RNAi Litigation

[from Case 1:09-cv-11168-PBS Document 108 Filed 09/14/10 in Max-Planck (Plaintiff) v. Wolf Greenfield & Sacks, PC (Defendant) Civil Action no. 09-11168-PBS]

Ruling on Proximate Causation of Damages by Wolf Greenfield & Sacks PC

Wolf Greenfield argues that Max-Planck cannot prove that Wolf Greenfield’s actions were the proximate cause of any harm to the plaintiff. A plaintiff in a legal malpractice action proves causation by proving it would have achieved a different, better result had the malpractice not been committed.

This Court has previously written that “Max-Planck will have to show that Wolf Greenfield’s conflict of interest in the prosecution of the Tuschl I applications proximately caused the PTO to reject in whole, or in part, patent claims sought by Max-Planck. In other words, it must show that if Wolf Greenfield were conflict-free, the Tuschl II patent claims would be stronger.”

Wolf Greenfield argues that because the mammalian and 3′ data and the cross-claim of priority were already in the Tuschl I application when the firm was retained to prosecute the applications before the USPTO, any actions taken by the firm could not have been the cause of Max-Planck’s injury. Under the co-assignees’ agreement, Whitehead was delegated the responsibility to prosecute the patent applications. Since Whitehead made the decision to keep the contested information in the Tuschl I applications, the argument goes, Wolf Greenfield’s actions had no effect on the content of the applications. Max-Planck responds that Wolf Greenfield did in fact cause its injury.

In 2004, Max-Planck asked Wolf Greenfield to remove the alleged Tuschl II material from the Tuschl I applications, and to withdraw from the Tuschl I applications the claim of priority to the Tuschl II application.

Wolf Greenfield drafted a memorandum stating that it was “not aware of a compelling reason to maintain the priority claim in the Tuschl I applications with the currently pending claims that are fully supported by the Tuschl I provisional applications.” Wolf Greenfield did not, however, remove the data and the priority claims. Defendant states that this decision was based upon direction from its client, Whitehead. Nonetheless, Max- Planck argues that discovery in this case has revealed that Wolf Greenfield was in fact complying with requests from another coassignee, UMass. The Court notes that the deposition testimony cited to support that argument is not included in the excerpted depositions currently in the record. In any event, even if UMass requested Whitehead to make this decision, there is undisputed evidence that Whitehead, not its counsel, was the ultimate decision-maker.

It is clear from the record that Wolf Greenfield could not have removed the contested data from the Tuschl I patent applications over Whitehead’s objection. It is undisputed that Whitehead was represented by Wolf Greenfield, and Wolf Greenfield would have committed legal malpractice by substantively altering a patent application without Whitehead’s consent.

Wolf Greenfield’s actions related to the alleged refusal (requested by Max-Planck) to delete the mammalian data and the priority claims did not cause Max-Planck’s injury. The appropriate course of action once Wolf Greenfield became aware of the conflicting instructions from its joint clients, Whitehead and Max-Planck, would have been to withdraw from the Tuschl I patent prosecution. Wolf Greenfield did not withdraw, however, and Max-Planck subsequently incurred legal fees in connection with the preparation and litigation of the Goldstein petition before the USPTO. Max-Planck’s damages in this case, at best, would cover the attorney’s fees incurred as a result of Wolf Greenfield’s refusal to withdraw. With respect to these fees, the defendant has not established that it is entitled to summary judgment on the issue of proximate causation.

Ruling on Statute of Limitations Related to the Damages by Wolf Greenfield & Sacks PC)

In support of its motion for summary judgment, Wolf Greenfield claims that Max-Planck’s tort claims are time-barred. The parties agree that plaintiff’s legal malpractice and breach of fiduciary duty claims are subject to a three year statute of limitations. The statute of limitations begins to run when a client knows or reasonably should know that he has suffered any appreciable harm as a result of a lawyer’s conduct. Determining the date on which the statute of limitations begins to run can in some cases involve conflicting evidence that can raise disputed issues of material fact.

Wolf Greenfield argues that Max-Planck knew or reasonably should have known that it suffered appreciable harm as a result of Wolf Greenfield’s conduct as early as the summer of 2004 when Wolf Greenfield failed to file Max-Planck’s proposed Information Disclosure Statement and, at the latest, by June 1, 2006 when Wolf Greenfield turned down Max-Planck’s request to meet with the Tuschl I patent examiner.

Max-Planck argues that the harm it allegedly suffered was its inability to obtain patents on its Tuschl II invention as a result of Wolf-Greenfield’s actions. The USPTO examiner expressly informed Max-Planck that it could not obtain patents on its Tuschl II invention because of the inclusion of the same material and priority claims into Tuschl I on September 18, 2007.Under this argument, the Complaint, filed on June 26, 2009, was timely.

However, Max-Planck did anticipate that the inclusion of the contested data and the claim of priority in the Tuschl I applications would cause it harm, and engaged another law firm as early as January 2006 to request that Wolf Greenfield remove the data. Plaintiff is seeking recovery of legal fees incurred in 2005 and 2006 as a result of these efforts to delete the mammalian data and the claim of priority in the Tuschl I patent applications. Accordingly, the defendant argues that Max-Planck knew or reasonably should have known that Wolf Greenfield’s actions were causing it harm prior to the communication about the Tuschl II patent applications from the USPTO examiner. Max-Planck argues that, even if it knew or should have known it had suffered harm prior to June 26, 2006 (three years before it filed its complaint), the limitations period would be tolled by the “continuing representation doctrine,” which “tolls the statute of limitations in legal malpractice actions where the attorney continues to represent the plaintiff’s interests in the matter in question.”

Wolf Greenfield claims that the continuing representation doctrine does not apply here because Max-Planck actually knew that it suffered appreciable harm as a result of the law firm’s conduct.

Under Massachusetts law, if a client has actual knowledge, “then there is no ‘innocent reliance which the continued representation doctrine seeks to protect.’

The record shows that Max-Planck was aware of a conflict of interests among itself and the other co-owners with respect to the inclusion of the contested data and the claims of priority in the Tuschl I patent applications prior to Wolf Greenfield’s retention as the law firm responsible for the prosecution of Tuschl I.

Although Wolf Greenfield did comply with certain requests for legal advice and assistance from Max-Planck, … there were numerous occasions where it was unambiguous that Wolf
Greenfield was following the instructions of Whitehead as opposed to Max-Planck. In January 2006, Max-Planck’s other attorney, Rothwell Figg, prepared a revised declaration of Thomas Tuschl withdrawing the cross-claim of priority in the Tuschl I patent applications and forwarded to Wolf Greenfield for filing with the USPTO.

On Whitehead’s instructions, Wolf Greenfield declined to file the proposed declaration and Rothwell Figg ultimately filed the declaration itself. In addition, on May 30, 2006, Max-Planck caused a request to be made to Wolf Greenfield that attorneys from Rothwell Figg be permitted to attend an interview with the patent examiner for the Tuschl I patent applications. Wolf Greenfield responded, “…upon consultation with my client, we have concluded that we will decline your offer to attend the interview.”

By January or, at the latest, June 1, 2006, Max-Planck was aware that Wolf Greenfield was deferring to Whitehead’s instructions, which were clearly in conflict with the wishes of Max-Planck. This knowledge is corroborated by Max-Planck’s reliance on other attorneys in an attempt to protect its interest in the Tuschl II inventions, which was allegedly threatened by the inclusion of the disputed data and claims of priority in Tuschl I. Accordingly, Max-Planck is not entitled to tolling of the statute of limitations under the continuing representation doctrine, because it had actual knowledge of its own harm.

The complaint in this case was filed on June 26, 2009, and the Court finds that Max-Planck was aware of appreciable harm caused by Wolf Greenfield’s actions prior to June 26, 2006. Max- Planck’s claims are time-barred.

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