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.

The Federal Circuit has backed Delaware Chief Judge Colm F. Connolly’s authority to explore whether a fraud may have been perpetrated on the court and/or on the USPTO via certain LLC plaintiffs, including by requiring the human owners of those LLCs to appear in person before him. Not only has Judge Connolly ordered one of those owners, Texas paralegal Lori LaPray, to show up in Delaware on September 18, ready to pay a $53K civil contempt fine, he has also ordered Swirlate IP LLC to make a document production to the court, in full and unredacted this time, with Dina Gamez (Swirlate IP’s sole owner) and David R. Bennett of Direction IP Law (its counsel) also expected in person on September 18. The owners of other plaintiffs before Judge Connolly, including those of Creekview IP LLC, MISSED CALL, LLC, and SAFE IP LLC, are on notice that their own dates are likely now coming.

Delaware Chief Judge Colm F. Connolly reset the deadline to March 14 for Swirlate IP LLC, a plaintiff tied to Texas monetization firm IP Edge LLC, to produce to the court documents related to whether its counsel—Chong Firm PA and David R. Bennett of Direction IP Law—obtained informed consent from Swirlate before filing and settling cases on its behalf. This past week, Swirlate made that production to the court, its counsel submitting a letter, partially redacted on the docket, that characterizes the purpose of the court’s retained jurisdiction as an “ethics investigation” that must be conducted confidentially and that maintains assertions of privilege (attorney-client and “community of interest”, as well as the attorney-work product doctrine) over some of the documents sought.

Delaware Chief Judge Colm F. Connolly has recently returned attention to certain plaintiffs that had filed cases before him, cases that became tied up in concerns about compliance with his April 2022 standing orders late that year but had been sliding under the radar. In mid-January, the court questioned two attorneys about representation of an additional pair of plaintiffs tied to Texas monetization firm IP Edge LLC, subsequently ordering one of those plaintiffs to produce to the court a set of documents designed to determine whether ethical violations occurred in the conduct of the suits before him. Separately, the court set a status conference in a case filed by MISSED CALL, LLC, requiring counsel to appear in person, after that plaintiff began suing the same defendants elsewhere. Now, events have stalled both inquiries.

Delaware Chief Judge Colm F. Connolly ended 2023 in dramatic faction, detailing his findings that patent monetization firm IP Edge LLC, a related consulting firm, and the individuals behind them had together engaged in a sweeping “fraud” through their unusually structured patent assertion model. That order teed up various “consequences” for those involved, among them a set of disciplinary referrals for the attorneys representing the IP Edge-linked plaintiffs under scrutiny based on a variety of professional rule violations. Now, Judge Connolly has grilled the attorneys for two more of the plaintiffs in IP Edge’s web about whether they engaged in some of the same ethical violations—including one of the same litigators tagged in the court’s prior decision, Jimmy Chong (of Chong Firm PA), as well as his cocounsel David Bennett (of Direction IP Law). In a January 17 hearing, an increasingly irritated and incredulous Judge Connolly questioned their grasp of the legal and ethical issues at play, concluding that Chong had earned a second disciplinary referral, and ordering a conspicuously forgetful Bennett to produce documents in order to lay out some basic facts.

In a November 27, 2023 order, and a set of subsequent letters, Delaware Chief Judge Colm F. Connolly referred certain attorneys employed by Texas monetization operation IP Edge LLC (which is not a law firm) to a Texas disciplinary body for the unauthorized practice of law, also referring local and lead counsel for certain LLC plaintiffs before him to state disciplinary bodies for improperly treating IP Edge as their true client. Those LLC plaintiffs are Lamplight Licensing LLC, Mellaconic IP LLC, and Nimitz Technologies LLC. Now, one of the referred attorneys—Jimmy Chong of Chong Law Firm PA—has been ordered, alongside co-counsel (David Bennett of Direction IP Law), to appear next week before Judge Connolly. The court has warned that both attorneys must be “prepared to address the Court’s concern” that the “same improprieties” prompting the referrals “may have occurred in connection with the litigation” in additional IP Edge-linked cases, namely, those filed by Swirlate IP LLC and by Waverly Licensing LLC.

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 recent months, RPX has flagged various approaches that patent litigants are taking to avoid the heightened corporate and third-party funding disclosure requirements in Chief Judge Colm F. Connolly’s courtroom. As shown by his stay in early August of a case filed by VLSI Technology LLC against Intel, and his more recent stay of an IP Edge LLC case against Amazon, parties attempting to circumvent Judge Connolly’s new standing orders should expect to face consequences.

In mid-April, District of Delaware Chief Judge Colm F. Connolly posted two new standing orders related to that courtroom’s disclosure requirements: one requiring litigants to disclose details related to any nonrecourse funding arrangements with third parties and a second requiring all “nongovernmental joint ventures, limited liability corporations, partnerships or limited liability partnerships” to include in disclosure statements “the name of every owner, member and partner of the party, proceeding up the chain of ownership until the name of every individual and corporation with a direct or indirect interest in the party has been identified”. At least one plaintiff has now responded to the application of these new standing orders to cases in its campaign.

In recent days, several plaintiffs have had their District of Delaware cases assigned to Chief Judge Colm F. Connolly, who posted two new standing orders related to that courtroom’s disclosure requirements in mid-April: one requiring litigants to disclose details related to any nonrecourse funding arrangements with third parties and a second requiring all “nongovernmental joint ventures, limited liability corporations, partnerships or limited liability partnerships” to include in disclosure statements “the name of every owner, member and partner of the party, proceeding up the chain of ownership until the name of every individual and corporation with a direct or indirect interest in the party has been identified”. None of the new plaintiffs has yet filed a disclosure under the requirements now governing their cases.