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Judge orders law firm, client to pay $4.3 million

By: dmc-admin//November 10, 2008//

Judge orders law firm, client to pay $4.3 million

By: dmc-admin//November 10, 2008//

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Boston (Dolan) — At a time when law firms are looking to save their pennies, McDermott, Will & Emery has learned the hard way that breaking the rules in a high-stakes intellectual property trial can have serious repercussions.

Earlier this month, a federal judge in Colorado ordered the 1,200-lawyer firm and its client, Medtronic Inc., to fork over $4.3 million as punishment for alleged abuse of advocacy in a patent case.

An agitated U.S. District Court Judge Richard P. Matsch whacked two Silicon Valley MW&E litigators, Terrence P. McMahon and Vera M. Elson, for misleading jurors and ignoring his earlier claims-construction decision in a 2005 patent trial between Medtronic and BrainLAB.

“Rather than accept that the claims construction ruling stripped the merits from this case, counsel chose to pursue a strategy of distorting those rulings, [and] misdirecting the jury to a different reading of the claim language,” the judge wrote. “Throughout these proceedings, Medtronic and the MWE lawyers have demonstrated that when they are faced with adverse court rulings, they proceed undeterred, with only superficial observance of the court’s determination.”

In their final argument to the jury, Matsch also found that the litigators willfully ignored his instructions and distorted both the evidence and the law.

Just 10 months earlier, U.S. District Court Judge Edward F. Harrington in Boston hit defendant Medtronic and its legal team of Dewey & LeBoeuf with a $10 million penalty in a patent case.

Scott E. Erlich of Nutter, McClennen & Fish in Boston, who served as local counsel on behalf of the plaintiffs in the case before Harrington, declined to comment.

While Boston patent attorney Vickie L. Henry of Foley Hoag says she is not familiar with the Colorado case, she notes that claim-construction orders generally define the scope of arguments that lawyers are permitted to offer to jurors.

“Once the judge makes that claim construction, it governs the rest of the litigation,” she says. “And if a party continues to resist, they do run the risk of incurring the ire of the court.”

Regarding the size of the sanction, Henry says the number of dollars involved reaffirms the notion that, when a judge sets the boundaries for proper argument, the consequences of non-compliance are severe.

“I don’t think there’s any question that most people would consider that a very significant sanction, particularly if the law firm is indeed on the hook for that payment,” says Henry.

“You’re in a tough situation as the lawyer because you need to make sure you’re being a zealous advocate, but at some point you have to accept what the trial judge’s rulings are and litigate your case.”

As far as what the sanction means to the 80-plus McDermott lawyers hanging their hats at 28 State St., it’s difficult to tell.

“We intend to appeal the decision,” says the firm’s media and communications manager, Maryanne C. Adams. “The firm also stands strongly behind the trial team.”

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