Lawyers Fined $72.6 Million For Screwing Up Patent Application, Not Letting Company Sue For Enough Cash

from the so-that's-what-it's-come-to dept

Rob Hyndman points us to the news that a law firm has been hit with a $72.6 million judgment for legal malpractice, after a company who had hired the law firm to handle its patent applications claimed that the law firm screwed up the applications, making it that much harder for the company to shake down other companies for cash. The inventors, in this case, claim to have come up with a “man down” alert system (for firefighters and the like), and had this law firm patent it for them. Of course, similar technology appeared on the market soon after, and so these guys sued and were “only” able to collect $9 million — which they deemed to be way too little. So they sued the law firm… and won. So, apparently, these days you don’t even need to have a good patent to make money. You can just blame your law firm for screwing up your patent if you weren’t able to shake down enough other companies.

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Comments on “Lawyers Fined $72.6 Million For Screwing Up Patent Application, Not Letting Company Sue For Enough Cash”

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Ima Fish (profile) says:

Re: What did the law firm do wrong?

According to the complaint, the attorneys failed to file the initial patent application within the one year “on sale bar.” Which means under patent law, if an invention has been on sale for more than a year, it is no longer patentable.

The attorneys failed to disclose two prior patents in the initial and subsequent filings. That means that the companies being sued by Air Measurement Technologies, Inc. (the company that wanted the patent and sued the attorneys for malpractice) assert an “inequitable conduct” affirmative defense against AMT. Which means, that AMT were basically already guilty of inequitable conduct due to the conduct of the attorneys.

The main patent could have been filed back in 1990, but was not actually filed until 1997. That shortened the 17 years of protection AMT had over the patent.

And one hilarious act of malpractice was settling the one case for “only” 9 million dollars. AMT argued that by settling for such a low figure, it made it next to impossible to get higher settlements out of the other companies that were infringing the patent.

YouAreWrong says:

Inequitable conduct

Inequitable conduct is pled in virtually every patent case right now because it’s so unbelievably strong. IC in patent cases is typically where the attorney/agent who filed the application decided to withhold information from the PTO because that information would have an adverse effect on the patent in some way. It happens A LOT, and because everyone emails EVERYTHING, it gets caught all the time.

2 things happen whenever IC is found. First, the alleged infringer amends their claims/counterclaims to add what’s called a walker process antitrust claim — basically that the patentee tried to commit fraud to monopolize the industry (these have basically always failed, even in the walker process case that created the doctrine). The second thing that happens is the patentee starts looking for other attorneys to handle the malpractice claim against whoever filed the patent.

I know a lot of the guys at Akin Gump, and they’re great attorneys, but I don’t personally know the guy who filed the patent — it was back in the 80s (most of us here on TD were still in diapers or at most, riding the big yellow school bus).

MikeIP says:

Scent of stupidity in the morning

Why all the hate for lawyers? Oh, they’re “ruining everything that everyone has ever worked for, and they don’t like dogs.” You poor little children. Someday you’ll need the services of a lawyer. Perhaps then you’ll understand that a lawyer’s job is to argue, within the applicable limits, on his client’s behalf. I really don’t know what’s so difficult for you all to understand about that. Of course, you’ll surely only hire the “only good lawyer there is.” As for Mike’s comments about a patent holder “shaking down” others, what do you expect them to do? If someone infringes on their patent, then a lawsuit is completely within their rights. I wouldn’t expect an MBA to understand much, but I’d expect at least that much to be clear.

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