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Cybersex Patent Case Leads to Bad Vibes Between Firm, Client
The Recorder
August 14, 2008
With a sparkling reputation in patent litigation, San Francisco's Keker & Van Nest chooses its cases carefully, wins often, and has clients who follow its marching orders -- at least most of the time.
But its recent efforts to defend a small-time adult business that tries to put a little sensation into cybersex ended with hurt feelings all around -- and a protracted fight to get off the case entirely. Keker argues irreconcilable differences, its client says it's all about greed, and one of L.A.'s leading porn lawyers is caught in the middle.
Internet Services LLC piqued the interest of Keker attorneys with its claim to standing in a patent fight involving Sony Corp.
A company called Immersion Corp., which holds patents to "a man-machine interface which provides tactile feedback to various sensing body parts," sued Sony for patent infringement in 2002 over the electronics giant's shaking video-game controllers.
Internet Services jumped in with its own claim just before trial that its 2000 deal with Immersion would entitle it to a cut of any winnings. (Immersion eventually won $82 million.)
Internet Services' license allowed it to develop software that would add "haptic" capability -- meaning you can touch and feel the action on the computer screen -- to adult Web sites and video games. Internet Services also said that Immersion had given it the right to enforce its patents in the field of "teledildonics," and that Immersion's suit against Sony stepped on those enforcement rights.
Two of Keker & Van Nest's top patent litigators -- Daralyn Durie, a frequent first-chair in big cases, and well-known intellectual property scholar Mark Lemley -- took the case.
Back in 2004, it had seemed like a good case to Lemley, if a bit unusual for the small, staid firm used to representing such mainstream companies as Genentech and Comcast.
"I think it presented interesting legal questions, and it was a client that had a potentially significant claim," Lemley said.
Lemley, of counsel at Keker as well as a professor at Stanford Law School, said the interesting point of law was what kind of standing an exclusive licensee should have in a patent infringement case.
Lemley and Durie lost their argument, though. Northern District of California Judge Claudia Wilken tossed all of Internet Services' claims in 2005. The U.S. Court of Appeals for the Federal Circuit agreed, ruling in April 2007 that the company had no standing in the Sony patent case, though it left the door open for a breach of contract dispute with Immersion.
SEED OF DISCONTENT?
By the time the case was back in the Northern District last year, the relationship between Keker and Internet Services had begun to fray.
It's hard to say exactly what happened, since most of the voluminous court filings have been redacted for attorney-client privilege -- and none of the lawyers on the case, including Lemley, would discuss the matter. But what's clear is that the Keker lawyers have been agitating to get off the case since the beginning of this year.
In available court documents, Keker says the problem is a stonewalling porn attorney named Gregory Piccionelli.
Well-known in L.A.'s ever-booming adult entertainment industry, Piccionelli does work for porn producers, exotic dance emporia and everyone in between. He also helped Internet Services hook up with a potential buyer, Adult Entertainment Broadcast Network, a pay-per-view streaming porn video Web site whose CEO, Scott Coffman, had previously ventured into the ill-fated business of a sports channel hosted by nude anchorwomen.
Due to Piccionelli's advisory role in that still-pending transaction, Immersion's attorneys at Irell & Manella wanted to depose him about the case. The Keker lawyers intended to represent Piccionelli as a friendly witness, according to the declarations of Mathias Kamber, a Keker associate on the case. But things got unfriendly fast.
First, Keker asserts, Piccionelli canceled his December deposition, citing a surprise trip to Hawaii planned by his wife. Then he wouldn't return phone calls for months. Finally, after a few rounds of lawyer letters from Keker, Piccionelli threatened to sue the firm.
Piccionelli's version goes like this: First, he said, the subpoena wasn't served to him personally -- instead it was given to Shellmarie Saldiva, who doesn't work for Piccionelli and whom he can only guess might be the building receptionist he knows as "Mari." Second, he said that he never agreed to be represented by Keker and Keker shouldn't have said otherwise in court.
Then in a March 14 e-mail -- in which Piccionelli's "distress" at Kamber's copying two other parties on a previous e-mail was "compounded" by his "outrage" regarding Kamber's "conduct" -- Piccionelli said he was considering suing the firm over the alleged misrepresentations.
The attorney also was none too pleased with Judge Wilken, and vice versa. She seemed unimpressed with Piccionelli, of Piccionelli & Sarno, in a remark to Keker's Durie during an April 1 discussion of the Keker-Piccionelli problems.
"I'm just saying, based on my knowledge of dealings with your firm, that I would be inclined to think that if there was an error it was Mr. Piccionelli's," Wilken said, according to a transcript.
Piccionelli fumed in a subsequent declaration, "I have maintained a spotless reputation in the legal community and I am simply outraged that I am being forced to confront the scurrilous accusations and insinuations that I have read about me in the transcript."
KEKER PULLS OUT
Calling the heated struggle with Piccionelli a conflict of interest that threatened the firm's loyalty to Internet Services, Keker filed a motion to withdraw from the case, saying it could no longer represent Internet Services under State Bar Rule 3-700(b), which addresses mandatory withdrawal. The Keker lawyers also argued that there had been a breakdown of the attorney-client relationship with Internet Services.
The company protested vehemently, hiring Timothy Dillon of San Diego's Dillon & Gerardi to handle the battle with Keker. Internet Services argued that there was neither a breakdown nor a real conflict of interest with Piccionelli. They accused Keker of trying to get off the case because it wasn't getting paid as expected.
Internet Services President Layne Britton suggests in a declaration that Keker had been hoping for some kind of contingency fee, and in a heavily redacted section about the firm's retainer agreement, Britton says the dismissal of all of Internet Services' claims left "no possibility that [Internet Services] will have a 'recovery' in this case."
The company's opposition to Keker's second motion to withdraw -- Judge Wilken denied the first -- was titled "[Keker's] Alleged Conflicts of Interest Are a Pretext For Its Inability to Receive Fees."
Keker prevailed in late June, when Wilken let the firm off the case. Citing Rule 3-700(b) in her brief order, she wrote that "a conflict of interest has arisen that requires" Keker to withdraw from Internet Services LLC v. Immersion Corp., 06-02009.
MOVING ON
Internet Services has a new law firm, Los Angeles' Spillane Shaeffer Aronoff Bandlow, ironing out remaining counterclaims by Immersion.
Outside the courtroom, no one seems to want to talk about the fractious teledildonics case. The new lawyers declined to comment, as did Internet Services' Britton and attorney Piccionelli. Keker's Durie did not return phone calls seeking comment and Kamber declined to comment.
Lemley wouldn't discuss the dispute with the client, but he said he thinks the courts got the patent and contract issue wrong. He also said he doesn't regret having taken it to start with, even if the subject matter may seem less refined than the Keker firm is used to.
"My view is, those sorts of patent issues are sort of interesting issues no matter who raises them," Lemley said.
