Fish & Richardson Strikes Back at Scott Harris

This case concerns a lawyer's grave breach of his duties to his law firm. Mr. Harris, the attorney, obtained a "portfolio" of patents while a principal of Fish & Richardson by misusing firm resources and engaging in unauthorized legal work. The patent at issue in this case ("the '252 Patent" or "Patent") is one such patent. Mr. Harris then sought to cash in on his patents, including the '252 Patent, by offering them to sale to parties that Mr. Harris knew would file infringement actions against defendants that included his own firm's clients. The instant lawsuit by Illinois Computer Research against Google is one such action against a Fish & Richardson client for alleged infringement of a patent Harris sold.

That was the beginning of the counterclaim Fish & Richardson filed this week against Scott Harris after Illinois Computer Research itself amended its complaint to add Fish & Richardson as a defendant in its patent infringement suit against Google. The counterclaim attempts to paint a story about a highly-paid patent attorney who was so greedy he couldn't resist suing his firm's clients to make a few extra bucks. The attorneys at Jenner & Block in Chicago drafted this pleading. Here are some nuggets from the counterclaim:

"Mr. Harris kept his misconduct secret from Fish & Richardson, concealing from the Firm key facts about his patent dealings and misrepresenting or omitting other facts when confronted by Firm personnel. As the facts have emerged, however, the breadth of Mr. Harris's betrayal is stunning."

"At the time of Mr. Harris's resignation, he was one of the ten most highly paid principals at Fish & Richardson."

"Mr. Harris filed and prosecuted his applications using Fish & Richardson's resources, including but not limited to the time and assistance of Fish & Richardson secretarial and paralegal personnel, docketing and filing systems, letterhead and forms, and office equipment."

"[A]t least as early as November 1999, Mr. Harris approached a Fish & Richardson client ("Client A") to inquire whether the client had an interest in licensing rights in certain technologies covered by at least one of Mr. Harris's patent applications. Mr. Harris did not disclose to Fish & Richardson that he was proposing a self-interested transaction with a firm client. . . . In return [for a license], the client granted Mr. Harris stock options and a royalty to be applied to the sales of products incorporating the technology. The agreement also required the client to pay $1 million to Harris within three years. Mr. Harris did not disclose this agreement to Fish & Richardson."

"At times, Mr. Harris used Client A's name in Firm recordkeeping systems as the client for which he was supposedly prosecuting the '252 Patent. However, it does not appear that Mr. Harris billed Client A for all of his work on the '252 Patent. Rather, as described, Mr. Harris bartered his legal services while practicing at Fish & Richardson in exchange for consideration from the client to Mr. Harris personally."

"On March 14, 2003, Mr. Harris sent an email to Client A's executives stating that Client A had breached its agreement with Harris for failure to pay $1 million within three years. . . . Client A returned the license to Mr. Harris."

"Mr. Harris [] misled the Firm about the status of his prosecution efforts and the patent license. When Firm personnel asked him the status of the '252 prosecution, Mr. Harris instructed the Patent would "go abandoned" -- i.e., no further action was expected. In fact, however, Mr. Harris continued prosecuting the '252 Patent with the intent of enforcing that patent and his other patents against various parties, including clients of Fish & Richardson."

"In 2006, Mr. Harris began operating a website with the address imapatenttroll.com."

"Mr. Harris was aware of the Firm's adversarial relationship with Mr. Niro's clients and Mr. Niro's litigation against the Firm. Nonetheless, on March 21, 2006, Mr. Harris sought out Mr. Niro's assistance. As Mr. Harris explained in an e-mail he sent to Mr. Niro using the Fish & Richardson e-mail system and server, Harris 'was a patentee on a number of patents, covering a number of things, some of which are being infringed by others.' Notwithstanding his fiduciary obligations to Fish & Richardson's clients and his contractual obligations to the Firm, Mr. Harris inquired of Mr. Niro, 'I was wondering if this was something you could help me with.'"

"As a result of his secret discussions with Mr. Niro, which Mr. Harris did not disclose to any of his fellow principals or firm management at Fish & Richardson, Harris soon after entered into agreements transferring licenses and/or other rights in certain of his patents to a series of entities represented by or otherwise affiliated with Mr. Niro. Mr. Harris used the Firm's resources to facilitate these secret transactions."

"Upon information and belief, the arrangement between Mr. Harris and ICR related to the '252 Patent provides Mr. Harris with a financial interest in the proceeds of litigation or settlements involving alleged infringement of the '252 Patent. Fish & Richardson has asked for a copy of this agreement but Mr. Harris and Mr. Niro have refused to provide it."

"In 2006 [] Mr. Harris had corresponded with another patent attorney (again using the Fish & Richardson e-mail system) regarding potential targets for infringement actions based on the '252 Patent. That attorney suggested to Mr. Harris that Google could be a target of such an action."

"Harris personally acted as a neutral 'referee' [for Fish & Richardson and Google] on a Google conflict resolution inquiry within the Firm."

"Mr. Niro also knew that Google was a client of Fish & Richardson. Mr. Niro had represented at least one plaintiff making patent infringement claims against Google in a matter which Fish & Richardson represented Google."

"After ICR sued Google, Fish & Richardson again confronted Mr. Harris. Harris again equivocated and was not truthful and candid about his activities, misrepresenting some facts and omitting others. In light of his breach of fiduciary duties, breach of his contractual obligations, and his deception of the other shareholders at Fish & Richardson, Harris was asked to resign, which he did effective September 14, 2007."

Joe Mullin of the Daily Journal, a California legal newspaper, writes the following, based on his own discussions with Harris and others (my emphasis in bold):

Harris said his former employer's allegations were "ridiculous and outrageous." He didn't know about Niro's litigation against the firm and its clients, and didn't know how the '252 patent, now asserted against Google, might be used once he sold it earlier this year, he said.

"I didn't know exactly what they were going to do with [the patent]," said Harris. "Fish & Richardson told me, in no uncertain terms, to sell this patent and do it sooner rather than later."

Harris said he never used firm personnel or resources to prosecute his patents, as the complaint alleges. He added that he had billed millions of dollars of fees to the firm over the 14 years he worked there, mostly in the firm's San Diego office.

"They're trying to make it seem like I'm a bad guy," said Harris. "They knew all this stuff. They knew all along I was filing these patents."

Harris declined to say if he had any ongoing financial interest in the litigation against Google. He also declined to elaborate on his business relationship with Florida attorney James Beauregard Parker, who owns BarTex Research and IRC, two patent-holding companies that were set up on July 30 and bought Harris' patents. ...

Regarding the ICR lawsuit against Google, Parker said he was disenchanted to see how Fish & Richardson was treating its former principal.

"I think Mr. Harris is a genius and a prolific inventor, and has a very creative mind," said Parker. "I find [the firm's] conduct reprehensible. As soon as some potential client strong-arms them, they turn their back on their own."

Parker said he met Harris in Chicago, around the same time he bought Harris' patents. He said the two had "spoken before that," but declined to elaborate.

Parker denied ICR was a "patent troll," saying that Harris' patent for "Enhancing Touch and Feel on the Internet," which relates to three-dimensional online displays, was a valuable invention.

"I'm tired of these big companies basically walking all over these little guys, these inventors. If there seems to be a good business opportunity available, and to help out a creative mind at the same time - I'm all about that."

Yeah, right, J-Beau. You're all about aiding and abetting Harris and Niro if you can make a quick and easy buck.

Anyway, there are three big lessons here:

1) Never assume that emails sent on your employer's email system are private.
2) Don't use your employer's computer system, email system, etc., to try to extract money from your employer's clients.
3) If you're one of the top 10 paid professionals in one of the top patent firms in the country, and you still feel a need to supplement your income by becoming a patent troll and suing your law firm's clients, it's going to make headlines. Better to leave the firm first.