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They say imitation is the sincerest flattery. If that’s the case, Milberg Weiss Bershad Hynes & Lerach doesn’t much like being flattered. The New York-based securities litigation firm, known for serving as lead plaintiffs’ counsel for stockholders suing Enron, is attempting to clamp down on law firms that lift language from complaints it files in shareholder class actions. As a result, Milberg Weiss’ local Atlanta counsel on the matter, John C. Herman of Duane Morris, sent cease-and-desist letters to about 10 firms around the country this month, asking them to stop violating his client’s copyright by plagiarizing Milberg Weiss’ work product. None of the targeted firms is in Atlanta. “It’s been a longstanding practice of certain law firms simply to take our work product, actually our clients’ work product, and then copy it and use it for their own benefits,” said William S. Lerach, a partner in Milberg Weiss’ San Diego office, and one of the best-known plaintiffs’ securities class action lawyers in the country. Lerach adds that a wise person — whom he won’t name — took him aside and said, “You’re being taken advantage of. You shouldn’t tolerate it. You should copyright your complaints.” He started putting copyright notices on some of his complaints, and registering those notices with the U.S. Copyright Office last September. Now, Herman is attempting to enforce those copyright protections. None of the firms has responded to the cease and desist letters, and Milberg Weiss has not filed any suits. “The other plaintiffs’ firms, who don’t have the same experience, support or expertise that Milberg does, are taking the complaints that have been written, investigated and drafted by the Milberg attorneys,” said Herman. “They’re copying those complaints and filing them in the same case.” Herman says one firm that has copied Milberg Weiss’ complaints more than once — and as a result, got a cease and desist letter — is Schiffrin & Barroway of Bala Cynwyd, Pa. Name partner Andrew L. Barroway could not be reached for comment by press time. Sometimes, the complaints are virtually unchanged; other times, the copycat firms only lift about 50 percent of the complaint, he said. BECOMING MORE COMMON The practice has become much more common in the past few months, according to Herman, who said the most recent instance of complaint copying happened in the shareholder suit against Kindred Healthcare Inc., in Massachusetts State Carpenters Pension Fund v. Kindred Healthcare, No. 3:2002cv00600 (W.D. Ky. filed Oct. 16, 2002). “There are cases where Milberg lost the lead plaintiff role to a firm that does not have the same expertise, experience and resources,” Herman said. The result, sometimes, is a lower settlement than Milberg’s expertise might have brokered, or a case getting dismissed when it shouldn’t have been, he adds. “I think that [Milberg Weiss lawyers] are saying that they would have done a better job,” Herman says. Because of other firms copying its complaints, Milberg Weiss got shut out of the plaintiffs’ lead counsel role in shareholder suits against at least four corporations, he said, citing Baker Hughes Inc., which creates technology for oil and gas producers; BroadVision, which provides portal software for Fortune 500 companies; software company Critical Path; and Pilot Network Services Inc., which provided managed network access and security services before closing in 2001. Lerach said he can’t estimate the economic losses to the firm connected with those cases. Herman said he hasn’t done the analysis yet, but damages would vary depending on the case. In a big case they could be in the millions of dollars, he added. CLIENTS GET HURT, TOO Both Lerach and Herman point out that clients get hurt, too. “If the lead plaintiff that wins is not necessarily a good, diligent lead plaintiff and retains counsel that aren’t the most aggressive, well-financed and competent, they do lose out,” Lerach said. If a suit went forward, Milberg Weiss would seek both monetary damages and an injunction, Herman said. Copyright law permits recovery of lost profits, and can force an infringer to disgorge profits. One possible, hypothetical analysis: A copycat law firm settles the suit for $400,000; Milberg Weiss alleges it could have settled for $1 million and sues the copycat firm for its share of lost fees — say, 40 percent of the $600,000 difference. UNFAIR COMPETITION? Herman said his client alleges that the copying is not just copyright infringement but also unfair competition and a federal Rule 11 violation. Rule 11 provides sanctions for frivolous litigation, and Herman is quick to explain that he’s not alleging the copycat complaints are frivolous, because to do so could implicate Milberg Weiss’ complaints as well. Rather, he said, “It’s hard to say this categorically, but it is unclear on its face that these firms have done any investigation of the case at all. … When another firm simply adopts the allegations without doing any independent investigation, I think that we would question whether that meets the attorney’s burden under Rule 11.” Margo A. Bagley, an associate professor at Emory University’s law school who teaches intellectual property, said Rule 11 does require lawyers to investigate before suing, but added, “That’s a different kind of twist to Rule 11.” Copyrighting complaints, and then enforcing those copyrights, is a different kind of twist, too. Herman acknowledges that if he ends up suing to enforce Milberg Weiss’ copyrights in its complaints, the case will be one of first impression. Bagley said that even though it’s a novel theory, Milberg Weiss might have a viable claim if it decided to sue. Though there’s no copyright protection for the cases and statutes the firm may have cited, if other firms are lifting Milberg Weiss’ work verbatim, the arrangement, selection and coordination of information is copyrightable and the firm could protect its compilation. NOT AN EASY CLAIM TO WIN? It’s not an easy claim to win, because compilation gets weaker protections. “Copyright in compilation tends to be ‘thin.’ That’s what the U.S. Supreme Court has said,” Bagley said. Thomas G. Field Jr., an intellectual property law professor at Franklin Pierce Law Center in Concord, N.H., is even less sanguine about Milberg Weiss’ chances. Though he didn’t say the Milberg Weiss copyright theory won’t pass the laugh test, he burst into laughter again and again during a 20-minute conversation on the subject. He cited National Basketball Association v. Motorola, 105 F.3d 841 (2nd Cir. 1997), in which the National Basketball Association tried to stop Motorola from putting out pager announcements about basketball games, alleging that Motorola misappropriated that information. Motorola’s announcements amounted to, “So and so made a basket, so and so missed a basket, so and so got fouled,” Field said. Because those are facts — like the information in a complaint — he added, “That’s not copyright.” In Veeck v. Southern Building Code Congress International, 293 F.3d 791 (5th Cir. 2002), authors working for a private concern — not any government entity — drafted a model zoning code that was adopted by several small communities. A private individual posted a copy of the code, as adopted by several of the towns, on his Web site. The authors of the code then sued him for copyright infringement and unfair competition. The court held that once adopted by a town, the code became part of the official record and its copyright protection was lost, Field said. The same argument could be made about legal complaints, which are filed with the court and become part of a case’s official record, he added. In another case, SmithKline Beecham held a patent on the stop-smoking gum Nicorette. When the patent expired, a generic manufacturer began producing Nicorette, and copied SmithKline’s labeling because it wasn’t able to reword the label and still pass FDA muster. SmithKline Beecham Consumer Healthcare v. Watson Pharmaceuticals, 211 F.3d 21 (2nd Cir. 2000). SmithKline sued to protect its label, Field said, but the court found there was no protection because a patent is in the public domain and a copyright can’t be used to extend it once it expires. Field said his instinct is that Milberg Weiss doesn’t have a protectable copyright in its complaints. What it has is a claim that, “You guys are stealing the bread right out of my mouth, slimeballs that you are,” he said, adding, “There’s almost no law on point.”

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