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Richard Snyder, the chairman and chief executive officer of Austin-based Forgent Networks Inc., didn’t skimp on market research before picking a new trial firm for some potentially lucrative patent litigation. Snyder says he met recently with eight or nine Texas firms vying to represent his software technology company in infringement litigation related to its patent on digital video recording (DVR) technology. On April 27, after that beauty contest, Forgent announced it chose W. Fred Hagans, a partner in Houston’s eight-lawyer Hagans, Burdine, Montgomery, Rustay & Winchester, to lead a trial team for the DVR patent litigation. Forgent also selected Ralph McBride, Stephen Crain, Jeff Whittle and Ross Kennedy, all partners in Houston-based Bracewell & Giuliani, for the team. “Having had some experience with different law firms, we were looking very closely for a team that had good litigation fire power and could provide depth,” CEO Snyder says. The Hagans-Bracewell team will replace Dallas’ Godwin Pappas Langley Ronquillo. Godwin Pappas has been representing Forgent in the DVR litigation since late October 2004. In the complaint in the DVR litigation, Forgent Networks Inc. v Echostar Communications, et al., Forgent alleges 15 defendant companies infringed upon one of its patents, by offering DVR services to subscribers without paying licensing fees. Forgent filed the suit in July 2005 in U.S. District Court for the Eastern District of Texas in Marshall. Forgent’s CEO Snyder says his company decided to replace Godwin Pappas on the DVR suit because the firm “had continued to decline in terms of its IP support services,” making reference to Godwin Pappas’ dwindling number of IP lawyers. In September 2005, Godwin Pappas lost most of its intellectual property group when six lawyers defected to Greenberg Traurig’s Dallas office. [See "Goodbye Godwin Gruber" Texas Lawyer, January 2, 2006, page 1] Two months after that, Forgent hired Houston’s Susman Godfrey to replace Godwin Pappas on another piece of lucrative infringement litigation, In Re: Compression Labs Inc. Patent Litigation, filed in the U.S. District Court for the Northern District of California. The suit is related to a patent for the JPEG file format used in transmitting still digital images. (Marcos Ronquillo, the managing partner of Godwin Pappas, declines comment on Snyder’s remarks and on Forgent’s decision to drop Godwin Pappas, for the second time, from some major patent litigation. Thomas Sankey, who represented Forgent in the DVR suit while a partner in Godwin Pappas in Houston, recently left the firm to start his own practice. He did not return a telephone message left at his new office before presstime May 4. Dallas’ Winstead Sechrest & Minick was hired as regular outside counsel for Forgent at the same time Forgent hired Godwin Pappas for patent litigation. Winstead remains regular outside counsel, according to Snyder. Forgent does not have a general counsel or in-house lawyers, Snyder says. Hagans says he is pleased to land the Forgent work for Hagans, Burdine. “This is the size of a case that would have an impact on anyone’s revenues,” Hagans says.
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Hagans, Burdine and lawyers from Bracewell previously worked together on some big litigation. In 2001, the firms jointly represented Houston plaintiffs lawyer Kendall Montgomery in a suit he filed against his former boss, John O’Quinn, over millions in fees Montgomery alleged he was owed for working at O’Quinn’s firm, then known as O’Quinn & Laminack. That suit settled in September 2001. Montgomery now practices with Hagans at Hagans, Burdine. [ See "Parties Lawyered Up for Fee Fight,"Texas Lawyer , Sept. 3, 2001, page 1.] Fees Licensing fees generated from the DVR litigation could exceed $100 million, says McBride, the Bracewell partner who will take the lead for his firm on the suit. Snyder confirms Forgent hired the Hagans-Bracewell team on a contingency basis, paying nothing up front, but promising 40 percent of any licensing fees, settlements or court judgments awarded in the DVR patent litigation. Snyder confirms that Godwin Pappas received no contingency fees from the DVR litigation or the JPEG litigation. But Forgent has a good record of generating income for itself and its lawyers from its patent litigation � a possible explanation for why so many firms sought the Forgent work in April. Since 2002, Snyder says, the company has generated more than $100 million in licensing and legal fees stemming from litigation related to its JPEG patent, the litigation now handled by Susman Godfrey. Steve Susman did not return a telephone call seeking comment before presstime on May 4. Initially, Dallas’ Jenkens & Gilchrist had represented Forgent on JPEG patent litigation, and the firm split the profits from that litigation 50-50 with the company, according to Snyder. Throughout its representation of the company, Forgent investor relations director Michael Noonan confirmed in 2004, Jenkens received $46 million in contingency fees from the Austin company. But in November 2004, Forgent, seeking to change the terms of its contingency arrangement in the JPEG litigation, switched from Jenkens to Godwin Pappas, then known as Godwin Gruber. [See "Jenkens Loses Client Forgent Networks to Winstead, Godwin Gruber, Texas Lawyer, Nov. 8, 2004, page 5]. Then, in 2005, Forgent switched again to Susman Godfrey. Although Forgent’s Snyder declined to name all the firms recently interviewed to replace Godwin Gruber, the company CEO did confirm he also talked to the patent lawyers who left that Dallas firm to go to Greenberg Traurig. “We discussed it but we didn’t come up with an agreement,” Snyder says. Eric Buether, who led the group of Godwin Pappas lawyers who switched to Greenberg Traurig, could not be reached for comment by presstime.

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