This is the latest in the series titled "NPE Showcase," where we discuss high-volume non-practicing entities (or as some call them, "patent trolls"). This installment will update our previous post explaining recent events at the U.S. District Court for the District of Delaware.
The District of Delaware has long been a favorite venue for patent trolls across the country. Relatively fast and with few challenges to venue, the district's docket became one of the busiest for patent litigation after recent decisions limited where patent owners could file suit. Chief Judge Connolly enacted several orders to manage the large caseload and required all litigants to identify any third party funding up front. Several IP Edge entities simply ignored the order, which Connolly rightfully did not appreciate. Here's what he found after digging a little further:
- IP Edge manages their lawsuits through an entity named Maxevar.
- Each of the patent trolls are single-entity LLC's owned by completely random individuals. How random, you ask? One of the owners is a food truck operator who apparently makes great fried chicken but has no familiarity with patents or litigation.
- The owners of these patent trolls paid nothing to be placed into the role as sole owner. Instead, they accepted a small (5-10%) portion of licensing revenue in exchange for accepting 100% of the liability if the lawsuits went south.
- Maxevar/IP Edge called the shots. They decided when to settle cases, which attorneys to hire, etc. and failed to obtain the owner's consent before doing so.
In short, IP Edge created dozens of sham entities and hid that from both the defendants in lawsuits and the court in which they were litigating.
So what's the update? After the District of Delaware pulled back the curtain, IP Edge stopped fling patent lawsuits in the District of Delaware altogether. They filed no lawsuits in Delaware during the entire month of December, leading overall patent lawsuits in Delaware to decrease by 62% and overall troll lawsuits to decline significantly nationwide.
So the moral of the story is – know who you're litigating against in patent troll litigation, because they sure don't want to tell you. And hopefully the owner of the food truck is selling a lot of fried chicken, because it doesn't look like he'll be receiving those royalty checks anytime soon.
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