ALPS Sues Law Firm in Patent Dispute
July 13, 2017
ALPS South, St. Petersburg, Florida, filed a lawsuit June 30 in Florida federal court against its former law firm, Shumaker Loop & Kendrick, claiming the firm allowed the company's patent dispute with WillowWood, Mt. Sterling, Ohio, to be handled by two lawyers who cost ALPS more than $50 million in losses by mishandling the case, according to Law360.
Alps claimed in its complaint that the law firm failed to establish standing in the case by not joining the patent inventor, John Y. Chen, or his company; assigned attorneys not equipped to handle a patent case or a jury trial; and created an unnecessary conflict of interest by also representing Chen.
"Defendant Shumaker did not recognize that its lawyers undertook to handle a specialized kind of lawsuit for infringement of patents without reasonable training, qualifications, or experience," ALPS said in the complaint. "As a result, [Shumaker] filed a lawsuit based on a license agreement that did not create a legal basis for the lawsuit."
The attorney for Shumaker Loop & Kendrick told Law360 that the firm denied all wrongdoing and was currently suing Alps for "millions of dollars in unpaid legal fees."
The suit arises out of a case ALPS filed in 2009 against WillowWood concerning patented technology that manufacturers claim makes prosthetic liners more comfortable and more durable; the patent is held by Chen and assigned to his company, Applied Elastomerics, San Francisco, California. ALPS obtained a license from Applied Elastomerics to the technology and accused WillowWood of infringing on the patent. ALPS didn't name Applied Elastomerics as a co-plaintiff.
ALPS won a $15 million judgment against WillowWood in the lower court, but the verdict was overturned on appeal. The Federal Circuit found that the license from Applied Elastomerics did not convey sufficient rights to the patent to provide ALPS with the standing to pursue its infringement litigation in its own name, without Applied Elastomerics. The Supreme Court declined to hear an appeal of the Federal Circuit decision in January 2016.
"[Shumaker Loop & Kendrick] had patent attorneys and patent litigators, but none were assigned…to the legal team representing ALPS despite repeated legal challenges at the outset of and throughout the case that related to specific, technical aspects of patent law," ALPS said in the complaint, according to Law360. ALPS argued that if the attorneys were more familiar with patent law, they would have realized that they needed to included Applied Elastomerics to establish legal standing. The firm also represented Chen, according to ALPS, which argued in its complaint that this created a nonwaivable conflict. In addition, ALPS claimed that the assigned attorneys were not up to the task of handling a jury trial and made key mistakes, including failing to adequately prepare an expert witness.
ALPS calculated that the law firm's errors cost it $42 million in lost profits and $14 million in lost royalties, plus $3 million in legal fees.