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An NPE, a law firm and a claim for $10 million in unpaid fees

Court documents have emerged which provide details of the kind of relationship law firms and NPEs arrange when they decide to work together; and which give an insight into what can go wrong when they subsequently fall out. The case involves Texas-based NPE Parallel Networks as plaintiff and national law firm Jenner & Block as defendant. There is a supporting cast that includes an arbitrator and companies such as Oracle and Microsoft, as well as contingency fee arrangements, damages awards and claims for unpaid fees totalling $10 million. For anyone interested in the nitty gritty of the US IP marketplace it it is juicy stuff. 

To keep things short, the essence of the story is that Parallel Networks was sued by Jenner & Block for fees after they quit representing the NPE in a case.  The matter went to arbitration and now the NPE is appealing that decision to a district court in Texas.  As a result, the basis of its case and the evidence it is presenting are all in the public domain. Parallel Networks accuses the law firm of offering bad advice and engaging in unethical behaviour, and claims that that the arbitrator “fashioned his own brand of industrial justice”, “exceeded his powers” and “disregarded over 150 years of well-settled Texas law governing attorney-client fee arrangements”.

It is important to remember that what we currently have are Parallel Networks’ version of events and the evidence that it has chosen to present. Jenner & Block has not yet had the opportunity to provide its side of the story or any evidence to support its arguments. Likewise, the arbitrator (who I understand is named Jerry Grissom) has not yet been called upon to justify his reasoning or, indeed, to confirm that what Parallel Networks claims was his judgment is, in fact, an accurate record of what he decided.

But while bearing all that in mind, as I say, everything is in the public domain; so here is a link to Parallel Networks’ motion and petition to vacate the arbitration award, as well as a couple of items of evidence that the NPE has submitted to support its case – Exhibit H here; Exhibit I here.        


Joff Wild
IAM Magazine
31 January 2013

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IP litigation, Patents, IP business

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