearances “at any time in the foreseeable future”, Judge Connolly sent materials from the cases to her employer, stating his belief that this disclosure would reveal that her work obligations “might not be as burdensome as she had suggested”. The owner now attests, in a June 7 sworn declaration, that she feels “harassed” by the court’s requirement that her appearance at a hearing now set for July be in person and feels that “the Court’s treatment of [her] and its expectation of [her] ’employer’ to explain to [her] what [she] can and cannot do is textbook gender harassment and intimidation, and further influencing [her] employer to engage in gender harassment and discrimination (e.g., in the form of ‘mansplaining’)”.

Over the past several months, Delaware Chief Judge Colm F. Connolly has applied continued pressure to a set of plaintiffs linked to patent monetization firm IP Edge LLC over their failure to comply with heightened disclosure requirements that he imposed in his court last April. As he has forced more and more of those plaintiffs to reveal details on their corporate control, assets, and legal representation, Judge Connolly has expressed increasing concerns that IP Edge’s unusual entity formation strategy—under which the firm has named individuals with no prior experience in patent assertion as the managers of entities under its apparent control—is part of a “fraud upon the court” designed to shield IP Edge and its principals from liability. Now, one of those individuals—a Texas paralegal listed as the sole owner of IP Edge-linked plaintiff Backertop Licensing LLC—may soon have to testify in person despite her other personal and professional commitments. On May 31, Judge Connolly excused her from a June 8 hearing but ruled that she will need to appear in person next month, warning that he needs to assess her credibility on a number of key issues.

Two more of the plaintiffs associated with Texas monetization firm IP Edge LLC have notified Delaware Chief Judge Colm F. Connolly that they have complied with his orders respectively requiring them to produce to the court comprehensive materials concerning their corporate control, assets, and legal representation. Backertop Licensing LLC and Mellaconic IP LLC both did so on May 9, 2023, joining Nimitz Technologies LLC, another such plaintiff, which turned over a similar batch of documents in early April. This compliance leaves in limbo just four other IP Edge-linked plaintiffs, each with cases stayed before Judge Connolly, while the court, counsel for Backertop, and the sole owner of Backertop prepare for an in-person June 8 hearing concerning a motion to withdraw from representation. Backertop’s sole owner has attested to the court that she cannot attend the hearing in person as ordered on June 8 “or at any time in the foreseeable future” due to previously made travel plans, other job responsibilities, and summertime “parental obligations [that] require [her] physical presence”.

Since late last year, a growing web of plaintiffs associated with IP Edge LLC have become tangled in compliance issues over heightened disclosure requirements imposed by Delaware Chief Judge Colm F. Connolly in a pair of April 2022 standing orders. Now, Judge Connolly has rejected motions from two more IP Edge-linked plaintiffs, Backertop Licensing LLC and Mellaconic IP LLC, that sought to overturn a related set of production orders requiring them to disclose reams of information on their corporate control, assets, and legal representation. Not only did those decisions reject objections related to jurisdiction and allegations of overbreadth, Judge Connolly also ominously suggested that their claims of attorney-client privilege are undercut by the crime/fraud exception—which allows the disclosure of communications between a party and counsel that relate to legal advice used in furtherance of illegal activity.