Mophie, maker of external batteries for the iPhone, filed a scathing malpractice lawsuit against its former patent attorneys. Among the sins allegedly committed by Loza & Loza, the most serious (if true) dealt with their “John Wayne” style enforcement tactics.
From the complaint:
Without adequately counseling Plaintiffs on the ramifications of such letters, Defendant L&L prepared and delivered patently aggressive “cease and desist” letters that threatened that Defendants would “proceed to file suit and immediately seek a Temporary Restraining Order, Preliminary Injunction, monetary damages, and recovery of our attorneys’ fees and costs.” Under clear and prevailing case law available at the time the “cease and desist” letters were written, such aggressive language provides legal basis for the filing of declaratory judgment actions by the letters’ recipients. Defendant L&L did not tell Plaintiff Huang or Mophie that such “cease and desist” letters would or could trigger declaratory judgment actions by the letters’ recipients.
Prior to sending the aggressive and threatening “cease and desist” letters, Defendant Christina Loza failed adequately to advise Plaintiffs that there was a likelihood that the recipients of the letters would file declaratory judgment actions.
Naturally, these letters did lead to pre-emptive litigation against Mophie, despite the fact that: “Plaintiffs had specifically instructed Defendants that they wanted to avoid litigation and wanted to take conservative steps in enforcing Mophie’s intellectual property rights.” Even more shocking, Mophie claims that “Loza misrepresented to Plaintiffs that the language of the letters to competitors would not result in any challenges to the validity of Plaintiffs’ patents.” Again, simply not true, and any competent attorney would certainly counsel even a highly sophisticated client that any mention of a patent in a letter bears some risk of litigation (even, apparently, when the patent and patent owner are not directly mentioned).
On the heels of a malpractice lawsuit resulting from a botched licensing-turned-declaratory-judgment lawsuit comes a declaratory judgment suit from Microsoft. There’s a definite lack of professional courtesy demonstrated by the lawyers, but I suppose that’s no real surprise. The real lesson here is something I used to tell every client: forget about protective orders, non-disclosure agreements and attorney-client privilege, and understand that the only thing that can’t be read by others is something you don’t write down in the first place. “What the heck does that mean?” you’re probably asking.
The basis for Microsoft’s declaratory judgment suit is a series of patent lawsuits brought by Niro, Haller & Niro against various companies in East Texas. Microsoft became involved when several of the defendants approached the software company for indemnification. As evidence supporting Microsoft’s lawsuit is Exhibit F (available at Justia.com), which is a letter on Niro Haller letterhead that was sent to Iron Mountain, offering a license in exchange for a lump sum payment of $300,000. Attached to the letter is a claim chart which, in the left hand column shows claim language from one the Niro clients’ patents, and on the right are various quoted sources under a heading “Users of Microsoft ADO.NET.”
Of course, also marked all over these documents are designations like “CONFIDENTIAL UNDER RULE 408.” Often times, these documents are provided under a confidentiality agreement that extends beyond just a rule of evidence so that patent owners can provide information to their litigation opponents without having it splashed all over the internet. Microsoft’s lawyers also could have just as easily described the facts and existence of the letter without actually disclosing its contents, and their basis for bringing a DJ action wouldn’t really be negatively impacted.
But you just can’t count on any professional courtesy these days, I suppose …
Oh, and I’m not exactly playing the “victim” card here for the Niro lawyers. After all, we have tools like WebEx and GoToMeeting to show someone a set of claim charts, and, particularly for settlement offers before an agreement is in place, there’s also this invention called the telephone.
Thenagain, maybe Microsoft’s just upset that Niro and Apple have become such good friends …
- Frivolous Patent Lawsuit Illustrates High Cost Of Litigation (gametimeip.com)
- Patent Plaintiffs Should Meet High Expectations In Eastern District Of Texas (gametimeip.com)