by Dennis Crouch
Joff Wild at IAM has posted some interesting reading in the ongoing dispute between the patent assertion entity, Parallel Networks and its former litigation counsel at Jenner & Block. [Link]
According to the pleadings filed by Parallel Networks in Texas state court[link below], Jenner withdrew from its contingency-fee representation of Parallel Networks against Oracle after losing on summary judgment and determining that it was unlikely to win a large award. Parallel Networks then found new counsel and eventually settled the case for about $20 million. Once that case ended, Jenner returned asking for more than $10 million in attorney fees based upon its hourly rates through summary judgment.
Under the representation agreement, both parties had agreed to arbitrate any dispute over fees and an arbitrator awarded Jenner with a $3 million fee. Parallel Networks has now asked the court to set aside the arbitration award – arguing that under Texas law, a contingent fee attorney cannot drop its client simply for economic reasons and then expect to receive any further compensation. The suit also alleges a host of other problems with Jenner & Block representation in both the Oracle litigation and the parallel case against QuinStreet. The bulk of those allegation stem from various internal communications at Jenner involving the risk and potential of the cases that were never communicated to Parallel Networks.
The lawsuit will be interesting to follow because it offers a rare public glimpse inside big-firm contingency fee structures and the associated political struggle raised by many risk-averse firm leaders. Here, that attempted risk aversion may well cost the firm several million dollars in fees.
I should note that Professor David Hricik testified on behalf of Parallel Networks in the Arbitration. Hricik is on leave from his Patently-O writing as he clerks at the Federal Circuit. I have not spoken with him about this case. – Dennis
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