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Inventor Leverages Litigation Funding to Beat Microsoft

August 2, 2022

Inventor Leverages Litigation Funding to Beat Microsoft

One of the great benefits of third-party legal funding is the ability for small companies and even individuals to fight on a level playing field against the world’s largest corporations. This dynamic was made evident in a recent case, where a US inventor was able to achieve a $10 million award for patent infringement from Microsoft, after enlisting the support of a litigation funder. Detailed in an article by Bloomberg Law, inventor Michael Kaufman has been in a decade-long struggle to receive compensation, after he alleged that Microsoft infringed his technology patent by using it in their Visual Studios Software. However, it wasn’t until he and attorney Ronald Abramson sought funding from Woodsford Litigation Funding that he was able to take Microsoft to court with previously inaccessible financial resources to fight the case. Whilst Microsoft initially claimed it had not used the patented product to a significant degree in 2019, lawyers for Abramson discovered that this was only true for the previous year, and Microsoft had in fact been substantially using the product in prior years. After an appeal in federal court, the panel opinion stated that Kaufman should have received royalties from the product usage dating back to 2011. Whilst victories in patent infringement cases for individual inventors is rare, Nicole Morris, a professor at Emory School of Law, highlighted that in situations where they can receive third-party funding, inventors are determined litigants due to their desire to see their own invention and work recognised.

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Case Developments Commercial

Deloitte and Grant Thornton Sued in France Over Atos Accounts in Funded Shareholder Claim

By John Freund |

In what is being described as an unprecedented action in French corporate law, nearly 800 shareholders have filed a civil liability claim against Deloitte & Associes and Grant Thornton, the former statutory auditors of Atos, the once-prominent French IT services company and former CAC 40 constituent.

As reported by Atos Audit Action, the claim targets the auditors for allegedly certifying consolidated financial statements that did not reflect the true financial and asset position of the Atos group across six consecutive fiscal years. Shareholders who purchased Atos shares between February 2018 and March 2024 are eligible to participate. The case has been filed with the Nanterre Commercial Court.

The plaintiffs, represented by law firm Vermeille & Co and supported by the Union for the Protection of Shareholders (UPRA), accuse the auditors of approving accounts containing overvalued assets, overly optimistic revenue recognition, and insufficiently provisioned risks. They further allege that the auditors failed to issue going concern warnings despite the company's deteriorating finances, which they argue had been compromised since the early 2020s. Atos shares collapsed from approximately 70 euros in April 2021 to under one euro by April 2024.

The litigation is backed by an unnamed litigation fund that covers all procedural costs in exchange for a commission on any recovery. The case marks the first time in France that a civil liability action has been brought directly against the auditors of a listed company, potentially setting a precedent for future shareholder claims in the French market.

Case Developments Commercial

Which? Drops £480 Million Funded Class Action Against Qualcomm

By John Freund |

A £480 million collective proceedings claim against chipmaker Qualcomm has been withdrawn in full after the UK consumer group Which? reassessed its position following trial evidence. The settlement, which requires Competition Appeal Tribunal approval, involves no payment from Qualcomm.

As reported by Non-Billable, the litigation-funded claim was originally filed in 2021 under the UK's collective proceedings framework. Backed by litigation funder Augusta Ventures, Which? alleged that Qualcomm's overcharging at the manufacturer level inflated retail mobile phone prices for millions of consumers. Quinn Emanuel and Norton Rose Fulbright represented Qualcomm in the defense.

According to Quinn Emanuel's statement, the class representative concluded that the tribunal would reject allegations that Qualcomm coerced Apple, chipset manufacturers, or Samsung into unfair licensing terms. The firm's partners Miguel Rato and Marixenia Davilla led the defense alongside Norton Rose Fulbright's Caroline Thomas, Helen Fairhead, Nuala Canavan, and US partner Rich Zembek. Hausfeld, led by managing partner Nicola Boyle, represented Which? with counsel from Monckton Chambers.

The withdrawal underscores the ongoing challenges facing the UK's developing competition class action regime, which has faced uncertainty since the Supreme Court's 2023 PACCAR ruling on the enforceability of litigation funding agreements. For funders like Augusta Ventures, the outcome represents a significant loss on what was one of the higher-profile consumer class actions in the UK market.

Case Developments Commercial

Law Firm in J&J Baby Powder Cases Sues Litigation Funders

By John Freund |

A dispute emerging from the long-running talc litigation against Johnson & Johnson has spilled into a new front, as a plaintiffs’ law firm has filed suit against its own litigation funders in a high-stakes funding battle tied to the baby powder cases.

An article in Reuters reports that the firm, which represents claimants alleging that Johnson & Johnson’s baby powder products caused cancer, has sued multiple litigation funders over the terms and enforcement of its funding agreements. The complaint centers on allegations that the funders are seeking repayment amounts the firm contends are excessive or otherwise improper under the governing contracts. The lawsuit underscores the financial strain and complex capital structures underpinning mass tort litigation, particularly in sprawling, multi-year proceedings like the talc cases.

According to the report, the firm argues that the funders’ demands threaten its financial stability and ability to continue representing clients in the ongoing litigation. The case reflects the high-risk, high-reward nature of funding large portfolios of mass tort claims, where returns can hinge on bankruptcy proceedings, global settlements, or appellate outcomes. Johnson & Johnson’s use of bankruptcy maneuvers to resolve talc liabilities has already added further uncertainty and delay, complicating recovery timelines for plaintiffs’ firms and their capital providers.

The dispute highlights the intricate dynamics between law firms and funders in contingency-heavy practices. Funding arrangements in mass torts often involve layered investments, staged drawdowns, and complex priority waterfalls. When case timelines stretch or resolution values shift, tensions over repayment multiples and control rights can quickly surface.