U.S. Patent & Trademark Office.
U.S. Patent & Trademark Office. (Photo: Diego M. Radzinschi/ALM)

The now-disbanded Niro, Haller & Niro made a name for itself through aggressive patent litigation against big technology companies. But it also suffered at least one black eye with its work for Intellect Wireless Inc., a representation that led to costly sanctions against the Niro firm and its client.

Now, the fallout from that engagement has resulted in a U.S. Patent and Trademark Office suspension for one of the former Niro lawyers involved in an Intellect Wireless litigation campaign.

The USPTO recently handed down an 18-month suspension to former Niro lawyer David Mahalek over his role in Intellect Wireless’ cases against HTC Corp. and Sharp Corp. Those suits brought to light revelations that Intellect Wireless’ owner, Daniel Henderson, had misled the USPTO to obtain his patents related to displaying caller ID and other images on wireless phones.

The suspension, the product of a settlement between Mahalek and the USPTO’s disciplinary office, follows Mahalek’s work on an Intellect Wireless litigation that was upended when defense lawyers for HTC uncovered evidence that two Intellect Wireless patents had been obtained through inequitable conduct at the USPTO.

In 2012, a federal judge in Chicago determined that Henderson had submitted various inaccurate declarations to the patent office, including his statement that he had built a working prototype of a picture phone in the early 1990s. That ruling was later affirmed by a federal appeals court.

Following the invalidation of the patents, defense lawyers for HTC, including Stephen Korniczky of Sheppard, Mullin, Richter & Hampton, successfully pushed for sanctions against Intellect Wireless and the Niro firm, including Mahalek. In July 2015, a federal court put Intellect Wireless and its lawyers on the hook to HTC for $4 million in “exceptional case” attorney fees.

In its suspension order, the USPTO wrote that Mahalek and others at the Niro firm did not represent Intellect Wireless or Henderson at the time he made misleading statements to obtain patents. The patent office also notes that Mahalek was the most junior lawyer on the Niro team that represented Intellect Wireless.

But the USPTO faulted Mahalek for violating several of the patent office’s ethics rules. Mahalek “continued to prosecute the case without confirming what occurred with the patent applications and with knowledge at some point that Henderson’s original declarations were false and his revised declarations were inconsistent,” the USPTO wrote in its suspension order.

Barry Spevack of Chicago’s Monico & Spevack, who represented Mahalek at the USPTO, did not immediately respond to a request for comment.

Mahalek’s suspension prevents him from practicing in front of the USPTO on patent, trademark and nonpatent matters for 18 months, retroactive to Jan. 27, the date when the USPTO signed the suspension order.

Funk & Bolton partner Michael McCabe Jr., who runs an IP-focused legal ethics blog, noted in a post on Monday that the USPTO suspension may serve as a precursor to “reciprocal” discipline for Mahalek from state and federal bars. McCabe also suggested that other former Niro firm lawyers may face discipline from the USPTO.

Scott Flaherty covers the business of law with a special focus on the plaintiffs bar. Contact him at sflaherty@alm.com or on Twitter: @sflaherty18.

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