Patent Law Turns Sexy, But Firms’ Expertise May Not Match Claims

The resume looked great. So did the press release: A Washington law firm was trumpeting the addition of a “prominent trial lawyer″ who would be “practicing intellectual-property law.″

But Finnegan, Henderson, Farabow, Garrett & Dunner didn’t bother to mention that its new partner hasn’t exactly had much experience with intellectual property. In fact, the firm acknowledges that his record in such cases is 0 for 1.

It seems every firm these days wants to call itself an expert in intellectual property, which includes the law of patents, copyrights and related subjects. (Finnegan argues that its new partner, John C. Lowe, will be part of a team of patent specialists and has won many cases in other areas, including a murder trial that inspired the Robert Redford movie “Incident at Oglala.″)

Money, naturally, is the motivating factor. An explosion in the number of patent lawsuits and several huge recent verdicts have meant gigantic fees for some lawyers. So an arcane part of the law once peopled mostly with wonkish ex-engineers is suddenly as sexy as the merger-and-acquisition field was a decade ago. Law firms are raiding one another, with small boutiques losing partners and big firms scrambling to claim this turf as their own.

“We started it,″ boasts Michael Epstein of New York’s Weil, Gotshal & Manges, after mentioning other big firms that recently have hired patent lawyers. “They are all following us.″

John Kidd, who joined New York’s Rogers & Wells last year, brags: “We are probably the largest″ intellectual-property group at a big firm. “They don’t do″ patent litigation at Weil Gotshal, he says. (Mr. Epstein says his firm does.) For their part, small patent firms tend to deride the big ones as neophytes.

All of this can be very confusing for clients, whose corporate lives are often at stake in major patent disputes. Legal consultants warn of puffery in marketing claims, especially by big law firms that may be backing up a marquee name in the patent area with run-of-the-mill associates who have no expertise in the subject. Others may be exaggerating their abilities. “Some will respond to a phone call and say, `Oh sure, we can do that,‴ says Creighton “Corky″ Hoffman, a law-firm consultant for Price Waterhouse.

Different kinds of law firms are appropriate in different circumstances, consultants say. For an inventor or a company needing only to obtain a patent, a small law firm might be best: They often are staffed by attorneys with graduate degrees in technical areas and experience preparing applications for the U.S. Patent Office. (A lawyer who wants to file such an application must pass a special test, but those fighting patent cases in court don’t have to.) And these so-called patent boutique law firms are almost invariably cheaper than big, Wall Street law firms.

For companies that already hold patents but need to sue alleged violators in court, however, the question is more complicated. “You need to know patents. But you’ve also got to be a good trial lawyer,″ Mr. Hoffman says.

To help clients sort out the competing claims, consultants and other legal experts urge them to interview prospective lawyers rigorously. Mr. Epstein of Weil Gotshal suggests asking, among other questions: “How many lawyers do you have who are members of the patent bar?″ He says his firm has “more than 25.″

Mr. Kidd and others suggest checking out the lawyers’ track records in patent litigation; he notes that he and his team obtained a $145 million settlement earlier this month on behalf of Genentech Inc. in a dispute with Eli Lilly & Co. over rights to a human growth hormone and other products made through recombinant-DNA technology. He adds that all of the lawyers on a case don’t need a background in technology, and his group sometimes turns to members of the firm’s litigation department to help out.

Among other big, recent cases: A $208.3 million jury award last year against Nintendo Co. for violating a now-defunct firm’s video-game patent. With only one exception, the largest verdict in a patent case before 1990 was just over a quarter of that size.

And more patent disputes than ever before are set to be resolved by jury trial. That is partly because of all the new-fangled stuff that people want to protect. But it also is because juries have shown a tendency to sympathize with patent holders, who in the past may have balked at trying to explain their complex creations to lay people.

The mad scramble in the patent-law business is reminiscent of the time a few years ago, when demand for merger-and-acquisition attorneys slumped and bankruptcy experts were suddenly sought after. Takeover lawyers and other litigators tried to reinvent themselves, and big law firms began to scoop up bankruptcy boutiques.

Among the big law firms that have picked up patent partners recently are New York’s Chadbourne & Parke, Coudert Brothers, and Stroock & Stroock & Lavan. And competition from big firms _ both for clients and for top partners _ is challenging some patent boutiques. In response, two of the best-known smaller firms are expected to announce a merger: The 45-lawyer Washington firm Banner, Birch, McKie & Beckett plans to combine with the 45-lawyer Chicago firm Allegretti & Witcoff, effective April 1.

Two years ago, Houston’s Baker & Botts lured away two Banner Birch partners, and several associates followed more recently. The merged firm will have “greater strength,″ says Banner Birch partner Alan Cooper. Before choosing the unusual alignment with a firm of its own size, Mr. Cooper says his firm was “courted by 10 big firms in the last three or four years.″

That’s a big change. “You used to ask large firms if they wanted to hire patent lawyers, and they’d say: `What! Are you crazy?‴ recalls legal consultant Bradford Hildebrandt. Until recently, he says, patent lawyers were viewed by big firms as “engineers masquerading as lawyers.″

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