Touchcom Inc. v. Parr

• Decision Date: 07 July 2011
• Docket Number: No. 1:07cv114 (JCC).,1:07cv114 (JCC).
• Citation: 790 F.Supp.2d 435
• Court: U.S. District Court — Eastern District of Virginia
• Parties: TOUCHCOM, INC., et al., Plaintiffs,v.BERESKIN & PARR, et al., Defendants.

790 F.Supp.2d 435

TOUCHCOM, INC., et al., Plaintiffs,

v.BERESKIN & PARR, et al., Defendants.

No. 1:07cv114 (JCC).

United States District Court, E.D. Virginia,Alexandria Division.

May 18, 2011.Opinion Granting In Part and Denying In Part Motion for Reconsideration July 7, 2011.

Daniel Donohoe Prichard, Lynn Marie Deavers, Dow Lohnes & Albertson PLLC, Washington, DC, for Plaintiffs.Monplaisir Godfrey Hamilton, Shook Hardy & Bacon LLP, Washington, DC, for Defendants.

MEMORANDUM OPINION

JAMES C. CACHERIS, District Judge.

This matter comes before the Court on Defendants Bereskin & Parr and H. Samuel Frost's Motion for Summary Judgment (“MSJ”). [Dkt. 150.] For the reasons stated below, the Court will grant in part and deny in part this motion.

I. Background

In 1987, plaintiff Touchcom, Inc. (“TI”) hired defendants Bereskin & Parr (“B & P”) and H. Samuel Frost (a partner at B & P) (collectively “Defendants”) to obtain patent protection for an invention related to gasoline pumps (the “Invention”). After obtaining a Canadian Patent, Defendants filed an application under the Patent Cooperation Treaty (“PCT”), resulting in the issuance of United States Patent No. 5,027,282 (the “'282 Patent”) in 1991. (MSJ Ex. B–1.) Plaintiff Touchcom Technologies, Inc. (“TTI”) was incorporated on June 13, 1989. (MSJ at 3 ¶ 3). In 2003, TI and TTI (collectively “Plaintiffs”) sued Dresser, Inc., in the Eastern District of Texas for infringement of the '282 Patent (the “Dresser Litigation”). The court in that action granted summary judgment, finding the '282 Patent was invalid because certain software code was missing from the specification. Touchcom, Inc. v. Dresser, Inc., 427 F.Supp.2d 730, 736–37 (E.D.Tex.2005). Plaintiffs are suing Defendants for malpractice arising out of that action.

Defendants filed their Motion for Summary Judgment on August 11, 2010. [Dkt. 150.] Plaintiffs filed a Memorandum in Opposition (“Opp.”) on August 25, 2010. [Dkt. 161.] And Defendants filed a Reply in Support of their Motion for Summary Judgment (“Reply.”) on August 30, 2010. [Dkt. 162.] Following oral argument before this Court on September 3, 2010, this Court took the Motion for Summary Judgment under advisement and elected to hold a hearing on the issue of “ensnarement,” which was held on November 22, 2010. The parties then submitted proposed findings of fact and conclusions of law [Dkts. 215 (Defendants' Proposed Findings of Fact (“D. FoF”)), 216 (Defendants' Proposed Conclusions of Law (“D. CoL.”)), 217 (Plaintiffs' Proposed Findings of Fact and Conclusions of Law (“P. FoF”)) ], as well as briefs in opposition [Dkts. 218 (Plaintiffs' Response (“P. Resp.”)), 219 (Defendants' Response (“D. Resp.”)) ].

Defendants make four general arguments in support of summary judgment: (1) that Plaintiff's claims are time-barred; (2) that the allegedly infringing Dresser systems do not in fact infringe; (3) that TTI was never a B & P client and therefore has no standing to sue B & P; and (4) that TI did not suffer an injury and lacks standing to sue Defendants.¹ (MSJ at 1–2.) Defendants submitted “undisputed” facts in support of these arguments, most of which Plaintiffs in fact dispute. This Court will therefore proceed to the substance of Defendants' arguments and will address disputed facts as the need arises.

II. Standard of Review

Summary judgment is appropriate only if the record shows that “there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Evans v. Techs. Apps. & Serv. Co., 80 F.3d 954, 958–59 (4th Cir.1996) (citations omitted). The party seeking summary judgment has the initial burden of showing the absence of a material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine issue of material fact exists “if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Anderson, 477 U.S. at 248, 106 S.Ct. 2505.

Once a motion for summary judgment is properly made and supported, the opposing party has the burden of showing that a genuine dispute exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The party opposing summary judgment may not rest upon mere allegations or denials. Rather, the non-moving party “must set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 248, 106 S.Ct. 2505 (quotation omitted).

Unsupported speculation is not enough to withstand a motion for summary judgment. See Ash v. United Parcel Serv., Inc., 800 F.2d 409, 411–12 (4th Cir.1986). Summary judgment is appropriate when, after discovery, a party has failed to make a “showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322, 106 S.Ct. 2548. In reviewing the record on summary judgment, “the court must draw any inferences in the light most favorable to the nonmovant” and “determine whether the record taken as a whole could lead a reasonable trier of fact to find for the non-movant.” Brock v. Entre Computer Ctrs., Inc., 933 F.2d 1253, 1259 (4th Cir.1991) (citations omitted).

III. Analysis

A. Statute of Limitations

Defendants argue first that their patent work for Plaintiffs ended more than three years before Plaintiffs filed suit in this case, thus barring suit under Virginia's three-year statute of limitations for oral contract claims. See Va.Code Ann. § 8.01–246(1). Defendants claim that they were retained for a series of separate tasks that ended with the issuance of the '282 Patent, as opposed to being retained generally. (MSJ at 6–11.) Defendants further argue that Plaintiff's were injured, if at all, in 1991, when Defendants secured the '282 Patent (as opposed to when the Dresser Litigation found the Patent invalid). (MSJ at 11–13.)

i. D & P's Scope of Retention

Defendants argue that, as a general matter, their pursuit of the ' 282 Patent “was one of a series of separate engagements for securing foreign patents.” (MSJ at 7.) The implication of this is that Defendants did not continuously represent Plaintiffs up to and through the Dresser Litigation. This Court is not convinced.

Defendants first cite deposition testimony of Peter Hollidge, President of TI and TTI, arguing that Hollidge had “no knowledge of the terms of the oral contract that B & P allegedly breached” and that Hollidge instead simply retained B & P to procure a Canadian patent. (MSJ at 7.) It is unclear whether Hollidge's deposition testimony supports such a reading. Hollidge appears to testify instead that Petro–Canada (part owner of TI) originally asked B & P to perform legal services for TI and that Hollidge was unsure what precisely Petro–Canada asked of B & P. Hollidge Dep. at 205:7–16. Whatever Petro–Canada asked of B & P, neither Plaintiffs nor Defendants argue that Petro–Canada's request constituted the “oral contract” at issue in this case. Defendants therefore fail to show that Hollidge actually had no knowledge of the terms of B & P's oral contract with TI.

Defendants secondly note that when Hollidge decided to file a PCT application and engaged B & P for the task, B & P opened separate files and invoiced separately for each application, and kept separate files and invoiced separately for each patent. (MSJ at 7–8.) Defendants claim this shows those services having been rendered subject to new and independent agreements. Id. But the existence of separate files and separate invoices for separate patents hardly proves that each patent was governed by its own separate contract.

Defendants additionally note that TI retained other law firms on matters relating to the '282 Patent. (MSJ at 9.) But while that may show that the Parties did not maintain an exclusive relationship with respect to the '282 Patent, this hardly proves that no relationship continued between the Parties past B & P's procurement of the patent.

A closer call, however, is Hollidge's sworn declaration in the underlying Dresser matter, in which he stated that

Mr. Sam Frost, of the law firm of Bereskin and Parr, has not provided Touchcom or Touchcom Technologies with any counseling or substantive legal work for many years. The extent of our use of Sam Frost in recent years has been to retrieve documents associated with recent court actions.

(Decl. of Peter Hollidge (June 8, 2005) ¶ 4.) Defendants claim that this statement judicially estoppes Plaintiffs from arguing that the Parties were engaged in a continuous representation. (MSJ at 9–10.)

The elements of judicial estoppel are as follows:

First, the party sought to be estopped must be seeking to adopt a [fact] position that is inconsistent with a stance taken in prior litigation.... Second, the prior inconsistent position must have been accepted by the court. Lastly, the party against whom judicial estoppel is to be applied must have intentionally misled the court to gain unfair advantage. This bad faith requirement is the determinative factor.

Whitten v. Fred's, Inc., 601 F.3d 231, 241 (4th Cir.2010). Based on the information before this Court, the analysis can stop at step one. It is unclear to what degree Hollidge's statement is inconsistent with continuous representation. It is possible, for instance, that a single representation could include both the procurement of a patent—a substantively significant task—and the maintenance of the patent—a substantively less significant task. Even if the more difficult work was completed, the fact that any work was continuing suggests that some relationship remained. This Court will leave the significance of that relationship to the jury.

Defendants further argue, citing Virginia Military Institute v. King, 217 Va. 751, 232 S.E.2d...