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Commercial

Enhanced Damages Award Granted in IP Case

Treble damages have been called the white whale of IP and patent law. For contingency lawyers, treble damages—an award where the damages are multiplied by three because of willful infringement—can be a dream come true.  Above the Law details that in reality, only a tiny percentage of patent cases end with an enhanced damages award. When one does, it’s generally of interest to the entire legal community. Sometimes, the details are entertaining as well. A patent case involving EagleView and Xactware Solutions is one such example. Both tech companies compete with similar products and an overlapping customer base. EagleView amassed a large portfolio of patents, and in late 2019, was awarded a $125 million verdict in a case involving five different patents. Rather than taking the money and running, EagleView noted the discovery of willful infringement and used that to try to secure treble damages. The trial judge agreed, awarding damages in the maximum allowable amount. In the end, EagleView wound up with the original award, incidentals, costs, and an additional $375 million in enhanced damages. It is possible that this number will be reduced on appeal, or perhaps via settlement. While the court decision is long, it can be boiled down to a few points:
  • Defendants acted with the express intent to lure EagleView’s customers and decrease their reach.
  • Enhanced damages in this case are a punitive measure, meant to chastise and to dissuade others from similar tactics.
  • The court was put off by the acrimonious and borderline underhanded nature of the trial itself, and the unnecessarily nasty discovery process.
Given the conduct described, it’s understandable how the court could make the enhanced damages award. If the award survives a Federal Circuit court appeal, it could set a precedent that’s likely to be repeated.
Commercial

Burford Roundtable: COVID-Inspired Changes in Litigation Finance

Burford Capital is in the midst of assembling a study of how CFOs can make better use of legal funding. Finance professionals Amanda Parness, Michael Curran, and Jim Kilman lend their thoughts to the discussion. Burford Capital begins by gauging the interest in financial products that mitigate risk from claims that might not otherwise be litigated. Parness: CFOs and corporate advisors have a responsibility to look into innovative alternate sources of monetization. Looking at the value of pending litigation or awards should be standard. Curran: Lending certainty to cost estimates is a big deal, and can have a direct and immediate impact on the finances of a business. When operating funds are low or COVID has taken a toll, legal funding becomes even more attractive. Burford: Is COVID spurring the changes we’re seeing now in terms of legal departments thinking more commercially? Kilman: While COVID is accelerating the momentum of these changes, many were already underway long before. Legal departments are generally a cost center for businesses. But funding can reduce cost, lower risk, and bring in spendable income at a time when funds are low. Curran: The changes we’re seeing now will likely be long-lasting, and will almost certainly be more creative and commercially minded for the foreseeable future.
Commercial

A New Resource for Litigation Funding Fundamentals

Litigation Finance began as a way to expand access to the legal system for those who could not otherwise afford it. Funders could provide non-recourse cash to a promising case in exchange for a percentage of any award. If the case fails, the funder loses its investment. Third-party legal funding is still used this way, but has also expanded to portfolio funding, claims monetization, and more. Omni Bridgeway explains that once legal and business professionals understand the basics of legal funding, they’re more likely to see the many possible benefits. With this in mind, the firm has developed a primer on the industry. The resource material includes a brief history of litigation funding and its relation to champerty laws that may still impact its implementation in some jurisdictions—though that’s becoming rarer by the year. It goes on to discuss how legal funding is defined, and the various forms it can take. Benefits discussed include the flexibility of legal funding, and how it can level the playing field between ordinary claimants or plaintiffs versus huge corporations or even governments. Explanations of non-recourse funding, risk-sharing, and what one should expect when inquiring about funding for a case are all detailed. Ultimately, Omni Bridgeway is committed to ensuring that the public and private sector grow mindful of the benefits that can be realized through the use of Litigation Funding.
Commercial

After CIO Departs, Partners Capital Plans for Future

Partners Capital has been through a lot in the last year. Arjun Raghavan became the CEO in July of last year. Since then, the firm has hired a new managing director and a head of ESG. Last month, Colin Pan departed as CIO. Despite the internal reshuffling and the impact of COVID, Partners Capital reportedly enjoyed its best year ever. Institutional Investor details that Pan will stay on at PC for a further six months before he departs to begin his own investment startup. Partners Capital is known for making investments in third-party legal funding, a legal service that expands access to justice for those who could not otherwise afford it. Raghavan expressed regret at Pan’s departure, but is quick to assert that PC maintains a wealth of talent that together, can fill the chasm left by Pan.
Announcements Commercial

Siltstone Capital Raises Initial Litigation Finance Fund

Siltstone Capital, LLC ("Siltstone"), a Houston, Texas based investment and advisory firm, announced the successful closing of Siltstone Capital Litigation Fund, L.P. (the "Fund"). Siltstone, through its affiliate Litigo Financial, LLC ("Litigo"), will invest in commercial litigation across the United States, and welcomes the opportunity to provide capital to litigants to pursue their claims fully. The Fund will focus on commercial litigation, with a unique focus on energy and patent litigation. Founded in 2013, Siltstone strives to create lasting value for its stakeholders though organically sourced alternative investment opportunities that offer downside protection with significant upside potential. Siltstone believes that its rare combination of investment and legal expertise will help solve real-world legal problems on behalf of clients, in a budgetary sensible way. Siltstone's mission is to make a meaningful difference for clients by focusing on clarity, fairness, and innovation. Robert Le, Siltstone's Co-Founder and Managing Partner, commented, "With our investment acumen, in-depth sector focus, and unique skillset to identify compelling legal cases to fund, we believe that we will be able to deliver significant value to our litigants and investors for years to come." Litigo handles all of the legal due diligence in-house and uses a proprietary software platform that integrates with AI in order to efficiently assess the merits of each case. Mani Walia, who serves as Managing Director and General Counsel at Siltstone, leads the Fund's efforts. Earlier in his career, Mr. Walia clerked for both Judge Jane R. Roth of the United States Court of Appeals for the Third Circuit and Chief Judge Hayden W. Head of the United States District Court for the Southern District of Texas. Additionally, Mr. Walia practiced law at Susman Godfrey in the Houston Office, where he litigated high-profile cases. Mr. Walia stated, "We believe that there are significant opportunities when it comes to investing in litigation finance. We are also particularly excited to bring our in-house legal expertise, investment, and technology experience to this space and are honored to help plaintiffs who need capital to pursue their claims even the playing field."
Commercial

Burford Roundtable: CFO Wish List for Legal Teams and Firms

Litigation funders already know that legal assets can be a source of revenue for businesses—especially those left strapped for operating funds during COVID. The problem? Finance departments may not realize funding is an option. To bridge this knowledge gap, one leading funder conducted an informal survey of finance professionals. Burford Capital details a range of perspectives on various subjects. Below are some key takeaways: Subject: Challenges of Affirmative Recovery Amanda Parness: A good CFO must balance cash flow, timing, and the overall impact that litigation can have. Planning for every step in the process with estimates and cost caps are essential. Michael Curran: General counsel often doesn’t consider the legal department to be a money-maker and therefore may be applying the wrong metrics when determining how to proceed with a case.  Subject: The Illiquid Nature of Corporate Legal Assets Jim Kilman: Commercial claims are often overlooked by CFOs, but if they understood how easily those claims can be turned into liquid assets—they’d probably find that option attractive. Parness: CFOs are less likely to consider that a potential award is a monetary asset, and this needs to change. Subject: Barriers to Facilitating Legal Finance Curran: Valuation can be a stumbling block if CFOs don’t have a credible person to determine the value of legal assets. CFOs must be fully informed of the facts in order to make a decision with confidence. Kilman: A partner with deep expertise or relevant niche experience can make a profound difference. Ideally, a CFO needs someone to offer unique, relevant, new ideas and can back them up with funding and experience.
Commercial Covid-19

Is Big Law Ready to Accept the Death of the Billable Hour Model?

A new survey by Blickstein Group and Legal Value Network suggests that large law firms may be more open to the idea of non-traditional fee arrangements. At the same time, more than half of the survey respondents assert that attorneys' resistance to change is the most difficult aspect of adopting new payment models. Bloomberg Law details that since 2013, lawyers at major law firms have been asked about adapting and updating the way they charge for legal services. Since that time, lawyers have indicated that they haven't been all that interested in doing so. One co-author of the survey, David Cambria, believes that COVID brought an urgency that illustrates the importance of flexibility in pricing structures. This may not be an obvious result of COVID, but the general turbulence has spurred the legal world to make changes that are likely to last even after a return to normalcy. Remote working has led to increased use of technology. In turn, the tech itself has become more advanced and specialized. Software is commonly used to hold remote meetings, facilitate collaboration, and even obtain signatures from across the globe. Partner compensation is another sticking point in some firms—even though partner payouts have increased dramatically during the pandemic. Partners who are making huge annual profits are unlikely to want to explore new pricing models that add value for clients. Will big law firms become less averse to change over time? Only time will tell. 
Commercial

Virtual Depositions Coming from Remote Legal

Remote depositions have become part-and-parcel of remote legal work during the pandemic. Now, one litigation funder has taken steps to partner with a remote deposition legal tech solution. LexShares reveals that it has partnered with Remote Legal, a legal services provider that lends expertise to video conferencing for depositions, court reporting, and arbitrations, among other proceedings. This technology differs from standard video chat applications, as it was specifically tailored to meet the needs of legal proceedings to facilitate socially distant meetings. Some of the features available include virtual exhibition of documents, live voice-to-text, a tech-enabled court reporter, and dedicated private chatrooms for privileged discussions. It’s expected that even after COVID, virtual proceedings will continue as they are a cost and time-saving measure.
Announcements Commercial

Deminor successfully raises EUR 40m to expand the growth of its litigation funding portfolio

Deminor Recovery Services announces the closing of a financing round consisting of equity, senior bank loans and mezzanine finance for an amount up to €40 million to support its rapidly growing litigation funding activities globally. 

The financing round is supported by the current shareholders as well as new investors including Saffelberg Investments, Finance&Invest Brussels and various other investors. The bank financing portion is provided by KBC Bank.  

Along with its current cash position and expected realizations from the existing portfolio, Deminor expects to be able to commit €90 million in new litigation funding investments over the next 2-3 years. These investments will be on Deminor’s own balance sheet, allowing the company to continue to make fast decisions and propose flexible funding terms. Crucially, Deminor’s Investment Committee retains the ultimate decision making authority as to which cases to invest in. 

Deminor’s core mission is to help investors and businesses monetise their legal claims by supporting individual and group litigation. We put our own money at stake:  we pay all legal costs and only receive a return if a case is successful and our client achieves a recovery. Originally started in the field of collective securities actions where Deminor has built and occupies a leading place in non-US jurisdictions, the business has been extended and now also includes private antitrust litigation and B2B commercial litigation.  

Deminor prides itself on providing more than just funding. We only take on good causes and we never compromise on our values. We stand by our clients and are determined to achieve recoveries for them. Clients can benefit from Deminor’s 13 year-long expertise in supporting complex international litigation and, where legally permitted, its unique claims management and back-office execution capacity. The company boasts one of the most impressive track records (over 80%) in the industry thanks to its careful selection of cases and management of litigation risks.  

To serve its growing client base in the US, UK and Asia, Deminor has opened offices over the last 3 years in New York, London and Hong Kong. The team is composed of 30 legal, finance, marketing and claims management professionals speaking 13 different languages.  

“This funding round is a milestone in the history of Deminor. We are thrilled to welcome our new investors and expand our success story thanks to their support. The additional capital will allow us to respond to the growing demand that we are seeing for litigation funding in our core markets and to achieve our mission statement: to give businesses access to the best legal representation and highest standards of justice when pursuing their legal claims.”, says Erik Bomans, CEO of Deminor.