Justia Professional Malpractice & Ethics Opinion Summaries

Articles Posted in Intellectual Property
by
In an infringement suit, the district court declared Minton’s patent invalid under the “on sale” bar since he had leased his interactive securities trading system to a brokerage more than one year before the patent application, 35 U. S. C. 102(b). Seeking reconsideration, Minton argued for the first time that the lease was part of testing and fell within the “experimental use” exception to the bar. The Federal Circuit affirmed denial of the motion, concluding that the argument was waived. Minton sued for legal malpractice in Texas state court. His former attorneys argued that Minton’s claims would have failed even if the experimental-use argument had been timely raised. The trial court agreed. Minton then claimed that the court lacked jurisdiction under 28 U. S. C. 1338(a), which provides for exclusive federal jurisdiction over any case “arising under any Act of Congress relating to patents.” The Texas Court of Appeals rejected Minton’s argument and determined that Minton failed to establish experimental use. The state’s highest court reversed. The Supreme Court reversed, holding that Section 338(a) does not deprive state courts of subject matter jurisdiction over Minton’s malpractice claim. Federal law does not create that claim, so it can arise under federal patent law only if it necessarily raises a stated federal issue, actually disputed and substantial, which may be entertained without disturbing an approved balance of federal and state judicial responsibilities. Resolution of a federal patent question is “necessary” to Minton’s case and the issue is “actually disputed,” but it does not carry the necessary significance. No matter the resolution of the hypothetical “case within a case,” the result of the prior patent litigation will not change. Nor will allowing state courts to resolve these cases undermine development of a uniform body of patent law. View "Gunn v. Minton" on Justia Law

by
In an infringement suit, the district court declared Minton’s patent invalid under the “on sale” bar since he had leased his interactive securities trading system to a brokerage more than one year before the patent application, 35 U. S. C. 102(b). Seeking reconsideration, Minton argued for the first time that the lease was part of testing and fell within the “experimental use” exception to the bar. The Federal Circuit affirmed denial of the motion, concluding that the argument was waived. Minton sued for legal malpractice in Texas state court. His former attorneys argued that Minton’s claims would have failed even if the experimental-use argument had been timely raised. The trial court agreed. Minton then claimed that the court lacked jurisdiction under 28 U. S. C. 1338(a), which provides for exclusive federal jurisdiction over any case “arising under any Act of Congress relating to patents.” The Texas Court of Appeals rejected Minton’s argument and determined that Minton failed to establish experimental use. The state’s highest court reversed. The Supreme Court reversed, holding that Section 338(a) does not deprive state courts of subject matter jurisdiction over Minton’s malpractice claim. Federal law does not create that claim, so it can arise under federal patent law only if it necessarily raises a stated federal issue, actually disputed and substantial, which may be entertained without disturbing an approved balance of federal and state judicial responsibilities. Resolution of a federal patent question is “necessary” to Minton’s case and the issue is “actually disputed,” but it does not carry the necessary significance. No matter the resolution of the hypothetical “case within a case,” the result of the prior patent litigation will not change. Nor will allowing state courts to resolve these cases undermine development of a uniform body of patent law. View "Gunn v. Minton" on Justia Law

by
Plaintiff worked as an airplane mechanic, in the Navy and for several airlines. In the 1960s, he devised a tool that could reach deep inside airplane engines without disassembling external components. In 2000, a patent issued to plaintiff for the extended reach pliers, based on an application written and prosecuted by defendant. Danaher, a customer of plaintiff's business, subsequently developed its own version of the ERP and began competing against the device. Plaintiff sued for malpractice, alleging that the patent was so negligently drafted that it offered no meaningful protection against infringers. Its expert proposed alternate claim language that allegedly could have been enforced against Danaher. The district court granted defendant summary judgment, based on the element of causation. The Federal Circuit affirmed. Plaintiff did not raise a genuine dispute of material fact as to the patentability of its alternate claims. Plaintiff failed to raise a single material fact in dispute as to the nonobviousness of the proposed alternate claims. View "Minkin v. Gibbons, P.C." on Justia Law

by
In 1999 Beasley filed a patent application for personalized postage stamps. In 2001 the PTO issued notice of allowance. Beasley then entered into a licensing agreement with Avery, specifying that Avery would assume responsibility for prosecution of the patent application and would pay patent prosecution expenses. Beasley appointed Renner to prosecute his application. A Renner attorney filed a supplemental information disclosure statement concerning prior art references. The PTO issued a second notice of allowance. Beasley transferred ownership USPPS. USPPS and Avery entered into an agreement. Later, the PTO vacated its notice of allowance and issued final rejections. Beasley and USPPS alleged that Avery mismanaged the application. Beasley’s suit for was dismissed for lack of standing. USPPS filed suit, alleging breach of fiduciary duty and fraud, based on Avery’s alleged representation that Beasley was the client of Renner. The district court granted summary judgment for defendants. The Fifth Circuit transferred to the Federal Circuit, finding that jurisdiction was based, in part, on 28 U.S.C. 1338 and that the alleged malpractice involves a question of patentability, even if no patent actually issued. The Federal Circuit affirmed, holding that it had jurisdiction and that the complaint was untimely. View "USPPS, Ltd. v. Avery Dennison Corp." on Justia Law

by
The owner consulted with two architectural firms, T-Peg and VTW. T-Peg drew up a preliminary design then worked with the owner to refine the design. In 2001, T-Peg registered its design with the Copyright Office. Meanwhile, in 2000, the owner showed T-Peg's unregistered preliminary design to VTW, which began working on its own design. VTW completed its plan in 2002 with significant, minutely detailed input from the owner. Completed construction apparently reflected T-Peg's registered design. In a suit for copyright infringement, the court granted summary judgment for VTW and the owner, concluding that no reasonable jury could find that T-Peg's and VTW's designs were substantially similar. The First Circuit reversed and, following trial, the jury found in VTW's favor and rejected T-Peg's infringement claims. VTW sought fees of more than $200,000 under 17 U.S.C. 505. The district court granted VTW a fee award of $35,000. The First Circuit affirmed, finding that the district court adequately elaborated its reasoning. View "T-Peg, Inc. v. VT Timber Works, Inc." on Justia Law

by
This case involved a claim for breach of the fiduciary duty of loyalty that stemmed from a dispute regarding assets of IFCT, a now defunct tech startup company founded by Stephen Marsh to develop potentially revolutionary micro fuel cell technology. The crux of plaintiff's argument was that the Director Defendants conducted an unfair and disloyal bidding process, whereby they favored the Echelon-backed bid and refused to follow up on or negotiate with other superior bids. As a result, IFCT missed its chance to sell its assets at the peak of their value and was forced to sell its assets at a discount in bankruptcy. Given that the Director Defendants have conceded the applicability of entire fairness review and given the fact-intensive nature of that review, the court found that the Director Defendants have not met their burden at this stage to achieve summary judgment against Encite. The court also found that material facts remained as to the liability of Echelon for aiding and abetting the alleged breach of fiduciary duty by the Director Defendants and therefore, the court denied Echelon's motion for summary judgment on that claim. The court finally found that material facts also remained regarding Echelon's third party claims, and so denied Marsh's motion for summary judgment. View "Encite, LLC v. Soni, et al." on Justia Law

by
This post-trial opinion determined the voting membership of GnB, LLC, a Delaware limited liability company. The parties disputed whether Firehouse Gallery, LLC, a Florida limited liability company, was a voting member of GnB. The parties also disputed whether GnB possessed an exclusive license to use the first-tier, generic domain name candles.com; held an option to purchase candles.com; and owned other assorted domain names relating to the candles business. The court held that Firehouse and plaintiff, who controlled GnB, each held a 50% voting membership interest; GnB owned the exclusive license and option to purchase candles.com and the other domain names; and plaintiff and defendant, the current principal of Firehouse, each breached their fiduciary duty of loyalty to GnB and must account for the profits and personal benefits they received. The court held that defendant was not otherwise liable to GnB or plaintiff. Because all of the litigants engaged in misconduct that could support fee-shifting, the doctrine of unclean hands applied with particular salience. Accordingly, the court held that all parties would bear their own fees and costs. View "Phillips v. Hove, et al." on Justia Law

by
This suit stemmed from the efforts of plaintiff and its owner and founder to obtain a patent for an invention related to personalized postage stamps and the suit involved state law claims of fraud and breach of fiduciary duty in connection with a patent application. Plaintiff appealed the district court's grant of summary judgment in favor of defendants, holding that there was no genuine issue of material fact as to whether plaintiff's claims were time-barred such that defendants were entitled to judgment as a matter of law and that in the alternative, there was no genuine issue of material fact as to the causation elements of plaintiff's claims. The court held that this case raised issues of patent law, and those issues were substantial because of the special federal interest in developing a uniform body of patent law in the Federal Circuit as recognized in Scherbatskoy v. Halliburton Co. and expressed by Congress's grant of exclusive appellate jurisdiction over patent cases to that court. Therefore, the court held that it lacked jurisdiction over the appeal and transferred the suit to the United States Court of Appeals for the Federal Circuit pursuant to 28 U.S.C. 1631. View "USPPS, Ltd. v. Avery Dennison Corp., et al." on Justia Law