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Law Firms Held Liable for Fees in 'Tissue of Lies' Patent Suit
New York Law Journal
July 23, 2008
A federal judge has ordered a patent holder and his lawyers to pay attorney fees for bringing an infringement suit based on "nothing more than a tissue of lies."
Irving Bauer had sued Romag Fasteners Inc., a manufacturer of magnetic snap closures for handbags, for infringing a 1996 patent on a new type of closure he claimed to have invented.
But Southern District of New York Judge Paul A. Crotty invalidated Bauer's patent last week, finding that it had been issued through iniquitous conduct. Bauer's testimony about his inventorship "bore clear indicia of fabrication," the judge said, adding that he was "convinced beyond a shadow of a doubt" that Bauer was no inventor.
"The Court refused to believe that Bauer, lacking any training or experience in the field, and equipped only with curiosity and pluck, was able to successfully design around the industry standard '294 Patent," Crotty wrote in Advanced Magnetic Closures Inc. v. Rome Fastener Sales Corp., 98 Civ. 7766.
The judge said Bauer had come up with his dubious '773 Patent because the industry had begun to legally design around the '294 Patent, which Bauer had previously acquired.
"[H]e only fraudulently 'conceived' of the idea, after it became apparent that his investment in the '294 Patent was worthless and he needed a viable substitute," Judge Crotty said.
The judge held New York law firm Abelman, Frayne & Schwab, which initially represented Bauer in his suit against Romag, jointly and severally liable for Romag's attorney fees after Feb. 11, 2006. That was the earliest date, the judge said, Abelman Frayne should have realized expert testimony the firm planned to use to support Bauer's claim had been contradicted by testing.
"By persisting with this claim to trial, Abelman counsel played a central role in so unreasonably and unnecessarily multiplying the proceedings so as to give rise to bad faith litigation," the judge said.
Bauer replaced the Abelman firm in August 2007 with David Jaroslawicz of Jaroslawicz & Jaros. The judge held Mr. Jaroslawicz jointly and severally liable for Romag's costs after Oct. 5, 2007, finding he also should have been aware of the deficiencies of Bauer's claims.
Romag's lawyer, Norman Zivin of Cooper & Dunham in New York, said he had previously requested around $1.2 million in attorney fees, though he said the judge would likely modify that amount.
Jeffrey A. Schwab of Abelman Frayne said his firm was "disappointed" in Crotty's decision, which he called "not justified on the law or facts." He said the firm was reviewing its options.
Jaroslawicz did not return a call seeking comment.
