The case of the day is In re BMW (N.D. Ill. 2022). BMW was a defendant in German patent litigation brought by Arigna Technology Ltd., an Irish “patent assertion entity.” BMW came to Illinois to seek discovery from Magnetar, an investor in Arigna’s patent portfolio, seeking among other things communications regarding the patents. This may not be the most typical litigation funding arrangement, but if you have ever dealt with a funder, you know how careful you want to be to minimize the risk that any communications between you and the funder will be discoverable.

American courts have begun to develop approaches to discovery concerning litigation funding agreements and communications with funders. In domestic litigation, courts tend to say, for example, that such material is often not discoverable because it is not relevant to any party’s claims or defenses. They tend to say that such material is not protected by the attorney-client privilege but that it may be protected by the work-product rule. But some of these ideas have to be modified in the 1782 context. In today’s case, for example, the court didn’t consider whether the information sought would be relevant in a US lawsuit, but instead, whether it would be useful in the German lawsuit, i.e., whether it would be relevant under German law to damages, as BMW argued. The court, unsurprisingly, granted the ex parte application, noting that it would be open to Magnetar and to Arigna to seek to quash the subpoena later. It reasoned that BMW had made at least an arguable case for relevance and on the Intel factors.

I can imagine that 1782 cases aimed at US-based funders will send shivers down the spines of litigants in Europe and elsewhere. But even if the funder is not in the US, I think there is still reason for litigants to be concerned. A party that brings a Section 1782 petition may be subject to reciprocal discovery, which in principle could include discovery concerning the litigant’s funding arrangement wherever the funder is located. I don’t know of cases where anyone has obtained such reciprocal discovery concerning litigation funding, but surely someone tried or will try.

By the way, the beginning of today’s decision is worth reading on a different issue altogether. Parties typically tell courts that 1782 applications are routinely granted. And yet the briefing in Section 1782 cases has, maybe inevitably, become more and more elaborate, with multiple declarations, foreign legal authorities, and lengthy briefs. It’s worth at least considering whether it’s smart to say that the issues for the court are simple when you are filing elaborate and complicated papers.