District Court Orders Production of Litigation Funding Agreement

November 13, 2013

In the patent infringement action between Cobra International, Inc. ("Cobra") and BCNY International, Inc. ("BCNY"), BCNY filed a motion to compel several documents, including a litigation funding agreement. Cobra opposed the motion asserting that the person funding the litigation was not making decisions regarding the lawsuit and was not interfering with the prosecution of the litigation. BCNY asserted that it was entitled to the document to determine if the patent had transferred.

As explained by the district court, "[i]n response to request for production number 32, which pertains to the litigation funding agreement, Mr. Eavzan stated in his declaration that 'Cobra continues to own the '858 patent. The person or entity funding Cobra's prosecution of the lawsuit against [BCNY] is not making the decisions for Cobra regarding the above-styled lawsuit, is not interfering with the independence and professional judgment of Cobra's counsel relating to the above-styled lawsuit, and is not receiving confidential communications between Cobra and its counsel relating to the above-styled lawsuit.'"

In response, BCNY argued that the Eavzan's declaration was not sufficiently responsive to request for production number 32. BCNY further explained that it wanted to know whether ownership of the patent had transferred, and who had control over the decisions in the case. Accordingly, BCNY explained that it was seeking the documents that memorialize the funding agreement.

In response, Cobra asserted that the ownership documents were not relevant and the litigation funding agreement would not lead to the discovery of relevant evidence. "Cobra, on the other hand, maintains that ownership of the '858 patent and who is funding the instant litigation are not relevant issues in the case, and that turning over the litigation funding agreement would not lead to the discovery of relevant evidence. Cobra also believes that the litigation agreement is privileged material."

At the hearing on the motion, BCNY explained why it need the litigation funding agreement. "When asked why BCNY would need the litigation funding agreement in light of the statements made by Mr. Eavzan in paragraph 8 of his declaration, BCNY explained that it should still have the opportunity to test Mr. Eavzan's averments, and that the ownership of the '858 patent is relevant to the issue of standing. In response, Cobra maintained that it has no other documents in its possession that are responsive to request for production 32."

Based on these arguments, the district court found that the litigation funding agreement was relevant and not privileged.


Cobra International, Inc. v. BCNY International, Inc., et al., Case No. 05-61225-CIV (S. D. Fla. Nov. 4, 2013)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.