Patent Lawyers Discover Cost of Arguing Outside Claim Construction

[WSJ_law_blog]

“In Denver, if you’re going to be a federal trial lawyer, one stage is to be yelled at by Judge Matsch. I’ve also seen agents of the Federal Government deeply regret they have come up short.” — a Denver trial lawyer speaking to Time about U.S. District Judge Richard Matsch



Civ pro profs love Rule 11. Lucky for them, patent lawyers are providing some good exam fodder.

Outside patent lawyers for Medtronic have had a rough go of things. Earlier this year, in the span of two weeks, two different teams of outside litigators representing Medtronic in two different patent trials, heard in two different jurisdictions, were both fined attorneys fees. On Tuesday, U.S. District of Colorado Judge Richard Matsch (pictured) put a price tag on those sanctions for one of the teams: McDermott, Will & Emery (and Medtronic) must cough of up $4.3 million. Here’s a report from the Recorder.

The common offense, if you remember, was a big no-no in the patent world: The lawyers were found to have argued outside the “claim construction” as determined by the “Markman hearings” in the cases. (In the second case, in Massachusetts, Medtronic and their Dewey & LeBeouf lawyers were hit with a $10 million sanction.) What’s the heck is a “Markman hearing”? It’s held prior to a patent trial to in essence identify the parameters of the supposedly infringed patent. This takes that determination away from the jury, and defines what the claims mean as a matter of law.

Markman hearings were intended to streamline cases — a function that patent judges enjoy. But when McDermott lawyers argued outside the claim construction, they made life harder for Judge Matsch. “The [McDermott] lawyers artfully avoided the limitations of the patent claims and created an illusion of infringement. They did so with full awareness that their case was without merit,” Matsch wrote at the time.

Now, McDermott and Medtronic must pay Renner, Otto, Boisselle & Sklar — the lawyers for BrainLAB, the defendant — for nearly three years of work, reports the Recorder. But that’s not all. They also have to pay attorneys fees to Orrick, Herrington & Sutcliffe, which provided a second opinion.

McDermott is appealing, but a firm spokeswoman did not return the Recorder’s call seeking comment. Lawyers for McDermott reportedly argued that the court had an obligation to stop any litigation conduct that stepped over the line, according to the ruling. McDermott’s lawyers also argued that the judge could have granted BrainLAB’s summary judgment motion for dismissal if the case really didn’t hold any water.

LB Readers: Should it have been up to Judge Matsch to call the McDermott lawyers out during trial if he felt they were arguing outside the claim construction?