Patent Malpractice: Everything You Need to Know
Patent malpractice claims are generally decided by state courts. The federal court hears and decides claims having to do with patent law.3 min read
2. Judgmental Immunity
Updated November 27, 2020:
Patent malpractice claims are generally decided by state courts. The federal court hears and decides claims having to do with patent law. Currently, however, the Supreme Court is reviewing the case of Gunn v. Minton to determine if an attorney malpractice claim that demonstrates malpractice in the handling of a lawsuit falls under patent law and is, therefore, a matter for the federal courts.
Gunn v. Minton
Federal courts have jurisdiction over lawsuits that relate to:
In the case of Gunn v. Minton, Minton created software for use in investment trading. He licensed his software to NASDAQ in 1995, a year before applying for a patent. Later, Minton sued NASDAQ for $100 million in patent infringement. His patent was deemed invalid because he sold his software before patenting it.
After Minton received his judgment, he asked the court to take into account the fact that early licensing should not invalidate his patent since it was an experimental use. From there, Minton went on to sue his patent attorney for failing to plead experimental use on his behalf.
Minton's legal malpractice suit began in Texas, where it was dismissed for a lack of evidence. From there, he went on to appeal the dismissal in the state appellate court. While his case was being appealed, the Federal Circuit Court wound up ruling on two similar cases that, if a case of malpractice arises from patent law issues, the federal courts will maintain jurisdiction.
Because these two rulings came down during his appeal process, Minton asked the appellate court to dismiss his case based on the lack of subject matter jurisdiction. The appellate court denied his request, but the Texas Supreme court ruled to bring the case before federal court.
Throughout this process, the attorneys who were representing the patent attorney petitioned the United States Supreme Court, asking them to decide who will settle patent attorney malpractice claims. As such, the Supreme Court is currently reviewing the issue.
As you can see, legal malpractice lawsuits are highly complex, especially when dealing with intellectual property. In these malpractice or ethical complaint cases, it's always wise to hire a seasoned attorney.
It's common for people to second-guess the decision made throughout the process of patent prosecution. Care is necessary, but it's difficult to define "reasonable" when faced with time and budget restrictions. Furthermore, a patent that is prosecuted may not be able to withstand litigation. In the end, judgments in patent cases require a bit of discretion. This is established in the form of judgmental immunity.
The D.C. Circuit Court applied judgmental immunity to a case in 2016, in the case of Seed Co. v. Westerman. This was a malpractice claim that stemmed from an interference proceeding. It was the attorney's responsibility to claim priority over a previously-filed patent application domesticated through a PCT, an element that stems from the Patent Cooperation Treaty.
However, the previously-filed application was in Japanese and regulations require an English version of the claim. The attorney filed an application in English but neglected to file the PCT. As such, the board awarded the prior filing date and Seed won the case.
Then, the decision was reversed by the Federal Circuit. It ruled that, without the English PCT, the board was wrong to make an award based on the Japanese application. As a result, Seed lost the interference. That was the birth of the malpractice suit.
At this point, the district court granted summary judgment to the defendant's attorney, relying on judgmental immunity. Since the law had not yet established that an English PCT was mandated, the attorney's decision not to file one was immune from any second-guessing.
Here's the final plot twist. The court went on to reverse the decision. It ruled that judgmental immunity was limited to circumstances when an attorney makes a strategic decision between two options, each with their own benefits and costs. Thus, if an attorney interprets an unsettled law that risks a loss with no plausible advantage, an attorney can err on the side of caution and file the translation if the laws were, at the time, ambiguous, and there was no reason to act differently.
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