By Nate Raymond
When the U.S. Chamber of Commerce called last week for the
regulation of third-party litigation funders, Juridica
Investments Ltd appeared to be one of the top ones on the
business lobby's target list. A Chamber report criticizing the industry made several references to Juridica, which is today the
second-largest publicly traded funder operating in the United
Yet for the litigation financier, the Chamber's report will
go down as a small nuisance in an otherwise outstanding 2012.
Shares in Juridica are up 32 percent since the funder announced in August that it would earn $35.2 million from four antitrust
settlements. Those settlements added considerably to the $85
million Juridica will have earned by the end of the year from
settlements since its inception in 2007. And the announcement in
August helped ease investor concerns about the length of time to
attain returns on the approximately $185 million they poured
into the litigation funder in two public offerings in the last
In the view of the Chamber, third-party litigation finance
companies like Juridica pose a "clear and present danger" to the
court system, as hedge funds drive up litigation and prolong
settlements in lawsuits of "questionable merit." But in an
interview last week, Juridica CEO Richard Fields disputed the
Chamber's notion that funders encourage meritless lawsuits. "The
fundamental premise that commercial litigation funding will
increase frivolous litigation is fundamentally flawed," he said.
After all, if Juridica wants to make money, it needs to win the
cases it backs.
So what cases is Juridica betting on? Like other funders,
Juridica considers its docket proprietary. Fields said he isn't
opposed to more transparency about the cases he is funding,
which, oddly, aligns him with the Chamber on the question of
funders disclosing their involvement. But in an interview,
Fields cited Juridica's current policy and declined to confirm
the identify of the cases he's funding.
Nevertheless, we've got a pretty good idea of three recent
Juridica suits that have resulted in jury verdicts. We figured
it out from looking at the funder's half-year report, issued on
Sept. 17. It revealed a trio of recent jury verdicts in patent
cases Juridica financed. A review of court records clued us in
on the specific cases Juridica is referring to.
Thanks to a filing by defense counsel for Genzyme Corp in a
case brought by patent-holding company Shelbyzyme LLC, we
already knew that Juridica was funding Shelbyzyme's 2009 IP suit
in U.S. District Court in Delaware. In July, a jury in
Wilmington found Genzyme had infringed Shelbyzyme's patent,
which covered a way of treating the genetic disease Fabry. The
jury awarded Shelbyzyme $50 million in damages, which sounds a
lot like the $50 million verdict Juridica described in its Sept.17 half-year report.
In that case, Juridica said it had invested $4.8 million in
the case, identified in regulatory filings as Case 0409-C, and
reported that it would receive the first $3 million in proceeds
from any settlement or judgment plus 49 percent of the remainder
of the recovery. (Shelbyzyme's lawyer, Frederick Lorig of Quinn
Emanuel Urquhart & Sullivan, did not return calls seeking
comment. Kenneth Herman, a lawyer for Genzyme at Ropes & Gray,
also did not respond to requests for comment, nor did company
Another recent verdict produced mixed results for Juridica.
In June, a federal jury in Marshall, Texas, returned a $10million verdict against Citrix Systems Inc in a lawsuit by
Juridica-backed SSL Services, LLC, over a networking patent.
While a later order on Sept. 17 by U.S. District Judge Rodney
Gilstrap drove the judgment up to $20 million, the sum remained
below the $63 million sought at trial by SSL. Citrix,
represented by Goodwin Procter, has promised to appeal.
Juridica's ties to SSL were revealed in a court order in
another lawsuit involving SSL. A lawyer for SSL, Gary Hoffman of
Dickstein Shapiro, confirmed Juridica was involved in the Citrix
Juridica, without identifying the case, described a verdict
in a lawsuit that sounds like SSL's called Case 0108-S. The $10
million verdict was on the "low end of the recovery range" of
what Juridica said it expected. Juridica's half-year report came
out the same day as Gilstrap's order in the Citrix case, perhaps
explaining the lack of any reference to the additional $10
million he granted. Juridica said it had invested $8.3 million
in the case and stands to receive the first $8 million
recovered. The lawyers get a 21 percent contingency fee, the
The third recent verdict appears to be an outright
disappointment for Juridica. In a case Juridica called Case
7608-A, a jury in an unnamed court delivered a $500,000 verdict
in a patent case in July. Juridica has already earned $1.2
million on the case through settlements with other defendants,
but the funder sank a total of $2 million into the case.
Juridica said in its half-year report that the verdict was below
its expectations, and unless anything changes, it does not
expect to make more money on the lawsuit.
Of various patent verdicts tracked by IP analytics firm Lex Machina, the funder's description of Case 7608-A matches only a
single verdict this year, an award to patent-holding company
Ambato Media, LLC, in its suit against Garmin International Inc.
Ambato had been seeking up to $7.2 million, according to a blog post by Michael Smith, a Marshall, Texas, lawyer with Siebman,
Burg, Phillips & Smith who was co-counsel to the company with
lawyers at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo.
Lawyers for Ambato and Garmin, represented by Greenberg Traurig,
declined to comment.
Fields declined to confirm some of these cases and wasn't
available to discuss others. Even if we're right, it's just
three lawsuits with $15.1 million invested. Juridica has 23
lawsuits in total pending through June, with $157.1 million
committed. That's a lot of lawsuits -- and money -- that remains
shrouded in secrecy.
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