A patent infringement case being brought against one of the world’s largest streaming companies would on its face be considered a significant matter. However, this case may have added implications for the world of litigation funding, as a judge has indicated that sanctions may be imposed on an attorney who shared sensitive information with the case’s funder.  

Reporting by Bloomberg Law offers new insights into an ongoing patent lawsuit being brought against Netflix, as a federal judge looks set to impose sanctions on the plaintiff’s attorney for sharing the streaming service’s source code and company financial information with a litigation funder. The development came during a hearing in the US District Court for the Northern District of California, following Netflix’s complaint that attorney Bill Ramey shared information disclosure during discovery with AiPi LLC.

AiPi is the party that has funded the patent infringement case brought by Lauri Valjakka, a Finnish inventor who sued Netflix in 2022. AiPI Solutions’ website lists ‘IP Litigation Finance’ as one of the core services it offers to clients, which include corporate patent holders, law firms seeking alternative financing arrangements, and investors looking to invest in lawsuits.

Netflix’s complaint stems from allegations that Ramey shared information that was designated “attorneys eyes only” with AiPi, and that this information had been shared before Netflix had been informed of the funder’s involvement in the lawsuit. Sarah Piepmeier, an attorney at Perkins Coie representing Netflix, argued that having access to this sensitive company data “could influence their decisions to underwrite new cases or that could inspire them to bring new cases.”

Whilst Ramey tried to argue that the case’s protective order allowed for information to be shared with affiliates, and that the four lawyers at AiPi he had shared the information with fell under this designation, Judge Jon S. Tigar strongly disagreed with Ramey’s suggestion that this “is a situation of no harm”. Judge Tigar not only suggested that substantial “attorneys’ fees as a sanction are going to be appropriate”, he also said he was considering ordering Ramey to hand over any communications with the four individuals at AiPi. Furthermore, the judge indicated that he would be considering referring Ramey to a disciplinary body such as the California State Bar.

Among the criticisms leveled at the legal funding industry, one critique that has gained significant traction lately in the United States is the idea that the funding of patent infringement poses a unique risk to national security.

A new report released by the American Security Project (ASP) looks at the arguments around the use of third-party litigation funding in the United States, and whether its involvement in the legal system presents a threat to the country’s national security. ASP’s analysis draws on a variety of sources including public databases, a review of pre-existing literature on the subject, and interviews with individuals from both sides of funded cases.

Whilst the paper’s title, ‘National Security Implications of Foreign Third-Party Litigation Financing’, would suggest that this analysis covers the entire breadth of funded lawsuits, it is primarily focused on patent litigation which is regularly identified as a high risk area for national and economic security. The report’s contents include an overview of the potential risks around third-party funding, the competing arguments on its use, a series of findings from the research, and four public policy recommendations. 

The recommendations put forward by ASP include a universal disclosure requirement for funders, similar to those measures that have recently been introduced in several state legislatures. The paper also suggests that an additional disclosure should be required where a case ‘implicates national or economic security’, with courts then given special discovery rules to project sensitive information as part of this additional disclosure.

The last two recommendations take a wider scope, with one idea being the introduction of mandatory sanctions for those found to have disclosed sensitive information as part of these funded cases. ASP’s final recommendation calls for a comparative study of patent litigation in foreign courts, to assess whether funded cases in foreign courts are targeting U.S. economic assets or national security information.

The National Security Implications of Foreign Third-Party Litigation Financing report can be read in full here.

As LFJ covered yesterday, the availability of legal funding is having a significant impact on the world of arbitration, with funders offering a variety of services from financing the initial claim to supporting claimants through the enforcement of awards.

In an interview with Confilegal, Cristina Soler, CEO of Ramco Litigation Funding, discusses the growing use of award monetization in arbitral proceedings and the increasing adoption of litigation funding both in Spain and across Europe. Confilegal spoke with Soler at the 11^th edition of the Open de Arbitraje in Madrid, where she participated in a panel discussion with Emma Morales (Simmons & Simmons), Damian Vallejo (Dunning Rievaman & Macdonald LLP), Carlos Iso (SACYR). Lourdes Martínez de Victoria Gómez (Departamento de Arbitrajes Internacionales), and María Rodríguez (ACCIONA).

In the interview, Soler highlights that the end of any arbitration proceedings is never marked simply with a party obtaining an award, as the enforcement of that award is often a long and expensive process. Soler explains that funders like Ramco can provide support in one of two ways: either by providing the financing to cover the legal costs of enforcement, or through the monetization of an award where it is sold or assigned to the funder for an upfront payment.

Soler emphasises that the main benefits of award monetization are the immediate provision of liquidity to the claimant and the mitigation of any risk involved in the complex enforcement process. She also goes on to explain that award monetization has become more sophisticated with different payment structures available and a growing secondary market where these awards are bought and sold.

More insights from Soler are available in the full interview on Confilegal’s website.

As LFJ covered in March of this year, JurisTrade launched the first phase of its Litigation Asset Marketplace offering over $70 million in litigation funding opportunities, with the aim of bridging the gap between available capital and active cases in need of financing.

In an interview with Global Finance, JurisTrade’s CEO, James Koutoulas discusses the company’s new marketplace, explaining the benefits it offers to both investors and plaintiffs who find themselves in need of additional funding during a case. 

Koutoulas describes the platform as “the first secondary marketplace for litigation assets”, with the marketplace designed to allow investors to buy and sell these opportunities just like tradeable securities. Koutoulas says that this will generate “two or three turns on these cases”, with the flexibility of this model allowing “investors to pick when they want to come in, like VC investors pick the A-round or C-round.”

Koutoulas also clarifies that the marketplace is not targeting retail investors, as the minimum stake is set at $500,000. Instead JurisTrade’s platform is focused on offering these opportunities to institutional investors and family offices, highlighting that due to the variety of cases “every investment is very bespoke.” 

While some funders are looking towards the secondaries market as a way to expand their investment opportunities, one funder is moving in the opposite direction following the closing of its sixth fund. 

Reporting by Bloomberg Law covers the closing of a $600 million fund by Gerchen Capital Partners (GCP), with this latest fund representing a shift in the company’s strategy to expand its investments beyond the secondaries market. The new fund’s capital is set to be dedicated towards two key areas: monetizing litigation portfolios for corporations and funding late-stage or post-settlement matters.

Adam Gerchen, CEO of GCP, spoke with Bloomberg Law about the closing of the company’s sixth fund and explained that the funder’s original focus on secondaries was about addressing “this unmet market need.” On the pivot towards corporate monetization, Kelly Daley, managing director at GCP, suggested that it can be a valuable offering due to the level of instability in the financial market, arguing that “the more uncertainty there is in the market, the more appealing certainty is”.

The article also highlighted GCP’s growth over the past three years since it was founded, with around $1.9 billion in assets raised over that time. The growth has been bolstered by the recruitment of experienced industry professionals, like Daley, from other funders including Burford Capital. Daley explained her decision to move to GCP from Burford as being driven by the culture of the growing funder, saying: “The ability to be in a more nimble entrepreneurial environment was appealing to me.”

With the growing prominence of third-party funding in arbitration proceedings, industry bodies are keen to establish best practices for those involved in funded matters, and to increase the broader levels of knowledge among all members of the wider arbitration community.

The Chartered Institute of Arbitrators (Ciarb) has today announced the release of its Proposed Guideline on Third-Party Funding, and has opened a call for comment to source feedback from members of the alternative dispute resolution (ADR) community. 

Ciarb’s guideline is designed to support those involved in arbitration matters to navigate funding arrangements, and to assist all parties and arbitral tribunals to facilitate effective case management of funded proceedings. The proposed guideline is split into two parts, with the first section dedicated to providing a thorough overview of the funding process, whilst the latter part covers all aspects of arbitration proceedings that involve a funded party.

The call for comment is open to both Ciarb members and non-members, with the deadline to submit feedback set for 17 June 2025. The feedback form can be accessed here.

Drafting of the guideline was undertaken by Mercy McBrayer, Head of Arbitration Professional Practice at Ciarb, and Mohamed Sadiq, PPP Intern at Ciarb, and the drafting group committee was co-chaired by Philippa Charles (Twenty Essex) and Dr Hasan Tahsin Azizagaoglu (Bench Walk Advisors). The drafting group’s members also included: Christopher Bloch (Squire Patton Boggs), Julian Chamberlayne (Stewarts), Ayse Yazir (Bench Walk Advisors), Susan Dunn (Harbour), Napoleão Casado Filho (Clasen | Casado Filho | Longo | Caribé), Camilla Godman (Omni Bridgeway), Dana MacGrath (MacGrath Arbirtration), Viren Mascarenhas (Milbank), Kathryn Sanger (Herbert Smith Freehills), and Sarah Vasani (CMS).

Dr Hasan Tahsin Azizagaoglu described the guideline as “a clear and accessible roadmap for legal practitioners”, and noted that it is “unique in its commitment to full transparency”. Philippa Charles explained that although the drafting group “contains representation from practitioners and funders”, the call for comment aims to “ensure that a multiplicity of viewpoints on these matters is contained in the Guideline to make it as useful as possible.”