Tuesday, May 23, 2023

To go after patent trolls, states are passing laws requiring disclosure of ligation financing agreements

Bloomberg on rules designed to prevent secretive litigation financing: 

Louisiana is advancing legislation to require disclosure of litigation finance agreements, making it the latest in a string of states to clamp down on the lawsuit funding tool.


The legislation underscores how states are pushing to restrict the opaque litigation finance industry that topped $13 billion in assets under management last year. Wisconsin and New Jersey already require disclosure, and US District Judge Colm F. Connolly in Delaware has required it for certain patent cases in his courtroom.

Matt Levine wrote about the rule in Delware exposing a particular patent troll in today's newsletter:

The downside of scale in litigation is that, if you are constantly suing everyone in the world for infringing on your portfolio of patents, people are going to start rolling their eyes when they see your lawsuits. “These guys again,” they will say. “Patent trolls,” they will say.

But you can sell your patents to somebody else. You can, for instance, find some guy, and give him one of your patents, and then pay for him to sue people who make things that allegedly infringe on the patents, and sign an agreement with him where he’ll give you most of the money if he wins and just keep a little tip for himself for letting you use his name. And then when he sues, he doesn’t have a long history of patent litigation, and maybe people won’t roll their eyes at him.

Or maybe they will.