There was another hearing this morning in the still-ongoing Mavexar saga, this time in Backertop Licensing LLC v. Canary Connect, Inc., C.A. N. 22-572 (D. Del.).
If you recall, this is the case where the sole member of the patent assertion LLC is a litigation paralegal from Texas who was the wife of a Mavexar attorney.
She appeared in one of the first Mavexar hearings back in November 2022. She later accused the Court of "mansplaining" and "gender harassment and intimidation," and she refused to appear in person to testify a second time, incurring a $53,000 fine. She appealed, and the Federal Circuit affirmed.
Since the last hearing, her husband unfortunately passed away, and she was left as the single parent of two children.
At the hearing today, her attorney first asked moved for the Court to waive the fine, citing her personal circumstances. More on that below.
The Court then asked the witness a lengthy series of questions about a number of topics. I'm sure I didn't catch everything, but here is generally what the Court seemed interested in:
- Potential false representations to the USPTO regarding whether Backertop held all rights to the patents it asserted in the case
- Whether her attorneys had properly advised her or Backertop as to various issues, including:
- Her rights regarding the engagement
- Settlement offers generally
- A specific settlement offer from a specific defendant in one of the cases
- Backertop's assets
- Her relationship with Mavexar
- Who paid for her travel (Mavexar did)
- Her efforts to search for documents in response to the Court's order to provide them
- Apparently, she was not asked to, and did not, search for her own personal documents in response to the Court's order to do so. Only the attorneys searched. The Court pointed out that some documents appear to be missing.
The Court said it would issue a judgment in favor of the United States in the amount of her fine, and refer it to the Department of Justice to collect. I noticed that the U.S. Attorney for the District of Delaware was in the audience for at least part of the hearing.
Who Do You Really Represent?
The most striking part of the hearing, for me at least, was when Backertop's attorney got up and started asking questions of the witness—who he seemingly represents in her personal capacity, and who is also the sole member of the Backertop LLC that he nominally represented.
He initially asked questions about the witness's ability to pay the Court's fine, in support of her request that the Court reduce it. That made sense, because she had asked to have it reduced.
But he quickly moved on to questions that seemed designed to exonerate and protect Mavexar and IP Edge—which would seem directly contrary to Backertop's (and the witness's) interests. He asked her to admit that she had the sole decision making authority, that she was informed of various rights, and so on. She seemed to eagerly agree.
As I sat there trying to figure out what he was doing (and who he represented), the Court clearly picked up on this as well and interjected. Chief Judge Connolly noted that the lawyer was suggesting by his questions that the witness had real authority and Backertop did not act without her authority—and noted that would be the opposite of what he needs to show to get leniency from the Court.
The Court asked him who he was really representing, and pointed out that his questions were designed to adduce a statement helpful to Mavexar, and contrary to the witness's and Backertop's interests.
The attorney seemed to persist for a minute. Chief Judge Connolly again reminded him that he is Backertop's counsel, and that the argument he seems to be making advances the interest of Mavexar and IP Edge. Judge Connolly said that, in that light, the attorney's questions were "quite remarkable." No kidding. The attorney finally took the hint and ended his questioning entirely.
I've honestly never seen anything like that. I have to imagine, taking things in the light most favorable to the attorney, that it was somehow in the witness's best interest or Backertop's best interest to take all the blame and exonerate Mavexar/IP Edge—perhaps in the hopes that they will pay the fines and legal fees.
No Leniency
Ultimately, the Court denied the witness's request for leniency on the $53k fine. The Court noted that, while she was primarily a victim and largely a pawn, she still played a role in the scheme. And the Court noted that dropping the fine would send a terrible message to IP Edge, Mavexar, and NPEs who want to bring suit using owners who have only nominal interests. It also pointed out that she may have individual causes of action against Mavexar.
The Court also noted that it got the sense that Mavexar would ultimately pay the fine. The witness had explained that she asked Mavexar to pay, and implied that Mavexar seemed open to it, but asked that she seek to have it waived or reduced first, and that they would cross that bridge when they come to it.
To me it sounded like Mavexar wanted to take a shot at getting the Court to take pity on a witness who can't pay, before they step in and pay anyway.
The Court also said that, as with prior Mavexar matters, it will be referring an additional out-of-state attorney to their state's office of disciplinary counsel, and referring the matters to the U.S. Department of Justice as well.
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