Monday, June 21, 2010

IP Portfolio Management Company Targets Law Firms in Patent Infringement Suit

A new patent infringement case seen in today’s Docket Report, WhitServe LLC v. Benesch Friedlander Coplan & Aranoff LLP et al., 8-10-cv-01639 (MDD 2010), targets customers of Computer Packages, Inc., which includes several law firms. The complaint asserts two patents that are used by NetDocket ( to provide a “patent annuity and trademark renewal payment service.” The NetDocket website further describes its service as follows:
NetDocket LLC has licensed patents and trademarks from WhitServe LLC and seeks to commercialize this technology in the legal market, particularly for intellectual property management.

The company's online offering is unique because it allows participating law firms to private label the application for the benefit of their respective clients. Clients get the convenience of secure, 24/7 portfolio management while law firms significantly enhance their client services, without the costly investment of developing and maintaining the software, hardware, and skilled staff necessary.
Inventor and patent litigator at St. Onge Steward Johnston & Reens, Wesley W. Whitmyer, Jr., is the founder of WhitServe LLC. In an earlier case against competitor Computer Packages, Inc. (“CPI”), filed in the District of Connecticut, WhitServe obtained an $8.3 Million verdict. However, WhitServe claims that it was precluded from seeking damages attributable to infringement by CPI’s customers. The new lawsuit reported in today’s Docket Report is WhitServe’s attempt to collect damages from those customers, including a number of law firms. From WhitServe’s complaint:
During the course of the Connecticut litigation, WhitServe sought damages attributable to the law firms' service fees and the benefits derived by corporate users, since CPI is a joint tortfeasor with the law firms and corporations and jointly and severally liable for their infringement. Although CPI provides its clients with the EARS products, CPI sought to avoid its liability as a joint tortfeasor. Through motions to preclude, CPI sought to prevent WhitServe from introducing evidence of the law firms' revenue from their use of the EARS products on the grounds that the law firms' revenue far exceeded its own and CPI would not be willing to pay a royalty for the law firms' or corporations' use of EARS. The Connecticut court granted CPI's motion to preclude WhitServe from introducing evidence at trial regarding these revenues and benefits on the grounds that WhitServe did not rely on actual income figures from CPI's customers. Thus,WhitServe's damages associated with the law firms' and corporations' use of the EARS products was not resolved by the Connecticut litigation.
While the Connecticut court did preclude evidence of CPI’s customer’s revenues, it appears there were multiple reasons for the ruling, not all of which are addressed in WhitServe’s new complaint. In particular, the Connecticut court observed during summary judgment that "damages based upon a percentage of both CPI's revenues and the revenues of CPI's customers might result in compensation greater than necessary to 'fully compensate' WhitServe for the infringement, and would thus be inappropriate." Then, in ruling on CPI’s motion to preclude such evidence at trial, the court explained, “having now heard evidence relating to the fees charged by those in the industry, the court concludes that the very specific evidence of CPI's revenues is sufficient to determine fair, just, and reasonable compensation in this case.”

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