MWE Off Hook for $4.4 Million

Terrence P. McMahon

McDermott Will & Emery dodged a $4.3 million bullet when sanctions against patent litigator Terrence McMahon were reversed on appeal.

McMahon (Santa Clara BSC ’72, JD ’76) was benchslapped in 2008 by a Colorado district judge for acting “cavalierly, with reckless indifference to the merits of Medtronic’s infringement claims.”

The Federal Circuit turned that on its head and told the judge that he should have curtailed McMahon at trial if his behavior was so bad.

We pour a little rain on his parade after the jump (plus top-tier BigLaw on the appeal).

Let’s put this back in context. Medtronic sued BrainLab for infringement.

The judge denied BrainLab’s motion for summary judgment. So that’s a minor victory for McMahon/Medtronic/MWE.

Medtronic makes its case-in-chief, BrainLab moves for judgment as a matter of law, and that’s denied, too. Another win for McM/MT/MWE.

The trial ends and before it goes to jury, BrainLab moves for JML a second time, and loses a second time. (The judge was pretty adamant he was going to make good use of the jury)

Then the jury finds for Medtronic and awards $51 million. That’s a big win for McM/MT/MWE.

BrainLab moves for JML again. This time the judge grants it! Third time’s a charm and all that.

Of course, Medtronic appeals. And loses when the Federal Circuit affirms the dismissal.

Much like the 2009 Red Sox, Medtronic started out strong, but couldn’t finish. All those wins on summary judgment, JML, and even at trial ended up worth nothing.

That’s why we find this comment a little disingenuous:

A blustery, battle-tested trial lawyer, McMahon said he was “delighted” by the decision.

“This is a complete vindication of the trial work we did for Medtronic, and I’m pleased that the Federal Circuit has concluded that we engaged in proper and zealous advocacy,” he said.

It’s a complete vindication of taking 10 years to lose?

The $4.4 million must be a drop in the bucket compared to what McDermott racked up over all those years. Further, the court didn’t find that they engaged in proper and zealous advocacy, the court held that

it is clear to us that, viewed in context, that [the one particular bad] incident was not sufficiently egregious to justify the imposition of sanctions under the court’s inherent authority. We therefore reverse the district court’s order and vacate the award of attorney fees, costs, and expenses.

As far as we’re concerned, there’s a big difference between “proper and zealous advocacy” and advocacy that is distasteful but not sanctionable, which is a closer description based on our reading of the opinion.

Less cynically, the appellate teams were top notch for what seems like a pretty mundane argument. Covington’s WilmerHale’s Seth Waxman for Medtronic against old rival Carter Phillips of Sidley Austin for BrainLab.