Swedish inventor Hakan Lans intentionally misled a U.S. court about the ownership of a color graphics patent, and he should have to pay attorneys fees to Dell and Gateway in the lawsuit he filed against the two computer makers in 1997, a lawyer representing the companies argued Friday.
But Lans’ lawyer argued that the inventor had notified his former lawyers that he had transferred ownership of the patent from himself to a company he owns, Uniboard AB. Lans’ former attorneys are responsible for the ownership confusion, and they should pay any attorneys fees the court awards, Lans’ lawyer, Kevin Fong, told a three-judge panel at the U.S. Court of Appeals for the Federal Circuit, in Washington, D.C.
Attorneys fees in the case are several hundred thousand dollars, said Christopher Wall, a lawyer representing Lans in a separate, ongoing malpractice lawsuit against the inventor’s former lawyers. Lans cannot refile a patent infringement lawsuit against Dell and Gateway because his patent has expired, and the inventor has lost millions of dollars in license fees, Wall added.
Lans transferred ownership of the patent to Uniboard to avoid taxes, but his testimony about the ownership in his 1997 lawsuit contained “stark inconsistencies,” said Amanda Woodall Mayor, representing Gateway and Dell. Lans is not a victim of bad advice from law firms Adduci, Mastriani & Schaumberg LLP, based in Washington, and Advokatfirman Delphi & Co., based in Sweden, but of his own efforts to hide the ownership transfer, she said. Gateway and Dell have argued Lans’ lawsuit wasn’t valid because he didn’t own the patent.
Lans made a “studied decision” to transfer ownership of the patent, Mayor told the court. “While Mr. Lans is a [legal] layman, he is not ignorant of business,” Mayor told the court. “The district court found that Mr. Lans was just not credible.”
Lans received a 1981 patent for color graphics, used on color computer monitors, and after a 10-year lawsuit against Hitachi many computer manufacturers have agreed to pay him license fees. But Dell and Gateway have refused, and in 2001, the U.S. District Court for the District of Columbia ruled in their favor, saying the inventor had misled his lawyers about the ownership of the patent.
Fong argued Friday that Lans had notified Adduci, Mastriani & Schaumberg of the ownership change as it moved forward with the lawsuits against Dell and Gateway. The firm’s lawyers knew they didn’t have a key document detailing the ownership change, and the law firm gave bad legal advice to Lans, Fong said.
“At the end of the day a mistake was made [by the law firm],” Fong said.
Judges seemed skeptical of Fong’s argument. Judge Arthur Gajarsa noted that Lans testified in the Dell and Gateway trial that he owned the patent, and Judge Richard Linn noted that the district court looked at all the evidence in the case before ordering Lans to pay attorneys fees.
“The problem I’m having is you selectively pick and choose little snippets of information from the record,” Linn told Fong. “It’s very difficult to say the district court’s conclusion is wrong.”
Fong said he was picking the information that showed Lans notified Adduci, Mastriani & Schaumberg of the ownership change. The district court based its ruling on the “faulty assumption” that Lans misled the law firm about the patent ownership, he said.
Aaron Handleman, representing the law firm, disagreed, saying Lans changed his story during testimony. “It was like a shell game,” Handleman said. “As new facts were found from Mr. Lans, he shifted his story.”
The judges will rule on Lans’ appeal at a later date.
