Companies searching for capital to fund litigation pursuits must first persuade a potential investment firm of the claim’s merits. These persuasion efforts often include the company’s counsel sharing legal analyses and other work-product documents with a putative financier. But this sharing leads defendants to later claim privilege waiver and seek production of the shared information.
While some courts, such as the one profiled here, have rejected these waiver claims, the Delaware federal court bucked this trend. The court rejected the work-product and common–interest doctrines and ordered a company to produce its emails and documents shared with a potential litigation-financing firm. Acceleration Bay LLC v. Activision Blizzard, Inc., 2018 WL 798731 (D. Del. Feb. 9, 2018). You may read the opinion here.
Before pursuing a patent-infringement action, Acceleration Bay LLC and its counsel communicated with Hamilton Capital about financing the litigation effort. Acceleration also provided documents so that Hamilton Capital could conduct due diligence before deciding whether to provide capital. This information exchange occurred before Acceleration and Hamilton Capital entered an agreement or filed litigation which, as we’ll see, is apparently a big deal.