The facts
A federal jury in San Diego found on Friday, September 25, that haptic technology in Apple's iPhone and Apple Watch infringed two patents held by Taction Technology, and awarded more than $5.7 billion. Taction's law firm, Quinn Emanuel, called it the largest patent jury verdict in U.S. history. Taction sued Apple in 2021. Apple told CNBC it strongly disagrees with the verdict, says its Taptic Engine is "fundamentally different," and will appeal. Apple has also asked the trial court to set the verdict aside.
On Monday, UK-listed litigation funder Burford Capital said that if the verdict were paid as issued, its funding agreement would entitle it to $1.4 billion, "split roughly equally between its balance sheet and its investment funds," Reuters and Investing.com reported. Burford cautioned that the verdict "does not represent a final judgment or cash proceeds received by Burford" and that the case "remains subject to significant litigation and collection risks." Burford has said very few large patent verdicts survive post-trial proceedings intact and that it could receive substantially less, or in some circumstances nothing.
Burford shares rose more than 12% on Monday, their largest intraday gain since late March. In March, a court decision forced Burford to write down its interest in litigation over Argentina's YPF by $2.4 billion.
Our take
Nobody at Burford invented a vibrating watch. Nobody at Burford built a Taptic Engine or a buzzing iPhone. What Burford did was write a check for somebody else's lawsuit, and on the first business day after the verdict it stood up and announced it wants $1.4 billion of the pot.
Then, in the same breath, it explained why you shouldn't believe it. The verdict isn't a judgment. It isn't cash. Big patent awards rarely survive. The payout could be a lot less, or zero. That is the most Wall Street sentence ever filed with a regulator: we are rich, pending the part where we are not.
The market heard "$1.4 billion" and stopped reading. Shares jumped 12%, the best day since March, which is the same March a court torched Burford's Argentina bet and forced a $2.4 billion write-down. Six months later, it's popping champagne over a check Apple has already asked a judge to rip up. These guys keep buying lottery tickets with somebody else's grievance and celebrating before the numbers are drawn.
Apple deserves no sympathy here, by the way. A company that charges you extra for a charging brick can survive a jury's opinion about its buzzing. The fun part is watching the two most expensive shitshows in American business, Big Tech and litigation finance, argue over whose money it is before anyone has actually paid anything.
The inventors waited five years for a jury. Burford waited one weekend to put its hand out.
