The situation is not unusual.  Attorneys represent client in a transnational setting, and the transaction is compromised, but not yet finished.  Three years are about to pass.  What is the plaintiff to do?  If you do not sue, the statute will pass.  if you do sue, defendant will say that it is too early.  Economic Alchemy LLC v Fincham Downs, LLC  2020 NY Slip Op 31177(U)  May 6, 2020 Supreme Court, New York County,Docket Number: Index No. 156052/2018,  Judge: Louis L. Nock shows one way for resolution.

“As alleged in the amended verified complaint (the “Complaint”), 1 plaintiff, a financial technology intellectual property holding company, retained defendant law firm in 2013 to represent it with regard to five pending patent applications. Those applications seek to acquire
patents for plaintiff’s “methods and systems to estimate market risks and present and future economic conditions . . . . ” (Complaint ¶ 7.) Plaintiff retained defendant law firm after discharging a prior law firm which, in plaintiff’s view, made “incorrect[]” and “negligent[]”
filings in respect of the applications (id., ¶ )9  Plaintiff ultimately discharged defendant law firm, as well, and retained a third law firm to carry on the patent application work. Notably, the applications were still pending before the U.S. Patent and Trademark Office (the “USPTO”) as of the time of the commencement of this lawsuit and the making of the instant motion to dismiss.

In other words, there is, as yet, no determination from the deciding authority – the USPTO – on whether or not plaintiff is entitled to her applied-for patents. As will be observed below, that is a significant factor in the assessment of plaintiff’s claim herein that it has been economically injured through any alleged negligence by defendants, causing a delay in obtaining the patents.

In this action, plaintiff alleges the following:

• Defendant law firm “unnecessarily introduced a limiting feature in the applications that
was not contained in the specification portion of the applications wherein plaintiff’s
inventions are described” (Complaint ¶ 11);
• Defendant law firm “filed a design patent application . . . which included references to
some of plaintiff’s registered trademarks that were incorrectly used and not followed by
the” trademark protective symbols (id., ¶ 13);
• Defendant law firm “filed a specification” which similarly did not include trademark
protective symbols (id., ¶ 15).
The motion to dismiss presents a variety of arguments, including an assertion of lack of
personal jurisdiction over defendants, who are Connecticut domiciliaries; the fact that plaintiff’s
current, third, patent counsel can correct any alleged patent application infirmities claimed to
have been committed by defendants prior to the retention of said third law firm; and that the
economic losses alleged by the plaintiff are purely speculative.

To succeed on a legal malpractice claim, a plaintiff must demonstrate “(1) that the attorney was negligent; (2) that such negligence was a proximate cause of plaintiff’s losses; and (3) proof of actual damages” (Global Business Inst. v Rivkin Radler LLP, 101 AD3d 651, 651 [1st
Dept 2012]; see also, Rudolph v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438 [2007]). “Proximate cause requires a showing that ‘but for’ the attorney’s negligence, the plaintiff would . . . not have sustained any ascertainable damages” (Barbara King Family Trust v Voluto
Ventures LLC, 46 AD3d 423, 424 [1st Dept 2007]). “[T]he failure to show proximate cause mandates the dismissal of a legal malpractice action regardless of whether the attorney was negligent” (Wo Yee Hing Realty Corp. v Stern, 99 AD3d 58, 63 [1st Dept 2012]). An ultimate determination by the USPTO on whether plaintiff will be granted her applied-for patents or not, and whether, fundamentally, plaintiff’s processes are patentable property to begin with, can change the entire landscape of the instant litigation. If the determination is “no” on either or both of those two yet-unanswered questions, plaintiff may be hard pressed to demonstrate, if not incapable of demonstrating, any tangible loss, and, for that matter, any tangible loss that was proximately caused (via “but for” causation) by the defendants herein. That is because the entire factual theory of this case is predicated on an assumption that patentable property was deprived of its rightful protection on account of actions and/or inactions of the defendants. The USPTO will need to first determine the keystone questions of patentability, non-patentability, and the reasons therefor, relating to plaintiff’s patent applications lying at the very heart of this action at law for damages. Therefore, the court perceives no just option at this time but to grant the motion to dismiss to the extent of staying the prosecution of this action pending a final determination by the U.S. Patent and Trademark Office concerning the subject matter patent applications.”

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Andrew Lavoott Bluestone

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened…

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened his private law office and took his first legal malpractice case.

Since 1989, Bluestone has become a leader in the New York Plaintiff’s Legal Malpractice bar, handling a wide array of plaintiff’s legal malpractice cases arising from catastrophic personal injury, contracts, patents, commercial litigation, securities, matrimonial and custody issues, medical malpractice, insurance, product liability, real estate, landlord-tenant, foreclosures and has defended attorneys in a limited number of legal malpractice cases.

Bluestone also took an academic role in field, publishing the New York Attorney Malpractice Report from 2002-2004.  He started the “New York Attorney Malpractice Blog” in 2004, where he has published more than 4500 entries.

Mr. Bluestone has written 38 scholarly peer-reviewed articles concerning legal malpractice, many in the Outside Counsel column of the New York Law Journal. He has appeared as an Expert witness in multiple legal malpractice litigations.

Mr. Bluestone is an adjunct professor of law at St. John’s University College of Law, teaching Legal Malpractice.  Mr. Bluestone has argued legal malpractice cases in the Second Circuit, in the New York State Court of Appeals, each of the four New York Appellate Divisions, in all four of  the U.S. District Courts of New York and in Supreme Courts all over the state.  He has also been admitted pro haec vice in the states of Connecticut, New Jersey and Florida and was formally admitted to the US District Court of Connecticut and to its Bankruptcy Court all for legal malpractice matters. He has been retained by U.S. Trustees in legal malpractice cases from Bankruptcy Courts, and has represented municipalities, insurance companies, hedge funds, communications companies and international manufacturing firms. Mr. Bluestone regularly lectures in CLEs on legal malpractice.

Based upon his professional experience Bluestone was named a Diplomate and was Board Certified by the American Board of Professional Liability Attorneys in 2008 in Legal Malpractice. He remains Board Certified.  He was admitted to The Best Lawyers in America from 2012-2019.  He has been featured in Who’s Who in Law since 1993.

In the last years, Mr. Bluestone has been featured for two particularly noteworthy legal malpractice cases.  The first was a settlement of an $11.9 million dollar default legal malpractice case of Yeo v. Kasowitz, Benson, Torres & Friedman which was reported in the NYLJ on August 15, 2016. Most recently, Mr. Bluestone obtained a rare plaintiff’s verdict in a legal malpractice case on behalf of the City of White Plains v. Joseph Maria, reported in the NYLJ on February 14, 2017. It was the sole legal malpractice jury verdict in the State of New York for 2017.

Bluestone has been at the forefront of the development of legal malpractice principles and has contributed case law decisions, writing and lecturing which have been recognized by his peers.  He is regularly mentioned in academic writing, and his past cases are often cited in current legal malpractice decisions. He is recognized for his ample writings on Judiciary Law § 487, a 850 year old statute deriving from England which relates to attorney deceit.