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Over the course of a decade, Townsend and Townsend and Crew partner Albert Hillman wore three hats when it came to Bio-Rad Laboratories Inc.: working as one of its IP lawyers, sitting on its board of directors, and testifying in its patent litigation. Now the biotech company is raising Hillman’s three roles in a legal malpractice suit against Townsend and two of its partners. In a complaint filed Thursday in San Francisco Superior Court, the Hercules-based company accuses the firm of legal malpractice, breach of fiduciary duty and breach of contract for services spanning one decade and two pieces of patent litigation. Bio-Rad wants about $35.5 million in damages, including $5.5 million for Townsend’s attorneys fees. The company claims that from 1984 to 1994 Townsend gave bad advice and failed to disclose a conflict during two patent trials between Bio-Rad and a pharmaceutical company. In addition to the firm, the suit names partners Roger Cook and Theodore Brown III, who represented it at trial, as defendants. Guy Calladine, a defense attorney for the firm and its partners, said the dispute is “ancient,” and as much about attorneys fees as anything else. “Bio-Rad was fully informed as to everything,” said Calladine, of Carlson, Calladine & Peterson. He pointedly added that, though the dispute arose about nine years ago, Townsend “has continued to do substantial work for Bio-Rad.” Bio-Rad lawyer Richard Stratton, a litigation partner at Hanson, Bridgett, Marcus, Vlahos & Rudy, doesn’t deny it. In fact, he praises the firm as a whole. “Townsend and Townsend and Crew is a very fine firm. They’re very well respected,” Stratton said. “This is unfortunately an exception to the rule, where they really dropped the ball.” Cook and Brown represented Bio-Rad in two patent fights. In the first, Bio-Rad filed a patent infringement action against Pharmacia AB in 1988. Pharmacia countersued, saying Bio-Rad’s patent was invalid, according to the complaint filed last week. Bio-Rad claims Pharmacia tried to resolve the dispute, but Townsend discouraged settlement by “incorrectly” advising that Bio-Rad would prevail. The case went to trial in 1992, and Bio-Rad lost. The company notes that Hillman and another Townsend partner who had worked on Bio-Rad’s patent in the 1980s testified at trial. Now Bio-Rad says they were “subject to significant impeachment due to Hillman’s position on the Bio-Rad board of directors and the fact that Bio-Rad had paid and continued to pay Townsend significant sums for representation.” The jury found Pharmacia hadn’t infringed Bio-Rad’s patent and that the patent was invalid. The judgment was affirmed on appeal, the complaint says. Citing California Rule of Professional Conduct 3-310, Bio-Rad now complains that Townsend had an interest in the suit and should have obtained informed written consent from its client but didn’t. The firm was litigating the validity of a patent it had filed, the complaint says, and Townsend should have seen “the foreseeable consequences of Hillman testifying.” Hillman, who isn’t named as a defendant in the suit, has retired from the firm. Bio-Rad similarly alleges that the firm gave bad advice when Pharmacia sued it in federal court in New Jersey in 1991, alleging Bio-Rad had willfully infringed on a patent. After a jury found for Pharmacia, Bio-Rad resolved the case for $5.5 million before reaching the trial’s damages phase, the complaint says. Calladine likens Bio-Rad’s suit to Monday morning quarterbacking. “In any trial, there’s a winner and a loser,” he said. “No one guarantees any result.” Townsend hopes the dispute can be resolved, given its longstanding relationship with Bio-Rad, he said. But if not, the firm is prepared to file a cross-claim for what he says are hundreds of thousands of dollars the company still owes. “While there has been a longstanding relationship, the client expects the attorneys to make it right,” Stratton said. “They lost a case they shouldn’t have brought.”

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