Patent prosecution malpractice claim properly heard in federal court and appealed to Federal CircuitOctober 16, 2007

In its second decision yesterday in a legal malpractice case, the Federal Circuit affirmed the district court's decision that jurisdiction was proper over a legal malpractice claim on the basis that the malpractice claim involved a question of claim scope which presented a substantial question of patent law. The alleged malpractice involved prosecution of a patent using "consisting of" in a claim as opposed to "comprising," which allegedly resulted in a lost opportunity to license the patent.

The court also affirmed the district court's conclusion that the claim was barred by the statute of limitations.

The inventors of U.S. Patent No. 5,571,418 hired the law firm of Fulbright & Jaworski, L.L.P. to obtain patent protection for large pore hemofiltration technology. The '418 patent issued on November 5, 1996. The inventors of the '418 patent assigned their rights to Immunocept L.L.C., and Immunocept subsequently hired a patent attorney, Thomas Felger, to prosecute additional applications based on the technology. In so doing, Felger reviewed the '418 claims and file history. In January of 2002 Immunocept entered into negotiations with a subsidiary of Johnson & Johnson to commercialize the invention. On April 5, 2002 the Johnson & Johnson subsidiary terminated discussions with Immunocept on the basis that claim 1 of the '418 patent used the transition phrase "consisting of."

Immunocept filed suit against Fulbright & Jaworski on May 6, 2005, alleging legal malpractice under Texas state law. The district court granted summary judgment in favor of Fulbright & Jaworski on the grounds that the malpractice claim was barred by the statute of limitations and that the damages are too speculative. The Federal Circuit initially noted that it has exclusive jurisdiction over "an appeal from a final decision of a district court of the United States . . . if the jurisdiction of that court was based, in whole or in part, on section 1338." Quoting Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., the Federal Circuit next noted that it must determine whether "a state-law claim necessarily raise[s] a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and statue judicial responsibilities." The Federal Circuit concluded it had § 1338 jurisdiction, noting that the alleged claim drafting error was "a necessary element of the malpractice cause of action", that "there is no way Immunocept can prevail without addressing claim scope" and that claim scope is surely a "substantial question of patent law."With respect to the district court's decision that Immunocept's malpractice claim is barred by the statute of limitations, Immunocept argued it was not on notice regarding the basis of the malpractice claim—the alleged claim drafting error—until Johnson & Johnson terminated the negotiation discussions in April 2002. Immunocept additionally asserted that attorney Felger was hired to prosecute additional patents and did not reasonably know about the malpractice claim.The Federal Circuit concluded that "Felger should have reasonably known that 'consisting of' drastically narrowed the scope of the claim in the '418 patent no later than February 2002, thereby starting the statute of limitations clock." In so concluding, the court noted that "[t]he relevant inquiry is not whether Felger was hired to investigate malpractice, but whether he knew or should have known facts later establishing a malpractice claim." The Federal Circuit additionally noted that Felger also testified that "one of his assignments was to draft 'claims that were broader than the [100,000 to 150,000 Daltons] range on the filter' in claim 1 of the '418 patent . . . and that his goal was 'to develop a picket fence around the '418 patent'". Further, the Federal Circuit concluded, based in part on descriptions in attorney Felger's billing records, that "Felger acted within the scope of his authority when he reasonably should have discovered the facts that later served as the basis of Immunocept's malpractice claim" and that Felger's knowledge could be properly imputed to Immunocept.Based on this decision and a second decision regarding another malpractice claim relating to patents decided yesterday, it appears that malpractice claims involving patents may, in most cases, be heard in federal court and appealed to the Federal Circuit.To read the full decision in Immunocept, L.L.C. v. Fulbright & Jaworski, L.L.P., click here.

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