Attorney in Patent Infringement Case Files Motion to Withdraw, Citing Issues with Funder
The role of funders in patent litigation has come under much scrutiny over the last year, with objections arising over the lack of disclosure of funder involvement and the level of control that funders can assert. An emergency motion for withdrawal made by a plaintiff’s attorney has provided some insight into one such case, where the relationship between legal counsel and plaintiff has broken down over the actions of an outside funder. A blog post on Patently-O by Dennis Crouch, law professor at the University of Missouri School of Law, analyses an ongoing dispute between a plaintiff and its attorney over the role of a third-party funder in its patent infringement case. The conflict emerged in the case of CTD Networks v. Microsoft, an infringement lawsuit that was dismissed in the Western District of Texas for a failure to ‘include plausible allegations of infringement’, and which has subsequently been appealed. However, since the appeal was filed, the plaintiff’s attorney, William P. Ramey III has filed an emergency motion seeking court approval to withdraw from the case. Ramey’s motion alleges that CTD’s funder, AiPi failed to pay legal fees and that ‘CTD is controlled by AiPi, whose principal recently formed Whitestone Law.’ Ramey explains that the conflict over control emerged because AiPi’s co-founder, Eric Morehouse, ‘explained that he controls CTD because he bought the patents which allowed him to do what he wants with the patents and settlements.’ He also alleges that the funder and its owner ‘appear to be purposely prejudicing Ramey LLP’s and CTD Network’s interests in the pending appeal at the Federal Circuit by not filing an appeal brief.’ CTD has filed a response to Ramey’s request to withdraw, arguing that ‘CTD Networks is not controlled by any other party’, and that ‘AiPi is not "adverse" to Mr. Ramey, AiPi is adverse to improper handling of litigation.’ The brief places the blame squarely on Ramey, stating that the attorney ‘is facing sanctions in a number of other matters in a number of other jurisdictions and has been sanctioned in a number of cases over the past few years.’ Whilst CDT does not object to Ramey’s withdrawal from representing the business, it argues that Ramey cannot withdraw wholly from the matter, as they remain responsible for their actions in this matter and remain as a party from whom Defendant is seeking sanctions.’ This ongoing conflict once again demonstrates the issues that can arise in cases where the line between a funder of patent litigation and an entity controlling the litigation is blurred.