Apple’s Taptic Engine patent defeat sends litigation funder’s shares up 9%

Shares in litigation funder Burford Capital jumped more than 9% today as a result of Apple’s $5.7 billion verdict over Taptic Engine patent infringement. Here are the details.

Last Friday, a US jury ruled that Apple’s Taptic Engine infringes on two patents held by California-based company Taction Technology.

Apple introduced the Taptic Engine in September 2014 with the first Apple Watch, and the technology has since expanded to other products, including the iPhone, where it provides haptic feedback for notifications, interactions, and other system events.

When Taction filed its patent infringement lawsuit in 2021, the company accused Apple of directly and indirectly infringing two of its patents through the Taptic Engine used in a range of iPhone and Apple Watch models.

Last Friday, following the verdict, Taction said the jury had “vindicated its patent rights,” while Apple said it strongly disagreed with the decision and would appeal.

Earlier today, as reported by The Financial Times, litigation funder Burford Capital disclosed that it has a financial entitlement in the case, and that it could be entitled to $1.4 billion if the $5.7 billion verdict is ultimately paid in full.

The disclosure sent Burford shares sharply higher in London, with the stock closing up 9.41% and giving the company a market capitalization of £659.9 million, or roughly $875 million.

Bloomberg Law notes that court records show that Taction received funding from Kenosha Investments LP and Gronostaj Investments LLC. The report also notes that Kenosha has been identified as an indirect subsidiary of Burford, which finances lawsuits in exchange for a share of any eventual recovery.

In a statement to investors on Monday, Burford said that if the $5.7 billion verdict were paid in full, its $1.4 billion entitlement would be split roughly equally between the company’s own balance sheet and its investment funds.

To read The Financial Times’ full report, follow this link.