We will be discussing two recent, intellectual property and ethics-related opinions in our weekly SoCal IP Institute meeting on Monday, May 16, 2011.  The first case pertains to unintentional delay and failing to inform the client of the status of pending applications.  The second case hinges on a client’s failure to apprehend the full scope of a settlement agreement and the attorney’s alleged failure to apprise the client of the full scope.  A brief synopsis of the cases is presented below.

Aristocrat Tech., Australia Pty. Ltd. v. Int’l. Game Tech., 2011 U.S. Dist LEXIS 48693 (N.D. Cal. May 6, 2011) (attached).  Aristocrat’s asserted patent was abandoned during the course of prosecution.  Int’l Game asserted inequitable conduct and all other issues were stayed while this issue was considered.  It came to light that Mr. Islam, the patent attorney for Aristocrat in the U.S. had failed to properly file the application claiming priority to a PCT application.  He was allegedly unaware of the abandonment, then transferred firms all the while failing to inform Aristocrat of the status of the application.  It was eventually revived and proceeded to issuance.

The court determined that the petitions to revive were not deceitful because the delay was unintentional, at least as to Aristocrat itself.  In this way, the petition to revive for “unintentional” delay was not false.  Thus, the court could not find any inequitable conduct on the part of Aristocrat.

Viking Corp. v. Van Dyck, 2011 Mich. App. LEXIS 612 (Mich. App. April 5, 2011) (attached).  Viking Corp. was sued by Central Sprinkler Company in 2003.  That suit eventually resulted in a settlement including a license to all patents claiming priority to the parent patent of the asserted group of patents.  The settlement agreement did not include Central’s parent company, Tyco.  Later, Tyco sued Viking separately on different patents.  This suit also resulted in a settlement.

Viking then filed a malpractice suit against their attorneys in the first case alleging that they failed to inform them that Tyco was not included in the original settlement agreement.  The appeals court here affirmed the lower court’s decision that malpractice was not present for a number of reasons.  First, there is a general presumption that a party to an agreement cannot later argue that it did not understand the agreement.  Second, even if they had known that they were not licensed as to Tyco, Viking failed to demonstrate that the failure to include Tyco in the settlement agreement was the proximate cause of their damage.

All are invited to join us in our discussion of these cases during the SoCal IP Institute meeting on Monday, May 16, 2011 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE ethics credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.