Haptic, Inc. v. Apple, Inc.

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 HAPTIC, INC., Case Nos. 24-cv-02296 Plaintiff, 25-mc-80114 8 v. 9 ORDER RE: APPLE’S MOTION TO 10 APPLE, INC., C A O G M RE P E E M L E C N O T M S M W U I N TH IC T A H T I I R O D N S AND Defendant. PARTIES; AND JOINT MOTION TO 11 QUASH SUBPOENAS

12 Re: Dkt. No. 164 (24-cv-02296); & HAPTIC, INC., et al., 13 Dkt. No. 1 (25-mc-80114) Plaintiffs,

14 v. 15 APPLE, INC., 16 Defendant. 17 18 Haptic, Inc. (“Haptic”) sues Apple, Inc. (“Apple”) for infringement of its U.S. Patent No. 19 9,996,738 (“the ‘738 patent”). In engaging counsel for litigation, Haptic has enlisted a litigation 20 funder. Apple now moves for an order compelling Haptic to produce all relevant documents 21 relating to litigation funding. (Dkt. No. 164.)1 Having carefully reviewed the parties’ briefing and 22 with the benefit of oral argument on June 3, 2025, the Court DENIES Apple’s motion to compel. 23 BACKGROUND 24 I. Litigation Funding Background 25 Prior to filing suit against Apple, Haptic retained Susman Godfrey as counsel. (Dkt. No. 26 170-2 ¶ 6.) As part of its work in “[a]dvising Haptic in its plans to pursue litigation against Apple, 27 1 … Susman Godfrey engaged a third-party firm and oversaw its creation of a report identifying the 2 state of the art prior to the Asserted Patent.” (Id. ¶ 7.) Haptic’s counsel also “engaged and 3 collaborated with an expert to prepare an analysis of Haptic’s potential damages in anticipated 4 litigation.” (Id.) 5 In early 2022, Haptic communicated with “several litigation-funding entities.” (Id. ¶ 8.) 6 Prior to sharing “substantive information about its anticipated claims,” Haptic entered into 7 confidentiality or nondisclosure agreements where potential funders agreed “not to disclose” 8 information about its potential litigation. (Id. ¶ 10-16.) “Haptic did not provide to any litigation 9 funder, or receive from any litigation funder, a valuation of the Asserted Patent.” (Id. ¶ 17.) 10 Though Haptic communicated with a number of potential funders, it eventually entered an 11 agreement with Siltstone Capital Litigation Fund, LP (the “Funder”). (Id. ¶ 8.) The Funder “is 12 lending capital to Haptic for litigation costs in connection with this litigation,” but “has no present 13 or future ownership interest in Haptic or the Asserted Patent,” and “has no authority to control this 14 litigation or settlement decisions.” (Id. ¶¶ 19-21; see also Haptic v. Apple, No. 25-mc-80114-JSC 15 (N.D. Cal.) (Dkt. No. 1-1 ¶ 9 (“None of the Siltstone Entities have any ownership interest, rights, 16 title, or other interest in the 738 Patent and are not parties to the Haptic Action. None of the 17 Siltstone Entities’ approval is required for any litigation or settlement decision in the Haptic 18 Action or with respect to the 738 Patent, nor do any of the Siltstone Entities have authority to 19 make litigation or settlement decisions regarding the same.”)).) 20 II. Procedural Background 21 Apple now seeks discovery into all documents and communications between Haptic and 22 any litigation funders. On February 19, the parties indicated in their joint case management 23 statement they were meeting and conferring regarding this issue. (Dkt. No. 141.) At the same 24 time, Apple served subpoenas on Haptic and the Funder to obtain the same information it sought 25 from Haptic. (Dkt. No. 164 at 9 n.1.) On February 24, 2025, Haptic and the Funder jointly sought 26 to quash Apple’s subpoena in federal court in the Southern District of Texas. Haptic v. Apple, No. 27 25-mc-80114-JSC (Dkt. No. 1.) The parties briefed the motion to quash and also briefed Apple’s 1 court granted Apple’s motion to transfer to this Court, id. (Dkt. No. 19); the matter was then 2 related to this one. On March 13, 2025, Apple filed a unilateral discovery dispute letter which was 3 subsequently stricken for failure to comply with the Court’s civil standing order regarding 4 discovery disputes. (Dkt. Nos. 150, 152.) Soon thereafter, the parties filed a joint discovery 5 dispute letter seeking the Court’s guidance on the production of these documents. (Dkt. No. 154.) 6 On April 2, 2025, the Court held an informal discovery conference about this dispute. 7 (Dkt. No. 164-5.) At the conference, the Court indicated Haptic must prepare a privilege log for 8 documents between Haptic and the Funder regarding either “valuation of the patent” or 9 “evaluation of the patent.” (Id. at 19-20.) The Court did not rule on whether the documents were 10 relevant or privileged. (Id.) Pursuant to the Court’s instructions, Haptic served a privilege log 11 with 16 entries, claiming “Work Product; Common-Interest Privilege” for all entries. (Dkt. No. 12 163-2.) Apple then moved to compel all litigation funding communications and documents, 13 including documents not described in the log. (Dkt. No. 164.) 14 Apple seeks to obtain documents relating to (1) the ‘738 patent’s valuation, validity, and 15 potential infringement; (2) whether any party has an interest in the outcome of the litigation; and 16 (3) dealings between Haptic and the Funder and potential funders. (Dkt. Nos. 164-2, 164-3.)2 17 ANALYSIS 18 I. Relevance 19 “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any 20 party’s claim or defense and proportional to the needs of the case.” Fed. R. Civ. P. 26. 21 Information is relevant if “it has a tendency to make a fact more or less probable than it would be” 22 otherwise. Fed. R. Evid. 401. 23 a. Logged Documents Relevance 24 Apple claims the logged documents are relevant because (1) valuation documents inform 25 or dispute damages numbers; and (2) evaluation documents “bear directly on the issues that the 26

27 2 The Court ordered on April 2, 2025 that Haptic first log only valuation and evaluation 1 jury must decide here, [and] they are also relevant to assessing witness credibility at trial.” (Dkt. 2 No. 164 at 12-14.) Further, Apple seeks discovery into litigation funding to rebut potential trial 3 themes it expects Haptic to make—namely the so-called “David v. Goliath” story—and to target 4 witness credibility. (Id. at 24.) Finally, Apple contends the litigation funding agreement(s) would 5 be relevant to whether Haptic has standing to sue. 6 i. Valuation Documents 7 “Valuation” is a slight misnomer here, because, as Haptic contends and Apple does not 8 contest, Haptic has not logged any documents that speak to the value of the patent in itself. 9 Instead, the documents Apple seeks—and which Haptic logged—are so-called “damages analysis” 10 reports shared by Mr. Boshernitzan (Haptic’s CEO) with the Funder. (Dkt. No. 170-8 at 4 11 (privilege log nos. 14-16).) The log indicates three email attachments from January 2023, prior to 12 the institution of this action, where Haptic shared “damages analys[es] prepared by and at the 13 direction of counsel in anticipation of litigation.” (Id.) Mr. Boshernitzan attests “Haptic’s counsel 14 also engaged and collaborated with an expert to prepare an analysis of Haptic’s potential damages 15 in anticipated litigation,” though Haptic does not intend to use these reports at trial. (Dkt. No. 16 170-2 ¶ 7.) And at the April 2, 2025 informal discovery hearing, Haptic’s counsel stated, “We did 17 not do some independent valuation of the patent itself. … What Apple wants is our damages 18 model, preliminary sketches of our damages model that we would have provided to a funder.” 19 (Dkt. No. 164-5 at 7.) And in its brief, Haptic further details the documents “reflect what Haptic’s 20 counsel and a non-testifying expert estimated Haptic could recover in anticipated litigation against 21 Apple,” (Dkt. No. 170 at 16), which it also characterizes as “its counsel’s royalty analysis based 22 on Apple’s usage, even though that analysis does not assess the value or validity of the Asserted 23 Patent itself.” (Id. at 11.) So, the Court considers whether these shared pre-litigation royalty base 24 analyses are relevant under Federal Rule of Civil Procedure 26. 25 In patent infringement cases, “[u]pon finding for the claimant the court shall award the 26 claimant damages adequate to compensate for the infringement, but in no event less than a 27 reasonable royalty for the use made of the invention by the infringer.” 35 U.S.C. § 284. The 1 often determined on the basis of a hypothetical negotiation, occurring between the parties at the 2 time that infringement began.” Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1312 (Fed. 3 Cir. 2011) (citations omitted). In reasonable royalty analyses, courts are guided by the Georgia- 4 Pacific factors which inform damages analyses in patent cases. See Georgia-Pacific Corp. v. U.S. 5 Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y.1970); see also Uniloc USA, Inc. v. Microsoft Corp., 6 632 F.3d 1292, 1317 (Fed. Cir. 2011) (holding the Federal Circuit “has sanctioned the use of the 7 Georgia-Pacific factors to frame the reasonable royalty inquiry.”). A determination of whether 8 the underlying documents are relevant to damages calculations will therefore necessarily center on 9 whether they inform a hypothetical negotiation at the time of infringement, in other words, 10 whether they are relevant to any Georgia-Pacific factor. See AVM Techs., LLC v. Intel Corp., No. 11 15-cv-00033-RGA, 2017 WL 1787562, at *3 (D. Del. May 1, 2017) (denying discovery into 12 litigation funding documents because they “are not otherwise relevant to the hypothetical 13 negotiation between the parties”). 14 Apple argues the royalty base documents are relevant to Factors 14 and 15. At the April 2, 15 2025 hearing, Apple noted the valuation documents would be relevant to “Factor 15 … because 16 the damages expert is trying to determine what they would be willing to pay at the hypothetical 17 negotiation, and [Haptic’s] view of what the patent is worth would inform what they are willing to 18 pay at the hypothetical negotiation.” (Dkt. No. 164-5 at 10.) And in its Reply, Apple added the 19 valuation documents would be relevant to Factor 14. (Dkt. No. 171 at 7.) The fifteenth factor is 20 “[t]he amount that a licensor (such as the patentee) and a licensee (such as the infringer) would 21 have agreed upon (at the time the infringement began) if both had been reasonably and voluntarily 22 trying to reach an agreement.” MLC Intell. Prop., LLC v. Micron Tech., Inc., 10 F.4th 1358, 1365 23 (Fed. Cir. 2021) (quoting Georgia-Pacific, 318 F. Supp. at 1120). And Factor 14 is “the opinion 24 testimony of qualified experts.” Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10, 27 n.11 25 (Fed. Cir. 2012) (quoting i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831, 853 n.3 (Fed. Cir. 26 2010), aff’d, 564 U.S. 91 (2011)). 27 The shared royalty base analyses are relevant to both Georgia-Pacific factors. The 1 in infringement cases—reasonable royalty bases. See Uniloc USA, Inc., 632 F.3d at 1312. In 2 other words, such a damages analysis would likely indicate the amount the licensor here “would 3 have agreed upon (at the time the infringement began)” because it is a closer-in-time analysis of 4 what Haptic believes was reasonable. MLC Intell. Prop., LLC, 10 F.4th at 1365 (quoting Georgia- 5 Pacific, 318 F. Supp. at 1120). What is more, these analyses were made with an expert, so they 6 may also be relevant to Factor 14. (Dkt. No. 170-2 ¶ 6.) 7 Haptic’s cited cases are inapposite. While some courts have held, for instance, that 8 litigation funding agreements are “informed gambling on the outcome of litigation,” none of the 9 cases cited considered whether reasonable royalty bases shared with a third party are relevant to 10 damages in a patent case. AVM Techs., LLC v. Intel Corp., No. 15-cv-00033-RGA, 2017 WL 11 1787562, at *3 (D. Del. May 1, 2017) (holding the agreements themselves were irrelevant to 12 damages); see also GoTV Streaming, LLC v. Netflix, Inc., No. 22-cv-07556-RGK-SHK, 2023 WL 13 4237609, at *13 (C.D. Cal. May 24, 2023) (holding “any valuation for litigation funding has no 14 ‘more than a vague relationship (if that) with actual damages in patent litigation’”). Further, that 15 the damages calculations do not have a “valuation of the Asserted Patent,” (Dkt. No. 170 at 15), 16 does not make these documents irrelevant where the documents include reasonable royalty base 17 calculations, as described above. And that the reasonable royalty bases were prepared in 2022 or 18 2023 also does not make the documents irrelevant because Haptic claims infringement since at 19 least 2020, and potentially longer. (Dkt. No. 1 ¶ 42.) This is supported by Haptic’s argument 20 about these documents: “they reflect what Haptic’s counsel and a non-testifying expert estimated 21 Haptic could recover in anticipated litigation against Apple.” (Dkt. No. 170 at 16.) 22 As such, these damages-related documents are relevant.3 23 ii. Evaluation Documents 24 Next, Haptic’s privilege log records a number of documents described as reports 25

26 3 Apple also seeks the funding agreement itself, arguing this too informs damages. The Court is unpersuaded because unlike the damages analysis documents which are relevant to the damages at 27 issue, the funding agreement’s valuation of the litigation itself is merely “informed gambling on 1 “analyzing the validity of the Asserted Patent,” “merits analysis,” “merits of anticipated 2 litigation,” reports “analyzing the validity of the Asserted Patent,” and references for those merits 3 analyses. (Dkt. No. 170-8.) 4 Documents shared with third parties containing “infringement or validity analys[es]” (Dkt. 5 No. 170 at 17), are relevant because they are relevant to Haptic’s infringement claims and Apple’s 6 invalidity defenses. Fed. R. Civ. Proc. 26. Indeed, these documents were sent by Mr. 7 Boshernitzan or Haptic’s counsel, and speak to Haptic’s own impressions about the strength—and 8 potentially weaknesses—of its claims. (Dkt. No. 170-8.) 9 Haptic’s arguments that these documents are only speculatively relevant and are irrelevant 10 to witness credibility are unavailing. First, an infringement or validity analysis by Haptic’s 11 counsel is not speculatively relevant. Such documents would speak directly to Haptic’s 12 impressions on the strengths of its claims. Further, insofar as Mr. Boshernitzan makes statements 13 as to these documents or the infringement/validity claims, these documents would certainly be 14 relevant to either bolster or contradict his testimony about Apple’s infringement or the ‘738 15 patent’s validity. 16 Haptic’s logged evaluation documents are thus also relevant. 17 iii. Standing 18 Apple also argues the agreement with the Funder (and related documents) are relevant to 19 whether Haptic has standing to sue because the agreement could reveal it lacks “the entire bundle 20 of sticks” for the ‘738 patent. (Dkt. No. 164 at 26.) In particular, Apple contends the agreement 21 might have granted the Funder some present or future ownership interest in the patent, so that 22 Haptic would not have “all legal rights to the patent as the patentee or assignee of all patent 23 rights.” Morrow v. Microsoft Corp., 499 F.3d 1332, 1339-40 (Fed. Cir. 2007). 24 Apple has not shown the agreement is relevant to Haptic’s standing. Both Haptic and the 25 Funder separately attest the agreement does not grant or vest any present or future interest in the 26 patent to the Funder. (Dkt. No. 170-2 ¶¶ 19-21; see Haptic v. Apple, No. 25-mc-80114 (N.D. Cal.) 27 (Dkt. No. 1-1 ¶ 9).) And both Haptic and the Funder also attest the Funder has no say in the 1 Funder’s testimony is not dispositive. 2 Apple cites Uniloc, where the court held the plaintiffs lacked standing to sue for patent 3 infringement because they defaulted on their loan from their litigation funder under an agreement 4 which granted the funder a royalty-free license upon default. Uniloc USA, Inc. v. Apple, Inc., No. 5 18-cv-00358-WHA, 2020 WL 7122617, at *6-7 (N.D. Cal. Dec. 4, 2020). As the court explained, 6 “a party ‘derives its standing from the exclusionary rights it holds,’ and ‘its standing will 7 ordinarily be coterminous with those rights.’” Id. at *7 (quoting WiAV Sols. LLC v. Motorola, 8 Inc., 631 F.3d 1257, 1266 (Fed. Cir. 2010)). And because the funder there “held an unfettered 9 right in its ‘sole and absolute discretion’ to license the ‘203 patent to the world,” the plaintiffs 10 therefore lacked exclusionary rights and likewise lacked standing to sue. Id. By contrast, here, 11 Haptic asserts no such agreement exists between it and the Funder. And Apple’s arguments that 12 there are “concerns about Haptic’s future standing” and “Apple should be entitled to know who 13 the real decision-makers are in this case” (Dkt. No. 164 at 26-27) are “based solely on [Apple’s] 14 suspicion,” which is insufficient to support discovery into this subject matter. Drone Techs., Inc. 15 v. Parrot S.A., 838 F.3d 1283, 1300 (Fed. Cir. 2016). 16 So, Haptic’s agreement with the Funder is not relevant. 17 b. Non-Logged Documents 18 Finally, Apple seeks all other non-logged, litigation-funding documents to (1) rebut a 19 “David v. Goliath” theme at trial, and (2) rebut witness testimony. Apple requests three groups of 20 documents: 21 • Documents relating to two conversations between the Funder and Haptic, one when 22 Haptic reached out to inquire about funding for litigation and the other when the 23 parties signed a Non-Disclosure Agreement (NDA) before discussing the substance 24 of litigation. Haptic v. Apple, No. 25-mc-80114 (N.D. Cal.) (Dkt. No. 1-1 ¶ 4-5). 25 • Communications surrounding the parties’ NDA(s). 26 • Communications about the Funder’s ultimate decision to fund litigation. 27 Apple fails to demonstrate these documents are relevant. 1 rebut trial themes fail to persuade. (Dkt. No. 164 at 25; Dkt. No. 171 at 17.) In Continental 2 Circuits, the court conducted little analysis as to relevancy, but held the funding agreement and 3 other documents “concern Plaintiff’s financial resources and could be used to refute any David vs. 4 Goliath narrative at trial.” Cont’l Cirs. LLC v. Intel Corp., 435 F. Supp. 3d 1014, 1019 (D. Ariz. 5 2020). But unlike the defendant there, Apple knows the identity of the litigation funder here, 6 knows the agreement functions as a loan and provides no ownership stake to the Funder, and even 7 knows details about when Haptic sought funding. (Dkt. No. 170-2 ¶¶ 19-21; see also Haptic v. 8 Apple, No. 25-mc-80114 (N.D. Cal.) (Dkt. No. 1-1 ¶ 9).) Meanwhile, in Daimler, the court 9 allowed limited discovery into litigation funding because the plaintiff admitted the funder had a 10 security interest in the patent, but the court nonetheless restricted discovery “regarding the 11 relationship between [the funder] and other similarly named entities or [the funder’s] other 12 business interests.” Electrolysis Prevention Sols. LLC v. Daimler Truck N. Am. LLC, No. 21-cv- 13 00171-RJC-WCM, 2023 WL 4750822, at *8 (W.D.N.C. July 24, 2023). Here, the Funder has no 14 ownership stake in the ‘738 patent. (Dkt. No. 170-2 ¶¶ 19-21; see also Haptic v. Apple, No. 25- 15 mc-80114 (N.D. Cal.) (Dkt. No. 1-1 ¶ 9).) Additionally, neither case permitted broad discovery 16 into potential funders. “[N]ow that [Apple] has the name of the funder, it has the necessary 17 information to refute any such argument.” GoTV Streaming, LLC, 2023 WL 4237609, at *13. 18 Second, Apple does not show how these documents are relevant to dispute witness 19 credibility, namely, Mr. Boshernitzan’s credibility. Apple’s arguments about credibility are 20 limited to valuation and evaluation documents and do not reach the other categories of documents 21 it now seeks to compel. 22 Therefore the non-logged documents are not relevant and are thus not discoverable. 23 c. Additional Documents Sought from the Funder 24 Finally, Apple seeks from the Funder, in a nutshell, “discovery about the Asserted Patent, 25 Siltstone’s relationship and communications with Haptic, and the extent of Siltstone’s relevant 26 financial interest.” Haptic v. Apple, 25-mc-80114-JSC (Dkt. No. 6 at 6). While this request 27 significantly overlaps with the discovery Apple seeks from Haptic, the subpoena also seeks 1 performed its own analyses, including of the patent and as to the value of the expected return, and 2 such documents created by [the Funder] may be uniquely in [its] possession.” Id. But Apple fails 3 to show how such documents, to the extent they exist, are more relevant than any other third- 4 party’s analyses of the patent. Unlike Haptic’s valuation and evaluation of its own patent at suit, 5 the Funder’s same valuations and evaluations are “so far removed from the hypothetical 6 negotiation that they have no relevance.” AVM Techs., LLC, 2017 WL 1787562, at *3. And 7 Apple’s assertions that other relevant documents likely exist are merely speculative and so do not 8 support further discovery into the Funder. See Colibri Heart Valve LLC v. Medtronic CoreValve 9 LLC, 8:20-cv-00847-DOC (JDEx), 2021 WL 10425630, at *4 (C.D. Cal. Mar. 26, 2021) 10 (“Importantly, courts have declined to order production of litigation funding documents where, as 11 in this instance, the moving party’s justifications are based on speculation.”) (collecting cases). 12 * * * 13 So, documents relating to Haptic’s evaluation of the patent, as well as damages royalty 14 rates, are relevant both to the claims and defenses in this matter as well as potential damages. The 15 other documents Apple seeks are not relevant and therefore not discoverable. 16 II. Work-Product Privilege 17 “The work product doctrine protects from discovery documents and tangible things 18 prepared by a party or his representative in anticipation of litigation.” United States v. Richey, 632 19 F.3d 559, 567 (9th Cir. 2011). “To qualify for work-product protection, documents must: (1) be 20 ‘prepared in anticipation of litigation or for trial’ and (2) be prepared ‘by or for another party or by 21 or for that other party’s representative.’” In re Grand Jury Subpoena (Mark Torf/Torf Env’t 22 Mgmt, 357 F.3d 900, 907 (9th Cir. 2004). “The doctrine protects both ‘material prepared by 23 agents for the attorney as well as those prepared by the attorney himself,’ and its primary purpose 24 is to ‘prevent exploitation of a party’s efforts in preparing for litigation.’” Entangled Media, LLC 25 v. Dropbox Inc., No. 23-cv-03264-PCP (VKD), 2025 WL 1069896, at *2 (N.D. Cal. Apr. 8, 2025) 26 (quoting United States v. Sanmina Corp., 968 F.3d 1107, 1119 (9th Cir. 2020); and Admiral Ins. 27 Co. v. U.S. Dist. Ct., 881 F.2d 1486, 1494 (9th Cir. 1989)). The party resisting production of 1 applies. See Hernandez v. Tanninen, 604 F.3d 1095, 1102 (9th Cir. 2010). 2 a. Prima-facie Showing of Privilege 3 Having found the valuation and evaluation documents are relevant, the Court considers 4 whether the work-product doctrine protects these documents from production. As a preliminary 5 matter, Haptic makes a prima facie showing that, absent waiver, the documents on its privilege log 6 are protected as attorney-work product. Haptic’s log provides adequate explanations for what 7 each withheld document contains, who created it, who sent it, who received it, and the date of 8 sending. (See generally Dkt. No. 170-8.) Haptic further provides a supporting declaration from 9 its CEO who attests that Haptic’s attorneys or their agents prepared these documents in 10 anticipation of litigation. (Dkt. No. 170-2.) 11 Apple’s contention that the documents were prepared with a business rather than litigation 12 purpose is unpersuasive. First, Haptic’s CEO attests:

13 Advising Haptic in its plans to pursue litigation against Apple, Haptic’s counsel thoroughly investigated Haptic’s anticipated claims 14 of patent infringement against Apple, assessing the merits and potential damages. As part of that evaluation, Susman Godfrey 15 engaged a third-party firm and oversaw its creation of a report identifying the state of the art prior to the Asserted Patent. Haptic’s 16 counsel also engaged and collaborated with an expert to prepare an analysis of Haptic’s potential damages in anticipated litigation. 17 (Dkt. No. 170-2 ¶ 7.) Although these documents were likely created to assist with obtaining 18 litigation funding, “[t]hese internal discussions leave a revealing trail of mental impressions, legal 19 theories, and strategic notes—all created as confidential internal documents or sent under 20 nondisclosure agreements, and so written with vulnerable candor.” Design with Friends, Inc. v. 21 Target Corp., No. 21-cv-01376-SB, 2024 WL 4333114, at *3 (D. Del. Sept. 27, 2024) (citing 22 Carlyle Inv. Mgmt. LLC v. Moonmouth Co. SA, No. 7841, 2015 WL 778846, at *9 (Del. Ch. Feb. 23 24, 2015)). As the Ninth Circuit explains, 24 [its] “because of” standard does not consider whether litigation was a 25 primary or secondary motive behind the creation of a document. Rather, it considers the totality of the circumstances and affords 26 protection when it can fairly be said that the document was created because of anticipated litigation, and would not have been created in 27 substantially similar form but for the prospect of that litigation. 1 Haptic’s privilege log and as attested to by its CEO, were created because of anticipated litigation. 2 Apple’s reliance on Acceleration Bay LLC v. Activision Blizzard, Inc., No. 16-cv-00453- 3 RGA, 2018 WL 798731, at *2 (D. Del. Feb. 9, 2018), is misplaced. The Third Circuit, unlike the 4 Ninth, applies a “primary purpose” test to the work-product privilege. Id. at *1. This Court is 5 bound by Ninth Circuit law. Applying that law, the logged documents would not have been 6 created but for the prospect of this litigation. 7 So, Haptic has met its burden of showing its communications are, absent waiver, protected 8 from disclosure by the work-product doctrine. 9 b. Waiver 10 “The privilege derived from the work-product doctrine is not absolute. Like other qualified 11 privileges, it may be waived.” United States v. Nobles, 422 U.S. 225, 239 (1975). “An express or 12 voluntary disclosure of work product waives the protection where such disclosure is made to an 13 adversary in litigation or where the disclosure is made in a manner that substantially increases the 14 opportunities for potential adversaries to obtain the work product.” Entangled Media, 2025 WL 15 1069896, at *2. (citing Sanmina, 968 F.3d at 1121; 8 Charles Alan Wright & Arthur R. Miller, 16 Federal Practice & Procedure § 2024 (3d ed. 2020); Nidec Corp. v. Victor Co. of Japan, 249 17 F.R.D. 575, 578 (N.D. Cal. 2007)). And whether a party waived the privilege is a “fact-intensive 18 analysis requir[ing] a consideration of the totality of the circumstances and is ultimately guided by 19 the [] principle of fundamental fairness.” Sanmina, 968 F.3d at 1122. So, a Court “may find the 20 work-product immunity waived where the disclosing party’s conduct has reached a ‘certain point 21 of disclosure’ towards his adversary such that ‘fairness requires that his privilege shall cease, 22 whether he intended that result or not.’” Id. (quoting Weil v. Investment/Indicators, Rsch. & 23 Mgmt., Inc., 647 F.2d 18, 24 (9th Cir. 1981)). 24 Apple argues Haptic waived its work-product privilege over documents shared with the 25 Funder by sharing those documents. Haptic counters it shares a common legal interest with the 26 Funder, so the documents remain privileged despite being shared with a third party. Since there is 27 no dispute Haptic shared documents it claims are privileged with the third-party funders, the Court 1 privilege. And, if the common interest doctrine does not shield Haptic from waiver, the Court 2 must then consider whether Haptic’s conduct nonetheless constitutes waiver of the privilege. 3 i. Common Interest Doctrine 4 The common interest/joint defense doctrine does not make a document or communication 5 privileged; rather, it is a doctrine that prevents waiver of a pre-existing privilege if the privileged 6 information is shared only with those with a common legal interest. Thus, it “is not technically a 7 privilege in and of itself but instead constitutes an exception to the rule on waiver where 8 communications are disclosed to third parties.” Holmes v. Collection Bureau of Am., Ltd., No. 09- 9 cv-02540-WHA, 2010 WL 143484, at *2 (N.D. Cal. Jan. 8, 2010). As one court has explained:

10 Therefore, a party seeking to rely on the common interest doctrine does not satisfy its burden to justify a claim of privilege simply by 11 demonstrating that a confidential communication took place between parties who purportedly share a common interest. Rather, the party 12 seeking to invoke the doctrine must first establish that the communicated information would otherwise be protected from 13 disclosure by a claim of privilege. For example, the content of the communication may comprise information shared in confidence by a 14 client with his or her attorney, a legal opinion formed and advice given by the lawyer in the course of the attorney-client relationship, 15 or a writing reflecting an attorney’s impressions, conclusions, or theories. The next step in the analysis is to determine whether 16 disclosing the information to a party outside the attorney-client relationship waived any applicable privileges. 17 OXY Res. California LLC v. Superior Court, 115 Cal. App. 4th 874, 890, (2004), as modified 18 (Mar. 4, 2004). So, the common interest doctrine serves as “an exception to ordinary waiver rules 19 that applies when parties represented by separate counsel communicate in confidence about a 20 matter of common legal interest, in furtherance of that common legal interest.” Entangled Media, 21 2025 WL 1069896, at *3 (citing In re Pac. Pictures Corp., 679 F.3d 1121, 1129 (9th Cir. 2012)). 22 Though, “a shared desire to see the same outcome in a legal matter is insufficient to bring a 23 communication between two parties within this exception. Instead, the parties must make the 24 communication in pursuit of a joint strategy in accordance with some form of agreement.” In re 25 Pac. Pictures Corp., 679 F.3d at 1129 (citations omitted). 26 The common interest doctrine does not apply to Haptic’s disclosure to the funders. Prior 27 to sharing confidential communications with any potential litigation funder, Haptic and these 1 entities “entered into nondisclosure and common-interest agreements.” (Dkt. No. 170-2 ¶ 10.) 2 After entering into these agreements, Haptic shared documents prepared by its attorneys with the 3 Funder and potential funders. (Id.) These communications were made before any funder agreed 4 to fund Haptic’s litigation. Even though at this point the funders and Haptic were negotiating in 5 pursuit of Haptic’s ultimate litigation against Apple, it cannot be said the parties had something 6 more than “a shared desire to see the same outcome in a legal matter.” In re Pac. Pictures Corp., 7 679 F.3d at 1129 (citations omitted). Indeed, without first entering into an agreement to fund 8 Haptic’s litigation, it is unclear whether any of the potential funders, at the time of sharing 9 information, even shared Haptic’s desire for the same outcome in litigation. And because Haptic 10 never reached an agreement with the potential funders, no common legal interest existed between 11 them and Haptic even post-disclosure. As to the Funder, as Haptic and the Funder both attest, 12 their agreement does not grant or vest any present or future interest in the patent to the Funder, so 13 the interest does not apply even to it. (Dkt. No. 170-2 ¶¶ 19-21; see Haptic v. Apple, No. 25-mc- 14 80114 (N.D. Cal.) (Dkt. No. 1-1 ¶ 9.); cf. Rembrandt Patent Innovations, LLC v. Apple Inc., 14- 15 cv-05094-WHA, 2016 WL 427363, at *7 (N.D. Cal. Feb. 4, 2016) (holding a common legal 16 interest existed between the plaintiff and the named inventors because privileged information was 17 shared only after the plaintiff had obtained an exclusive option to purchase the patent from them); 18 and Entangled Media, 2025 WL 1069896 at *5 (holding the common interest doctrine does not 19 extend to a plaintiff and its funder when the plaintiff “insists that it is the sole owner of the 20 asserted patents and [the funder] has only a financial interest in the outcome of this litigation.”) 21 (citing In re Lidoderm Antitrust Litig., No. 14-md-02521-WHO, 2016 WL 861019, at *4 (N.D. 22 Cal. Mar. 7, 2016)). 23 Haptic posits it shares a common legal interest with both potential funders and the Funder 24 “by virtue of [the] nondisclosure and common-interest agreements.” (Dkt. No. 170 at 30.) As 25 support, Haptic cites Devon It, where the court held a plaintiff and its litigation funder had “a 26 common interest in the successful outcome of the litigation which otherwise [the plaintiff] may 27 not have been able to pursue without the financial assistance of [the funder].” Devon It, Inc. v. 1 noting the documents were disclosed “under a Confidentiality, Common Interest and 2 NonDisclosure[sic] Agreement,” the court does not explain how the parties’ relationship triggered 3 the common interest doctrine. Id. And Haptic does not explain how its agreements which 4 “contemplated those funders’ financial support of Haptic’s anticipated litigation against Apple,” 5 (Dkt. No. 170 at 30), meant the parties actually shared a common legal interest at the time of 6 disclosure. Extending the common interest privilege to when parties are merely negotiating such 7 an agreement “would remove the common interest doctrine far from its historical antecedent, the 8 joint defense doctrine.” Nidec Corp. v. Victor Co. of Japan, 249 F.R.D. 575, 580 (N.D. Cal. 9 2007); see also Acceleration Bay LLC v. Activision Blizzard, Inc., Nos. 16-cv-453-RGA, 16-cv- 10 454-RGA, 16-cv-455-RGA, 2018 WL 798731 at *3 (D. Del. Feb. 9, 2018) (declining to extend the 11 common interest doctrine to a plaintiff and litigation funder where the parties did not show they 12 “possessed identical interests in the patents-in-suit or were otherwise ‘allied in a common legal 13 cause’ at the time of the communications.”) (quoting Leader Techs., Inc. v. Facebook, Inc., 719 F. 14 Supp. 2d 373, 376 (D. Del. 2010)). 15 So, having found the common interest doctrine does not apply to the work-product 16 privilege documents, the Court next considers whether Haptic’s communications to the Funder 17 and potential funders waived the work-product privilege over these documents. 18 ii. Disclosure Waiver 19 “[D]isclosure of work product to a third party does not waive the protection unless such 20 disclosure is made to an adversary in litigation or has substantially increased the opportunities for 21 potential adversaries to obtain the information.” Sanmina, 968 F.3d at 1121 (quoting 8 Charles 22 Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 2024 (3d ed. 2020)). So, 23 disclosure only waives the privilege “where ‘such disclosure, under the circumstances, is 24 inconsistent with the maintenance of secrecy from the disclosing party’s adversary.’” Id. (quoting 25 Rockwell Int’l Corp. v. U.S. Dep’t of Justice, 235 F.3d 598, 605 (D.C. Cir. 2001)). 26 Haptic has not disclosed attorney work product “to an adversary in litigation” nor has it 27 “substantially increased the opportunities for potential adversaries to obtain the information.’” Id. 1 2024 (3d ed. 2020)). Haptic did not communicate any of the work product without first 2 “enter[ing] into nondisclosure and common-interest agreements with the litigation funders.” (Dkt. 3 No. 170-2 ¶ 10.) Further, Haptic shared these communications in anticipation of litigation 4 between itself and Apple, not itself and the funders. Though Haptic ultimately did not enter into a 5 final funding agreement with potential funders, they were not Haptic’s adversaries and disclosure 6 to them did not increase the opportunity for potential adversaries to obtain the work product. The 7 parties had non-disclosure and common-interest agreements and the communications were shared 8 in furtherance of Haptic’s efforts to sue Apple, not these entities. 9 Sanmina, 968 F.3d at 1121, is instructive. There, the defendant enlisted a third-party 10 auditing firm—DLA Piper—to prepare a valuation report after the IRS began examining the 11 defendant’s tax returns. Id. at 1112. The defendant then disclosed the report to the IRS, but the 12 report included reference to “two memoranda authored by Sanmina’s in-house counsel.” Id. The 13 IRS subsequently sought production of these attorney memoranda; the defendant claimed the 14 documents were protected from disclosure by the work-product doctrine. Id. The Ninth Circuit 15 agreed. Id. at 1123. First, the court concluded DLA Piper was not a potential adversary “with 16 respect to the memoranda” because “the Attorney Memos were prepared in anticipation of a 17 dispute between Sanmina and the IRS, not between Sanmina and DLA Piper, and they involve 18 legal assessments of potential tax implications for Sanmina, which would likely be irrelevant in 19 any potential dispute between Sanmina and DLA Piper.” Id. (citing United States v. Deloitte LLP, 20 610 F.3d 129, 140 (D.C. Cir. 2010)). And even though the defendant shared the work product 21 documents with DLA Piper to prepare a report to share with an adversary (the IRS), the defendant 22 “‘had a reasonable basis for believing that [DLA Piper] would keep the [Attorney Memos] 23 confidential’ in the process of producing its valuation analysis.” Id. (quoting Deloitte, 610 F.3d at 24 141). 25 Similarly here, Haptic’s work product documents were not shared with an adversary and 26 the nondisclosure and common interest agreements gave Haptic a reasonable basis for believing 27 the Funder and potential funders would keep the documents confidential. See Continental Circuits 1 proposition that “several courts have held that work product protection for litigation funding 2 documents is not waived when such documents contain confidentiality provisions and are 3 disclosed to litigation funders with common interests”). So, Haptic’s disclosure to these third 4 parties did not waive the work-product privilege. See Entangled Media, 2025 WL 1069896 at *6 5 (holding the plaintiff did not waive its work-product privilege over non-publicly filed or 6 referenced materials it shared with a litigation funder). 7 Waymo v. Uber does not support finding a waiver here. There the defendant retained a 8 third party to investigate an entity and individuals with whom it was contemplating entering into 9 an agreement. The court held the defendant’s disclosure of the investigation report to the entity 10 and persons being investigated was disclosure to an adversary and therefore waived the work- 11 product privilege. Waymo LLC v. Uber Techs., Inc., No. 17-cv-00939-WHA (JSC), 2017 WL 12 2485382, at *12-13 (N.D. Cal. June 8, 2017). The disclosure here is not similar. Haptic did not 13 disclose a report investigating potential funders to the potential funders; instead, it disclosed patent 14 evaluation and damages valuation information to the potential funders to facilitate their assistance 15 with litigation against Apple, Haptic’s adversary. 16 So, Haptic did not waive the work-product protections over its logged documents by 17 sharing these with the Funder or with potential litigation funders. 18 * * * 19 Accordingly, Haptic’s logged documents are protected from production by the work- 20 product privilege. And, the privilege was not waived by disclosure as the Funder and potential 21 funders are not Haptic’s adversaries, and Haptic’s disclosure has not “substantially increased the 22 opportunities for potential adversaries to obtain the information.” Sanmina, 968 F.3d at 1121 23 (cleaned up). Finally, Apple does not make any showing it has a substantial need for this 24 information sufficient to require disclosure of these documents. Fed. R. Civ. Proc. 26(b)(3)(A)(ii). 25 CONCLUSION 26 For the reasons stated above, Apple’s motion to compel is DENIED and the Funder’s and 27 Haptic’s joint motion to quash is GRANTED. 1 No. | in Haptic v. Apple, No. 25-mc-80114. 2 IT IS SO ORDERED. 3 Dated: June 3, 2025 4 5 ne ACQUELINE SCOTT CORLE 6 United States District Judge 7 8 9 10 11 12

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