Swirlate IP LLC v. Quantela, Inc.

Filing 37

MEMORANDUM ORDER: 1. Swirlate shall submit to the Court no later than September 6, 2024 an unredacted version of the document production it submitted to the Court on March 14, 2024 and any responsive documents it withheld from that March 14, 2024 production. 2. The Court will convene a hearing in Courtroom 4B on September 18, 2024 at 1:00 p.m. to address its concerns that counsel for Swirlate may have failed to comply with the Rules of Professional Conduct; that real parties in interes t, such as IP Edge and Mavexar, may have been hidden from the Court and the defendants; and that Swirlate, its counsel, and those real parties in interest may have perpetrated a fraud on the Court. Dina Gamez and David Bennett shall attend the hearing in person. Signed by Judge Colm F. Connolly on 8/28/2024. Associated Cases: 1:22-cv-00235-CFC, 1:22-cv-00249-CFC(nmf)

IN THE UNITED STATES DISTRICT COURT
. FOR THE DISTRICT OF DELAWARE

SWIRLATE IP LLC,
Plaintiff,
V.

QUANTELA, INC.,
Defendant.
SWIRLATE IP LLC,
Plaintiff,
V.

LANTRONIX, INC.,
Defendant.

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) Civ. No. 22-235-CFC
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) Civ. No. 22-249-CFC
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MEMORANDUM ORDER

This Memorandum Order marks the latest chapter in a voluminous history of
disturbing matters in this Court that have come to light in cases brought by certain
LLC plaintiffs affiliated with the patent monetization firm IP Edge LLC and its
affiliate Mavexar LLC. Prior chapters of that history were chronicled in Nimitz

Technologies LLC v. CNET Media, Inc., 2022 WL 17338396 (D. Del. Nov. 30,
2022) ("Nimitz f'), Nimitz Technologies LLC v. CNET Media, Inc., 2023 WL
8187441 (D. Del. Nov. 27, 2023) ("Nimitz If'), and Backertop Licensing LLC v.

Canary Connect, Inc., 2023 WL 3182084 (D. Del. May 1, 2023) ("Backertopf'),
all of which I incorporate by reference.
Plaintiff Swirlate IP, LLC is one of numerous LLCs affiliated with IP Edge
and Mavexar. These two actions, filed in February 2022, Civ. No. 22-235, D.I. 1;
Civ. No. 22-249, D.I. 1, are small parts of a larger litigation campaign brought
under Swirlate's name. Between April 2020 and November 2022, Swirlate filed at
least 49 patent infringement suits in federal courts; 21 of those suits were filed in
this District. 1 Mr. Bennett is counsel of record in all the cases filed by Swirlate in

1

Swirlate IP LLC v. Resmed, Inc., Civ. No. 20-cv-556, (D. Del., Apr. 23, 2020);
Swirlate IP LLC v. Badger Meter, Inc., Civ. No. 20-cv-1165, (D. Colo., Apr. 24,
2020); Swirlate IP LLC v. Continental Automotive Sys., Inc., Civ. No. 20-cv-2538,
(N.D. Ill., Apr. 24, 2020); Swirlate IP LLC v. Corning Optical Comms. LLC, Civ.
No. 20-cv-1033, (N.D. Tex., Apr. 24, 2020); Swirlate IP LLC v. Livongo Health,
Inc., Civ. No. 20-cv-2540, (N.D. Ill., Apr. 24, 2020); Swirlate IP LLC v. Astronics
Corp., Civ. No. 20-cv-3078, (N.D. Ill., May 22, 2020); Swirlate IP LLC v.
Smartwitness USA, LLC, Civ. No. 20-cv-3080, (N.D. Ill., May 22, 2020); Swirlate
IP LLC v. Lytx, Inc., Civ. No. 20-cv-696, (D. Del., May 26, 2020); Swirlate IP
LLC v. Getac, Inc., Civ. No. 20-cv-983, (C.D. Cal., May 28, 2020); Swirlate IP
LLC v. Badger Meter Inc., Civ. No. 20-cv-1314, (E.D. Wis., Aug. 26, 2020);
Swirlate IP LLC v. Keep Truckin, Inc., Civ. No. 20-cv-1283, (D. Del., Sep. 23,
2020); Swirlate IP LLC v. Coo/pad Techs., Inc., Civ. No. 20-cv-1284, (D. Del.,
Sep. 24, 2020); Swirlate IP LLC v. Verifone, Inc., Civ. No. 20-cv-5745, (N.D. Ill.,
Sep. 28, 2020); Swirlate IP LLC v. Eagle Eye Networks, Inc., Civ. No. 20-cv-1169,
(W.D. Tex., Nov. 24, 2020); Swirlate IP LLC v. Audiocodes Inc., Civ. No. 21-cv75, (D. Del., Jan. 26, 2021); Swirlate IP LLC v. L3harris Techs., Inc., Civ. No. 21cv-76, (D. Del., Jan. 26, 2021); Swirlate IP LLC v. Forcepoint LLC, Civ. No. 21cv-237, (D. Del., Feb. 22, 2021); Swirlate IP LLC v. Liveu Inc., Civ. No. 21-cv238, (D. Del., Feb. 22, 2021); Swirlate IP LLC v. Versa Networks, Inc., Civ. No.
21-cv-239, (D. Del., Feb. 22, 2021); Swirlate IP LLC v. Enphase Energy, Inc., Civ.
2

No. 21-cv-428, (D. Del., Mar. 25, 2021 ); Swirlate IP LLC v. Ametek, Inc., Civ. No.
21-cv-916, (D. Del., June 28, 2021); Swirlate IP LLC v. Sensitech Inc., Civ. No.
21-cv-917, (D. Del., June 28, 2021); Swirlate IP LLC v. Zetron Inc., Civ. No. 21cv-866, (W.D. Wash., June 28, 2021); Swirlate IP LLC v. Ei Electronics LLC, Civ.
No. 21-cv-1071, (D. Del., July 27, 2021); Swirlate IP LLC v. Cognex Corp., Civ.
No. 21-cv-4041, (N.D. Ill., July 29, 2021); Swirlate IP LLC v. FW Murphy
Production Controls, LLC, Civ. No. 21-cv-806, (W.D. Tex., Aug. 27, 2021);
Swirlate IP LLC v. Fluke Corp., Civ. No. 21-cv-1174, (W.D. Wash., Aug. 30,
2021); Swirlate IP LLC v. Mine Site Techs. (USA), Inc., Civ. No. 21-cv-1499, (D.
Del., Oct. 25, 2021); Swirlate IP LLC v. Volterra, Inc., Civ. No. 21-cv-1501, (D.
Del., Oct. 25, 2021); Swirlate IP LLC v. Cooperative Choice LLC, Civ. No. 21-cv4450, (N.D. Ga., Oct. 27, 2021); Swirlate IP LLC v. Talk-A-Phone, LLC, Civ. No.
21-cv-6238, (N.D. Ill., Nov. 22, 2021); Swirlate IP LLC v. Brivo Sys. LLC, Civ.
No. 22-cv-103, (D. Del., Jan. 26, 2022); Swirlate IP LLC v. Progressive Sys., LLC,
Civ. No. 22-cv-293, (S.D. Tex., Jan. 28, 2022); Swirlate IP LLC v. Crane Payment
Innovations, Inc., Civ. No. 22-cv-234, (D. Del., Feb. 24, 2022); Swirlate IP LLC v.
Draeger Safety, Inc., Civ. No. 22-cv-237, (D. Del., Feb. 24, 2022); Swirlate IP
LLC v. Quante/a, Inc., Civ. No. 22-cv-235, (D. Del., Feb. 24, 2022); Swirlate IP
LLC v. Lantronix, Inc., Civ. No. 22-cv-249, (D. Del., Feb. 25, 2022); Swirlate IP
LLC v. Plantronics, Inc., Civ. No. 22-cv-527, (D. Del., Apr. 26, 2022); Swirlate IP
LLC v. In-Situ, Inc., Civ. No. 22-cv-1016, (D. Colo., Apr. 27, 2022); Swirlate IP
LLC v. Draeger, Inc., Civ. No. 22-cv-2044, (E.D. Pa., May 25, 2022); Swirlate IP
LLC v. Parsons Corp., Civ. No. 22-cv-3333, (N.D. Ill., June 27, 2022); Swirlate IP
LLC v. Kymeta Corp., Civ. No. 22-cv-914, (W.D. Wash., June 30, 2022); Swirlate
IP LLC v. Amcrest Techs. LLC, Civ. No. 22-cv-2543, (S.D. Tex, July 31, 2022);
Swirlate IP LLC v. Jabil Inc., Civ. No. 22-cv-4557, (N.D. Ill., Aug. 26, 2022);
Swirlate IP LLC v. Viasat, Inc., Civ. No. 22-cv-2198, (D. Colo., Aug. 26, 2022);
Swirlate IP LLC v. Geoforce, Inc., Civ. No. 22-cv-425, (E.D. Tex., Oct. 26, 2022);
Swirlate IP LLC v. Noodoe Inc., Civ. No. 22-cv-3744, (S.D. Tex., Oct. 28, 2022);
Swirlate IP LLC v. Rab Lighting Inc., Civ. No. 22-cv-6660, (N.D. Ill., Nov. 29,
2022); Swirlate IP LLC v. Schweitzer Eng'g Labs., Inc, Civ. No. 22-cv-300, (E.D.
Wash., Nov. 29, 2022).
3

this Court. Dina Gamez is the sole owner and managing member of Swirlate. Civ.
No. 22-235, D.I. 16.2
I.
For reasons detailed in Nimitz I, by early September 2022, I had developed
concerns that Swirlate and other LLC plaintiffs in patent infringement cases
assigned to me may have had undisclosed financial relationships and may not have
complied with my April 18, 2022 standing order regarding third-party litigation
funding. To address those concerns, I issued in September 2022 in twelve cases,
including these two cases, orders convening a series of evidentiary hearings to
determine whether the LLC plaintiffs in the twelve cases had complied with the
third-party litigation funding standing order. See, e.g., D.I. 22. I also directed the
owners of the LLC plaintiffs to attend the hearings in person. Id. at 2. I set the
hearing date for these two cases for December 6, 2022 and ordered Ms. Gamez and
Mr. Bennett to attend the hearing. Id.
On November 4, 2022, I convened the first of the scheduled evidentiary
hearings-a consolidated proceeding for cases filed by Nimitz; Mellaconic IP,
LLC; and Lamplight Licensing LLC. As I explained in detail in Nimitz I, the

2

Unless otherwise noted, all docket citations for filings made in both of the abovecaptioned cases are from Civ. No. 22-235.
4

evidence adduced at that hearing raised serious concerns that the parties may have
made inaccurate statements in filings with the Court; that counsel for the plaintiffs
may have failed to comply with the Rules of Professional Conduct; that real parties
in interest, such as IP Edge and Mavexar, may have been hidden from the Court
and the defendants; and that those real parties in interest may have perpetrated a
fraud on the court by fraudulently conveying the patents asserted in this Court to a
shell LLC and filing fictious patent assignments with the United States Patent &
Trademark Office (PTO), all designed to shield the real parties in interest from the
potential liability they would otherwise face by asserting in litigation the patents in
question. 2022 WL 17338396 at *26.
Believing that I needed more information to decide whether further action
was warranted to address these four concerns, I issued in each of the Nimitz,
Mellaconic, and Lamplight cases on November 10, 2022 a memorandum order
requiring the plaintiffs in those cases to produce certain records (the November 10
Memorandum Order). Nimitz Techs. LLC. CNET Media, Inc., No. 21-1247,
D.I. 27; Nimitz Techs. LLC v. BuzzFeed, Inc., No. 21-1362, D.I. 21; Nimitz Techs.
LLC v. Imagine Learning, Inc., No. 21-1855, D.I. 22; Nimitz Techs. LLC v.
Bloomberg L.P., No. 22-413, D.I. 18; Me/laconic IP LLC v. TimeClock Plus, LLC,

No. 22-244, D.I. 22; Me/laconic IP LLC v. Deputy, Inc., No. 22-541, D.I. 15;
5

Lamplight Licensing LLC v. ABB Inc., No. 22-418, D.I. 24; Lamplight Licensing
LLC v. Ingram Micro, Inc., No. 22-1017, D.I. 17.
On that same day, I convened the second evidentiary hearing. This hearing
addressed specifically cases filed by Backertop LLC, and for the reasons detailed
in Backertop I, the evidence adduced at the hearing only heightened the concerns I
discussed in Nimitz I. I told counsel during the hearing that I would be issuing an
order along the lines of the November 10 Memorandum Order to require
Backertop to produce certain relevant documents.
Before I was able to issue that order, Nimitz filed in the Federal Circuit on
November 16, 2022 a petition for a writ of mandamus to reverse the November 10
Memorandum Order. In re Nimitz Techs. LLC, No. 23-103, D.I. 2 at 3 (Fed. Cir.
Nov. 16, 2022). On November 17, 2022, the Federal Circuit stayed the November
10 Memorandum Order "pending further action of'' that court. No. 23-103,
D.I. 5 at 2 (Fed. Cir. Nov. 17, 2022).
The next day, Swirlate filed in these cases a motion "to stay any and all
Orders and/or further proceedings in the above-captioned cases, including staying
I

the evidentiary hearing scheduled for December 6, 2022, until such time as the
Federal Circuit terminates the stay in connection with the Nimitz Petition." D.I. 29
at 1. I granted the motion. See December 1, 2022 Oral Order.
6

Swirlate also filed its own petition for a writ of mandamus with the Federal
Circuit. In re Swirlate IP LLC, No. 23-107, D.I. 2 (Fed. Cir. Nov. 30, 2022).
Swirlate sought by its petition an order directing me to dismiss the December 6,
2022 evidentiary hearings I had convened in these cases. On December 2, 2022,
the Federal Circuit denied Swirlate's petition. Id., D.I. 4.
On December 8, 2022, the Federal Circuit denied Nimitz's petition and lifted
the stay in the Nimitz actions. In re Nimitz Techs. LLC, 2022 WL 17494845, at *3
(Fed. Cir. Dec. 8, 2022). In doing so, the Court held that the four concerns I had
identified as the basis for the November 10 Memorandum Order
[a] 11 ... relate[] to potential legal issues in the case,
subject to the "principle of party presentation," United
States v. Sineneng-Smith, 140 S. Ct. 1575, 1579 (2020)
(discussing the principle and its limits), or to aspects of
proper practice before the court, over which district
courts have a range of authority preserved by the Federal
Rules of Civil Procedure, see Fed. R. Civ. P. 83(b);
Chambers v. NASCO, Inc., 501 U.S. 32 (1991). The
district court did not seek information simply in order to
serve an interest in public awareness, independent of the
adjudicatory and court-functioning interests reflected in
the stated concerns.

Id. at *2.
Nimitz thereafter filed a combined petition for panel rehearing and rehearing
en bane in the Federal Circuit. No. 23-103, D.I. 55 (Fed. Cir. Dec. 28, 2022). On
January 31, 2023, the Federal Circuit denied that petition. No. 23-103, D.I. 58 at 2
7

(Fed. Cir. Jan. 31, 2023). On February 3, Nimitz filed a motion asking the Federal
Circuit "to stay issuing the mandate ... pending the filing of a petition for
mandamus and/or writ of certiorari in the United States Supreme Court." No. 23103, D.I. 61 at 1 (Fed. Cir. Feb. 3, 2023). On February 7, the Federal Circuit
issued a written order denying Nimitz's motion to stay the issuance of the mandate.
No. 23-103, D.I. 62 at 2 (Fed. Cir. Feb. 7, 2023).
On February 17, 2023, Mellaconic filed a motion to set aside the
November 10 Memorandum Order. Civ. No. 22-244, D.I. 26. On March 2, 2023,
Lamplight filed a motion to set aside the November 10 Memorandum Order.
Civ. No. 22-418, D.I. 31. I denied Mellaconic's and Lamplight's motions
respectively on May 3, 2023 and May 22, 2023.
Nimitz, Mellaconic, and Lamplight eventually produced documents in
response to the November 10 Memorandum Order. My review of those documents
and my return to these Swirlate cases, however, was delayed by events transpiring
in the Backertop cases.
II.
In March 2023, soon after the Federal Circuit denied the mandamus petition
challenging the November 10 Memorandum Order, I issued in each of the
Backertop cases a document production order requiring Backertop to produce the
8

same categories of records that I ordered Nimitz, Mellaconic, and Lamplight to
produce in the November 10 Memorandum Order. Civ. No. 22-572, D.I. 25. On
April 3, 2023, Backertop filed a motion to set aside that document production
order. Civ. No. 22-572, D.I. 25. Backertop also filed a motion to stay compliance
with the document production order pending the resolution of its motion to set the
document production order aside. Civ. No. 22-572, D.I. 30.
While those motions were pending, both ofBackertop's attorneys requested
leave to withdraw as counsel. Civ. No. 22-572, D.I. 29; D.I. 31. One of
Backertop' s attorneys, Jimmy Chong, filed a formal motion to withdraw on April
25, 2023 and stated that he was "unable to effectively communicate with [his]
Client in a manner consistent with good attorney-client relations." Civ. No. 22572, D.I. 29. Backertop's other attorney of record, Ronald Bums, emailed his
motion to withdraw to the Court's clerk's office. Civ. No. 22-572, D.I. 31. Id. In
the email, Mr. Bums stated that he was "sending [the clerk's office] [his] Local
Rule 83. 7 Withdrawals for filing, due to the fact that [he could not] get a response
from [Mr. Chong]." Id. (Under Local Rule 83.5, Mr. Bums could not file and the
Court would not docket these documents because Mr. Bums is not Delaware
counsel.)

9

On May 1, 2023, I issued a memorandum opinion and order denying both
Backertop' s motion to stay compliance with the March 2023 document production
order and its motion to set aside that order. Civ. No. 22-572, D.I. 32; D.I. 33. I
also ordered Mr. Chong, Mr. Bums, and Backertop's sole owner and managing
member Lori LaPray to appear in person at a hearing on June 8, 2023 "to sort
through th[e] morass." Civ. No. 22-572, D.I. 32 at 17.
On May 9, 2024, Backertop finally produced records in response to the
March 2023 document production order. Civ. No. 22-572, D.I. 36. On that same
day, Backertop filed a notice of unavailability and an accompanying declaration
from Ms. LaPray. Civ. No. 22-572, D.I. 35. Ms. LaPray stated in the declaration
that she was "unavailable to attend the June 8, 2023 hearing in-person" and was
"unavailable to travel to Delaware for the foreseeable future." Id. at 2. Backertop
asked that I allow Ms. LaPray to appear telephonically at the June 8, 2023 hearing.
Civ. No. 22-572, D.I. 35.
On May 31, 2023, I denied the request for Ms. LaPray to appear
telephonically because credibility assessments are difficult to make over the phone,
and I set a new hearing for July 20, 2023. Civ. No. 22-572, D.I. 37 at 6. I also
gave Ms. LaPray the option to "submit to the Court no later than June 7, 2023
affidavits and supporting documentation" in the event that "a hearing on that date
10

present[ed] exceptional difficulties" for her. Id. On June 7, 2023, Backertop filed
a motion for reconsideration with respect to my May 31, 2023 order, arguing for
the first time that I lacked the authority to compel Ms. LaPray' s appearance under
Federal Rule of Civil Procedure 45. Civ. No. 22-572, D.I. 40. On July 10, 2023, I
denied Backertop's motion for reconsideration. Civ. No. 22-572, D.I. 45; D.I. 46.
On July 12, 2023, Backertop filed a document it called a "Notice of
Objection to and Non-participation in Judicial Inquisition." Civ. No. 22-572,
D.I. 48. On July 20, 2023, I went forward with the scheduled hearing. Civ. No. 22572, D.I. 53. When Ms. LaPray did not appear, I set a hearing for August 1, 2023
to give Backertop and Ms. LaPray "the opportunity to show cause for why Ms.
LaPray should not be held in civil contempt for failing to comply with the Court's
May 31, 2023 Memorandum Order and July 10, 2023 Order." Civ No. 22-572,
D.I. 52.
On July, 28, 2023, Backertop filed a motion to dismiss the contempt
proceeding. Civ No. 22-572, D.I. 54. Its principal argument in support of its
motion was that I lacked the authority to pursue the contempt proceeding because
"Backertop [had] voluntarily dismissed its complaints in September 2022, and
Backertop and the Defendants [had] filed joint stipulations of dismissal in April
2023 and June 2023." Civ. No. 22-572, D.I. 54 at 4. I had already rejected this
11

argument in Backertop I. Accordingly, I went forward with the August 1, 2023
show-cause hearing. Ms. LaPray again refused to appear at that hearing. Civ No.
22-572, D.I. 55. And on August 21, 2023, I issued a memorandum opinion in
which I denied Backertop' s motion to dismiss the contempt proceeding and found
Ms. LaPray in civil contempt of court. Civ No. 22-572, D.I. 56 at 20. I imposed a
sanction in the form of a $200 per day fine for each day the court was open and
Ms. LaPray failed to appear. Civ No. 22-572, D.I. 57 at 2.
Between August 23, 2023 and August 31, 2023, Backertop filed appeals
with the Federal Circuit challenging my August 21, 2023 order holding Ms.
LaPray in contempt and my May 31, 2023 order denying Ms. LaPray's request to
appear telephonically.
III.
While Backertop' s appeals were pending, I turned my attention back to the
Nimitz, Mellaconic, and Lamplight document productions. I concluded my review
of those documents in November 2023 and published my findings in Nimitz II. As
I explained in Nimitz II, although it was apparent from the documents produced by
Nimitz, Mellaconic, and Lamplight that the productions were incomplete, the
documents that were produced and the evidence adduced at the November 4, 2022
and November 10, 2022 hearings made clear, among other things, that:
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• real parties in interest in the patents asserted in the Nimitz,
Mellaconic, and Lamplight cases-including a foreign governmentwere not disclosed to the United States Patent & Trademark Office,
the defendants sued by those LLCs, and the Court;
• the de facto owner of the patents asserted by the Nimitz, Mellaconic,
and Lamplight LLCs was IP Edge;
• IP Edge had formed the LLCs under the names of relatively
unsophisticated individuals and arranged for the patents to be assigned
to the LLCs;
• the LLCs were empty vessels with no assets until IP Edge arranged
for the assignment of the patents to those LLCs;
• counsel of record for the LLCs were in reality serving the interests of
IP Edge and Mavexar, not the interests of their purported LLC clients;
and
• counsel of record had filed and settled lawsuits in the name of these
LLCs without ever having spoken with, let alone obtained the
informed consent of, the sole owner and member of each of the LLCs.
Based on these and other findings set forth in Nimitz II, I referred the attorneys of
record for Nimitz, Mellaconic, and Lamplight to the disciplinary counsel of their
13

respective bars, certain in-house attorneys associated with IP Edge and Mavexar to
the Texas Supreme Court's Unauthorized Practice of Law Committee, and the
matters in general to the United States Department of Justice and the PTO for
further investigation.
I issued Nimitz II on November 27, 2023. In December, I turned my
attention back to these Swirlate cases.
IV.
Because these cases had been stayed in November 2022 at Swirlate's request
pending the Federal Circuit's consideration of Nimitz's mandamus petition, I had
neither convened the scheduled December 6, 2022 evidentiary hearing nor ordered
Swirlate to produce records by the time I issued Nimitz II. I had reason to believe
that many if not all the findings set forth in Nimitz II would apply with respect to
Swirlate and its counsel. In Nimitz II, I had referred Swirlate's counsel Mr. Chong
to the Delaware State Bar for his failure to comply with the Model Rules as
counsel of record for Mellaconic and Lamplight. See 2023 WL 8187441 at *2833. Swirlate's Amended Rule 7.1 Disclosure Statement indicates that Swirlate is a
Texas LLC with a single owner and managing member. D.I. 16. And the April 27,
2020 patent assignment filed with the PTO that purports to transfer ownership of

14

the patents asserted in these cases to Swirlate lists "[e-mail]" as the
correspondence email address. 3
Accordingly, on December 28, 2023, I ordered counsel for SwirlateMessrs. Chong and Bennett-to appear before me at a hearing on January 17,
2024. Civ. No. 22-235, D.I. 30. In light of the fact that the Federal Circuit was
addressing in the then-pending Backertop appeals the issue of whether I had the
inherent authority to compel Backertop's sole owner and member to attend a court
proceeding, I did not order Swirlate's sole owner and member, Dina Gamez, to
appear at the January 17 hearing, and I limited the focus of my inquiry at that time
to whether Messrs. Chong and Bennett had complied with the Model Rules of
Professional Conduct.
At the January 17, 2024 hearing, I had the following exchange with Mr.
Bennett:
THE COURT: Okay. Well, as I explained in the
[Nimitz II] opinion, and I alluded to earlier this afternoon,
I made those referrals [of counsel of Nimitz, Mellaconic,
and Lamplight to their respective bar disciplinary
counsel] because it appears very clear that the counsel in
those cases took action and specifically filed lawsuits and
settled lawsuits on behalf of their client without having
3

U.S. PATENT AND TRADEMARK OFFICE, ELECTRONIC PATENT ASSIGNMENT
SYSTEM ID: PAT6080442 (April 27, 2020), https://legacyassignments.uspto.gov/assignments/assignment-pat-52506-513 .pdf
[https://perma.cc/CR99-3 72P].
15

any direct communication at any point prior to the
settlements or filing of the lawsuits with the client. And
instead, just communicating through Mavexar or IP
Edge.
And what I'm trying to ascertain in your cases, because
you filed a number of cases in this court, including these
cases on behalf of Swirlate, is whether or not you also
engaged in that type of conduct. In other words, you did
not at any point obtain from the client the informed
consent of the client to file the lawsuits and to settle the
lawsuits.
MR. BENNETT: Respectfully, no, Your Honor. I did
receive informed consent from the client.
THE COURT: Okay. So let's talk about - and the client
is Swirlate; is that right?
MR. BENNETT: Swirlate IP LLC.
THE COURT: And is it true that Dina Gamez is the sole
owner and managing partner of Swirlate IP LLC?
MR. BENNETT: Yes.
THE COURT: Did you speak with Ms. Gamez before
you filed these lawsuits?
MR. BENNETT: I don't specifically recall any
conversation, but I don't- this was several years ago. I
don't specifically recall one way or the other.
THE COURT: Did you have any e-mails with Ms.
Gamez to get her permission to file on behalf of Swirlate
IP LLC lawsuits in this Court?

16

MR. BENNETT: I received the agreement, or my
engagement agreement, which gave me authority, signed
by Ms. Gamez. I don't specifically remember where that
e-mail came from. It would have included, definitely,
their agents at Mavexar. But other than that, I don't
recall specifically who may have been included in any email chain.
THE COURT: All right. Did you -- what I'm really just
trying to get to the nub, as opposed to having you
produce documents, as I required in the other cases, is
whether or not you relied exclusively on communications
with Mavexar to take actions in these cases on behalf of
Swirlate.
MR. BENNETT: No. I did not rely exclusively on
Mavexar.
THE COURT: How did you obtain Ms. Gamez's
informed consent to take directions from Mavexar?
MR. BENNETT: I would have received them through
Mavexar.
THE COURT: So you never communicated directly with
Ms. Gamez in the first instance to obtain her informed
consent to have Mavexar communicate with you as her
agent, or as Swirlate's agent, I should say?
MR. BENNETT: I'd have to look back at the
engagement agreement. I don't specifically recall.
THE COURT: All right. So what I'm going to do, then,
since you don't recall, I'm going to have you have to
produce that documentation so I can ascertain whether, in
fact, you comported with the rules of ethics to obtain the
informed consent of a client before filing these lawsuits.
17

D.I. 31 at 19:22-22:9.
Six days later, on January 23, 2024, I issued a memorandum order (the
January Memorandum Order) that directed Swirlate to produce three categories of
documents no later than February 22, 2024. The three categories of documents
were identical to three of the five categories of documents covered by the
November 10 Memorandum Order upheld by the Federal Circuit when it denied
Nimitz's mandamus petition. (I had not included the other two categories in the
January Memorandum Order because they did not relate directly to counsel's
conduct, and my focus at that time was limited to whether Mr. Bennett had
complied with the Model Rules.)
On February 13, 2024, Swirlate filed what it called a Motion for
Clarification and/or Modification of Court's January 23, 2024 [Memorandum]
Order and Request for Extension. D.I. 33. Swirlate asked for three forms of relief
in its motion. First, it requested that I "narrow the scope of the [memorandum]
order." D.I. 33 at 7 (capitalization removed). In support of this request, Swirlate
argued:
The portion of the [January Memorandum] Order
requiring production of communications and
correspondence related to "U.S. Patent Nos. 7, 154,961
and 7,567,622" could be interpreted to include
production of communications for cases beyond the two
cases at issue here and would include production of
18

documents for cases filed, pending, and dismissed before
these cases were filed and cases outside of this District
and the Third Circuit.
In addition, Mr. Bennett, whose compliance with the
ABA Model Rules was the sole focus of the Hearing, was
not involved in the "formation of Swirlate IP LLC,"
"assets, including, owned by Swirlate IP LLC," or "[t]he
potential acquisition of assets, including patents, by
Swirlate IP LLC." These documents would be irrelevant
to whether Mr. Bennett complied with the ABA Model
Rules. Because the sole issue raised by the Court during
the Hearing was directed to Mr. Bennett's compliance
with the ABA Model Rules when filing and dismissing
these two cases, Plaintiff respectfully seeks a
modification of the Order to strike paragraphs 2( a-e) and
3(a-e) of the Order.
D.I. 33 at 7-8 (footnote omitted).
Second, Swirlate requested that
[i]n the alternative, in the event Plaintiff opts to, or
otherwise is compelled by the Court to, produce the
documents described in the [January Memorandum]
Order, Plaintiff respectfully requests the opportunity
( 1) to submit under seal for in camera review responsive
documents that are protected by the attorney-client
privilege and/or work product immunity; (2) to submit
under seal for in camera review responsive documents
that are confidential to Plaintiff; and (3) to seek reargument, or a stay pending appeal, of any determination
by the Court that such documents are not so protected by
the attorney-client privilege and/or work product
immunity.

19

D.I. 33 at 8. Third, Swirlate requested that "[i]n the event Plaintiff opts to, or
otherwise is compelled by the Court to, produce the documents described in the
[January Memorandum] Order, Plaintiff respectfully requests an additional three
weeks, to March 14, 2024, to produce such documents." D.I. 33 at 10.
I granted in part and denied in part Swirlate' s motion and issued a new
document production order on February 15, 2024 (the February Document
Production Order). With respect to Swirlate's first request, I agreed to drop the
requirement that Swirlate produce documents related to "[t]he formation of
Swirlate IP LLC," "[a]ssets, including, owned by Swirlate IP LLC," or "[t]he
potential acquisition of assets, including patents, by Swirlate IP LLC." Compare
D.I. 32, with D.I. 34. I also agreed to limit the production of documents regarding
"U.S. Patent Nos. 7,154,961 and 7,567,622" to documents regarding "U.S. Patent
Nos. 7,154,961 and 7,567,622 as they relate to these cases." D.l. 34 at 2, 4.
(emphasis added). I denied the request insofar as it sought to relieve Swirlate of its
obligation to produce documents related to "[t]he nature, scope, and likelihood of
any liability, including but not limited to attorney fees, expenses, and litigation
costs, Swirlate IP LLC could incur as a result of its acquisition of and/or assertion
in litigation of any patent."

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With respect to Swirlate' s second request, I added the following language in
the February Document Production Order:
Swirlate is granted leave to submit under seal responsive
documents that it has good cause to believe should be
submitted under seal. For any document submitted under
seal, Swirlate should identify with specificity in a cover
letter the reasons that Swirlate has submitted the
document under seal. Swirlate shall also cite case law to
support its position, that any particular document should
be maintained under seal.
D.I. 34 at 4. And finally, I granted Swirlate's request to have until March 14, 2024
to produce the documents covered by the February Document Production Order.
On March 14, Swirlate produced to my chambers under seal 710 pages of
documents covered by the February Document Production Order. Notwithstanding
the fact that Swirlate had expressly requested leave "to submit under seal for in

camera review responsive documents that are protected by the attorney-client
privilege and/or work product immunity" and I had expressly ruled in response to
that request that Swirlate was granted leave to submit under seal documents that it
had good cause to believe should be submitted under seal, many of the documents
are redacted, in some cases in their entirety.
In a cover letter for the production, Swirlate stated:
To the extent the Court's Order seeks documents
protected by the attorney-client privilege and/or work
product immunity, the Court essentially seeks to compel
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Mr. Bennett to violate his duties to his client (before
making a decision whether to refer Mr. Bennett to
disciplinary counsel). Here, Swirlate is not waiving
attorney-client privilege and work product immunity of
its documents. Submitted herewith is a Declaration of
Dina Gamez, Swirlate IP LLC's owner and managing
member, stating that Swirlate's privilege and work
product immunity are not being waived, and that
Swirlate 's agents and attorneys are instructed to maintain
the privilege and work product of Swirlate's documents.
Documents that contain attorney-client privilege and/or
work product are therefore being withheld or redacted to
remove attorney-client privilege and/or work product,
and all withheld or redacted documents will be identified
on the concurrently submitted privilege log.
D.I. 36 at 2 (footnote omitted).
It is axiomatic that the compelled disclosure of privileged material by a court
does not constitute a waiver of the privilege. See Bowen v. Parking Auth. ofCity of

Camden, 2002 WL 1754493, at *4 (D.N.J. July 30, 2002) ("a production of
documents ordered by a court does not constitute a waiver of attorney-client
privilege because such production was not 'voluntary"'). See also Gov 't

Guarantee Fund ofRepublic ofFinland v. Hyatt Corp., 182 F.R.D. 182, 187
(D.V.I. 1998) ("The attorney client privilege is not destroyed by disclosure of
protected information to an outside party which is done only under the compulsion
of a court order."); Cobell v. Norton, 213 F.R.D. 69, 75 (D.D.C. 2003) ("This
Court is [] unaware of any case in which the submission of privileged material for
22

in camera review has been deemed to constitute a waiver of the asserted privilege.
It would thus be illogical to find that a closely analogous situation-namely, the
submission of privileged documents to a judicial officer acting pursuant to the
authority vested in him by court order-resulted in a waiver of privilege."). And
so, when I first read Swirlate's letter-especially in light of Swirlate's express
request for leave to submit privileged materials under seal and my granting of that
request-I was concerned that Swirlate and Mr. Bennett were simply flouting the
February Document Production Order. But it also occurred to me that perhaps Mr.
Bennett believed that Swirlate could avoid waiving the attorney-client privilege
and/or work product immunity for produced documents only if it produced those
documents in response to another compulsion order issued after Swirlate had
asserted the privilege and work product immunity with respect to those specific
documents. In any event, before I decided what to do in response to Swirlate's
submission, I learned that the Federal Circuit had scheduled oral argument in the
Backertop appeals for early April and, because of the potential overlap of issues
between the Backertop cases and these cases, I elected to wait until the Federal
Circuit issued its decision in the Backertop appeals before taking further action in
these cases.

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V.
On July 16, 2024, the Federal Circuit issued its opinion in the Backertop
appeals. The opinion reads in relevant part:
We hold that the District Court's order requiring Ms.
LaPray to appear at an in-person hearing falls squarely
within its inherent powers.
****
Turning to the District Court's contempt order,
Appellants focus on an alleged conflict between the
District Court's order to appear and FRCP 45. Backertop
and Ms. LaPray do not argue that the District Court's
order to appear was otherwise unreasonable or an abuse
of discretion. Nor could they. The District Court's order
was a reasonable response to the problems and needs
confronting the court's fair administration of justice.
The District Court's order to compel Ms. LaPray's
attendance was an appropriate means to investigate
potential misconduct involving Backertop, a corporate
party of which she is the sole representative. More
specifically, the District Court's stated concerns include
that Backertop may have concealed certain third-party
funding and the real parties in interest, that those real
parties in interest may have perpetrated a fraud on the
court, and that Backertop' s counsel may have failed to
comply with the Rules of Professional Conduct.
Backertop' s counsel's motions to withdraw and
Backertop' s insufficient document production only
compounded the District Court's concerns. In light of
this, compelling Ms. LaPray' s attendance was not an
abuse of discretion of the District Court's inherent
authority. The District Court stated that Ms. LaPray' s
attendance in person was required to assess her
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credibility given ( 1) the representations and positions of
counsel and Ms. LaPray and their apparent lack of
communication, especially in light of counsels' motion to
withdraw; and (2) the District Court's questions for Ms.
LaPray about [Backertop's document] production. As
the Third Circuit recognizes, it is particularly important
to observe witnesses in person when making credibility
determinations. While another district court may have
found that a telephonic or videoconference hearing was
sufficient, it was reasonable for the District Court here to
require in-person testimony in furtherance of its authority
to investigate attorney and party misconduct.
****
Because the District Court was within its inherent
authority to order Ms. LaPray to appear before it to
investigate fraud on the court, and the order imposing
monetary sanctions when she did not appear was not an
abuse of discretion, we affirm.
Backertop Licensing LLC v. Canary Connect, Inc., 107 F.4th 1335, 1342-45 (Fed.

Cir. 2024).
Last week, on August 22, 2024, the Federal Circuit issued the mandate in the
Backertop appeals. Civ. No. 22-572, D.I. 64.
* ***

NOW THEREFORE, at Wilmington this Twenty-eighth day of August in
2024, it is HEREBY ORDERED that:

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1. Swirlate shall submit to the Court no later than September 6, 2024 an
unredacted version of the document production it submitted to the Court on
March 14, 2024 and any responsive documents it withheld from that March
14, 2024 production.
2. The Court will convene a hearing in Courtroom 4B on September 18, 2024
at 1:00 p.m. to address its concerns that counsel for Swirlate may have failed
to comply with the Rules of Professional Conduct; that real parties in
interest, such as IP Edge and Mavexar, may have been hidden from the
Court and the defendants; and that Swirlate, its counsel, and those real
parties in interest may have perpetrated a fraud on the Court. Dina Gamez
and David Bennett shall attend the hearing in person.

CFJUDGE

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