UK magic circle firm Allen & Overy has been heavily criticised by a High Court judge in London after claiming £5.2 million ($10 million) in costs relating to a dispute that was at trial for five days.
A&O, which was representing RIM in a patent case against Visto, allocated one partner – Nicola Dagg – to the case, as well as three senior associates, three associates and a team of trainees and paralegals. Dagg billed 1,387 hours and two of the three senior associates billed a combined 4,543 hours. The three more junior associates billed approximately 3,500 hours, while trainees and paralegals hours came in at over 5,000 – worth £1 million on their own. By way of contrast, the Taylor Wessing team, under the command of lead partner Gary Moss, estimated that its total bill would be around £1 million.
I am sure that A&O can justify every hour that it billed and, of course, magic circle firms do not come cheap. What is also worth noting, however, is that A&O is not a firm in which IP is regarded as a major earner. This is reflected by the findings of the two major UK law firm directories, Chambers and The Legal 500, neither of which rank it anywhere near to the top for either IP in general or patent litigation. Some might argue that if you go for a firm that charges high hourly fees, where the pressure is on partners and their departments to work large amounts of hours and where patent litigation is not a primary earner, it would be a major surprise if you did not end up getting a huge bill. What, the cynic might say, did Allen & Overy have to lose?
On the other hand, Taylor Wessing is very clearly among London’s patent litigation elite and is involved in intense competition with firms such as Bristows and Bird & Bird for the really big ticket instructions. If its costs were seen as excessive, it could start to lose clients to rivals; and once they are gone, clients are always very hard to win back. Added to this, it could well be that because IP is one of the main revenue drivers at Taylor Wessing, the partnership is happy to invest significant resources into training actual and potential patent litigators, as well as support staff. This, in turn, means that those involved in cases probably do not have to spend a great deal of time educating themselves as to the nuances of what is going on before they get into the thick of the action.
All in all, therefore, you could say that what we have here is a perfect example of why specialist IP firms should be the first port of call for any IP owners that are involved in a dispute. Except for one thing. It was A&O’s client and not Taylor Wessing’s that actually came out on top.
STOP PRESS: Here is the IP Kat's explanation for the reasons why the costs issue came to light in the first place. Clearly, it was not a hook, line and sinker victory for RIM.