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In a harshly worded opinion, a federal judge in Philadelphia has ordered discovery sanctions in a “smart cards” technology patent case after finding that a team of plaintiff’s lawyers engaged in “a pattern of deception and dilatory tactics.” In his 10-page opinion in Murray v. Gemplus International, U.S. District Judge Berle M. Schiller of the Eastern District of Pennsylvania found that attorney Mari Shaw and her co-counsel — Paul R. Rosen, David B. Picker and Dorian S. Mazurkevich of Spector Gadon & Rosen — had engaged in “bad faith” conduct that was designed to “frustrate” discovery. Schiller awarded attorney fees and costs under Federal Rule of Civil Procedure 37, which empowers federal judges to make a litigant pay an opponent’s expenses that are made necessary by the party’s refusal to cooperate in discovery. The ruling is a victory for defense attorneys David J. Wolfsohn, Mark A. Aronchick and Shanon Levin Lehman of Hangley Aronchick Segal & Pudlin, who argued that the plaintiffs should be sanctioned “for their blatant and repeated efforts to hide the truth.” Under Schiller’s order, defense counsel are to receive an unspecified amount of money to pay for attorney fees and costs incurred in countering the plaintiff’s lawyers’ “bad faith” conduct. In their motion, defense lawyers argued that the plaintiff’s lawyers violated discovery orders when they chose to turn over only 19 of the 247 pages in their client’s “inventor notebooks,” and later dodged efforts by the defense team to inspect the originals. “When defense counsel asked to review the originals of the 19 pages, plaintiff’s counsel attempted to put him off, knowing that review of the 19 pages produced would reveal that at least 228 pages had not been produced,” the motion said. The defense team also argued that Shaw — who is “of counsel” to the Spector Gadon firm for the purpose of handling Joseph Murray’s case — had attempted to hide her true relationship with Murray by suggesting that she was nothing more than his lawyer. Ultimately, the defense lawyers said, Shaw “admitted that she was a co-inventor” with Murray on an invention. But even then, the defense said, Shaw at first produced only one patent application. Not until she was pressed, they said, did Shaw turn over two more patent applications in which she and Murray are listed as co-inventors. “Given plaintiff counsel’s repeated false statements, we still do not know what else they are concealing,” the defense team wrote. The motion asked Schiller “to send a message that this ‘fast and loose’ approach to the truth will not be tolerated.” In response, the plaintiff’s team accused the defense lawyers of “litigating by intimidation, bullying and nastiness.” “These are on the cut-throat ‘Rambo’ tactics for which the legal profession has been justly reviled by the public. Thus, because they understand how important it is to Murray that Ms. Shaw represent him, [defense] counsel repeatedly and viciously attack her personally, questioning her integrity without basis,” the plaintiff’s lawyers wrote. In the suit, Murray claims Gemplus International SA and lawyers from Burns Doane Swecker & Mathis in Alexandria, Va., engaged in a scheme to misappropriate Murray’s inventions relating to smart card technology. Murray claims he was duped into becoming a Gemplus employee so that his inventions could be patented for the benefit of the company. He also claims the Burns Doane law firm duped him into believing that the firm represented him and would protect his interests so that he would divulge all of his inventions to Gemplus. The lawsuit has bounced back and forth between the state and federal courts. In one round of the litigation, Schiller found that the case did not present a true federal question under patent law since the real dispute was over who owned the patents. But after Schiller sent the case back to state court, the plaintiff’s lawyers amended the suit to drop Pennsylvania defendants. At that point, defense lawyers removed the case to federal court on diversity-of-citizenship grounds. In the sanctions motion, the Hangley Aronchick lawyers, who represent Burns Doane, said they hoped that “an appropriate sanction will deter plaintiff’s counsel from repeating their egregious conduct, so that this case can be litigated on the merits, rather than as a game of hide-and-go-seek.” The defense team said it had “myriad” complaints about its opponents’ litigation tactics, but that defense counsel chose to focus on just two in the motion — the inventor’s notebook and the patent applications that revealed Shaw’s role as co-inventor on several of Murray’s other patent applications. The motion said that soon after defense attorney Wolfsohn asked to see the originals of the notebooks, the plaintiff’s team engaged in “virtuoso evasionary tactics.” The motion said plaintiff’s attorney Picker “claimed that he personally had to be present during the inspection, and he then stated that he was either conveniently out of town, too busy, or just unavailable for the next several weeks.” Only after a court conference, the motion said, did plaintiff’s counsel agree to allow defense counsel to review the handwritten notes. Wolfsohn said in the motion that when he arrived at plaintiff’s counsel’s offices, expecting to review the 19 pages — assuming that they constituted the entire “inventor notebook” — he was “astonished to discover five legal pads — 247 pages — filled with plaintiff’s handwritten diary entries detailing his daily activities.” The defense team argued that “it then became clear that plaintiff’s counsel had deliberately gone through the five legal pads and chosen to copy only those few pages that plaintiff’s counsel thought would not harm Mr. Murray’s case. … It became equally clear that if defense counsel had not fortuitously asked to see the original 19 pages, the notebooks never would have been produced.” In response, the plaintiff’s team argued that no sanctions were warranted because the five notebooks “were not withheld, but were in fact voluntarily produced, and produced weeks before Mr. Murray’s deposition.” Schiller sided with the defense, saying, “Picker’s explanation of counsel’s failure to produce the notepads was insufficient. “First, Mr. Picker relied on his client to make a legal determination as to relevance, purportedly because he could not read or understand Mr. Murray’s notes. Yet even a cursory review of the notes makes clear that they are legible, and indeed Mr. Picker’s own subsequent review of the notes enabled him to determine that they contained substantial material that was responsive to defendants’ second request for production.” Schiller also found that the plaintiff’s team should have come forward more quickly with all of the patent applications that showed Murray and Shaw as co-inventors. “In both episodes … plaintiff’s counsel have demonstrated bad faith and a reckless disregard for the rules of discovery,” Schiller wrote. “Plaintiff’s counsel have exhibited gross professional negligence with regard to their duty to the court.” Schiller also found that Shaw’s statements to the court about the patent applications and her role as Murray’s attorney “both misled the court and frustrated the discovery process.” Schiller granted a defense motion for sanctions under Rule 37, but didn’t set a dollar figure. Instead he awarded Burns Doane “all reasonable costs and fees incurred in connection with their motion for sanctions and … the preparation for and attendance of the various discovery conferences discussed in their motion.” Shaw responded to Schiller’s ruling by saying, “I said nothing before the court which was inaccurate. I do not see how the court could reach the conclusion it did.”

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