Left to Right: Anthony Greene, Thomas Spath |
Anthony K. Greene, a Director at Herbert
L. Jamison & Co., LLC, one of the principal professional liability
insurance brokers in the Metropolitan New York Area, was the speaker at
the July 23, 2004 luncheon and CLE Program. Mr. Greene is an insurance
professional with accreditations that include "Certified Risk Manager"
and "Certified Insurance Counselor".
Mr. Greene is the immediate past president and trustee of
the American Intellectual Property Law Education Foundation, Inc., is
on the board of several professional associations and has served as Chair
of committees concerned with educational matters relating to professional
liability issues. In June 2004, Mr. Greene was an invited speaker at
the annual meeting of the American Bar Association in Toronto. His tenure
and experience in the field lends authority to his observations and recommendations.
He provided a highly enlightening presentation entitled "Protecting
Your Assets - How IP Lawyers Can Mitigate Their Exposure to Professional
Liability Claims". Using published statistical information gathered
by the American Bar Association over the last 30 years, and from other
national organizations, he presented graphically a variety of trends in
various categories of professional liability claims brought against IP
lawyers.
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Patent, trademark and
copyright claims have represented a small (but growing) percentage of
all the claims analyzed, increasing from about 0.5% to 4% since 1983.
Another study of over 9,100 claims placed all types of claims in the IP
area at about 2% of the total, while the value of the dollar losses represented
4% of the total.
During a recent six year
period, another study found that patent-related matters account for more
than 70% of the claims, trademarks for 15% and copyrights for about 3%.
His discussion included various categories of claims that include
subject matter conflict, the problems arising from the so-called mobile
client, representation of multiple parties, lateral hires that have previously
represented clients with interests conflicting with those of clients of
the hiring firm, and problems arising from a firm's acquisition of an
interest in a client's business enterprise.
Mr. Greene also discussed the relevant fact patterns of several
reported decisions (without specifically identifying the IP law firm party)
in order to provide concrete examples of the problems that must be anticipated
and addressed by the policy making and management of IP firms. Problems
associated with missed filing deadlines, including failure to complete
the project or late filing accounted for over 40% of IP-related claims
during one 18-month period analyzed. In one instance, a jury awarded
$30 million to a plaintiff-client when an international patent filing
deadline was missed.
Mr. Greene emphasized that firms need to establish and enforce
policies for identifying and handling potential conflicts of interest
at a very early stage of representation. In one example, a firm representing
two patent clients in a related technical area attempted to withdraw from
one representation after learning that a litigation between the parties
had been initiated. The ultimate result - after considerable procedural
wrangling - was that the firm was sued by both parties under various theories
and both sought to avoid payment of prior fees.
Problems associated with representing multiple related parties
were also discussed by Mr. Greene in the context of a firm that represented
an employee/inventor of one of its corporate clients who wished to pursue
the subject of a patent application that the corporation had intentionally
abandoned. Thereafter, the firm represented the employer against the
inventor who was sued for filing his own patent application on related
technology. Eventually, the inventor sued the firm, the firm lost the
corporate client, and its insurer paid out a seven-figure settlement.
Other complex scenarios were described in the context of lateral
hires and firms that took an interest in their client's businesses. As
these case studies revealed, the IP law firms (and their insurers) are
the losers.
One message to take away from this presentation is that lawyers,
who are often hired by their clients to anticipate potentially adverse
business developments and help the client to avoid them by either wise
counsel or written contracts and contingent agreements, do not perform
this type of analysis in managing their own business.
During the question-and-answer session, Mr. Greene discussed
the advantages of professional liability policies that covered events
that occurred prior to the merger of one firm with another or the arrival
of a lateral-hire attorney. While such policies can represent a substantial
expense, they also provide a tool for managing risk and defining the potential
monetary liability for the acquiring firm.
Interested parties can contact Mr. Greene at: agreene@jamisongroup.com. |
