Posts Tagged: "Parallel Networks"

But did Judge Reyna really fail to understand the importance that a web page and the page server are not the same thing as the Federal Circuit adjourned to deliberate? Did he and the other judges on the panel continue to have this important, yet fundamental misconception during deliberations? Did the reality that a web page and a page server are not the same thing become appreciated and understood by the Federal Circuit panel, or did this fundamental misconception perpetuate itself up to and through the decision making process? Did counsel for IBM managed to mislead the panel? Did the panel even realize that IBM had made the exact opposite argument about WebSphere technology at the district court? The sad, and rather inexplicable reality is it is impossible to know whether the Federal Circuit was mislead, simply didn’t understand the technology, or was even hoodwinked.

Oracle and Parallel Networks settled that arbitration in January 2013. So, more than four years after Jenner & Block lost the Oracle case and abandoned its client, they received nearly $500,000 in additional contingency fees from Parallel Network’s settlement with Oracle – despite the fact that they were not representing Parallel Networks when this January 2013 settlement with Oracle was negotiated and concluded (in point of fact, in January 2013 Jenner & Block was suing Parallel Networks in arbitration). While arbitrator Jerry Grissom’s rationale for awarding millions of dollars to Jenner & Block in contingency fees under his “interpretation” of the CFA is absurd, his acceptance of Jenner & Block’s “just cause” excuse which allowed Jenner & Block to abandon Parallel Networks and still retain a right to get paid, is truly bizarre.

Jenner & Block’s demand in the arbitration was for more than $10.2 million in hourly fees, which amounted to more than 70% of the net recovery obtained by Parallel Networks in the Oracle case and more than 110% of the net recovery obtained by Parallel Networks in the QuinStreet case. Jenner & Block justified this extraordinary amount by claiming that it had expended more than 24,000 billable hours in the Delaware Cases during the 18 months that it had represented Parallel Networks. Accepting Jenner & Block’s claim at face value would mean that Jenner & Block attorneys were purportedly billing Parallel Networks at a rate of nearly 44 hours per day, seven days a week, 365 days per year for the entire 18 months period of the representation. This was a rather startling claim given that the Oracle case was lost at the summary judgement stage and that the QuinStreet case never progressed much beyond the discovery phase.

After losing a case on summary judgment, and at a time when Parallel Networks most needed its counsel to fight to overturn the catastrophic summary judgment ruling, Jenner & Block was instead having internal discussions on which course of action would allow Jenner & Block to recover the maximum amount, whether that was to continue or terminate the representation… After subsequently firing the client Jenner & Block interpreted the termination provisions in the representation agreement to give it the right to convert the representation agreement from a contingency fee agreement to an hourly fee agreement… Ultimately, new counsel would prevail on behalf of Parallel Networks on appeal… Jenner’s interpretation of the representation agreement seems to fly in the face of Jenner & Block’s ethical obligation to act as a fiduciary to its client, which requires Jenner & Block to place Parallel Network’s interests before its own. It is difficult to see how Jenner & Block’s interpretation of the representation agreement did anything other than place Jenner & Block’s interests ahead of its client’s interests… Adding insult to injury, the arbitration award for fees was more than the subsequently victorious law firm collected against the infringer on behalf of Parallel Networks, which makes it difficult to understand how the fee collected was not unreasonable as that term is used in ABA Model Rule 1.5, which prohibits attorneys from charging unreasonable fees.

Jenner & Block represented Parallel Networks for 18 months and then lost one of the cases on summary judgment of non-infringement. Four weeks after losing summary judgement, Jenner & Block decided the cases were no longer economically viable, refused to handle the appeal of the adverse summary judgment and advised Parallel Networks that it was terminating its representation in both cases. Parallel Networks retained new legal counsel for the appeal and these new lawyers undid Jenner & Block’s loss when the Federal Circuit vacated the summary judgement order of non-infringement and remanded the case back to Delaware. Parallel Networks eventually settled both cases, including an eight-figure settlement in one of those cases. Incredibly, more than two and a half years after Jenner & Block determined that these cases weren’t economically viable and then decided to abandon its client, Jenner & Block sent a demand letter to Parallel Networks claiming it was entitled to payment of $10.2 million in hourly fees based on the successful outcomes of the cases achieved by a different law firm.