One More Reason Not to Litigate Patents Your Firm Prosecuted

One issue I get asked about a lot is what are the pros and cons of litigating a patent you/your firm prosecuted.  There are obvious benefits:  expertise and efficiency being the obvious two.  There are obvious downsides.  Perhaps the most glaring one occurs when the defendant accuses the attorney of having committed inequitable conduct. (There are lots of pros and cons; those are a couple.)

I hadn’t thought of this one, or don’t think I have, but add it to the con list: the continuous representation doctrine.  Under this doctrine, the statute of limitations on a legal malpractice claim is tolled while the firm continues to represent the client.  Depending on state law, this can mean that, even if the client discovered the harm, limitations is tolled.

So, if you prosecute a case, and then litigate it, you may be extending limitations on any error that occurred during prosecution.  (You also, by the way, have a duty to disclose any error you learn about to your client.)  For a recent case applying this doctrine and resulting in a $17m judgment being upheld against a firm (though not in the patent context), see Red Zone LLC v. Cadwalader, Wickersham & Taft, LLP (N.Y.App. Div. June 19, 2014).

13 thoughts on “One More Reason Not to Litigate Patents Your Firm Prosecuted

  1. Applied to its logical end point, the suggestion that prosecuting attorneys should not litigate patents they prosecuted because that tolls the statute on malpractice would also apply to continuing prosecution: Filing and prosecuting a continuation tolls the statute for any error in the parents.
    Maybe we should all be passing our continuation applications off to successor counsel to avoid this trap?
    Maybe there is a special rule for patent attorneys? That’s a question that could be answered by a scholar.

  2. The “continuous representation doctrine”. What an interesting thought: that EPO prosecuting counsel, in its own interest, should think twice before accepting instructions to defend the patent, after issue, against any attack on its validity.

    Given the benefits of expertise and efficiency, and the complete absence from the European landscape of the notion of of “inequitable conduct”, it is obvious to have your age-old, long-trusted and stalwart partner, your EPO prosecuting counsel continue, and defend the EP patent when there is post-issue opposition activity at the EPO.

    I hadn’t thought of the malpractice, “mistake in prosecution” and “statute of limitations” point might make it risky to accept instructions to handle the defence but, now I do, I’m thinking that new counsel is going to be more likely by far to spot any error I made in prosecution than that I do.

    Is that in fact the primary reason why US clients (but no others) typically switch to new counsel, when somebody opposes their patent at the EPO? Or is it more likely your “inequitable conduct” Point?

    Only asking. In the hope that the readership will educate me.

    Another thing David. Tell me more (if you don’t mind) about:

    “…tolled while the firm continues to represent the client”

    Take the following circumstances:

    1. I get the application through to issue. End of client relationship.

    2. Nine months later, patent opposed. I am asked to do the defence. Has there been continuity of representation?

    3. Or, After 5 years of silence, the client comes back, wanting to litigate the patent. Is that “continuous”?

    4. And, does it matter to “continuity” if I am busy through the entire intervening period, prosecuting other patent applications for that client?

    If the questions are banal, please forgive. Thanks.

    1. Max,

      Interesting questions, and they bring into tension several things that are probably distinct from the thing I posited: in the EPO, one could argue that opposition proceedings are “part of” the original representation so, perhaps, the lawyer has a *duty* to continue in the opposition. I can’t think (this early, without coffee) of an analog here in the US. But, clearly prosecution counsel has no obligation in the US to undertake enforcement efforts as part of prosecution (indeed, a lot of patent lawyers aren’t competent to undertake litigation, and vice versa).

      As to the other questions, generally under state laws I can recall, the way it works is: limitations begins to run when I “finish” the representation. In a US case, that would be once I get the client the patent/finish up. But (assume it’s a two year statute of limitations) if during the next two years, I start representing the client again (no matter what else I was doing/it was doing), then limitations is tolled unit that representation ends.

      I think that answers your questions.

      It is interesting to think of oppositions in this context, and I may be misapprehending something about oppositions, so let me ask: are there folks who specialize in oppositions, so that normally regular prosecution counsel wouldn’t do them?

      1. AH, I see now the reason for the “Huh?” – “(indeed, a lot of patent lawyers aren’t competent to undertake litigation, and vice versa).

        Our firm was one such firm that actively did both litigation and prosecution, and my comment was made from a total-package-serve-the-client mindset.

        If your experience is of the cleaved nature of only one or the other service, the situation would naturally be different.

        1. In thinking about your comment, I was also thinking there’s lurking there the difference between: legal ethics, risk management, and “ethics” in the deeper sense. On the latter point, I could argue that a lawyer whose work is challenged has an “ethical” duty to defend it, and to do so freely.

          But, risk management points the other way (perhaps), and this is not the key issue in this area — it’s the material limitations on the lawyer’s ability to represent the client in litigation that are the key problems. E.g., lawyer realizes he “messed up” the claims, and so pushes to settle rather than have that “error” come into focus.

          1. Thanks Prof. Hricik,

            I do recognize that your thrust was a bit different – that’s why I indicated that my post was touching on something that you likely did not intend as a take-away message.

            But for those types of entities that actively serve a client in more than just patent prosecution, your post does invoke the seemingly subtle ethical concern of a firm placing its own interests (risk management) ahead of the interests of the client.

            You are correct in that any firm in such a position owes a duty of honesty to the client – but the risk remains, and the indication – no matter how slight – that a firm should “bury” their risk and “wait it out” – for a firm that does more than mere prosecution – is not something that aligns with that duty of honesty all too well. I agree with you when you add the notion of the material limitation of representing the same client after some “oops” in earlier claim work (either writing or otherwise prosecuting) occurs. But firms do exist beyond the silo’d prosecution only models, and for such firms, legal ethics (not even getting into the “ethics” in a deeper sense) are impacted.

            1. We’re probably getting into semantics, but if the lawyer knows that he made an error, then “waiting it out” is not an option: he has to disclose, just as he would have to disclose error of prior counsel in a file.

              So, maybe we end up with:

              Patent issues and lawyer knows he messed up: must disclose, even if client doesn’t hire lawyer for something else.

              Patent issues and lawyer doesn’t know he did something wrong: lawyer should think (material limitations, mostly, but also the continuous representation doctrine) about whether to litigate the patent.

              Patent issues, lawyer doesn’t know, agrees to represent client in litigation, then discovers problem: lawyer has to tell client, and limitations on the underlying claim, the original error in prosecution, are tolled. And, lawyer faces risk of material limitations issues.

              And probably other variations.

      2. Interesting question David, whether there are law firms that specialise in oppositions.

        Whereas prosecution is ex parte, opposition at the EPO is very much inter partes disputed proceedings. Oppositions when filed by Germans are typically purely local, with no immediate prospect of litigation. When filed by an American, however, they are likely to be just one element in a global dispute, litigated anywhere and everywhere.

        In both cases, prosecuting counsel would normally handle defence at the EPO. In the former case, it’s just the client and the firm, working together. In the latter case, it is not uncommon that local EPO counsel is under the direction of a civil law firm, outside counsel, that specialises in co-ordinating litigation in a plurality of jurisdictions, both common and civil law.

        I know of no EPO prosecutor who would decline to handle defence at the EPO, but many smaller firm EPO prosecutors would be apprehensive about co-ordinating the dispute, world-wide. After all, European patent attorneys are not attorneys at law. In the world of patents outside the USA, the attorney profession and the patent attorney professions are complementary and neither is inferior to the other. A European patent attorney is not qualified, by study or by experience, to have the conduct of litigation in a common law jurisdiction.

        1. Interesting. I know a little bit, but not enough, about EPO and foreign practices. It sounds, though, as if it is a case-by-case determination that a particular practitioner must make.

          Thanks!

  3. A take-away message (and quite possibly not the one intended) is that attorneys should learn to bury their mistakes as efficiently as possible…

    To err is human, to hide the ball is…..

    Yes, I do get that it is a “smart business move” to reduce or eliminate risk as much as possible, and that includes the risk of malpractice, including extending the risk through continued representation, but really, the advice here smacks almost of a “purposeful ignorance” nature. I would think that the hard work that goes into cultivating a client relationship and serving a client in all the client’s needs outweighs the deliberate segregation to minimize the attorney risk alone. In a subtle way, you are venturing into a different ethical greyzone by seeking to place the attorney benefit before the client benefit, are you not?

Comments are closed.