Of late, there has developed something of a fad of clients suing their attorneys. Typically in cases involving patents, the clients seek to recover the profits they allegedly would have made but for the alleged misconduct of the attorneys. When this occurs, the claimed damages can reach truly impressive levels. (Nomir Medical Technologies Inc. v. McDermott, Will & Emery)
Nomir, a “development stage” company (read: “company with no sales and no products”) retained MW&E to prepare and prosecute four patent applications pertaining to the use of lasers to attack biofilm, which is clumps of microorganisms adhering to each other. Nomir claims that in 1995 the first of these applications went abandoned as a result of a faulty docketing system at MW&E. Although the application was subsequently resurrected by another law firm and issued as a patent, there was a loss of more than two and a half years of patent protection, $2-3M in financing, $600K in actual damages and – here it comes - $22.4M in revenue!
Nomir further claims that, in the same year, MW&E missed two deadlines to convert provisional applications into utility cases, resulting in $125K in costs and – wait for it – “about” $120.6M in lost profits!
As to the fourth patent, Nomir claims that MW&E failed to file an amendment that would have expanded the scope of the medical applications covered by the patent claims. Nomir did not even speculate as to the damages resulting from this alleged error.
MW&E responded to the complaint by denying everything of any importance and counterclaimed for $490,857.65 in unpaid bills plus prejudgment and post judgment interest (their docketing system may be flawed, but their accounting system appears to work just fine). Nomir countered that it was not obligated to pay for services “which were not rendered in a proper, skillful and diligent manner …” Each party appended a laundry list of affirmative defenses to its answer to the claims of the other.
The bottom line here is that MW&E is staring down the barrel of over $143 MILLION in damages.
THE LESSONS TO BE LEARNED: (1) It pays to have a good docketing system; and (2) even so, carry a lot of malpractice insurance.
Nomir countered that it was not obligated to pay for services “which were not rendered in a proper, skillful and diligent manner …”
I wish that rule applied at my neighborhood copy center (which shall remain nameless).