Case 1:16-cv-00455-RGA Document 348 Filed 12/21/17 Page 1 of 11 PageID #: 24107
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`C.A. No. 16-453 (RGA)
`
`C.A. No. 16-454 (RGA)
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`C.A. No. 16-455 (RGA)
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`))))))))))
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`))))))))))
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`)))))))))))
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`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`v.
`
`ACTIVISION BLIZZARD, INC.,
`
`Defendant.
`
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`v.
`
`ELECTRONIC ARTS INC.,
`
`Defendant.
`
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`v.
`
`TAKE-TWO INTERACTIVE SOFTWARE,
`INC., ROCKSTAR GAMES, INC., and 2K
`SPORTS, INC.,
`
`Defendants.
`
`PLAINTIFF ACCELERATION BAY LLC’S
`OBJECTIONS TO SPECIAL MASTER ORDER NO. 13
`
`PUBLIC VERSION
`
`

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`Case 1:16-cv-00455-RGA Document 348 Filed 12/21/17 Page 2 of 11 PageID #: 24108
`
`Philip A. Rovner (#3215)
`Jonathan A. Choa (#5319)
`POTTER ANDERSON & CORROON LLP
`Hercules Plaza
`P.O. Box 951
`Wilmington, DE 19899
`(302) 984-6000
`provner@potteranderson.com
`jchoa@potteranderson.com
`
`Attorneys for Plaintiff
`ACCELERATION BAY LLC
`
`OF COUNSEL:
`
`Paul J. Andre
`Lisa Kobialka
`KRAMER LEVIN NAFTALIS
` & FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`(650) 752-1700
`pandre@kramerlevin.com
`lkobialka@kramerlevin.com
`
`Aaron M. Frankel
`KRAMER LEVIN NAFTALIS
` & FRANKEL LLP
`1177 Avenue of the Americas
`New York, NY 10036
` (212) 715-9100
`afrankel@kramerlevin.com
`
`Dated: December 13, 2017
`
`Public version dated: December 21, 2017
`
`

`

`Case 1:16-cv-00455-RGA Document 348 Filed 12/21/17 Page 3 of 11 PageID #: 24109
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`TABLE OF CONTENTS
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`I. NATURE AND STAGE OF THE PROCEEDINGS ............................................................. 1
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`II. OBJECTIONS......................................................................................................................... 1
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`III. ARGUMENT .......................................................................................................................... 2
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`A. Confidential Communications Between Counsel for Acceleration Bay and its Litigation
`Funder are Non-Discoverable Work Product ..................................................................... 2
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`B. The Common Interest Doctrine Extends Attorney-Client Privilege to Confidential
`Communications Between Counsel for Acceleration Bay and its Litigation Funder ......... 4
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`C. The Diligence Emails Are Not Relevant ............................................................................ 6
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`IV. CONCLUSION ....................................................................................................................... 7
`
`i
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`

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`Case 1:16-cv-00455-RGA Document 348 Filed 12/21/17 Page 4 of 11 PageID #: 24110
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`I.
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`NATURE AND STAGE OF THE PROCEEDINGS
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`Acceleration Bay respectfully objects, in part, to the Special Master’s November 22,
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`2017 Order No. 13. Ex. A, (D.I. 361, the “Order”)1. The Order requires Acceleration Bay to
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`“produce what it provided in writing to Hamilton Capital [Acceleration Bay’s litigation funder]
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`or its counsel at the time of Hamilton Capital’s due diligence.” Id. at 7. Acceleration Bay
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`already produced
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` However, Acceleration Bay objects to producing emails
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`exchanged between its counsel and counsel for Hamilton Capital, on the grounds that such
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`emails are work product, protected under the common interest doctrine and not relevant to the
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`issues in the case.
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`II.
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`OBJECTIONS
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`Acceleration Bay objects, in part, to the Order pursuant to Rule 53(f)(2) of the Federal
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`Rules of Civil Procedure and the Court’s Order Appointing Special Master dated February 18,
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`2016 (C.A. No. 15-228-RGA, D.I. 94 at ¶6)2. The Court reviews the Special Master’s Order de
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`novo. Fed. R. Civ. P. 53(f). Acceleration Bay respectfully requests that the Court overrule the
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`Order on the following three grounds:
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`(1) the emails exchanged between outside counsel for Acceleration Bay and Hamilton
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`Capital are non-discoverable, attorney work product;
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`1 All docket citations are to C.A. No. 16-453-RGA, and are representative to filings in the related
`cases.
`2 In accordance with that Order, Acceleration Bay submits herewith an Appendix containing the
`transcript from the hearing before the Special Master (Ex. B) and the materials submitted by the
`parties in connection with the hearing.
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`

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`Case 1:16-cv-00455-RGA Document 348 Filed 12/21/17 Page 5 of 11 PageID #: 24111
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`(2) because Acceleration Bay and Hamilton Capital share a common legal interest in the
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`successful enforcement of the asserted patents against Defendants, the emails exchanged
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`between their counsel are protected by attorney-client privilege; and
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`(3) the emails are irrelevant to the issue of Acceleration Bay’s business operations.
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`III.
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`ARGUMENT
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`A.
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`Confidential Communications Between Counsel for Acceleration Bay and its
`Litigation Funder are Non-Discoverable Work Product
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`
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`
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`Upon the Court’s
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`request, Acceleration Bay will make the Diligence Emails available for in camera inspection to
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`confirm that, to the extent they contain substantive content, they are attorney work product.3
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`As attorney work product, the Diligence Emails are not discoverable “absent a showing
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`of substantial need, undue hardship, or inability to obtain their equivalent by other means.”
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`WebXchange Inc. v. Dell Inc., 264 F.R.D. 123, 128 (2010) (denying motion to compel work-
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`product); Fed. R. Civ. P. 26(b)(3). The Order does not identify any such need. Nor did
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`Defendants make any showing of a substantial need for the work product in the Diligence Emails
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`in their briefing. Indeed, they could not.
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`
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`
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`and withholding them would not impose an undue hardship on
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`3 As noted above, Acceleration Bay already produced to Defendants the attachments to the
`Diligence Emails, and does not object to the portions of the Order requiring production of those
`attachments.
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`2
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`

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`Case 1:16-cv-00455-RGA Document 348 Filed 12/21/17 Page 6 of 11 PageID #: 24112
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`Defendants. Indeed, opposing counsel should not be permitted “to perform [their] functions . . .
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`on wits borrowed from [their] adversary.” Hickman v. Taylor, 329 U.S. 495, 516; 67 S.Ct. 385,
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`91 L.Ed. 451, (1947) (Jackson, J., concurring).
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`Emails from Acceleration Bay’s counsel regarding
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`
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` are considered “core” work product that are afforded
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`“near absolute protection from discovery”:
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`Rule 26(b)(3) establishes two tiers of protection: first, work prepared in
`anticipation of litigation by an attorney or his agent is discoverable only upon a
`showing of need and hardship; second, ‘core’ or ‘opinion’ work product that
`encompasses the ‘mental impressions, conclusions, opinion, or legal theories of
`an attorney or other representative of a party concerning the litigation is generally
`afforded near absolute protection from discovery’.
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`In re Cendant Corp. Secs. Litig., 343 F.3d 658, 663 (3d Cir. 2003) (emphasis added).
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`That Acceleration Bay’s counsel sent the Diligence Emails to counsel for Hamilton
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`Capital did not waive the work product immunity. “[T]o waive the protection of the work-
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`product doctrine, the disclosure must enable an adversary to gain access to the information.”
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`Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d 1414, 1428 (3d Cir. 1991) (citing
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`as example, United States v. AT & T, 642 F.2d 1285, 1299 (D.C. Cir. 1980). See also 8 Wright
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`& Miller, § 2024 at 210 (citing cases). Here, confidential communications between counsel for
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`Acceleration Bay and Hamilton Capital did not create any risk of these materials falling into the
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`hands of Defendants.
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`Various court, including this District, have applied work product doctrine to documents
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`shared with litigation funders and prohibit discovery into them, even without establishing a
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`common interest:
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`In the present case, the question is not whether Sanjeev/Softline and Som share a
`common interest in the litigation; rather, the question is whether Sanjeev/Softline
`and Som are adversaries. Certainly, Systems America does not contend that
`Sanjeev/Softline and Som are adversaries. Indeed, the documents that Systems
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`3
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`

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`Case 1:16-cv-00455-RGA Document 348 Filed 12/21/17 Page 7 of 11 PageID #: 24113
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`America now seeks are only asserted to be relevant to the extent they show Som's
`bias toward Sanjeev/Softline. As a result, the correspondence created by the
`attorney for Sanjeev/Softline does not lose the protection of the work product
`doctrine due to its disclosure to the attorney for Som.
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`Sys. Am., Inc. v. Tyagi, No. 97-42, 1997 WL 35386736, at *5 (D. Del. Feb. 20, 1997) (emphasis
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`added).
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`Similarly, the Northern District Court of Illinois found documents shared with litigation
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`funders protected under the work product doctrine due to the expectation of confidentiality for
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`such exchanges. See Miller UK Ltd. v. Caterpillar, Inc., 17 F. Supp. 3d 711, 734-38 (N.D. Ill.
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`2014); see also Devon IT, Inc. v. IBM Corp., No. 10–2899, 2012 WL 4748160, at *1 n.1 (E.D.
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`Pa. Sept. 27, 2012) (finding communications with funders and funding agreement drafts to be
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`protected as work product).
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`Accordingly, because the Diligence Emails contain work product, the Court should
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`sustain Acceleration Bay’s objection to producing them.
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`B.
`
`The Common Interest Doctrine Extends Attorney-Client Privilege to
`Confidential Communications Between Counsel for Acceleration Bay and its
`Litigation Funder
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`Acceleration Bay further objects to production of the Diligence Emails on the
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`independent ground that they are subject to attorney-client privilege under the common interest
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`doctrine. Under the common interest doctrine, these communications between counsel are
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`privileged because Acceleration Bay and Hamilton Capital “share a common legal interest, or
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`have a community of interest, with respect to the subject of the communications[]” and ‘“the
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`nature of the interest [is] identical, not similar, and be legal, not solely commercial.’” In re
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`Regents of Univ. of California, 101 F.3d 1386, 1390 (Fed. Cir. 1996)(citation omitted).
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`Specifically, both Acceleration Bay and Hamilton Capital have an interest in the successful
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`enforcement of the asserted patents against Defendants in the actions.
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`4
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`

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`Case 1:16-cv-00455-RGA Document 348 Filed 12/21/17 Page 8 of 11 PageID #: 24114
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`Under the prevailing view in Delaware and other courts, Acceleration Bay and Hamilton
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`Capital hold a common legal interest sufficient to invoke the common interest
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`doctrine. Recently, the Delaware Court of Chancery surveyed the relevant literature and cases
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`and found that there is a community of legal interest between a patent owner and its litigation
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`funder. Carlyle Inv. Mgmt. L.L.C. v. Moonmouth Co. S.A., No. 7841-VCP, 2015 WL 778846, at
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`*7 (Del. Ch. Feb. 24, 2015) (disallowing discovery into negotiation with litigation funder under
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`common interest doctrine). The Delaware Court of Chancery criticized the Leader Techs.
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`decision, upon which Defendants relied in arguing there is no common interest between a
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`potential plaintiff and a potential funder. Id.; see also id. at n.48. Specifically, the Court of
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`Chancery found that Leader Tech. and similar cases “do not analyze the work product issue
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`thoroughly.” Id at *7. After conducting a thorough analysis of the issue, the Court concluded
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`that common interest applies in the context of litigation funder and patent holder. Id. at *9.
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`The Special Master cited to the Court’s order in Delaware Display Grp. LLC v. Lenovo
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`Grp. Ltd., Lenovo Holding Co. in finding there was no common interest between Acceleration
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`Bay and Hamilton Capital, but that case is inapposite. Ex. A, (D.I. 361) at 6-7. In that case, the
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`Court ordered production of teardown reports that were prepared by a third-party consultant
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`(Acacia) on behalf of a third-party to the lawsuit (Rambus). No. 13-2108-RGA, 2016 WL
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`720977, at *5 (D. Del. Feb. 23, 2016). The Court found these reports were not work product
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`because they were not prepared by counsel involved with the litigation (in contrast, here, the
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`emails contain work product of litigation counsel). Id. at *3. Having found that the reports were
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`not work product, the Court then declined to find common interest privilege between Rambus
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`(former owner of the asserted patent) and its consultant Acacia, because their relationship was
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`“commercial.” Id. at *5. The key fact was that consultant “Rambus possesses no legal interest
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`5
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`

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`Case 1:16-cv-00455-RGA Document 348 Filed 12/21/17 Page 9 of 11 PageID #: 24115
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`in the patents-in-suit.” Id. That is not the case here, where Acceleration Bay is plaintiff, and
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`Hamilton Capital is plaintiff’s litigation funder
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`
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` Litigation funders provide funds “for the sake of
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`securing, advancing, or supplying legal representation,” and thus have a common legal interest
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`with the plaintiffs they fund. In re Regents of Univ. of California, 101 F.3d at 1389. The
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`Court’s decision in Delaware Display Group is not to the contrary, because it did not address the
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`issue of common interest between a plaintiff and its funder.
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`Acceleration Bay never waived privilege for its exchanges with Hamilton Capital. To the
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`contrary, after receiving Defendants’ request for production, Acceleration Bay asserted a variety
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`of objections, including that Defendants “seek[] information protected by the attorney-client
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`privilege, the work product doctrine, the common interest doctrine, or any other applicable law,
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`privilege, doctrine, or immunity.” Ex. C at Ex. 9 (4/3/17 Plaintiff’s Objections and Responses to
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`Third RFPDs) at 13.
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`Accordingly, the Court should sustain Acceleration Bay’s objection to the Order on the
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`grounds that the Diligence Emails it exchanged with Hamilton Capital are privileged under the
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`common interest doctrine. To hold otherwise, would chill the free and frank exchange of
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`information between prospective litigants and funders, and reduce such litigants’ access to
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`justice.
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`C.
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`The Diligence Emails Are Not Relevant
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`The Court should sustain Acceleration Bay’s objections to the Order on the additional
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`ground that the Diligence Emails are irrelevant to the limited scope of discovery permitted by the
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`Court.
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`Defendants previously sought to compel production of materials exchanged with
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`Hamilton Capital. In the motion papers associated with Special Master Order No. 6, Defendants
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`6
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`

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`Case 1:16-cv-00455-RGA Document 348 Filed 12/21/17 Page 10 of 11 PageID #: 24116
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`confirmed that they were not seeking production of emails exchanged between Acceleration Bay
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`and Hamilton Capital. Ex. D at Ex. 3 (Def. 7/5/17 Br. “F”) at 4 (“Defendants are not moving to
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`compel on emails”). The Special Master ultimately ordered production of various materials
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`associated with Acceleration Bay’s funding. In overruling Acceleration Bay’s objections to
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`producing those documents, the Court held that “Plaintiff need not produce any of the requested
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`documents, as they are not relevant to the issues that will remain in the case. If, however,
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`Plaintiff wants to be able to argue that it should be allowed to present evidence at trial that it is
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`an ‘operating company,’ then it must comply with the Special Master’s Order as to the other
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`three RFPs.” Ex. E (D.I. 285) at 3.
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`Here, even if Defendants had not excluded the emails exchanged between Acceleration
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`Bay and Hamilton Capital from their prior motion, they would not have been covered by the
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`Court’s order because they have no bearing on the nature of Acceleration Bay’s operational
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`activities. The Court can confirm this fact through in camera review of the emails. Therefore,
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`other than containing non-discoverable work-product and privileged communications, the
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`Diligence Emails are not relevant to any issue in the case, and there is no basis to compel their
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`production.
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`IV.
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`CONCLUSION
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`For the reasons set forth above, the Court should sustain Acceleration Bay’s limited
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`objections to Special Master No. 13.
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`7
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`

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`Case 1:16-cv-00455-RGA Document 348 Filed 12/21/17 Page 11 of 11 PageID #: 24117
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`POTTER ANDERSON & CORROON LLP
`
`By: /s/ Philip A. Rovner
`Philip A. Rovner (#3215)
`Jonathan A. Choa (#5319)
`Hercules Plaza
`P.O. Box 951
`Wilmington, DE 19899
`(302) 984-6000
`provner@potteranderson.com
`jchoa@potteranderson.com
`
`Attorneys for Plaintiff
`ACCELERATION BAY LLC
`
`OF COUNSEL:
`
`Paul J. Andre
`Lisa Kobialka
`KRAMER LEVIN NAFTALIS
` & FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`(650) 752-1700
`pandre@kramerlevin.com
`lkobialka@kramerlevin.com
`
`Aaron M. Frankel
`KRAMER LEVIN NAFTALIS
` & FRANKEL LLP
`1177 Avenue of the Americas
`New York, NY 10036
`(212) 715-9100
`afrankel@kramerlevin.com
`
`Dated: December 13, 2017
`
`5585088
`
`8
`
`Public version dated: December 21, 2017
`
`