BMW Pushes for Susman Funding Deal Details in Arigna Patent Suit

Arigna Technology Ltd. should be forced to turn over documents related to its litigation funding, German automaker Bayerishche Motoren Werke AG—the target of a patent litigation compaign by the Irish patent monetizer—said in a filing Jan. 26.

BMW’s opposition to a motion to withdraw by attorneys from Susman Godfrey LLP representing Arigna said the documents—revealed to them after the patent holding company sued its funder in another federal district court—are material to the patent-infringement lawsuit, and hinted it could eventually seek sanctions against the white-shoe law firm.

The question whether third-party litigation funding information must be or should be shared with defendants in funded lawsuits, with judges who oversee cases, or with the public has been hotly contested by attorneys who practice patent law—a lucrative practice area that has become a magnet for outside investment.

Since early 2021, BMW has been the target of a flurry of patent suits filed by Arigna, an affiliate of patent-monetization group Atlantic IP Services Ltd. that’s funded at least in part by Chicago hedge fund Magnetar Capital.

First, Arigna sued over an allegedly infringing semiconductor product used in ten models of BMWs; three months later in mid-May Arigna sued over a different device made by a German chipmaker and incorporated in the BMW i3 and X5; and that same day it sued over an alternating circuit made by yet another semiconductor manufacturer and used in eight BMW models. Arigna also accused BMW of patent infringement in actions at the US International Trade Commission and in a German court.

But how the Irish company—which doesn’t make or sell products of its own—was paying its lawyers at Susman was a mystery until December 2023 when it sued litigation funder Longford Capital over proceeds from its various litigation campaigns against BMW, other auto makers, and tech giants Apple Inc. and Samsung Electronics Co.

BMW told the US District Court for the Eastern District of Virginia in its filing that Arigna should’ve turned over documents related to the funding arrangement as part of discovery in the patent suit pending there, but instead it learned of Longford’s involvement outside of court processes thanks only to the Delaware funding litigation. The automaker said that after the fracas between Arigna and its funder broke out, it received copies of the litigation funding agreement and its engagement agreement with Susman via social media and later from a news reporter.

“Documents related to the perceived value of Arigna’s portfolio are relevant to damages, and documents regarding the scope, strength, or content of the patent-in-suit are relevant to noninfringement and invalidity,” it argued in its filing.

BMW also attached an email exchange between its lawyer Lionel Lavenue, a partner at Finnegan Henderson Farabow Garrett & Dunner LLP, and Arigna’s attorney Steve Seigel, a Susman partner, in which Seigel asked BMW to destroy the documents and also sought the identity of the reporter who’d gotten copies. Seigel also contended that “an error by the clerk” in Delaware led to the Arigna-Longford complaint, along with several attached exhibits, being “publicly accessible for a short period of time,” but that they aren’t relevant to the Virginia patent case and so aren’t subject to discovery.

After several weeks of email sparring between Lavenue and Seigel over whether the information from the two agreements must be handed over to BMW, Susman moved to withdraw from the Virginia case, saying Arigna’s dispute with Longford created a conflict of interest for the Susman lawyers.

Both Arigna and BMW oppose that motion. BMW argued in its Jan. 26 filing that Susman “should not be permitted to withdraw at least until the discoverability of the ‘Funding’ and ‘Engagement’ Agreements is resolved” and indicated BMW might be interested in recovering money directly from Susman later on in the case.

If the court allows the firm to exit the case, BMW contended, it should “retain jurisdiction over Susman for any liability to BMW or Arigna that may arise in connection with the underlying patent dispute.”

BMW is represented by Finnegan. Arigna is represented by Susman, DiMuroGinsberg PC, and Blankingship & Keith PC. Susman is separately represented by Law Offices of Charles B. Molster III PLLC.

The case is Arigna Tech. Ltd. v. Longford Cap. Fund, III, LP, D. Del., 1:23-cv-1441, Opp. to Mot. to Withdraw 1/26/24.