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October 15, 2007

Patent Malpractice

The appeals court ruled in two patent malpractice cases today: AMT v. Akin Gump and Immuocept v. Fulbright & Jaworski. Patent malpractice is found a federal issue under 28 U.S.C. § 1338.

Air Measurement Technologies v. Akin Gump Strauss Hauer & Feld (CAFC 2007-1035)

AMT made $10 million in litigation settlements, without "judicial determination of infringement, invalidity, or unenforceability of AMT’s patents." Then AMT, with new counsel, discovered alleged errors by the patents' prosecutor, Gary Hamilton, who went . AMT's beef was that the errors "forced them to settle the prior litigation far below the fair market value of the patents."

The complaint was first filed in state court, but then bumped to federal district court by motion from Akin Gump, under 28 U.S.C. § 1338, who then changed their mind, and sought appeal to take it back to state court. The appeals court affirmed the district court ruling that the matter was federal.

There is a strong federal interest in the adjudication of patent infringement claims in federal court because patents are issued by a federal agency. The litigants will also benefit from federal judges who have experience in claim construction and infringement matters. See Grable, 545 U.S. at 315; see also Lacks Indus., Inc. v. McKechnie Vehicle Components USA, Inc., 322 F.3d 1335, 1341 (Fed. Cir. 2003) (stating that patent infringement involves a two-step process where the court first determines the scope and meaning of the asserted claims and then compares the construed claims to the accused product). Under these circumstances, patent infringement justifies “resort to the experience, solicitude, and hope of uniformity that a federal forum offers on federal issues.” Grable, 545 U.S. at 312. In § 1338, Congress considered the federal-state division of labor and struck a balance in favor of this court’s entertaining patent infringement. For us to conclude otherwise would undermine Congress’s expectations.

[E]stablishing patent infringement is a necessary element of a malpractice claim stemming from alleged mishandling of patent prosecution and earlier patent litigation, the issue is substantial and contested, and federal resolution of the issue was intended by Congress, there is “arising under” jurisdiction under § 1338.

Immuocept v. Fulbright & Jaworski (CAFC 2006-1432)

In the Immunocept patent, the prosecutor had used the transition phrase "consisting of" rather than the more inclusive "comprising."

Similar legal rehash to the AMT case of federal jurisdiction:

Claim scope determination is a question of law that can be complex in that it may involve many claim construction doctrines. Litigants will benefit from federal judges who are used to handling these complicated rules. See Grable, 545 U.S. at 315. Additionally, Congress’ intent to remove non-uniformity in the patent law, as evidenced by its enactment of the Federal Courts Improvement Act of 1982, Pub. L. No. 97-164, 96 Stat. 25, is further indicium that § 1338 jurisdiction is proper here. See also Grable, 545 U.S. at 315; Christianson, 486 U.S. at 809.

Immunoconcept's case was barred by the statute of limitations.

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Asserting patent malpractice is an act of desperation. The patent holder really only has oneself to blame for making a bad choice in prosecutor, and not staying on top of prosecution progress (or lack thereof). As always, caveat emptor.

Sadly, Patent Hawk is periodically approached by potential clients with a crappy patent who are looking for assessment of valuation or enforcement prospects. Those clients are turned away at no charge, but with a clue that their dog won't hunt.

Patent agents are no more competent than any other profession, which is to say that the majority of work done is by those who are, shaded sweetly, randomly competent at best. The size of the firm makes is not telling; but a culture of professionalism makes a world of difference: birds of a feather...

If you are hiring a patent agent or attorney to obtain a patent, study up a bit. Understand the concepts of patent claims, the need for continuations to obtain adequate coverage, and the value of a patentability search before filing. Don't be shy about asking your potential patent agent for a primer as a way to gauge skill. In interviewing a potential patent agent, bluster about experience is no substitute for quiet factual substance about what patents are about, and how they work.

Patents are an exercise in storytelling. If a patent agent candidate is not an articulate storyteller, keep looking.

And be sure to hire a patent agent who has experience handling appeals.

Posted by Patent Hawk at October 15, 2007 9:51 PM | Litigation

Comments

"Asserting patent malpractice is an act of desperation. The patent holder really only has oneself to blame for making a bad choice in prosecutor, and not staying on top of prosecution progress (or lack thereof). As always, caveat emptor."

This is a ridiculous statement. You expect the patient to monitor the progress of his own brain surgery, and to second-guess the highly-paid professional with knowledge, training, expertise and at least two bar admissions (a state bar and the patent bar) who is retained for his professed expertise? Get real.

In case you have forgotten, there is this quaint little concept known as the "standard of care." A client is entitled to reasonably rely upon a patent attorney to comply with that standard, and a patent attorney is liable to the same degree as any other professional for conduct falling below that standard. The only "act of desperation" is the attempt to excuse patent attorneys from the same rules governing everyone else. Get over yourself.

Posted by: Art at October 26, 2007 12:57 PM

The analogy of brain surgeon to patent agent is not entirely apropos with regard to monitoring progress. It is common in medical diagnoses to seek second opinions.

Patent prosecution is a longish process, and an inventor/assignee should have ample opportunity to review progress during drafting and prosecution. A patent application, and claims, should be readable, and the prosecutor subject to questioning by a client.

Any sharp-eyed observer of human endeavor knows how bumbling people are. We swim in an ocean of incompetence, and random competence at best. My blog, news stories, and history, are all best read as burgeoning encyclopedias of human folly.

Only a fool would place faith in "standard of care" without due diligence.

I'm not saying one shouldn't strive to hold incompetence to account; quite the contrary.

Posted by: Patent Hawk at October 26, 2007 1:34 PM