April 23 (Reuters) - Landmark Screens LLC can pursue a legal
malpractice suit against Morgan, Lewis & Bockius over a botched
patent application, a federal appeals court ruled on Monday.
The Federal Circuit Court of Appeals in Washington, D.C.,
revived the suit, the latest turn in Landmark's six-year attempt
to recover damages from its former patent counsel. The decision
overturns a California federal judge's ruling that dismissed the
case on statute-of-limitations grounds.
The dispute dates to 2002 when Landmark's lawyer Thomas
Kohler, then at Pennie & Edmonds, filed a patent application for
an outdoor light-emitting diode electronic billboard for
Landmark. In a follow-up application, Kohler left out some key
information, according to the U.S. Patent and Trademark Office,
which rejected the filing as incomplete.
In order to qualify for a patent, an invention must be
different from all previously-published materials describing
similar inventions, or "prior art." Inventors have a one-year
grace period after their first application to file a subsequent
application without losing the novelty of their invention.
Kohler did not respond to the Patent and Trademark Office's
rejection until after the one-year anniversary of the first
application, the opinion said. At that point, all patent claims
in the first application became prior art against the subsequent
application, and all claims in the second filing were lost.
"This was a devastating outcome for Landmark. Nevertheless,
neither Kohler nor MLB divulged the true nature or seriousness
of the problem for another six months," the opinion said.
Landmark sued in California state court in 2005, but the
court found that the case belonged in federal court. That same
day, Landmark filed its claims again in federal court in San
Federal district judge Jeremy Fogel granted summary judgment
to Morgan Lewis and Kohler in 2011. He found that Landmark had
been aware of the issues for at least three years before it
filed the suit in federal court, and had missed the state
deadline for bringing fraud claims.
But a three-judge panel of the Federal Circuit Court of
Appeals in Washington disagreed, ruling that the clock stopped
running while the lawsuit was pending in state court.
The panel also overturned an order by the lower court that
had capped potential damages for the fraud claim.
Judge Kathleen O'Malley, in a separate concurring opinion,
called on the full Federal Circuit to reconsider whether state
law malpractice claims that involve patent law actually belong
in federal court. She accused the Federal Circuit's 2007
decision to claim jurisdiction over patent malpractice claims of
wreaking havoc with parties' "well-settled expectations" that
such claims belong in state court.
Elliot Peters, a lawyer at Keker & Van Nest who represented
Morgan Lewis and Kohler, did not immediately respond to a
request for comment. The firm did not immediately provide
Sanford Rosen, a lawyer for Landmark, said his client was
pleased with the decision.
The case is Landmark Screens LLC v. Morgan, Lewis & Bockius
et al, U.S. Court of Appeals for the Federal Circuit, No.
For Landmark: Sanford Rosen of Rosen, Bien & Galvan.
For Morgan Lewis et al: Elliot Peters of Keker & Van Nest.
(Reporting By Terry Baynes)
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