Akin Gump Loses $72.6 Million in Patent Malpractice

By Gene Quinn
May 9, 2009

On May 7, 2009, Akin Gump Strauss Hauer & Feld LLP lost a patent malpractice suit in the United States Federal District Court for the Western District of Texas, when the jury concluded deliberations and presented the court with its a Verdict Form, which awarded the plaintiff’s $72,611,397.83.  In a report in Law Blog of the Wall Street Journal on May 8, 2009, Akin Gump was quoted as saying that no jury verdict had been issued yet, and if one were issued an appeal would be taken because the evidence would not support such a jury verdict.  Clearly, a jury verdict had been issued, so I guess that means we now move into phases 2 and 3, which undoubtedly will be a stream of post-trial motions, ultimately ending up in an appeal.

While there were a total of five patents referenced in the complaint, only three were submitted to the jury for consideration of whether malpractice occurred.  The three patents where malpractice was found in are U.S. Patent Nos. 5,157,378, 5,689,234 and 5,910,771. According to the complaint filed, which was originally filed in State court and then removed to Federal Court, the plaintiffs alleged the following:

  • Plaintiffs’ hired Gary Hamilton, then a partner with Akin Gump, to prepare and prosecute various patent applications relating to a personal safety system for use by firemen and other emergency personnel engaged in hazardous substance control.  Among other things, the device contains an alarm that alerts others if the wearer ceases to move for a defined period, and since 2000 the National Fire Protection Agency has mandated use of this type of device by all firefighters.  [see complaint Fact paragraphs 1]
  • After patents were issued to the plaintiffs it became necessary to bring infringement actions against competitors.  During the course of these patent litigations evidence was discovered showing the Attorney Hamilton did not file the initial patent application within one year of the device being offered for sale, in violation of 35 U.S.C. 102(b).  Moreover, Attorney Hamilton failed to disclose two prior patents and other facts, of which he was aware, which lead the defendants in the patent litigations to assert inequitable conduct. [see complaint Fact paragraphs 5 and 6]
  • The patent application relating to U.S. Patent No. 5,910,771, could have been filed as early as 1990, but was not filed until 1997, which shortened the patent term. [see complaint Fact paragraph 7]
  • In one particular settlement, additional payments received as damages were limited to sales of the device through 2008.  The patent term was incorrectly calculated and should have been for sales of the device through 2010. [see complaint Fact paragraph 8].
  • Because of the actions of the defendents in this case, the plaintiffs were forced to settle the aforementioned patent litigations for sums demonstrably and significantly less than their fair value. [see complaint Fact paragraph 12].

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The Plaintiffs’ Statement of Claims filed on January 15, 2009, tells the same story as does the complaint. Not surprisingly, Akin Gump’s Statement of Claims and Defenses, also filed on January 15, 2009, tells a different story.  In relevant part of this pre-trial statement states:

Defandant Akin Gump maintains that it met all applicable standards of care for attorneys, denies it committed any malpractice or breached legal duties owed to its clients and denies that Plaintiffs suffered any damages.

Akin Gump also maintains: (1) Plaintiffs did not invent the device beacuse other persons had already developed and built substantially similar devices; (2) Plaintiffs never succeeded in developing a working prototype but were merely the first to file the patent paperwork; (3) it was Plaintiff’s own actions, errors and misrepresentations that made their infringement lawsuits less valuable; (4) Akin Gump did not begin its representation until four years after the original patent was filed, so if any mistakes were made that devalued the patents, those mistakes were made by other lawyers and law firms long before Akin Gump entered the picture; and (5) to the extent any correctable errors existed during Akin Gump’s representation, the lawyers who represented Plaintiffs after Akin Gump were in the same or better position to correct any such errors.  Many of these attorneys continue to represent Plaintiff’s in this lawsuit.

Obviously, if you read the Jury Verdict Form, it is apparent that the jury did not believe Akin Gump’s rendition of the facts.  According to the verdict reached by the jury, Akin Gump did not demonstrate that the claims to the patents were invalid, nor did they prove that others invented prior to the plaintiffs, nor did they prove that there was inequitable conduct.  What the jury did find, however, was that there were errors made that cost the plaintiffs quite a bit of money, 100% of the blame was placed on Akin Gump.

I did not attend the trial, so I am just trying to piece together what happened, so I am not saying that any of this is the truth, but this is an accurate representation of the events in the Western District of Texas.  I will, however, say that a couple things raised by Akin Gump in their statement of the case do not make a lot of sense to me.  For example, what difference does it make that  the plaintiffs never made a working prototype?  I am sure Akin Gump and their attorneys know that there is no requirement that a working prototype be created in order to obtain a patent, unless of course you are claiming a perpetual motion machine.  Only in the situation where you are claiming a perpectual motion machine must a working prototype be presented to the Patent Office.  Perhaps what they were trying to say is that the plaintiffs were never in possession of the invention and that they could not describe it in a way that would allow others to make and use the invention.  I don’t see that argument, so it is confusing why they would focus on a prototype, which is clearly irrelevant under the patent laws.

I also have never been a fan of saying saying there was no mistake, but if there was then it was someone else who is to blame.  The way this line of logic typically goes in a law school type discussion is in reference to a criminal defendant who says something like:

I didn’t do it, but if I did it I didn’t mean to do it, but if I did it and meant to do it then it was someone elses’s fault, but if I did it, meant to do it, it wasn’t someone else’s fault, then I was insane.

The final point raised by Akin Gump has that kind of quality to it.  They basically say that if we did committ errors then someone else should have fixed it.  I know you need to keep your options open in pleading and throughout discover and leading up to trial, but as you approach trial I just don’t think that there is any mileage in continuing the “but if” type arguments.  Juries need a story, and I think it makes people wonder when you continue to argue in the alternative.  It just sends the wrong message.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 13 Comments comments.

  1. Tom Human May 9, 2009 2:23 pm

    “I don’t see that argument, so it is confusing why they would focus on a prototype, which is clearly irrelevant under the patent laws.”

    While I have no idea of the merits of this specific case, your statement (which I believe is true to fact) is one of the reasons that many rational people consider the patent system, in its current form, to be deeply unjust and unfair.

    Anyone working in any engineering field can tell you that ideas are worthless – it’s making them work that requires the genius. All sorts of people tried to invent electric lighting before Edison – everyone knew at the time that this was a key problem of the age – but only Edison actually did the work of trying hundreds of experiments. All sorts of people tried to make steam engines before Watt, or flying machines before the Wright brothers.

    Look at the RIM patent fiasco. According to the courts of the land, the cumulative work of hundreds of talented engineers over a decade is worth far than that of a couple of lawyers writing up a set of speculative, technically empty patents of ideas *that they had no intention of ever developing*.

    Parents are supposed to encourage innovation. The logical strategy with the current patent system is to do nothing, let other people do the actual work, and then steal the fruits of their labour with a court of law.

    Again, this is no comment at all on the current case, which I have not investigated at all, but a more general comment on the madness of today’s patent system.

  2. Gene Quinn May 9, 2009 2:38 pm

    Tom-

    Your position is well taken. You are certainly correct that ideas are worthless, and ideas cannot be protected. What is required is a proof on paper, which admittedly doesn’t always translate into proof in reality once building is attempted. Having said this, I will certainly admit that there are a lot of patents, perhaps even an increasing number of patents, that are extremely light on disclosure and really cover little more than an idea. This is problematic, no doubt.

    The law does not require a prototype to be built as a prerequisite to obtaining a patent, except in the narrow case where a perpetual motion machine is being claimed. One could suspect that such a requirement would be extended to other impossible to believe situations, such as an HG Wells time machine. But remember that the value of patents are not the same, and when valuing a patent it is certainly considered whether there is a working prototype. The further the inventor gets down the road toward actual realization of the invention the more valuable the invention and the more valuable the patent.

    It is a defense to a patent infringement lawsuit that the invention does not work. If the defendant can demonstrate that one of skill in the art could not have made or used the invention without attempting undue experimentation then the patent claims would be invalid.

    If the patent laws were to require a prototype as a prerequisite far less would be patented, and innovation would likely be harmed. Many inventors and businesses need the patent in order to attract funding in order to pursue further development efforts. Large corporations would not be able to patent as much either, and what would be disclosed via patent applications would be a lagging indicator of technology far more than they already are if a prototype were required.

    I do understand your points and frustrations, but I personally think there is nothing wrong with no prototype being required because I think if it were we would have far less innovation.

    -Gene

  3. Tom Human May 9, 2009 8:27 pm

    “I personally think there is nothing wrong with no prototype being required because I think if it were we would have far less innovation.”

    But why? The more talent barrier to actually creating a patent there is, the better it is for innovation.

    Your model:

    – have an idea.
    – spend a lot of money and time patenting it.
    – (optional: build it).

    My model:

    – have an idea
    – build a model and see if it’s actually a good idea.
    – then patent it if so.

    In my world, you have fewer patents, and more products – your world has more patents and fewer products.

    In my world, you can do a patent search right after you get an idea and before you implement it – or simply rely on the fact that for every 20 people who has an idea, one of them will actually be able to implement it, and take the risk that someone else is working on it.

    The failure with your model is that a tiny amount of work blocks a huge amount of actual production – therefore someone who only seeks to maximize their profit should rationally patent all ideas they can get their hands on and never develop them in the expectation that some poor victim will blunder into their trap and be forced to give up the results of years of work to someone who has contributed absolutely nothing to society or the economy.

  4. Gene Quinn May 10, 2009 11:40 am

    Tom-

    Unfortunately, you are mistaken. Your mistake is fundamental. You cannot patent an idea, so any argument you have that starts with the believe that patent law allows for the patenting of ideas is simply wrong.

    You say: “The more talent barrier to actually creating a patent there is, the better it is for innovation.”

    More patents are better for innovation, not less. There is absolutely zero proof to suggest you get more innovation with fewer patents. Those who are lazy would prefer fewer patents so they can do what they want without infringing. Those who are motivated engineer around patents and advance innovation. If there were no or fewer patents there would be no need to innovate and engineer around, and advances in technology would stagnate.

    You say: “someone who only seeks to maximize their profit should rationally patent all ideas they can get their hands on and never develop them in the expectation that some poor victim will blunder into their trap and be forced to give up the results of years of work to someone who has contributed absolutely nothing to society or the economy.”

    If that were true I would agree with you, but it is factually not true so we should not attempt to alter the system based on fiction.

    -Gene

  5. Tom Human May 10, 2009 2:16 pm

    “Unfortunately, you are mistaken. Your mistake is fundamental. You cannot patent an idea, so any argument you have that starts with the believe that patent law allows for the patenting of ideas is simply wrong.”

    I never said you can patent “any idea”. However, you can patent some ideas. Clearly, if you are not required to generate a model, then ALL you can patent is some form of idea.

    I assume you’re in the business, yes? And “idea” is some form of technical word to you, yes? So let me use another term, a “conceptual thing” (what most people would call “an idea”). *If you are not required to patent some sort of physical, tangible thing, then you must be patenting a conceptual thing.*

    “More patents are better for innovation, not less. There is absolutely zero proof to suggest you get more innovation with fewer patents.”

    You provide less proof of your claims than I do – a simple fiat statement, “You’re wrong,” without even an argument to go with it.

    Clearly, protection of intellectual property does benefit innovation. This doesn’t mean that *more* protection of IP always results in more innovation.

    “You say: “someone who only seeks to maximize their profit should rationally patent all ideas they can get their hands on and never develop them in the expectation that some poor victim will blunder into their trap and be forced to give up the results of years of work to someone who has contributed absolutely nothing to society or the economy.”

    If that were true I would agree with you, but it is factually not true so we should not attempt to alter the system based on fiction.”

    Sir, there is no reason to be rude to me. I’ve been extremely polite to you. I’m not ignorant on this matter, I have two patents to my name.

    The fact is that when you patent a “process”, for example, you don’t actually bring someone in to your factory and show that process operating – you provide information to document *how someone would actually operate that process*. I understand that you have technical language where to you, this intangible, conceptual thing that has no physical component and lives only in our minds is not “an idea,” but this does not allow you to redefine *our* words for us.

    If patent law really wanted to encourage “innovation”, it should require innovation out of the patent holders. As I wrote above, *in most technical fields the idea itself is a tiny part of the actual brilliance involved.* When Edison said, “Genius is 10% inspiration and 90% perspiration,” he was stating an absolute fact.

    It is an undeniable fact that it’s an excellent strategy for a company to gather a portfolio of “unreified patents” – patents that it never intends to develop, that the company isn’t even competent to develop, but are simply there to catch other companies that are *actually performing economically useful services*.

    What economical utility do these patent vultures provide? If they didn’t exist, the actual innovators, the people who produce some actual product, would be able to profit and continue to innovate.

    More troubling are the lack of contemporary stories showing how individual can use patents to their own advantage. The fact is that making a patent claim is extremely expensive compared with other common legal matters. For example, we’ve successfully defended a trademark against Columbia Records for under $1000 (and we still have money on retainer with our attorneys) – this was easy as we’d simply kept documentation of what we’d done all the way. However, just getting your attorney to the point of standing up in patent court for you costs $100K, or so I’m lead to believe.

    There are the terrible stories like Research In Motion and SCO. But what about the winners? Let’s look at, say, Robert Kearns. He won – sort of – but it took him thirty years and he had to quit being an engineer, lose his family and his health.

    In the course of a moderately long life, I’ve had some small legal tussles (damage claims against others, a trademark dispute). The fact is that the law is perfectly healthy in these parts and I “won” – I had a legal victory and I didn’t spend that much money or time. Most legal cases are like this. Patent disputes are not like this. If you are an individual caught up in a patent dispute, you are suddenly looking at years of stress and hundreds of thousands of dollars.

    The fact is that if a model were needed, it would cut greatly into the business of patent attorneys. Not only would there be far fewer patents, but actual patent disputes would be infinitely simplified if instead of the massive hypothetical clauses that patents always include, there were documentations of actual processes, machines, programs or other such demonstrations – a model. You could still include all the varieties that patents include (“Here’s the machine cooking pancakes. Here’s the machine cooking eggs. Here’s the machine cooking tomatoes”) but you’d actually have to demonstrate a model. (No, I don’t mean you come into the patent office with your robot cooker, but that you, for example, present photos, videos and schematics of a model in operation, and that you be prepared to demonstrate it to an examiner on request.)

    The fact is that creating a model is
    a) hard but
    b) marginal in effort and capital investment compared to productionizing and monetizing a process, piece of software, machine or the like.

    In the software industry, the truism is that it takes nine times as long to go from a “finished demo” that demonstrates all the functionality to a production program. And that’s in an environment where you can lift pieces right out of your demo and use them in production!

    I actually think that’s optimistic, it’s closer to 20:1 – perhaps 100:1 if you are making physical objects.

    Today it’s easy to get a patent and difficult to defend one – and that this whole process has little to do with your technical skill in the field of the patent. If patents were required to have models, rather than be “pure hypothetical conceptual things with no working models” – what non-patent attorneys would call “ideas” – the actual innovators would be better rewarded and less money would go to groups and individuals who are not creating anything of economic value.

  6. Tom Human May 10, 2009 2:20 pm

    (And let me add that I have no axe to grind here – the legal system generally works well and, knock wood, has worked for me. I’ve had to learn something about some branches of commercial law for various reasons, and only patent law seemed patently (cough) ridiculous – the others seem pretty darned reasonable to me, if occasionally somewhat baroque.)

  7. Gene Quinn May 10, 2009 9:12 pm

    Tom-

    I certainly cannot argue that patent law is anything other than ridiculous. I personally think a lot of the problems are inadequate, incorrect and uneven administration of the laws. I would really like to try and actually have patent laws and rules enforced as they are written and intended.

    -Gene

  8. Gene Quinn May 10, 2009 9:27 pm

    Tom-

    You said: “I never said you can patent “any idea”. However, you can patent some ideas. Clearly, if you are not required to generate a model, then ALL you can patent is some form of idea.”

    You continue to make the same fundamental mistake. Ideas cannot be patented, and an invention that is explained so that others could make and use it (the legal requirement) is not merely an idea.

    You said: “What economical utility do these patent vultures provide? If they didn’t exist, the actual innovators, the people who produce some actual product, would be able to profit and continue to innovate.”

    The “patent vultures” as you call them are not preventing innovators at all. They prohibit copy-cats from using patent rights without paying for them.

    You said: “Today it’s easy to get a patent…”

    Everyone in the industry would disagree with you. With an allowance rate that is 42% it is anything but easy to get a patent. This is factually not a valid statement.

    If you require a prototype then you would cripple research and development. You would cripple universities, federal laboratories and research and development companies. These companies to the hard work to discover and prove concepts on a fundamental basis. If they had to also produce a working prototype this basic research, which is the most valuable, would simply never happen because it would not be economical; it would be a complete waste of time. This would gut the Bayh-Dole legislation, which is universally considered to be the most successful piece of legislation over the last 50+ years.

    -Gene

  9. Bill Ralston May 11, 2009 11:18 am

    Gotta disagree with you Gene (and others) who say “you can’t patent an idea.” That is precisely what we patent. It must be a well formed “idea” – something useful that has been thought out enough to be implementable. Patent claims extend to a conceptual description of a novel and non-obvious arrangement of physical elements (or sequence of operations). While a patent specification is required to supply enough information that one can make and use the invention without undue experimentation, patent claims are nothing more than ideas. The patent claims explain in written language a territory within “idea space” that the patentee claims to be his exclusive property. The patent grant precludes others from transforming that idea into physical reality. Now granted, this is somewhat of a semantic argument, but I find arguments that “you can’t patent an idea” tends to cause people to not think properly about what they are trying to do with patent claims.

  10. Gene Quinn May 11, 2009 12:23 pm

    Bill-

    Whether you choose to accept it or not, an idea cannot be patented. That is the law, and it does no service to the many inventors who are duped by scams who claim you can patent an idea to perpetuate a myth that ideas can be patented.

    If you choose to believe that a description of how to make and use an invention with the detail required by patent laws is nothing more than an idea, you are fine to believe that personally. At the end of the day this belief is erroneous and is not the law. Ideas cannot be patented.

    -Gene

  11. breadcrumbs May 11, 2009 12:28 pm

    Is Bill being his own lexicongrapher?

  12. Will May 15, 2009 1:46 am

    Gene

    I think it is a bit disingenuous of you to keep repeating the mantra “You can’t patent an idea” to Tom , who is obviously an engineer. While saying “You can’t patent an idea” has meaning to a patent attorney as a term of art, it’s meaningless to others. In case Tom is listenting, what this means is that you can’t obtain patent protecton for simply a broad brush idea. However, you can obtain a patent protection if you teach how to make and use that idea.

    Example: My idea is a system for transporting a person or an object from one physical location to another, at very high speed, by disassembling the atoms that make up the person or object, transporting the disassembled atoms through space, and re-assembling those atoms at a destination location. I’ll call this invention a “tranporter”.

    You can’t obtain a patent on the idea alone.

    However, if you can teach [one of ordinary skill in the art] how to make and use that idea [without undue experimentation], then you may be able to obtain a patent [if you satisfy all statuory requirements]. To put it another way, if you can actually teach how to build a device that can accomplish the idea, then you
    can obtain a patent for the device that accomplishes the idea [assuming all statutory requiremnts are met].

  13. Gene Quinn May 15, 2009 10:19 am

    Will-

    I am sorry that you feel I am being disingenuous. I have repeatedly explained the concept over and over again to Tom. If you read my comments you will see, for example:

    “You continue to make the same fundamental mistake. Ideas cannot be patented, and an invention that is explained so that others could make and use it (the legal requirement) is not merely an idea.”

    I would not characterize my explanation as disingenuous. I would also say that I believe it is Tom’s opinion that even if you describe how others can make and use the idea you do not have an invention until you have a prototype because much can go wrong in the building process. It is certainly true that much can go wrong, and a patent that covers an invention having a proven prototype is worth more. This does not, however, mean that ideas are patentable. Under Tom’s rationale detailed architectural drawings are just ideas until you build the building. That is not what the law holds to be true, and I ideologically oppose that view.

    -Gene