In Haptic, Inc. v. Apple, Inc., No. 24-cv-02296 & 25-mc-80114 (N.D. Cal. June 3, 2025), California District Judge Jacqueline S. Corley denied Apple’s motion to compel discovery into all documents and communications between Haptic and any litigation funders, finding that “Haptic’s logged documents are protected from production by the work-product privilege. And, the privilege was not waived by disclosure as the Funder and potential funders are not Haptic’s adversaries, and Haptic’s disclosure has not ‘substantially increased the opportunities for potential adversaries to obtain the information.’”

Case Discussion and Judge’s Ruling

In this patent infringement lawsuit, Apple moved to compel Haptic to produce all documents related to litigation funding, including communications and agreements with the Funder and other potential funders. Haptic and the Funder jointly sought to quash Apple’s subpoena in federal court in the Southern District of Texas, but Apple moved to transfer the motion to quash to this court which was granted.

The core issues addressed in the ruling were:

Relevance of Litigation Funding Documents: Which documents, if any, were relevant to the claims and defenses in the patent infringement case. Documents reflecting Haptic’s counsel’s and a non-testifying expert’s damages analyses or royalty base calculations shared with the Funder were deemed relevant as they directly informed potential damages calculations, specifically a “reasonable royalty” under 35 U.S.C. § 284, and relate to Georgia-Pacific factors 14 and 15.

Judge Corley stated, “The shared royalty base analyses are relevant to both Georgia-Pacific factors. The analyses Haptic shared with the Funder are the same analyses parties use in determining damages in infringement cases—reasonable royalty bases.” She also found reports analyzing the “validity of the Asserted Patent,” “merits analysis,” or “merits of anticipated litigation” to be relevant. However, she found that Apple failed to demonstrate that 1) Documents relating to two conversations between the Funder and Haptic, one when Haptic reached out to inquire about funding for litigation and the other when the parties signed a Non-Disclosure Agreement (NDA) before discussing the substance of litigation, 2) Communications surrounding the parties’ NDA(s), 3) Communications about the Funder’s ultimate decision to fund litigation and 4) Additional Documents Sought from the Funder were relevant.

Work-Product Privilege: Whether the documents prepared for litigation funding are protected by the work-product doctrine.

Here, Judge Corley ruled: “Haptic makes a prima facie showing that, absent waiver, the documents on its privilege log are protected as attorney-work product. Haptic’s log provides adequate explanations for what each withheld document contains, who created it, who sent it, who received it, and the date of sending…Haptic further provides a supporting declaration from its CEO who attests that Haptic’s attorneys or their agents prepared these documents in anticipation of litigation.”

Waiver of Privilege: Whether sharing these documents with litigation funders waived the work-product privilege.

Considering the common interest doctrine waiver, Judge Corley ruled: “The common interest doctrine does not apply to Haptic’s disclosure to the funders. Prior to sharing confidential communications with any potential litigation funder, Haptic and these entities “entered into nondisclosure and common-interest agreements.” After entering into these agreements, Haptic shared documents prepared by its attorneys with the Funder and potential funders. (Id.) These communications were made before any funder agreed to fund Haptic’s litigation… And because Haptic never reached an agreement with the potential funders, no common legal interest existed between them and Haptic even post-disclosure. As to the Funder, as Haptic and the Funder both attest, their agreement does not grant or vest any present or future interest in the patent to the Funder, so the interest does not apply even to it.”

Regarding the disclosure waiver, Judge Corley ruled: “Haptic has not disclosed attorney work product “to an adversary in litigation” nor has it ‘substantially increased the opportunities for potential adversaries to obtain the information.’…Haptic did not communicate any of the work product without first ‘enter[ing] into nondisclosure and common-interest agreements with the litigation funders.’…Further, Haptic shared these communications in anticipation of litigation between itself and Apple, not itself and the funders. Though Haptic ultimately did not enter into a final funding agreement with potential funders, they were not Haptic’s adversaries and disclosure to them did not increase the opportunity for potential adversaries to obtain the work product. The parties had non-disclosure and common-interest agreements and the communications were shared in furtherance of Haptic’s efforts to sue Apple, not these entities… So, Haptic did not waive the work-product protections over its logged documents by sharing these with the Funder or with potential litigation funders.”

As a result, Judge Corley ruled: “Haptic’s logged documents are protected from production by the work-product privilege. And, the privilege was not waived by disclosure as the Funder and potential funders are not Haptic’s adversaries, and Haptic’s disclosure has not ‘substantially increased the opportunities for potential adversaries to obtain the information.’”

So, what do you think? Do you agree that the privilege was not waived by disclosure to litigation funders? Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of Minerva26, an Affinity partner of eDiscovery Today.

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