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.

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.

Over the past several months, several plaintiffs affiliated with patent monetization firm IP Edge LLC have sparred with Delaware Chief Judge Colm F. Connolly over disclosure rules imposed in his courtroom. As this “Series of Extraordinary Events” has unfolded, those plaintiffs have found themselves under close scrutiny due to their apparent failure to disclose information on their management and control in compliance with those heightened rules. Now, one of those entities, Backertop Licensing LLC, has urged the court to halt an order mandating the wide-ranging production of information on those topics until its challenge of that order gets decided—while its attorney is looking for a way off of its cases altogether.

Litigants have been closely watching the “Series of Extraordinary Events” that have been playing out in Delaware as the result of a pair of standing orders issued by Chief Judge Colm F. Connolly in April, which require the disclosure of details on funding and corporate control for parties in his courtroom. Recent weeks have seen a group of related plaintiffs taken to task by Judge Connolly for their noncompliance with these orders, including their failure to disclose links to monetization firm IP Edge LLC and purported consulting firm MAVEXAR LLC—subjecting the NPEs to a series of revelatory evidentiary hearings and imposing a set of sweeping orders requiring some of those plaintiffs to produce a wide-ranging ream of information on their ownership/control, assets, and legal representation. Judge Connolly has now denied a motion to withdraw one of those production orders from one of those plaintiffs, Nimitz Technologies LLC—rejecting it as “devoid of merit”, and ordering it to show cause why he should not sanction the entity for failure to provide the required evidence, as a parallel fight over his probing plays out before the Federal Circuit.

In April of this year, Delaware Chief Judge Colm F. Connolly posted two standing orders imposing heightened disclosure requirements—regarding party ownership and any third-party litigation funding—on litigants in his courtroom. The responsive disclosures from certain plaintiffs, associated with various notable patent monetization players, have spawned intense scrutiny from the court, including a series of evidentiary hearings followed by an order requiring the production to the court of documents governing the relationships between those plaintiffs and those monetization outfits, together with related communications. Four of the plaintiffs then filed separate petitions for writs of mandamus with the Federal Circuit, prompting Judge Connolly to take certain additional hearings off calendar, to stay some of these cases, and to submit a memorandum to the appeals court, “explain[ing] more fulsomely and in writing” the reasons for this series of extraordinary events. This past week, (1) the Federal Circuit denied two of those petitions, (2) a denied petitioner filed a motion before Judge Connolly seeking the withdrawal of his explanatory memorandum (as well as recusal from its cases going forward), (3) defendants and amici filed responses to the other two petitions still pending before the appeals court, and (4) VLSI Technology LLC and Intel provided their answers to four related questions that Judge Connolly posed in the Delaware case between the two, in advance of a December 14 hearing.

For years, RPX has reported on the intelligence that can be culled from public records about the approach to patent monetization by the large collection of patent plaintiffs linked to IP Edge LLC. That Texas monetization firm has never filed suit itself but has, through its associated LLCs, been the top filer by volume of NPE litigation, both for several years running and by an order of magnitude. The “Series of Extraordinary Events” currently underway—first before Delaware Chief Judge Colm F. Connolly, but now also the Federal Circuit—appears to have confirmed that body of reporting, based solely on public records, that the founders of IP Edge, through sister entity MAVEXAR LLC, have constructed a business model by which individuals with no prior, cognizable connection to patent monetization take ownership of patents, the assertion of which MAVEXAR manages—all for a small percentage of the proceeds paid back to those individuals.