Court Denies Attempts to Compel Disclosure of Litigation Funding Documents
Published: June 1, 2023
In GoTV Streaming, LLC v. Netflix, Inc., 2-22-cv-07556 (CDCA May. 24, 2023) (Shashi H. Kewalramani), the Central District of California denied Defendant Netflix’s attempts to compel Plaintiff GoTV Streaming to provide documents and further information as to the source of the litigation funding that GoTV received in conjunction with the patent litigation.
In seeking to compel the litigation funding documents and information, Netflix argued that such information related to litigation funding is relevant to determine to stand and “would meaningfully affect Netflix’s litigation tactics and the terms of any possible resolution.” Netflix further argued that the information is relevant to reach a settlement agreement and to address any “potential conflict issues.” Netflix also argued that the information contained in the litigation funding documents is not privileged or subject to attorney work product protections and that even if the material is protected, which would not cover the identity of the funding entity, it should be produced because the materials may contain relevant valuation information and the information could not be obtained any other way.
In opposition, GoTV argued that the information regarding the litigation funder is irrelevant and that Netflix has not provided a sufficient basis warranting the disclosure of these documents over the assertion of any privilege. GoTV further stated that to resolve the dispute, it has already disclosed the identity of the litigation funder and offered to provide the documents for the Court to review in camera to allow the Court to determine whether the documents should be produced. Finally, GoTV argues that in the Ninth Circuit, documents, including litigation funding documents, created because of litigation are protected by the attorney work product doctrine.
In considering the arguments, the Court first found that Netflix has not shown how the information relates to a claim or defense and therefore has failed to meet its burden of showing that the requested discovery is relevant. The Court reasoned that since GoTV has disclosed the name of the litigation funder and provided “all the assignments of the asserted patents,” there does not appear to be any basis for seeking other materials related to the litigation funder. Further, the Court stated that its review of the documents in camera supports GoTV’s argument that the litigation funder has a security interest and GoTV’s standing to assert the patents-in-suit is not impacted by the funding agreement. Therefore, since the Court concluded that there was no valuation information regarding the patents-in-suit in the withheld documents, there is no basis for concluding that the information sought is relevant.
As to work product protection, the Court first noted that Netflix does not seriously contest the claim that the litigation funding-related documents are protected, other than to argue that “the identity of GoTV[’s] . . . litigation financier, and facts regarding their involvement in this action, could not constitute attorney work product.” But, the Court reasoned that now that GoTV has provided the information regarding the identity of the financier, that issue is moot. Thus, the Court concluded that Netflix’s main argument is that the information should be provided because “they contain relevant valuations of the patents-in-suit, and . . . [D]efendant could not receive the information any other way.”
However, the Court also dismissed that argument because (1) an in-camera review of the documents confirms that there are no valuations of the patents-in-suit in those documents; (2) GoTV stated during the hearing that several software licenses had been produced, which were entered into by the previous owner of the patents-in-suit and which Netflix claims involved software utilizing technology covered by the patents-in-suit; and (3) GoTV confirmed during the hearing that no licenses had been granted solely involving the patents-in-suit, i.e., a “naked” patent license. Thus, the Court denied Netflix’s motion to compel documents and information on the source of the litigation funding that GoTV received in conjunction with the case.
This case is another example of an evolving area of the law where defendants are pushing with varying outcomes to ascertain further information about the entities behind the financing of patent litigations.