March 26, 2009
Shifting to the tune of 7.6 Million in attorneys fees
The Federal Circuit recently issued an interesting opinion holding a patent holder’s appellate attorneys jointly and severally liable for one defendant’s fees and costs related to the appeal.
We consider this appeal, as it relates to PalmSource, frivolous. Although there is a host of reasons that collectively support our reaching this conclusion, we focus our discussion on two. First, E-Pass “fail[s] to explain how the trial court erred or to present cogent or clear arguments for reversal.” See id. at 1345; see also Refac Int’l, Ltd. v. Hitachi, Ltd., 921 F.2d 1247, 1256 (Fed. Cir. 1990) (sanctioning party that failed to point to any basis for reversal in the lower court’s decision). Second, E-Pass has made significant misrepresentations of the record and the law to the court. See Abbs, 237 F.3d at 1345; see also Romala Corp. v. United States, 927 F.2d 1219, 1224 (Fed. Cir. 1991) (sanctioning party for, among other things, distorting the lower court’s decision).
While the Federal Circuit’s decision is certainly a cautionary tale, what really caught our attention was the malpractice lawsuit E-Pass filed against its former litigation counsel at Moses & Singer and Squire Sanders. According to E-Pass’s malpractice counsel, litigation counsel for E-Pass collectively billed their client 7.6 million dollars in attorneys’ fees during the case. Whether or not there was malpractice or other malfeasance, 7.6 million is a truly eye-popping number. The Federal Circuit’s decision provides at least some clue as to what was going on:
But litigation misconduct is a central issue—the district court specifically concluded that E-Pass had engaged in repeated litigation misconduct, including, in particular, its shifting legal theories. See, e.g., Decision at 29 (“E-Pass’s allegations of inducing infringement against PalmSource have also changed over time.”); id. at 33 (“Throughout the litigation, defendants were forced to expend resources merely to attempt to have E-Pass clearly define its claims.”).
It is important for a litigant to have its infringement theories nailed down before filing a case, and to continually monitor its chances of success as the case progresses. That, and watch your bills.