IPWatchdog.com is in the process of transitioning to a newer version of our website. Please be patient with us while we work out all the kinks.

Posts Tagged: "contingency representation"

The Accounting Benefits of Legal Finance for IP

There are many reasons that it makes sense for companies, law firms and other entities with valuable IP assets to utilize legal finance. Most are well understood: The cost of litigation is rising, the IP landscape continues to be ever more fraught with risk, and fewer firms are willing to take IP matters on contingency… However, there’s another, less understood but quite compelling reason for IP litigants to use legal finance: Its positive impact on accounting outcomes. The accounting and financial reporting impact of litigation is clearly a pain point: The 2017 Litigation Finance Survey shows that a noteworthy 76% of in-house respondents identify as a business challenge that “ongoing legal expenses depress financial results.”

Why Patent Contingency Litigation is Declining?

Contingency representation is monetarily feasible for attorneys and law firms if and only if there is a high likelihood of success. Even in the best case scenario attorneys will sometimes make bad judgment calls when taking a contingency case, but when the underlying asset is under attack — as patents have been — it makes it all the more difficult to justify the risk of putting in all that work and ultimately receiving nothing in return.

Arbitrator’s ‘interpretation’ of unconscionable fee agreement gives Jenner & Block millions in unearned contingency fees

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.

Money For Nothing: An arbitrator awards Jenner & Block millions for losing case, abandoning its client

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.

Did Jenner & Block breach its fiduciary duty to Parallel Networks with an unreasonable contingency fee?

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.

A Better Mouse Trap: Patents and the Road to Riches

Inventors and entrepreneurs frequently take this mouse-trap quote all too literally, thinking that if they make a better product it will sell and make them rich beyond their wildest dreams. Although inventors hate hearing this, the truth is that the invention is the easy part of the process because it is the only part of the entire cycle from idea to commercial success that is completely controlled by the inventor. Once you invent something market forces and the reality of life takes over. There are any number of reasons why an invention won’t make money even if it truly is unique and superior to available alternative solutions.

Intellectual Property as a Corporate Asset

The theme of the annual meeting of the AIPF this year is “intellectual property as a corporate asset.” There are indeed presentations sprinkled across the two days of this meeting that relate specifically to this topic. Another recurring and equally treated topic is the use of the Internet in practice in a variety of contexts — attracting clients, networking generally and use of the Internet for investigations. Topics of particular interest included: (1) The Invisible Hand: Models for Monetizing Patents in the 21st Century; (2) Lies, Damn Lies, and Lawyers; (3) Contingent Fee Arrangements in Enforcing IP Rights; and (4) Economic Effect of Non Practicing Entities.

Why Patent Attorneys Don’t Work on Contingency

Having spent time as a litigator I know exactly what goes into taking a case on a contingency basis and you only take cases on a contingency when you know beyond a shadow of a doubt that there WILL be money ACTUALLY recovered. That is why it is perfect for personal injury attorneys. They can tell with great certainty, if they are being honest, if money will be recovered. So you need to be 100% sure when you take the case that money will be obtained because as it turns out cases can and do take on a life of their own and even when you are 100% certain at the outset you make mistakes. If you are not 100% certain at the beginning you pretty much never recover anything.

Lessons: 5 Odd Things Inventors Tell Patent Attorneys

One of the problems created by true newbies, particularly those who have not done any reading or tried to at least bring themselves up to speed to some extent, is that they present in a way that makes established patent attorneys and law firms want to run and hide. Whether it is unrealistic expectations, wanting a confidentiality agreement signed because they want to be able to sue you if things go bad, or wanting representation on a contingency basis, these things scream PROBLEM to most patent attorneys, thereby foreclosing a possible representation relationship in many cases.

A Better Mouse Trap: Patents and the Road to Riches

To paraphrase the famous quote of Ralph Waldo Emerson, if you build a better mouse-trap the world will make a path to your door. Inventors and entrepreneurs frequently take this quote all too literally, thinking that if they make a better product theirs will sell and make them rich beyond their wildest dreams. There are, of course, many different reasons…