Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_16-cv-02026/USCOURTS-azd-2_16-cv-02026-4/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Continental Circuits LLC,

Plaintiff,

v. 

Intel Corporation, et al.,

Defendants.

No. CV16-02026-PHX-DGC

ORDER

Defendants have filed a motion to compel the disclosure of information related to 

litigation funding agreements in this case. The Court held a conference call with the parties 

on December 4, 2019 (Doc. 334), and the issues have now been briefed by the parties 

(Docs. 344, 349, 360). The Court will grant in part and deny in part Defendants’ request.

1

I. Background.

Plaintiff alleges that Defendants’ products infringe several patents Plaintiff owns 

related to manufactured circuit boards. Plaintiff does not manufacture the products 

 

1 The parties have filed joint motions to seal exhibits G, H, K, L, and M to 

Defendants’ briefs (Docs. 340, 362), Plaintiff’s response (Doc. 350), and Defendants’ 

reply brief (Doc. 362). The Court finds that the exhibits, response, and reply contain 

confidential information and testimony regarding the licensing of the patents-in-suit, 

Plaintiff’s finances, and the interested parties in this lawsuit, that would have economic 

value to others and that is not generally known or readily ascertainable by proper means. 

The sealing of these documents will have little effect on the public’s ability to understand 

the issues addressed in this order because lightly redacted copies of all briefs have been 

filed in the public docket. The Court finds good cause to seal and will grant the motions. 

This order will cite to publicly filed briefs and exhibits where possible, and will state when 

it is citing to a sealed document.

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addressed in its patents or license its patents to others. Plaintiff has no business operations

other than owning the patents and asserting claims for their infringement. 

Defendants’ motion seeks production of what Defendants describe as “three 

narrowly-tailored categories of documents and information relating to [Plaintiff’s] thirdparty litigation funding” – (1) any final litigation funding agreements between Plaintiff and 

any third-party funders; (2) the identities of all persons or entities (other than counsel) with 

a fiscal interest in the outcome of the litigation; and (3) the identities of any potential 

litigation funders who declined to provide funding after being approached by Plaintiff or 

its founder, Peter Trzyna. Doc. 344 at 2.2 The Court will confine its analysis to these three 

requests. The first request seeks the production of specific documents – litigation funding 

agreements. The second and third requests seek information rather than documents. 

Plaintiff resists disclosure on the basis of the work product doctrine. Plaintiff does not 

argue that the discovery is barred by the attorney-client privilege. Because the work 

product doctrine applies differently to documents than to intangible information, the Court 

will address the first request separately from the second and third requests. Before doing 

so, however, the Court will address the parties’ relevancy arguments.

II. Relevancy.

A party may obtain discovery regarding any nonprivileged matter that is relevant to 

any claim or defense and proportional to the needs of the case. Fed. R. Civ. P. 26(b)(1). 

Relevant information need not be admissible at trial to be discoverable. Id.

Plaintiff contends that the requested documents and information are not relevant to 

any claim or defense in this case. Defendants disagree, arguing that the documents and 

information are relevant to refute any David vs. Goliath narrative at trial, to evaluate the 

value of the patents at issue and any damages claimed by Plaintiff, to address bias and 

prejudice of witnesses who may appear a trial, and to identify any jurors who may have a 

relationship with a litigation funder. Doc. 344 at 4-6.

 

2 Citations in this order are to page numbers placed at the top of each page by the 

Court’s electronic filing system, not to original page numbers at the bottom of each page.

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Relevancy in civil litigation is a relatively low bar. Under Rule 401 of the Federal 

Rules of Evidence, information having “any tendency” to make a fact in dispute “more or 

less probable” is relevant. Fed. R. Evid. 401. And courts “generally recognize that 

relevancy for purposes of discovery is broader than relevancy for purposes of trial.” In re 

Bard IVC Filters Prod. Liab. Litig., 317 F.R.D. 562, 566 (D. Ariz. 2016). 

With the exception of Defendants’ third request, the Court has little difficulty 

concluding that the requested documents and information are relevant. They concern 

Plaintiff’s financial resources and could be used to refute any David vs. Goliath narrative 

at trial. Plaintiff claims that any such narrative is speculative, but Defendants are entitled 

to conduct discovery that may refute potential trial themes, and Defendants note that at 

least some evidence suggests that such a narrative will be asserted in this case. Doc. 363 

at 8 (sealed document). 

Plaintiff argues that the information and documents are not relevant to the value of 

the patents because Defendants can conduct factual discovery concerning the patents and 

Plaintiff will produce expert evidence on damages. Doc. 349 at 6. But the fact that some 

information bears on the value of the patents does not render irrelevant other information 

that could shed additional light on their value. Litigation funding agreements in a case 

such as this likely contain financial information related to the value of the litigation, and 

therefore to the value of the allegedly infringed patents, that will not be included in, or may 

contradict, the expert’s report.

And to the extent persons affiliated with Plaintiff may receive substantial 

compensation through the litigation, that fact bears on their credibility. The identity of 

litigation funders who have a stake in the litigation will also help identify jurors, if any, 

who have a relationship with such funders. 

Of course, the fact that information is relevant for purposes of discovery does not 

eliminate work product protection. Most information covered by the work product doctrine 

is relevant — often highly relevant — but it is protected nonetheless. Nor does the 

relevancy of the information mean that it will be admissible at trial. Admissibility will be 

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addressed later in this litigation. For purposes of this motion, however, the Court does not 

accept Plaintiff’s argument that Defendants’ first and second requests are irrelevant.

The Court reaches a different conclusion on Defendants’ third request for the 

identities of any potential litigation funders who declined to provide funding after being 

approached by Plaintiff or its founder, Peter Trzyna. The identifies of such persons or 

entities, if they exist, have nothing to do with the actual financial interests or resources in 

this litigation, the potential bias of witnesses, or possible disqualification of jurors. 

Defendants might contend that communications with these persons or entities could bear 

on the value of the patents, but such an assertion is entirely speculative. The Court agrees

that “potential litigation funding is a side issue at best.” Space Data Corp. v. Google LLC, 

No. 16-CV-03260 BLF (NC), 2018 WL 3054797, at *1 (N.D. Cal. June 11, 2018)

(emphasis in original). The Court concludes that the information sought in Defendants’ 

third request is not relevant and not discoverable under Rule 26. The Court will not address 

the third request further, and will turn to the parties’ work product arguments with respect 

to the first and second requests.

III. First Request – Production of Litigation Funding Agreements.

Under the work product doctrine codified in Rule 26 of the Federal Rules of Civil 

Procedure, Defendants generally may not obtain discovery of “documents and tangible 

things that are prepared in anticipation of litigation or for trial by and for another party or 

its representative (including the other party’s attorney, consultant, surety, indemnitor, 

insurer, or agent).” Fed. R. Civ. P. 26(b)(3)(A). This protection may be overcome, 

however, if Defendants show that they have a “substantial need for the materials” and 

cannot “obtain their substantial equivalent by other means.” Id. Even if Defendants make 

this showing, they cannot obtain core work product — information revealing “the mental 

impressions, conclusions, opinions, or legal theories of a party’s attorney or other 

representative concerning the litigation.” Fed. R. Civ. P. 26(b)(3)(B).

/ / /

/ / /

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A. Are the Funding Agreements Work Product?

Plaintiffs have submitted several litigation-funding-related agreements to the Court

for in camera review. The Court has reviewed each of the agreements. The Court does 

not consider the fact that the agreements exist to be protected information under the work 

product doctrine. That fact constitutes intangible information that does not reveal the 

mental impressions or strategies of the attorneys, as discussed more fully in part IV of this 

order.

Defendants initially argued that funding agreements do not qualify for work product 

protection because they were not created “for use” in litigation. Doc. 344 at 8. Defendants 

now agree, however, that the Ninth Circuit has adopted the broader “because of” standard. 

Doc. 360 at 2. As the Ninth Circuit explained:

[W]e join a growing number of our sister circuits in employing the 

formulation of the “because of” standard articulated in the Wright & Miller 

Federal Practice treatise. This formulation states that a document should be 

deemed prepared “in anticipation of litigation” and thus eligible for work 

product protection under Rule 26(b)(3) if “in light of the nature of the 

document and the factual situation in the particular case, the document can 

be fairly said to have been prepared or obtained because of the prospect of 

litigation.”

In re Grand Jury Subpoena (Mark Torf/Torf Envtl. Mgmt.), 357 F.3d 900, 907 (9th Cir. 

2004) (quoting Charles Alan Wright, Arthur R. Miller, and Richard L. Marcus, 8 Federal 

Practice & Procedure § 2024 (2d ed. 1994)).

Litigation funding agreements are created “because of” the litigation they will fund. 

Defendants argue, however, that the agreements in this case were not created solely 

because of this litigation. They note that Plaintiff is a non-functioning entity that has no 

business other than filing lawsuits against alleged infringers of its patents – and no other 

source of revenue – and argue that the funding agreements were therefore “created for the 

independent purpose of providing Continental Circuits with funding to conduct its business 

and ease costs that would otherwise fall on [its founder].” Doc. 360 at 2. Although not 

entirely clear, Defendants appear to contend that work product protection does not apply 

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because of this second purpose. But even if Defendants are correct that the funding 

agreements have an additional business-support purpose, this does not defeat work product 

protection.

The Ninth Circuit has identified the work product analysis to be applied to “dual 

purpose” documents:

The “because of” standard does not consider whether litigation was a 

primary or secondary motive behind the creation of a document. Rather, it 

considers the totality of the circumstances and affords protection when it can 

fairly be said that the document was created because of anticipated litigation, 

and would not have been created in substantially similar form but for the 

prospect of that litigation[.]

In re Grand Jury Subpoena, 357 F.3d at 908. “When there is a true independent purpose 

for creating a document, work product protection is less likely, but when two purposes are 

profoundly interconnected, the analysis is more complicated.” Id.

Considering the totality of the circumstances, the Court concludes that any businesssustaining purpose of the litigation funding agreements in this case is “profoundly 

interconnected” with the purpose of funding the litigation. This litigation is the essential 

activity of Plaintiff’s business, and the funding agreements reviewed by the Court concern 

the funding of this lawsuit. Even if some of the funds obtained through the agreements 

will be used to sustain Plaintiff and its operation, the Court cannot separate that purpose 

from this lawsuit, which is the very object of the operation. Applying the Ninth Circuit’s 

standard for dual purpose agreements, the Court finds that the agreements in this case 

would not have been “created in substantially similar form but for the prospect of [the]

litigation[.]” Id (citation omitted). The agreements therefore satisfy the “because of” test 

and constitute work product. This conclusion comports with decisions of several other 

courts. See Odyssey Wireless, Inc. v. Samsung Elecs. Co., Ltd., 3:15-cv-01738-H (RBB), 

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2016 WL 7665898, at * 5 (S.D. Cal. Sept. 20, 2016) (collecting cases according work 

product protection to litigation funding agreements).3 

B. Waiver.

Defendants argue that Plaintiff has waived the work product protection by sharing 

the funding agreements with the litigation funders and by failing to include the agreements 

in its privilege log. The Court does not agree.

Work product protection is not waived merely because work product is shared with 

another person or entity. As courts have explained:

“The work product privilege is very different from the attorney-client 

privilege. The attorney-client privilege exists to protect confidential 

communications and to protect the attorney-client relationship and is waived 

by disclosure of confidential communications to third parties. The work 

product privilege, however, does not exist to protect a confidential 

relationship but to promote the adversary system by safeguarding the fruits of 

an attorney’s trial preparations from the discovery attempts of an opponent.”

Bickler v. Senior Lifestyle Corp., 266 F.R.D. 379, 383-84 (D. Ariz. 2010) (quoting 

Shields v. Sturm, Ruger & Co., 864 F.2d 379, 382 (5th Cir. 1989)).

Because the work product doctrine protects against disclosure to potential 

adversaries and not the world in general, courts have recognized that work product 

protection may be lost when a disclosure substantially increases the opportunity for 

potential adversaries to obtain the information. Bickler, 266 F.R.D. at 384. After 

identifying this standard for the parties, the Court asked Defendants to explain what 

disclosure Plaintiff has made that would increase the opportunity for adversaries to obtain 

the funding agreements. Doc. 358. Defendants failed to respond to this question. See 

Doc. 360. 

 

3 Defendants argue that even if work product protection attaches to the litigation 

funding agreements, Plaintiff itself is not alleging those agreements are work product, but 

rather an unidentified third party is making the assertion. This misstates Plaintiff’s 

position. See Doc. 344-1 at 43, 45, 48, 50.

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The Court cannot conclude that disclosure of the litigation funding agreements to 

the litigation funder – a party to the agreements – substantially increased the opportunity 

for Plaintiff’s litigation adversaries to obtain the agreements. The funding agreement 

documents reviewed by the Court include confidentiality provisions with respect to the 

agreements and information related to them. 

Courts also hold that “‘[d]isclosure to [a] person with interest common to that of 

attorney or client is not inconsistent with intent to invoke the work product doctrine’s 

protection and would not amount to waiver.’” Cal. Sportfishing Prot. Alliance v. Chico 

Scrap Metal, Inc., 299 F.R.D. 638, 645 (E.D. Cal. 2014) (quoting In re Doe, 662 F.2d 1073, 

1081 (4th Cir. 1981)). “In the context of work product, common interest is more broadly 

construed to include disclosure to third parties.” Odyssey, 2016 WL 7665898, at *6 

(citation omitted). Documents reviewed in camera by the Court recognize a common 

interest between Plaintiff and the funder.

Consistent with this conclusion, several courts have held that work product 

protection for litigation funding documents is not waived when such documents contain 

confidentiality provisions and are disclosed to litigation funders with common interests. 

Id. (finding no waiver of work product protection where disclosure to third parties occurred 

pursuant to confidentiality agreements and an expectation that the information would 

remain confidential); United States v. Ocwen Loan Serv., LLC, No. 4:12-CV-543, 2016 

WL 1031157, at *6 (E.D. Tex. March 15, 2016) (finding attorney work product protection 

not waived by disclosure to a potential litigation funder because the funder has an inherent 

interest in maintaining the confidentiality of potential clients’ information); Mondis Tech., 

Ltd. v. LG Elecs., Inc., 2:07-CV-565-TJW-CE, 2011 WL 1714304, at *3 (E.D. Tex. May 

4, 2011) (“[A]lthough these documents [regarding litigation funding] were disclosed to 

third parties, the disclosures do not create a waiver because they were disclosed subject to 

[nondisclosure] agreements and thus did not substantially increase the likelihood that an 

adversary would come into possession of the materials.”).

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Nor does the Court find that Plaintiff waived work product protection by failing to 

identify the funding agreements in its privilege log. The Ninth Circuit has rejected a per 

se waiver rule when documents are not identified in a privilege log. See Burlington N. & 

Santa Fe Ry. Co. v. U.S. Dist. Court for Dist. of Mont., 408 F.3d 1142, 1149 (9th Cir. 2005). 

Factors to be considered in deciding whether waiver has occurred include the timeliness of 

objections and whether the parties and the Court have enough information to evaluate any 

work product claim. Id. Here, Plaintiff responded to Defendants’ request for production 

of litigation funding agreements by asserting the work product doctrine and stating that any 

such documents were not discoverable. Doc. 344-1 at 20. Plaintiff made a similar 

objection to Defendants’ request for the identities of persons with a financial interest in the 

litigation. Id. at 32. These timely objections and the subsequent conference call and 

briefing have enabled the Court and the parties to address Plaintiff’s assertion of work

product protection. 

The Court finds that work product protection for the funding agreements has not 

been waived. 

C. Substantial Need.

As noted above, the work product protection provided by Rule 26(b)(3) may be 

overcome if Defendants show that they have a “substantial need for the materials” and 

“cannot, without undue hardship, obtain their substantial equivalent by other means.” Fed.

R. Civ. P. 26(b)(3)(A)(ii). Defendants contend that they have a substantial need to discover 

information “such as the identities of the litigation funders, the timing of the investment, 

the amount of money invested, and the potential return on investment,” and that they cannot 

obtain such information elsewhere. Doc. 360 at 6. But Defendants argue only that the 

information is relevant; they never explain why their need for the information is substantial. 

The Advisory Committee Note to Rule 26(b)(3) makes clear that a “special 

showing” must be made to overcome work product protection. Fed. R. Civ. P. 26(b)(3) 

advisory committee’s note to 1970 amendment. That showing requires more than mere 

relevancy. As a well-regarded treatise has noted: “Substantial need for material otherwise 

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protected by the work product doctrine is demonstrated by establishing that the facts 

contained in the requested documents are essential elements of the requesting party’s prima 

facie case.” 6 Moore’s Federal Practice - Civil § 26.70 (2019); see also Nevada v. J-M 

Mfg. Co., 555 F. App’x 782, 785 (10th Cir. 2014) (“A substantial need exists where the 

information sought is essential to the party’s defense, is crucial to the determination of 

whether the defendant could be held liable for the acts alleged, or carries great probative 

value on contested issues.”) (quotation marks and footnotes omitted); Fletcher v. Union 

Pac. R.R. Co., 194 F.R.D. 666, 671 (S.D. Cal. 2000) (citing standard from Moore’s Federal 

Practice).4

Defendants have not shown that obtaining the litigation funding agreements is 

essential to an element of their defense or the preparation of their case. Because they have 

not shown a “substantial need” as required by Rule 26(b)(3)(A)(ii), the Court concludes 

that they are not entitled to production of the agreements.

IV. Second Request – Intangible Work Product.

Although Rule 26(b)(3) applies only to documents and tangible things, the work 

product doctrine established by the Supreme Court in Hickman v. Taylor, 329 U.S. 495 

(1947), is not so limited. As one court has explained:

 

4 At least one court has concluded that the Rule 26 work product protection can be 

overcome by demonstrating “that the materials are relevant to the case, the materials have 

a unique value apart from those already in the movant’s possession, and ‘special 

circumstances’ excuse the movant’s failure to obtain the requested materials itself.” F.T.C. 

v. Boehringer Ingelheim Pharms., Inc., 778 F.3d 142, 155 (D.C. Cir. 2015). To the extent 

this case adopts a mere relevancy standard, the Court concludes that it provides too low a 

threshold for access to work product and misreads the Advisory Committee Note to Rule 

26(b)(3). The note repeatedly states that a party seeking to overcome work product 

protection must make a “special showing,” and instructs that the showing should address 

“the importance of the materials sought to the party seeking them in preparation of his 

case and the difficulty he will have obtaining them by other means[.]” Fed. R. Civ. P. 

26(b)(3) advisory committee’s note to 1970 amendment (emphasis added). The note also 

clearly states that it is following Hickman v. Taylor, 329 U.S. 495 (1947), the Supreme 

Court’s seminal decision on work product, and Hickman states that “[w]here relevant and 

non-privileged facts remain hidden in an attorney's file and where production of those facts 

is essential to the preparation of one’s case, discovery may properly be had.” Id. at 511 

(emphasis added). “Essential to the preparation of one’s case” is more than merely 

relevant.

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The government mistakenly assumes that Rule 26(b)(3) provides an 

exhaustive definition of what constitutes work product. On the contrary, 

Rule 26(b)(3) only partially codifies the work-product doctrine announced in 

Hickman. Rule 26(b)(3) addresses only “documents and tangible things,” 

but Hickman’s definition of work product extends to “intangible” things. 329 

U.S. at 511. Moreover, in Hickman, the Court explained that the attorney’s 

“mental impressions” were protected from discovery, so that he could not be 

forced to “repeat or write out” that information in discovery. Id. at 512-13. 

Thus Hickman provides work-product protection for intangible work product 

independent of Rule 26(b)(3). 

United States v. Deloitte LLP, 610 F.3d 129, 136 (D.C. Cir. 2010); see also In re Cendant 

Corp. Sec. Litig., 343 F.3d 658, 662 (3d Cir. 2003).

As noted in this explanation, the purpose of extending work product protection to 

intangible information is to shield an attorney’s mental impressions from discovery. 

Plaintiff cites no authority suggesting that every unwritten fact collected or developed by 

an attorney in preparation for litigation is protected from discovery. Defendants second 

request – for the identities of all persons or entities (other than counsel) with a fiscal interest 

in the outcome of the litigation – does not seek attorney mental impressions. The Court 

therefore concludes that these facts are not protected from discovery by the work product 

doctrine.5

IT IS ORDERED:

1. Defendants’ motion to compel (Doc. 344) is granted in part and denied in 

part. Plaintiffs shall provide Defendants with the identities of all persons or 

entities (other than counsel) with a fiscal interest in the outcome of this

litigation within five business days of this order.

 

5 As noted early in this order, the Court likewise concludes that the fact of the 

funding agreements’ existence does not disclose attorney mental impressions and therefore 

is not shielded from discovery by the work product protection for intangible information.

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2. The parties’ joint motions to seal (Docs. 340, 350, 362) are granted. The 

Clerk is directed to accept for filing under seal Docs. 341, 351, 363 and 364. The Clerk is 

further directed to maintain the numbering of the sealed documents as currently indicated 

on the docket.

Dated this 27th day of January, 2020.

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