Partial Success in a Patent Legal Malpractice Case
A world leader in the non-dairy segment of the frozen food industry and in non-dairy emulsions hires a world class law firm to file and prosecute patents for a "pourable dessert liquid product" (think: Mexican Cool Whip) which fails in both Mexico and Columbia. Is the law firm to blame? Yes and no.
Rich Prods. Corp. v Kenyon & Kenyon, LLP 2014 NY Slip Op 50937(U) Decided on June 17, 2014 Supreme Court, Erie County Walker, J. is a careful dissection of the claims. In the Mexican instance
"By letter dated September 21, 1999, Uhthoff acknowledged Kenyon's September 15 letter, but stated that it did not review it (or its enclosures) until September 20, 1999, because its offices were closed from September 15 through September 19, due to a Mexican Holiday and the ensuing weekend. Uhthoff stated further that, "in view of [the office closure], we are immediately processing the [Mexican Patent Application for filing] . . . within the one-month grace term ie, month 31th [sic] from the [Deadline], which is acceptable under the practice of the Mexican Patent Office."
By letters dated September 27 and October 1, 1999, Uhthoff confirmed that the Mexican Patent Application had been filed and accepted by the Mexican Patent Office. By letter dated October 21, 1999, Kenyon advised Rich that the Mexican Patent Application "has been entered on 27 September 1999", (emphasis added). On October 22, 2001, the Mexican Patent Office issued a patent for the Invention (the "Mexican Patent").
Thereafter, a series of discussions took place within Rich, to determine whether and/or how to proceed with enforcement of the Mexican Patent. During this time, Rich also attempted [*4]to identify a substitute Mexican law firm to pursue any such enforcement proceedings, because Uhthoff had a conflict with respect to one of Rich's competitors. Ultimately, Rich retained the firm of Calderon y De La Cierra ("Calderon"), which commenced four (4) separate enforcement proceedings on behalf of Rich in Mexico. Kenyon did not prosecute, nor was it named as counsel or co-counsel in these actions.Indeed, Calderon communicated directly with Rich and/or Rich's Mexican joint venture company regarding these proceedings.
In late 2007 (six (6) years after the Mexican Patent was issued), an entity named Lactoproductos La Loma ("Lactoproductos") commenced a "cancellation proceeding", in Mexico, in which it challenged the Mexican Patent on the basis that, inter alia, the Mexican Patent Application was filed after the Deadline.
Calderon represented Rich in the Lactoproductos cancellation proceedings.
On or about September 8, 2008, the Mexican Patent Office issued a decision cancelling the Mexican Patent, (in part) because the Mexican Patent Application was filed after the Deadline. Calderon (on behalf of Rich) appealed the decision to two different Mexican Courts. On June 23, 2009, the Mexican Patent Office determination was upheld. The court held that the Mexican Patent Office's practice of accepting applications in the 31st month (as was done in 1999 with the Mexican Patent Application) was "contrary to current Patent Law in Mexico . . ." [emphasis added].
The Mexican Patent Office's determination, without explanation, overturned an acknowledged and accepted practice for many years in Mexico, that had the force and effect of law. As Calderon noted:. . . the Mexican Patent Office actually ADOPTED the term of 31 months and applied same during more than 13 years. General principles of law in Mexico dictate that habits, customs or repetitive conducts exercise by the authorities are sources of law and actually become law, whenever these are not contrary to existing legal provisions. In the particular case, the fact that the Mexican Patent Office consistently accepted, tried and granted Applications filed with the 31st month, falls within the principle noted above and results in that the legally valid term to enter National Phase Applications in Mexico was legally extended to 31 months . . . . (Emphasis in original).
As a result of the Mexico Patent Office's determination, the Invention lacks patent protection in Mexico."
In the Columbian instance:
"Rich has established, as a matter of law, that Kenyon failed to timely submit the correct documents to Goytia in connection with filing the Columbian Patent Application. Kenyon has failed to raise an issue of material fact requiring a trial regarding this cause of action. Failure to correctly perform these services constitutes malpractice as a matter of law (see, eg., Deb-Jo Const. Inc. v. Westphal, 210 AD2d 951 [4th Dept 1994]; Lory v. Parsoff, 296 AD2d 535, 536 [2nd Dept 2002]).
While Kenyon timely retained Goytia on March 18, 1998, its "instructions" to Goytia were incomplete - indicating that the necessary Power of Attorney, Assignment and Priority Document would "follow". While Goytia filed the Columbian Patent Application by the March 19, 1998 deadline, it specifically advised Kenyon that the notarized and authenticated Power of Attorney and Assignment were due by April 30, 1998. Despite these clear instructions, Kenyon failed to prepare and deliver the required documents to Goytia by the deadline.
Equally relevant here, Goytia requested these documents no less than three (3) more times, and even obtained a filing extension to accommodate Kenyon's failure to provide them. Kenyon finally provided Goytia with additional, but still incorrect documentation days prior to the extended deadline, as well as a faxed copy of the Power of Attorney (that was not authenticated), after the deadline had passed. The faxed copy of the Power of Attorney was insufficient, as the Columbian PTO required an authenticated original.
Three years later, Goytia was still waiting for the authenticated Power of Attorney. In the end, the required documents were filed in December 2001 - more than three (3) years after the extended deadline. Ultimately, the Columbian PTO declared the Columbian Patent Application invalid, because incorrect documents were filed by the extended deadline.
As such, Rich is entitled to summary judgment on its Third Cause of Action on the issue of liability."