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

Wed, May 27th 2009 4:37pm — Mike Masnick

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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Filed Under: malpractice, patents

15 Comments

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Aaron, 27 May 2009 @ 4:56pm

What did the law firm do wrong?
Maybe someone can help me out here because I can't figure it out from either Mike's post or the linked article. What did the law firm do incorrectly that limited the amount they company could recover in damages? In essence, what was the malpractice itself?
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Ima Fish (profile), 27 May 2009 @ 5:22pm

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.
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John Doe, 27 May 2009 @ 5:44pm

So there is justice in this world!
A lawyer got sued and lost? That is AWESOME! Maybe if more lawyers get sued they would see how it feels.
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Agonizing Fury, 27 May 2009 @ 5:50pm

Can we get more of this?
Maybe if lawsuits like this keep happening, then lawyers will determine that patent law is too dangerous to get into, and avoid it like the plague?

Probably not, but I can always dream.
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ChurchHatesTucker (profile), 27 May 2009 @ 5:50pm

Re: So there is justice in this world!
"A lawyer got sued and lost? That is AWESOME! Maybe if more lawyers get sued they would see how it feels."

You'd think, but in reality it means the rest of us get sued more, if only so they can cover their asses.
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NullOp, 27 May 2009 @ 7:15pm

Sharks
Eventually the predators eliminate themselves...
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YouAreWrong, 27 May 2009 @ 7:46pm

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).
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Aaron, 27 May 2009 @ 8:27pm

Imafish: Thank you very much. That was exactly what I was looking for.
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SRS2000, 27 May 2009 @ 9:10pm

I'm torn.
I love that lawyers got their ass kicked and had to pay out the ass.. but.. the reason behind the lawsuit bothers me.
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Bettawrekonize, 27 May 2009 @ 10:12pm

Re: So there is justice in this world!
I've seen this happen before on the peoples court (a couple times actually). While the show doesn't have very many lawyers, when they do have them, they lose about as often as they win (it seems the judge doesn't seem to like lawyers very much).
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Azrael, 28 May 2009 @ 12:32am

Re: Sharks
Nah, sharks eat only the weaklings so, as the law of the survival of the fittest says, in the end all that's gonna be left are the supersharks and we're all gonna be eaten.
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Tgeigs (profile), 28 May 2009 @ 6:23am

Re: Re: So there is justice in this world!
Not to mention that you can be sure the OTHER side had lawyers too. It would only be justice if BOTH lawyers got fined into oblivion and were forced to fellate each other for the Court's visual enjoyment...
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ChurchHatesTucker (profile), 28 May 2009 @ 8:57am

Re: Re: Re: So there is justice in this world!
"Not to mention that you can be sure the OTHER side had lawyers too. It would only be justice if BOTH lawyers got fined into oblivion and were forced to fellate each other for the Court's visual enjoyment..."

Mike, can we get a comment rating system next?

+5 Funny
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MikeIP, 11 Jun 2009 @ 11:12am

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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Patent law firm, 17 Aug 2009 @ 10:45pm

It's quite obvious..Truth Prevails. A lawyer got sued and lost his own case-proves this.Never the less, this proves none is beyond law!
Stacy
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