Ex-Client Seeks $10M Legal Fees Clawback Over Ill-Fated Patent Litigation

A former client is suing two law firms in an effort to recapture some $10 million in legal fees and costs from ill-fated patent infringement litigation.

E-Pass Technologies is asserting negligent misrepresentation claims against the company's former counsel in its California lawsuit, reports the Recorder.

The defendants are New York City-based Moses & Singer and its trial partner, Stephen Weiss, and Squire Sanders & Dempsey and its San Francisco partner Mark Dosker, who served as local counsel. The two attorneys and a Squire Sanders spokeswoman didn't immediately respond to the Recorder's requests for comment.

The German patent holding company blames the two firms for a disastrous result in federal litigation that E-Pass filed in 2000 against Palm Inc. and others in U.S. District Court for the Northern District of California. U.S. District Judge D. Lowell Jensen not only dismissed the case in 2006 but found that E-Pass had committed litigation misconduct and agreed that the defendants' legal fees should be reimbursed.

E-Pass then appealed the defense fee award and not only lost the appeal but was sanctioned again for filing a frivolous appeal and making what the appellate court refers to in its opinion as "multiple misrepresentations to the court," according to a written decision (PDF) in the appeal provided by Patently-O.

The company again has been ordered to pay legal fees to those defending the appeal, although the amount has not yet been determined. The Federal U.S. Ciruit Court of Appeals decision was filed Friday.

"In advising E-Pass to file and maintain their patent infringement claim, they spent $10 million in legal fees and costs without a sound basis to make the elemental case of patent infringement," E-Pass attorney James Rosen of Rosen Saba tells the Recorder, regarding his client's claims against the two defendant law firms in the state-court negligent misrepresentation case.

The lawsuit was filed in January in San Francisco Superior Court but was not immediately served by Rosen as he awaited an appellate decision in the underlying federal patent case.

Additional coverage:

ABAJournal.com: "Patent Holding Company on the Defensive in Attorney Fee Dispute"

Updated at 2:40 p.m. on March 25 to remove link to January lawsuit provided by Recorder article, due to intermixing with unrelated complaint.