Legal Malpractice

Patent Litigation and Breach of Fiduciary Duty

By (Andrew Lavoott Bluestone)

Patent Litigators held their breath all through the summer, as the Supreme Court considered whether a patent could be enforced in the Internet process area.  Bilski v. Kapos was decided by terms end, but did not really put the issues to bed. 

Apparently, while others were holding their breath, this plaintiff/client and her attorney were starting their own litigation cycle.  As Law.Com reports dueling suits in Westchester and New York bring up the question of whether the attorneys abused plaintiff in their billing while representing her in patent litigation.

"A retired university professor who has pursued dozens of electronics companies for patent infringement on Monday filed a notice to sue her former attorneys for $10 million, accusing them of misusing escrow funds and charging her excessive fees.

Gertrude Neumark Rothschild filed a summons in Manhattan Supreme Court against Troutman Sanders; an intellectual property boutique chaired by Albert L. Jacobs Jr. before he became a partner at Troutman; and Jacobs.

Her motion comes only days after Troutman, Jacobs and the now-defunct boutique filed separate lawsuits against her in Westchester County Supreme Court for a combined $4.4 million in unpaid legal bills. Rothschild said in her court papers that she fired Troutman Sanders for cause in June.

Jacobs began representing Rothschild, a former Columbia physics professor, in October 2007 after arriving a few months earlier at Dreier from Greenberg Traurig, according to his boutique's complaint. Rothschild retained him to represent her before the International Trade Commission in cases against companies importing devices using light-emitting diodes that she claimed infringed on patents she held.

Rothschild turned to Jacobs for later disputes both in the United States and abroad, his complaint said. Among those Jacobs targeted for Rothschild were Sony Corporation, Motorola Inc. and Hitachi Ltd. and 31 other companies, according to records filed in February 2008 before the U.S. International Trade Commission.

By November 2009, when Jacobs formally became a partner at Troutman Sanders, he had obtained $14 million in settlements and licensing fees for Rothschild, according to the boutique's complaint, which said settlements and agreements came from 10 large consumer electronic companies.

Rothschild paid Albert Jacobs LLP on some of its invoices, "but has failed and refused" to pay other ones, the boutique said in its complaint. She "never expressed any dissatisfaction with the legal services" the boutique rendered, the suit claimed, but instead "commended" its efforts. "

Full post as published by New York Attorney Malpractice Blog on August 26, 2010 (boomark / email).