Legal Malpractice – Intellectual Property

Jury Instructions-IL > Professional Malpractice > Legal Malpractice – Intellectual Property > Legal Malpractice – Intellectual Property

Meriturn Partners, LLC; Meriturn Fund Mngt. LLC; Meriturn Fund, LP; SSI Investors, LLC; and SSI Holdco. Inc. vs. Banner & Witcoff, Ltd & Joseph Berghammer, 10 L 3985

Legal Malpractice – Intellectual Property – Negligent Patent Search – Due Diligence

This was a 2013 trial which resulted in a jury verdict for the plaintiffs of $6 million against a patent attorney and a law firm. The plaintiffs, an investment group, claimed that the defendants failed to properly determine whether the target company actually owned or controlled a patent on a process to regenerate scrap into cotton fiber. Defendants claimed the any losses were due to improper due diligence into a doomed target company with a bad track record of performance and, further, that the plaintiff had told the defendant to “go no further” on the cotton patent which was one of several patents listed as assets of the target company.

IPI 1.01 – Modified by the court to be read at end of case, and updated by IPI Committee in 2009 to include old IPI 3.01 language)

Now that the evidence has concluded, I will further instruct you as to the law and your duties. The law regarding this case is contained in the instructions I will give to you. You must consider the Court’s instructions as a whole, not picking out some instructions and disregarding others.

It is your duty to resolve this case by determining the facts and following the law given in the instructions. Your verdict must not be based upon speculation, prejudice, or sympathy. Each party, whether a corporation, partnership, or company or an individual, should receive your same fair consideration.

I have not meant to indicate any opinion as to the facts of this case by any of my rulings, remarks, or instructions.

You will decide what facts have been proven. Facts may be proven by evidence or reasonable inferences drawn from the evidence. Evidence consists of the testimony of witnesses and of exhibits admitted by the court. You should consider all the evidence without regard to which party produced it. You may use common sense gained from your experiences in life in evaluating what you see and hear during trial.

You are the only judges of the credibility of the witnesses. You will decide the weight to be given to the testimony of each of them. In evaluating the credibility of a witness you may consider that witness’ ability and opportunity to observe, memory, manner, interest, bias, qualifications, experience, and any previous inconsistent statement or act by the witness concerning an issue important to the case.

The use of cell phones, text messaging, Internet postings and Internet access devices in connection with your deliberations violates the rules of evidence and you are prohibited from using them

You must make your decision based on what you recall of the evidence. You will not receive a written transcript of the testimony when you retire to the jury room.

An opening statement is what an attorney expects the evidence will be. A closing argument is given at the conclusion of the case and is a summary of what an attorney contends the evidence has shown. If any statement or argument of an attorney is not supported by the law or the evidence you should disregard that statement.

IPI 2.01 – Evidence Deposition

The testimony of certain witnesses which was presented on videotape to the jury. You should give this testimony the same consideration you would give it had the witnesses personally appeared in court to testify in person.

IPI 3.02 Witness Who Has Been Interviewed by Attorney

An attorney may, if a witness agrees, interview a witness to learn what testimony will be given. Such an interview, by itself, does not reflect adversely on the truth of the testimony of the witness.

IPI 3.04 Circumstantial Evidence

A fact or a group of facts, may, based on logic and common sense, lead you to a conclusion as to other facts. This is known as circumstantial evidence. A fact may be proved by circumstantial evidence. For example, if you are in a building and a person enters who is wet and is holding an umbrella, you might conclude that it was raining outside. Circumstantial evidence is entitled to the same consideration as any other type of evidence.

IPI 3.08 – Opinion Testimony/New

You have heard witnesses give opinions about matters requiring knowledge and skill. You should judge their testimony in the same way you judge the testimony from any other witness. The fact that such persons have given opinions does not mean that you are required to accept them. Give the testimony whatever weight you think it deserves, considering the reasons given for the opinion, the witness’ qualifications, and all of the other evidence in the case

IPI 12.04 Concurrent Negligence Other Than Defendant’s

More than one person may be to blame for causing an injury. If you decide that a the defendants were negligent and that their negligence was a proximate cause of injury and loss to the plaintiffs, it is not a defense that some third person who is not a party to the suit may also have been to blame.

However, if you decide that the sole proximate cause of injury to the plaintiffs was the conduct of some person other than the defendants, then your verdict should be for the defendants.

IPI 15.01 Proximate Cause—Definition [Updated Sept.2009]

When I use the expression “proximate cause,” I mean a cause that, in the natural or ordinary course of events, produced the plaintiff’s losses or damages. It need not be the only cause, nor the last or nearest cause. It is sufficient if it combines with another cause resulting in the losses or damages.

IPI 20.01 – ISSUES – Negligence

The plaintiffs, Meriturn Partners, LLC; Meriturn Fund Management, LLC;

Meriturn Fund, LP; SSI Investors, LLC; and SSI Holdco. Inc., claim that they sustained losses and damages and that the defendants, Banner & Witcoff, Ltd and Joseph Berghammer, were negligent in one or more of the following respects:

Failed to adequately follow up on questions about the ‘179 Patent after they identified potential problems;
Failed to properly determine whether SSI owned the ‘179 Patent;
Failed to identify the true owner(s) of the ‘179 Patent;
Failed to get an assignment for the ‘179 Patent;
Failed to adequately advise the plaintiffs that the ‘179 Patent was not owned by SSI;
Represented and assured the plaintiffs that the ‘179 Patent was owned or controlled by SSI when it was not, in fact, owned or controlled by SSI; or
Defendant Joseph Berghammer failed to adequately supervise Paul Rivard.

The plaintiffs further claims that one or more of the foregoing was a proximate cause of their losses or damages.

The defendants deny that they did any of the things claimed by the plaintiffs, deny that they were negligent in doing any of the things claimed by the plaintiffs, and deny that any claimed act or omission on the part of the defendants was a proximate cause of the claimed injuries to the plaintiffs.

IPI 21.01 – BURDEN OF PROOF

When I say that a party has the burden of proof on any proposition, or use the expression “if you find,” or “if you decide,” I mean you must be persuaded, considering all the evidence in the case, that the proposition on which a party has the burden of proof is more probably true than not true.

IPI 21.02 – BURDEN

The plaintiffs have the burden of proving each of the following propositions as to the defendants:

First, that the defendants acted or failed to act in one of the ways claimed by the plaintiff as stated to you in these instructions and that in so acting, or failing to act, the defendant was negligent;

Second, that the plaintiffs sustained losses and damages; and

Third, that the negligence of the defendants was a proximate cause of losses and damages to the plaintiffs.

If you find from your consideration of all the evidence that the plaintiffs have proved all of the propositions required of the plaintiffs as to the defendants, then your verdict shall be for the plaintiffs.

On the other hand, if you find from your consideration of all the evidence that any of these propositions has not been proved as to the defendants, then your verdict should be for defendants.

30.01 et seq Damage Instructions, Measure of Damages

If you decide for the plaintiffs on the question of liability, then you must then fix the amount of money which will reasonably and fairly compensate them for any of the following elements of losses or damages proved by the evidence to have resulted from the negligence of the defendants, taking into consideration the nature, extent and duration of the losses or damages.

The loss of capital as a result of the investment made into SSI.
The value of the lost profits and/or interest accruing from

a reasonable alternative investment of capital (other than SSI)

dating from November 15, 2006 to today’s date.

Whether any of these elements of damages has been proved by the evidence is for you to determine.

IPI.36.01 In Absence of Liability—No Occasion to Consider Damages

If you decide for the defendants on the question of liability, you will have no occasion to consider the question of damages.

IPI 50.11/MODIFIED: A Corporation Acts Through Its Employees

The Plaintiffs in this case are:

Meriturn Partners, LLC;

Meriturn Fund Management, LLC;

Meriturn Fund, LP;

SSI Investors, LLC; and

SSI Holdco. Inc

The Defendants in this case are:

Banner & Witcoff, Ltd; and

Joseph Berghammer

The plaintiffs, Meriturn Partners, LLC, Meriturn Fund Management, LLC,

Meriturn Fund, LP, SSI Investors, LLC, and SSI Holdco. Inc., are corporate, company or partnership entities and can act only through their officers and employees. Any act or omission of an officer or employee within the scope of his or her employment is the action or omission of the plaintiff.

The defendant, Banner & Witcoff, Ltd., is a corporation and can act only through its officers and employees. Any act or omission of an officer or employee within the scope of his employment is the action or omission of the defendant.

IPI 50.01 Both Principal and Agent Sued—No Issue as to Agency

The defendants, Banner & Witcoff, Ltd. and Joseph Berghammer are sued as principal and agent. The defendant, Banner & Witcoff, Ltd., is the principal and the defendant, Joseph Berghammer, is its agent.

If you find that the defendant, Joseph Berghammer, is liable, then you must find that the defendant, Banner & Witcoff, Ltd., is also liable.

However, if you find that Joseph Berghammer is not liable, then you must find that Banner & Witcoff, Ltd is not liable

IPI 50.02 Principal Sued But Not Agent—No Issue as to Agency

Paul Rivard was the agent of the defendant Banner & Witcoff at the time of

this occurrence. Therefore, any act or omission of the agent at that time was in law the act or omission of the defendant Banner & Witcoff.

I.P.I. 105.01 Professional Negligence – Duty [September 2011]

A intellectual property attorney must possess and use the knowledge, skill, and care ordinarily used by a reasonably careful intellectual property attorney. The failure to do something that a reasonably careful intellectual property attorney would do, or the doing of something that a reasonably careful intellectual property attorney would not do, under circumstances similar to those shown by the evidence, is “professional negligence”.

The phrase “deviation from the standard of care means the same thing as “professional negligence”.

The law does not say how a reasonably careful intellectual property attorney would act under these circumstances. That is for you to decide.

In reaching your decision, you must rely upon opinion testimony from qualified witnesses. You must not attempt to determine how a reasonably careful intellectual property attorney would act from any personal knowledge you may have.

B45.01 – FORMS OF VERDICT

When you retire to the jury room you will first select a foreperson. He or she will preside during your deliberations.

Your verdict must be unanimous.

Forms of verdicts are supplied with these instructions. After you have reached your verdict, fill in and sign the appropriate form of verdict and return it to the court. Your verdict must be signed by each of you. You should not write or mark upon this or any of the other instructions given to you by the court.

The Plaintiffs in this case are:

Meriturn Partners, LLC;

Meriturn Fund Management, LLC;

Meriturn Fund, LP;

SSI Investors, LLC; and

SSI Holdco. Inc

The Defendants in this case are:

Banner & Witcoff, Ltd; and

Joseph Berghammer

If you find for the Plaintiffs and against the Defendants, then you should use

Verdict Form A.

If you find for the Defendants and against one or more of the Plaintiffs then you

should use Verdict Form B.

VERDICT FORM A

We, the jury, find for the Plaintiffs, Meriturn Partners, LLC., Meriturn Fund

Management, LLC., Meriturn Fund, LP., SSI Investors, LLC., and SSI Holdco. Inc.

and against the Defendants in the amount of $___________________________________ ,

itemized as follows:

The loss of capital as a result of the investment

made into SSI. $_________________

The value of the lost profits and/or interest

accruing from a reasonable alternative investment

of capital (other than SSI) dating from

November 15, 2006 to today’s date. $_________________

[Signature Lines ]

VERDICT FORM B

We, the jury, find for the defendants and against the plaintiffs.

[Signature Lines ]