By Dennis Crouch
Sanders v. Flanders (5th Cir. 2014)
This case is an attorney malpractice lawsuit that Eric Sanders is pursuing against his Texas-based patent attorney Harold Flanders. Although the case is based on a Texas state-law claim, it enters Federal Court on grounds of diversity (Sanders is from Georgia). And, although the case involves a number of questions of patent law, those are not substantial enough to raise Federal Circuit appellate jurisdiction. See, Gunn v. Minton, 133 S.Ct. 1059 (2013) (state-law malpractice claims “rarely, if ever, arise under federal patent law.”); See also MDS (Canada) Inc. v. Rad Source Techs., Inc., 720 F.3d 833 (11th Cir. 2013). (Note, Harold Flanders is no longer on the rolls of patent attorneys).
Here, the invention in question is an “effervescent mouthwash tablet.” Over a period of nine years, Flanders prepared and filed “numerous” patent applications on behalf of Sanders. Flanders apparently did not notify Sanders of any of the office action rejections and instead allowed the applications to go abandoned. However, the district court granted summary judgment in favor of Flanders – holding that Sanders had failed to prove either causation or damages. The difficulty with patent prosecution malpractice actions is that attorney misconduct alone is generally insufficient. Rather, the allegedly injured party must also prove that the party’s outcome would have been better absent misconduct. Here, that would mean that a valuable patent would-have-issued.
On appeal, the Fifth Circuit affirmed – finding that Sanders had only presented “speculative” and “unsubstantiated” evidence of damages. (The court did not address causation because a lack of damages was sufficient to affirm).
To prevail on any of his five claims, Sanders had to demonstrate, inter alia, that Flanders’s conduct caused damages, a point he does not contest. It is well settled that damages cannot be established merely through speculation or conjecture. Granting a judgment as a matter of law with respect to damages, the district court concluded that “Sanders’s damages testimony was too speculative as to lost investors and lost profits, and unsubstantiated by competent proof as to out-of-pocket expenses and legal fees, to be recoverable.” Because we agree and affirm the district court’s grant of Flanders’s Rule 50(a) motion on this basis, we need not address whether Sanders presented sufficient evidence with respect to the element of causation—an alternative ground on which the district court granted relief.
Sanders did refile his applications in 2011 – this time with a different patent attorney. See APN 13/316,600. However, that case has also been abandoned for failure to respond to an office action rejection.