Finnegan Sued for Malpractice

In today’s world, patents are often owned by corporations or by groups of corporations. Inventors form companies with investors, or assign shares to investors, and these are considered separate legal entities.

Despite the legal niceties of firms of Attorneys representing companies, in practice Attorneys form connections with real persons who are sometimes the inventor, sometimes the head of R&D and sometimes the CEO or CTO. Often the patent attorney is not fully informed of the corporate structure. Structure itself is a misnomer. It implies something with a plan and a logic. Typically with solid foundations.

When receiving instructions from an inventor, receiving payment from a company and having a POA with another company, it is possible for the attorney to act in accordance with instructions from someone who is not the legal owner of an asset, and to find him or herself with a conflict of interest. Sometimes these are legal niceties that are over-looked. Sometimes they blow up.

Michael Kildavaeld conceived of a razor utility knife with a graphite pencil blade.  The “marking blade” invention marks surfaces with far greater precision than a standard carpenter’s pencil.

In October 2012, Kildavaeld met Robert Cumings, who allegedly had extensive experience in the marketing and manufacturing of tools.  That same month, Cumings introduced Kildavaeld to Harry Billado, who allegedly had experience in patent prosecution, licensing of patents, and bringing inventions to market. Together they formed a Delaware company called  “Contractor Trusted LLC”. In March 2013, Contractor Trusted LLC hired Finnegan Henderson to obtain patent protection on the marking blade invention.  Attached to the complaint is an engagement agreement between Finnegan Henderson and “Contractor Trusted, LLC c/o Mr. Michael Kildavaeld.”

The complaint alleges that Contractor Trusted LLC, marketing as Accutrax LLC began marketing its product to Stanley Black and Decker.  According to the complaint, in October 2014, while Stanley was negotiating with “the LLC” for a master purchase agreement, Kildavaeld individually contacted Stanley and tried to negotiate his own exclusive relationship with Stanley that eliminated Accutrax LLC from the picture.

According to the complaint, Stanley decided to back out of the deal rather than get caught in between the two sides who were in the midst of a patent ownership dispute. On December 23, 2014, the USPTO issued Patent No. 8,915,662.  No assignee was identified on the face of the ’662 Patent.

According to the complaint, the “patent for the Marking Blade” was issued “to Kildavaeld.”  Stanley Black and Decker withdrew from negotiations due to a dispute over who owned the patent.

“Contractor Trusted LLC” (Accutrax) has sued Finnegan for what it considers was acting in favour of the inventor and adverse to its interest, alleging claims against Finnegan for legal malpractice (count 1), breach of fiduciary duty (count 2), breach of contract (count 3), and aiding and abetting the commission of torts and breach of fiduciary duty (count 4). Accutrax seeks an unspecified amount of monetary damages.

The case is styled Accutrax LLC v. Finnegan, Henderson, Farabow, Garrett & Dunner LLP, Mass. Suffolk County Civil Superior Court, Case No. 1784CV01617.

For more details see here.

One Response to Finnegan Sued for Malpractice

  1. Bruce E. Lilling says:

    An interesting corollary is that the US PTO insists in the new form of a Declaration that the inventor says that “I hereby declare that the application was made or was authorized to be made by me” but if he is not the owner he obviously has no authority to say this

    So you see the PTO insists that investors make a legally incorrect statement or it will not accept the application

    For decades (I am not sure about now) Examiners would insist that Powers be signed by the inventors even though it should have been the company issuing the Power. More than once I had a run in with an Examiner who did not understand that a power signed by the Company was what he needed and not a Power signed by the Inventor

    The PTO internal guidelines said you had to have the Power from the inventor and never took into consideration that the company actually had to give the Power

    So I can see how Finnegan could have been trapped, depending on who was their contact at the client

    They are a bog firm and probably should have been more careful, but sometimes the clients deceive you

    Bruce E. Lilling

    Bruce@Lilling.co.il

    Bruceelilling@gmail.com

    PO Box 435

    Jerusalem 91003

    050 639 7430

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