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 States.

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 five years.

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 representatives.)

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 case.

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 filing said.

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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