Patent Malpractice a Federal Issue

Air Measurement Corp v. Akin Gump (Fed. Cir. 2007).
Immunocept v. Fulbright & Jaworksi (Fed. Cir. 2007).

Through a pair of malpractice cases, the CAFC has expanded its reach over state law malpractice claims.  These cases conclude that federal courts hold exclusive jurisdiction over cases involving state law malpractice claims that require resolution of a “substantial question of federal patent law” such as infringement, validity, enforceability, or patent claim scope. This general concept is not new, rather, these case incrementally expand the type of patent malpractice claims that require federal court decisionmaking. The issue is whether the particular form of malpractice asserted requires a determination of a substantial question of federal patent law.

In Air Measurement (AMT), the patent holder sued its attorney for malpractice based on a series of alleged mistakes, including filing after an on sale bar date, failing to submit two prior art references; and failing to properly inform AMT of the mistakes. AMT was still able to collect $10m in royalties on the patent family, but asserted that it would have collected more but for the alleged attorney error.  Because adjudication of the malpractice claim requires a determination of (potential) patent infringement, the dispute properly ‘arises under’ the US Patent Law. 28 USC 1338.

In Immunocept, the patent holder attempted to license its patents to J&J back in 2002. J&J’s attorneys found that the patent was narrowly drafted and refused to take a license. (‘Consisting of’ claim language). In 2005, the Immunocept sued its patent attorneys for malpractice. On appeal, the CAFC agreed that federal courts holds exclusive jurisdiction over this case because it requires a determination of patent claim scope – a substantial patent law question.

“Because patent claim scope defines the scope of patent protection, we surely consider claim scope to be a substantial question of patent law.”

After finding jurisdiction, the appellate panel affirmed the lower court’s finding that the claim was barred by a two-year statute of limitations. (Clock begins running after reasonable notice of the facts underlying a malpractice claim).

17 thoughts on “Patent Malpractice a Federal Issue

  1. Seems like its not so much the patent law question surrounding the claim scope, but whether the scope, whatever it was or is, somehow worked a actionable disadvantage to the client. Personally, I don’t see it as a clear-cut winning issue for the plaintiff, since reasonable professional minds can differ on whether narrow language was required.

  2. JPA, part of what the patent searcher is paid for is to weed through material I would other wise have to weed through. So there is an element of efficiency there. But I agree, there is some redundancy. But at the most the client is out $500 for an independent search, and I start the case with the PA I need. Not a bad deal when the customer is looking at $10,000 in patenting fees. I would gladly spend it if I was the customer.

    But my primary point is that instead of automatically assuming I will be doing the PA search, and going ahead with it, I prefer to explain the alternatives to the client, give him some PA searcher contact numbers, and let him make the decision as to who(m?) does the search.

  3. I think the presumed conflict is that we are assumed to be motivated to do a poor search so that we can justify preparing an application, and thus doing further business. OTOH, I think there is a strong countervailing motivation to do a good search so that we can’t be accused of this.

    IME even a very good search performed by a skilled and diligent searcher following best practices can never be guaranteed to find the best art, so I think it is hard to make a case that a search was not good enough. In the case that BabelBoy is talking about perhaps there is a stipulation that only a cursory search was done, and it is being fought over informed consent, but that would not be the usual position.

  4. BabelBoy, aren’t you making your clients pay twice for someone to read the located prior art?

    I prefer to do my own patentability searches for applications that I draft. First, I best know the invention. Second, I read the located prior art as part of the search, which also aids me in avoiding the prior art when drafting the application. Reading the prior art also helps me meet the ethical obligation for reading every paper mentioned in another post on this fine blog. And, I don’t have to charge my clients to read the prior art to prepare the application because they already paid for me to read it during the search.

    Also, I do not see the conflict of interest alluded to. As attorneys, we advise clients. In almost every case, the advice is for us to do something else for the client. After we do something for a client should we always refer the client to someone else to avoid a conflict of interest? It is possible to draft an application such that more prosecution work is required. Should the prosecution be referred to another after the application is filed?

  5. “anonymous thinks its hard to distinguish between a poor patentability search and a good one”

    No. I was contrasting one poor patentability search (done with good intentions) to another poor patentability search (done with bad intentions). The bad intentions (not the mere low quality of the search) is most likely why the suit was so successful. I was not defending the quality of either search.

  6. anonymous thinks its hard to distinguish between a poor patentability search and a good one. I think not. If an informal, undocumented search is not accompanied with a written explanation of the limits of the search, then it is a sham search. The same is true for a limited, informal provisional app. As professionals, it is assumed that we are doing a professional job, unless the client is fully and completely informed otherwise. Anyone who does not document in writing such less than professional work is a fool.

  7. “The takeaway lesson is that you need to document everything upfront for clients, and document it twice for new clients.”

    Bingo, anony. Bless you and the ground you walk on. I also came away from the litigation convinced that I should not be doing the PA search for clients for whom I will be writing an application. Prof. searchers can do them just as well and for less money, and they don’t have an unavoidable conflict of interest. There is no way the guy or firm who is going to write the application can do a search without a conflict of interest.

    I know there is no ethics rule against doing the PA search, and I know I’m going to have to wade through the PA search results myself anyway. Nevertheless, I tell my clients that I prefer not to do the search, and I explain why. If they insist, then that’s their INFORMED choice.

  8. BabelBoy wrote, “The sham patent search and lack of any evidence showing one was conducted would have been sufficient. But there was also the ole’ “Oh, BTW, now we need $7000 more to file a real application” once the provisional was filed.”

    In hindsight, it’s hard to distinguish between (1) doing an informal, undocumented patent search to save a 75-year-old client some money and (2) doing a sham patent search without any evidence that one was conducted. It’s also hard to distinguish between (1) filing a less expensive provisional to defer costs of the more expensive utility and (2) filing a provisional just to bait-and-switch a person into filing a full patent application later. I’m not saying which happened in BabelBoy’s case because I wasn’t there. The jury’s verdict is significant, so I’ll defer to its judgment.

    The takeaway lesson is that you need to document everything upfront for clients, and document it twice for new clients. Standard engagement letters outlining the options of professional searches, the costs of provisionals, the costs of converting those professionals and average pendency help to assist clients in making informed decisions and to minimize clients’ surprises and hard feelings (and the lawsuits that can follow).

  9. If all a court had to do was determine “patent claim scope,” I don’t agree that claim construction alone is a “substantial question of patent law.” That pushes it too far, as evident by F.C.’s use of the adverb “surely.” “Surely” is up there with “clearly” – when lawyers use it, nothing is usually sure or clear. Just because a claim has to be interpreted and its scope determined does NOT by itself mean a substantial issue of patent law has arisen under the well pleaded complaint rule.

    For example, subject matter jurisdiction in a contract claim for breach of patent licensng agreement by a plaintiff that required construction of the patent claims does not always involve exclusive federal jurisdiction and might easily be barred from federal court by S.C.’s Colt, Vornado, and other decisions.

    There is no fundamental reason a state court can’t construe the patent claims and determine the substantive issues of malpractice in a particular case. For example, attorney’s use of “consisting of” when the attorney should have used “comprising” based on an inventor’s disclosure and underlying documents, the failure to inform the client of claim language, or whatever facts might be on a case-by-case basis do not necessarily require a determination of infringement or invalidity or necessarily rise to a level of a substantial question of patent law. At the very least, there is no call for a per se rule that claim construction is a federal issue.

  10. Anony
    The sham patent search and lack of any evidence showing one was conducted would have been sufficient. But there was also the ole’ “Oh, BTW, now we need $7000 more to file a real application” once the provisional was filed.

    Mr Doom, aka Moatz, is reviewing the facts at the moment.

    Malcolm
    There aren’t three re-posts showing up in my list of comments. Is your computer seeing triple? You aren’t Dennis Crouch are you, seeing the Previews as well as the Posts? Because I did preview that post a couple times.

    As to your question as to why the client didn’t find the PA. It’s not that he is a dolt with two fingers, as you suggest. It’s that he didn’t have Internet connection. A lot of 75 year old people don’t. Besides I was using “dolt” according to Webster’s third definition of the word: “3. n. suck-wad patent attorney who screws 75 year-old clients.”

  11. “I sued a patent lawyer in Va. last year for malpractice and fraud on the basis that he did a sham PA search in order to dupe the client into spending thousands on a worthless provisional application, and then wanted heaps more to convert to a worthless regular application.”

    I hope there were more facts than just an inadequate prior art search.

  12. “I’ve noticed how sensitive you are to posts regarding malpractice suits.

    Need I ask why, or is it too obvious?”

    LOL, BB. If “any dolt with two fingers” could have found the PA, why did your client pay an expensive patent attorney to do a search? Weird.

    In any event, all I was noting was the irony in your complaining about “dolts with two fingers” in three accidentally re-posted comments.

  13. Malcolm

    I’ve noticed how sensitive you are to posts regarding malpractice suits.

    Need I ask why, or is it too obvious?

  14. “Our expert testified, essentially, that any dolt with two fingers, a keyboard, and a modem would have found the PA.”

    Oh, the irony.

  15. Yeah, it can be a tight question, but I don’t think this is new law.

    I sued a patent lawyer in Va. last year for malpractice and fraud on the basis that he did a sham PA search in order to dupe the client into spending thousands on a worthless provisional application, and then wanted heaps more to convert to a worthless regular application. Our expert testified, essentially, that any dolt with two fingers, a keyboard, and a modem would have found the PA. We won a jury verdict.

    The defendants waited until 4 months before trial and then tried to dismiss on the grounds of exclusive federal jurisdiction. We went to the USDC and got a ruling that there was no federal jurisdiction. Since no patent ever issued, there were no federal patent rights at issue. In fact, my client had no patent rights at all because of the PA.

    My point is, . . .hang on. What was my point? Oh yeah, the question of exclusive federal subject matter jurisdiction is pretty nuanced if there is no actual patent at issue.

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