In case you missed it, CNBC recently reported that Burford Capital, a publicly-traded litigation funding behemoth headquartered in the United Kingdom, stands to cash in to the tune of $1.4 billion in a huge patent infringement case in the U.S. District Court for the Southern District of California.
The litigation, Taction Technology, Inc. v. Apple Inc. (No. 3:21-cv-00812-TWR-JLB), involves the alleged infringement of two patents owned by Taction, which Apple used in the haptic feedback hardware in iPhones and Apple Watches. On September 25, a San Diego jury found for Taction and awarded more than $5.7 billion, the largest patent verdict in U.S. history to date. It appears that at least three third-party litigation funders were involved, Kenosha Investments LP, Gronostaj Investments LLC, and Burford Capital. Burford’s share of the potential judgment has been reported to equal 25%, or about $1.4 billion. Needless to say, Apple has announced its intention to appeal.
For anyone who continues to think that third-party litigation funding has not become a significant factor in U.S. litigation, this case should be a wake-up call. The very notion of a multi-national hedge fund monetizing our taxpayer-funded federal and state courts and gambling on the outcome of litigation is offensive and insupportable. Allowing any third-party involvement, especially multi-billion dollar hedge funds and foreign actors, in a private dispute undermines and corrupts the adversarial system at its foundations.
This practice is also antithetical to the jury system because it takes place in secret and jurors are forbidden to know who is actually benefitting from the lawsuit. The federal jury in the Apple Case thought it was compensating the plaintiff, when in fact it was enriching Burford Capital (and its foreign and domestic investors), as well as the plaintiffs’ lawyers themselves. Additionally, we suspect that third-party litigation funding creates the incentive for the plaintiffs’ lawyers who are in cahoots with these hedge funds to inflate damages in order to assure that the funders’ cut doesn’t reduce theirs. No matter how one views it, TPLF has nothing but insidious and destructive effects on the civil justice system.
We applaud the Texas Supreme Court for instructing the Supreme Court Advisory Committee to act on a proposed rule to require disclosure of third-party funders to the court and the opposing parties. And when the Legislature comes to town in January, we will ask them to consider legislation to ban or severely restrict TPLF in general. Numerous states have already acted, as well as many federal and state courts. It’s time for Texas to follow suit.
Sources:
Ashley Capoot, “Apple faces $5.7 billion patent infringement verdict over iPhone and Apple Watch haptics.” CNBC, September 26, 2026. https://www.cnbc.com/2026/09/26/apple-taction-technology-patent-infringement-verdict.html(last accessed October 8, 2026).
“Apple Ordered to Pay Taction Technology $5.7 Billion in Haptics Patent Verdict, What it Means and What Happens Next.” All About Laywer, September 28, 2026. https://www.cnbc.com/2026/09/26/apple-taction-technology-patent-infringement-verdict.html (last accessed October 8, 2026).
