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UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION
WARRIOR SPORTS, INC., Case No. 09-12102 A Michigan Corporation, Honorable Gerald E. Rosen Magistrate Donald A. Scheer Plaintiff,
v
DICKINSON WRIGHT, PLLC., a Michigan 0300 Professional Limited Liability Company.
- 355 (248) Defendant. • ______/
FIRST AMENDED COMPLAINT AND DEMAND FOR TRIAL BY JURY
Warrior Sports, Inc. ("Warrior”) states:
THE PARTIES SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • 1. Warrior is a Michigan corporation incorporated under the laws of Michigan with its SOMMERS SCHWARTZ, P.C. principal offices in Macomb County, Michigan. Warrior is a citizen of Michigan. SUITE 900
R • 2. Dickinson Wright PLLC ("DW") is a professional limited liability company formed
under the laws of Michigan with its principal offices in Wayne County, Michigan. DW is a citizen of
2000 TOWN CENTE Michigan. Throughout this Amended Complaint, unless referred to with particularity, references to DW
are references to particular attorney employees and/or equity shareholders of DW who provided legal
services to Warrior in connection with the events referred to in this pleading.
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JURISDICTION AND VENUE
3. The controversy involves determination of issues involving application of patent law and
substantial questions relating to patent law. This Court has jurisdiction under 28 U.S.C. §1338.
4. Defendant does business in this District. The current principal place of business of DW is
in this District. The attorney client relation existing among Warrior and DW arose in this District. Many
of the alleged breaches of that contract and/or the tort alleged occurred in this District. Accordingly, this
Court has venue under 28 U.S.C. § 1391(a). 0300
- 355 (248) • COMMON ALLEGATIONS
A. The Attorney-Client Relations
5. Defendant DW is a law firm and/or was engaged in the practice of law.
6. DW employs as equity partners John A. Artz and John S. Artz, (the “Artzes”), who SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • practice in the field of patent law. An attorney client relationship has existed between Warrior, as client,
SOMMERS SCHWARTZ, P.C. and the Artzes, as attorneys, for many years. The relationship arose initially when the Artzes were SUITE 900 • employed by a patent law firm named Brooks & Kushman, P.C. (“the B&K law firm”).
7. The Artzes left the B&K law firm in approximately 1999 and were employed at John A.
Artz, P.C. d/b/a Artz & Artz, P.C. (The “Artz Firm”). The Artz Firm was originally named as a co- 2000 TOWN CENTER CENTER TOWN 2000 defendant in this action. A settlement has occurred between Warrior and the Artz Firm without prejudice
to this action against DW, or the claim made in this Amended Complaint, that DW has successor
liability for the acts and omissions of the Artz Firm.
8. The Artz Firm merged with the DW Firm in June 2007, publically announcing the merger
with a press release. The Artzes became equity partners at DW as a result of the merger. All actions
taken by the Artzes since June, 2007 have been as partners and employees of DW. Upon information
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and belief, at the time of the merger, Warrior was the Artzes’ largest client and DW was interested in
having Warrior as a client.
9. After the merger in 2007, Warrior was not consulted whether it would independently
retain DW as its lawyers, and neither signed nor was offered to sign a separate fee agreement with DW.
DW began billing Warrior for work performed by the Artzes, and other professionals employed by DW
immediately after the 2007 merger between the Artz firm and DW. DW became the successor-in-interest
to the Artz Firm insofar as the attorney client relationship existed with Warrior. 0300
10. This attorney-client relationship existed between Warrior and DW as of the date of the - 355 (248) • initial Complaint in this matter.
B. Nature of the Representation
11. At all times relevant to this action, Warrior has been engaged in the design, manufacture SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • and sale of sports equipment including lacrosse heads and sticks.
SOMMERS SCHWARTZ, P.C. 12. Many of Warrior's designs and products are patented. At the time of their original SUITE 900 • retention, and throughout the relevant time period, the Artzes have held themselves out as experts in
patent law, including patent prosecution and patent-related litigation. Over many years the Artzes, first
with B&K and later with DW, have worked on a number of patent-related litigations for Warrior and 2000 TOWN CENTER CENTER TOWN 2000 have actively participated in the prosecution of the Warrior patent portfolio.
13. After the 2007 merger, DW (through the Artzes) represented to Warrior that its patent
practice capabilities enabled more effective and broader representation to Warrior. For a considerable
period of time, including today, DW prominently displayed (and in fact still displays) Warrior as a
patent-related client in its website.
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C. The `216 Reissue
14. Warrior originally retained the Detroit law firm of Barnes, Kisselle, Raisch, Choate
Whittenmore & Hulbert to file a patent application on a scooped lacrosse head invented by David
Morrow, the President and founder of Warrior, and Philip Naumberg. On October 29, 1996, the United
States Patent and Trademark Office (“PTO”) issued U.S. Patent No. 5,568,925 (the “’925 Patent”).
15. Warrior transferred its patent files, including the file for the '925 Patent, to the B&K law
firm, where the Artzes began working on Warrior patent matters. Warrior transferred responsibility for 0300
the application for the '216 Patent to the Artz Firm. The Artzes worked on obtaining the reissue of the - 355 (248) • ‘925 Patent, which involved John S. Artz disclosing certain information concerning alleged prior art to
the PTO.
16. On August 12, 2003, after a re-issue proceeding, the PTO issued United States Patent No.
RE 38,216 ("the ‘216 Reissue”), entitled "Scooped Lacrosse Head." The ‘216 Reissue is a reissue of the SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • ‘925 Patent.
SOMMERS SCHWARTZ, P.C. 17. “Warrior Lacrosse, Inc.” became the owner by assignment of the '216 Reissue and, owns SUITE 900 • all right, title and interest in it. Warrior Lacrosse subsequently changed its name to “Warrior Sports,
Inc.,” the Plaintiff, and this entity owns the rights and title to the '216 Reissue.
18. The Artz Firm entered the '925 Patent and the '216 reissue application into its docketing 2000 TOWN CENTER CENTER TOWN 2000 system. The Artz Firm undertook responsibility for making maintenance fee payments on any patent
owned by Warrior, including the '925 Patent and the '216 Reissue.
19. The PTO requires that three separate maintenance fees be paid on an issued patent. The
first is due between the third and fourth years after issuance of the patent. The second is due between
the seventh and eighth years after issuance of the patent. The third is due between the eleventh and
twelfth years after issuance of the patent.
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20. The Second Maintenance Fee for the '216 Reissue was due during the period ending in
October, 2004.
D. Non-Payment Of The `216 Maintenance Fee
21. The Artz Firm undertook responsibility for paying the second maintenance fee on the
'216 Reissue. The Artz firm had responsibility for paying the maintenance fees on other Warrior patents
as well. The responsibility for paying the Second Maintenance Fee for the '216 reissue patent was 0300
ultimately that of Mr. John S. Artz, the principal attorney for the '925 patent, which was succeeded by - 355 (248) • the '216 reissue patent.
22. The Artz Firm failed to pay the second maintenance fee on the '216 Reissue when due.
The Artz Firm failed to confirm that a payment had been made, and then failed to check that the
payment had been received by the PTO during the period of time when a missed maintenance fee could SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • have been automatically accepted by the PTO.
SOMMERS SCHWARTZ, P.C. 23. Upon information and belief, the Artz firm had previously missed paying the first SUITE 900 • maintenance fee on the ‘216 Reissue but had rectified the missed payment by a petition to the PTO.
However, at least by reason of the missed earlier payment the Artz Firm was, or should have been, on
notice that its docketing system and other methods used to monitor compliance with the PTO 2000 TOWN CENTER CENTER TOWN 2000 maintenance fee schedules were deficient.
24. As a direct and proximate result of the failure to pay the second maintenance fee, the '216
Reissue lapsed on October 29, 2004. By so lapsing, the ‘216 Reissue ceased to have any vitality, and the
exclusivity obtained for Warrior under its claims was lost on October 29, 2004. Warrior was unaware of
the lapse for over two years, however.
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25. Warrior competes in a competitive industry for lacrosse sticks, gloves, and related
equipment. The scooped lacrosse head invention covered by the ‘216 Reissue gave Warrior a
competitive advantage against other lacrosse stick manufacturers, and resulted in a large gain in sales for
the company.
26. The Artzes were well aware of the competitive advantage that the ‘216 Reissue gave
Warrior. With their recommendation, Warrior litigated to enforce the patent, among others, against
Warrior’s competitors in the lacrosse equipment field, including the cases WARRIOR v. J. deBEER & 0300
SON., INC., (USDC Ed. Mi, Case Nos. 02-70193, 03-73667 and 03-60176). Those cases resulted in a - 355 (248) • license agreement granted by Warrior on the ‘216 Reissue. The Artzes were aware of the agreement,
having participated in its negotiation and drafting.
E. STX Litigation SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • 27. On January 30, 2004, on the advice of the Artzes, Warrior filed a patent infringement suit
SOMMERS SCHWARTZ, P.C. against its chief competitor, STX, LLC (“STX”) (USDC Ed. Mi. Case Nos. 04-71842 and 04-70363 (the SUITE 900 • "STX Litigation")) alleging, among other things, that STX was infringing the ‘216 Reissue. When the
Artz Firm merged with DW on June 1, 2007, the Artzes, as attorneys for the successor and/or merged
entity, DW, substituted as attorneys of record in the case on behalf of DW. Thus, no later than June 1, 2000 TOWN CENTER CENTER TOWN 2000 2007, DW directly represented Warrior in the STX Litigation.
28. During the course of the Litigation, STX counter-claimed for unenforceability and
invalidity of the ‘216 Reissue. It argued that the '216 Reissue should be held unenforceable and/or
invalid due to the inequitable conduct on the part of John S. Artz. STX argued that John S. Artz failed
to disclose relevant earlier art to the PTO during the re-issue proceeding. STX alleged that Artz learned
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of the art, the so-called Rule offset head information, during the course of previous litigation brought by
Warrior in which he was intimately involved.
29. STX also claimed that John S. Artz willfully deceived the PTO in the application process
for issuance of the '216 Reissue. STX further claimed that the ‘216 Reissue was improperly re-issued in
light of the scope of the ‘925 patent, which, if true, would be attributable to John S. Artz.
30. Both STX allegations, if proven, had the effect of potentially rendering the ‘216 Reissue
and Warrior’s case against STX worthless. 0300
31. Extensive discovery was undertaken against STX relating to STX’s sale of allegedly - 355 (248) • infringing lacrosse sticks and other equipment. With DW’s advice, Warrior asserted patent infringement
damages under the theory of lost profits against STX. Defendants retained a well-known damages expert
witness, Michael Chase and his company, Navigant Consulting, on Warrior’s behalf. Prior to learning of
the lapse of the ‘216 Reissue, and near the time that Warrior believed the case was set for resolution, SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • Chase issued a damages report based on a lost profits theory that enumerated a substantial amount of
SOMMERS SCHWARTZ, P.C. damages that Warrior was seeking from STX for past infringement. SUITE 900 • 32. It was known and understood by the Defendants that as a result of the lapse, all but a
small fraction of the infringement alleged against STX from the invalidity claim was wiped out (the
period from August 12, 2003 to October 29, 2004 was the only remaining infringement period). 2000 TOWN CENTER CENTER TOWN 2000 33. In 2006, before Defendants learned of the lapse of the ‘216 Reissue, STX sought to
bifurcate the case and try the inequitable conduct case before trying the infringement case on the merits.
34. On Warrior’s behalf, the Artzes objected to the request. They pointed out that:
[STX Docket #308]
As STX’s infringement is allowed to continue, every month causes further harm to Warrior in the form of lost sales, potential loss of business, and cannibalization of its patented technology…Unfortunately, as the [lacrosse] sport continues to grow, Warrior lacks the ability to enjoy the
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benefits of exclusive use of its patented technology because of STX’s continued infringement…Additionally, Warrior has also been prejudiced by the fact that other companies have begun making inroads in the lacrosse industry grounded on the utilization of Warrior’s patented technology.
35. Shortly later, the lapse of the ‘216 Reissue was discovered. STX immediately filed a
motion to add a defense of patent misuse to the ongoing litigation.
36. After the lapse was discovered, STX was able to effectively bifurcate the case, stay
0300 Warrior's remaining infringement claim, and have the district court schedule STX’s inequitable conduct
- 355 (248) claim on the ‘216 Reissue for trial in July, 2008. •
37. Warrior was unaware of the non-payment and consequent lapse of the ‘216 Reissue from
the day the patent lapsed in 2004 until the lapse was brought to the attention of John S. Artz on January
12, 2007, by counsel for STX.
38. By the time the Artzes learned that the patent had lapsed, any statutory period that would SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • have allowed reinstatement based upon a more lenient standard before the PTO had passed. As SOMMERS SCHWARTZ, P.C. described further below, first the Artz Firm and later DW (which substituted for the Artz Firm) filed SUITE 900 • petitions with the PTO to have the ‘216 Reissue reinstated under the “unavoidable” standard in place
which was necessitated by the passing of two years after the lapse of the ‘216 Reissue. As described
2000 TOWN CENTER CENTER TOWN 2000 below, these efforts in 2007 and 2008 were unsuccessful.
F. Failure to Advise Warrior of the Consequences of the Lapse And First Petition To Reinstate
39. In or about late January, 2007, John S. Artz telephoned the CEO of Warrior and
communicated that the ‘216 Reissue had lapsed. Artz learned of the lapse from the attorney representing
STX in the STX Litigation. He portrayed the lapse as a simple, administrative error and a routine
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occurrence which could and would be easily rectified. Upon information and belief, John S. Artz knew
or should have known that a lapse that had gone uncorrected for over two years stood a small chance of
being reinstated by the PTO.
40. The first effort to reinstate the patent was hastily made on January 19, 2007, a week after
the Artzes learned of the lapse. The petition to the PTO failed to attach a death certificate of the Artz
Firm clerical employee who the Artzes blamed for the missed payment. The significance of this failure
became apparent subsequently. 0300
41. In response to the petition, on February 20, 2007, STX filed with the court a motion for - 355 (248) • leave to file amended pleadings based on the defense of patent misuse. As part of the STX response, it
pointed out that the file record maintained by the PTO for the ‘216 Reissue indicated that the Artz firm
had also untimely paid the first maintenance fee for the ‘925 Patent (the predecessor to the ‘216), and
had filed a petition with the PTO for the PTO to accept the delayed payment. SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • 42. STX also made the allegation that, “Of the 12 maintenance fee payments due between
SOMMERS SCHWARTZ, P.C. 2002-2004 in which either an Artz or an Artz entity is identified as the fee addressee, almost half were SUITE 900 • paid late or were not paid at all…In short your claim in the [PTO] Petition that in the 2002-2004 period
’the only maintenance fee not paid was the last one, namely the second maintenance fee for the ‘216
Reissue‘ is false.” STX also attached the publicly available death certificate of the Artz Firm employee 2000 TOWN CENTER CENTER TOWN 2000 to the pleading, alleging that her terminal illness as a result of AIDS was diagnosed four years earlier.
43. The Artzes did not bring the information alleged by STX to Warrior’s attention. Instead,
they allowed Warrior to believe, based on Artzes’ prior representations, that the PTO would reinstate the
patent.
44. The Artzes failed to explain to Warrior the potential risks and consequences of the patent
lapse, including the opinion that it was highly unlikely that the PTO would reinstate the patent. They
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made no other communication, oral or written, to Warrior about the lapse, failing as well to advise
Warrior that: (a) the Artz Firm and its attorneys had committed legal malpractice by allowing the patent
to lapse, (b) that there had been a prior missed payment by the Artz Firm, (c) that the Artz Firm had
routinely missed making other maintenance payments, (d) that these facts were relevant to the PTO’s
consideration of the petitions, and (e) that STX was in possession of these potentially case-ending facts.
G. Liability of DW For the Artz Firm Actions Prior to June 1, 2007 0300
45. The Artz Firm and DW entered into what they called a “Practice Combination Agreement - 355 (248) • Between Dickinson Wright, PLLC and Artz & Artz, P.C.” (the “Combination Agreement”), effective
June 1, 2007. The pertinent terms of the Combination Agreement establish that the successor firm was a
seamless continuation of the predecessor firm. The June 1, 2007 transaction establishes either a merger
or de facto merger, making DW liable, as a matter of law. Even if the joinder is ultimately viewed as a SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • cash acquisition (which it is not) DW is still liable under Michigan law since the transaction amounts to
SOMMERS SCHWARTZ, P.C. a continuation of the Artz Firm. SUITE 900 • 46. DW has successor liability for all acts/omissions attributable to the Artz Firm. The
Settlement Agreement reached by Warrior with the Artzes and the Artz Firm specifically provides that
the successor liability of DW is not affected by the partial settlement. DW was in possession of the 2000 TOWN CENTER CENTER TOWN 2000 settlement agreement prior to its execution, and acquiesced in its execution, which released from
liability two of its equity shareholders. Indeed, DW retained an ultimate right to veto Warrior’s
settlement with the Artzes since an aspect of that settlement was resolution of DW’s claim that it was
entitled to defense and coverage under the Artz Firm’s legal malpractice tail policy. That claim by DW
evidences in and of itself that the two firms considered themselves one and the same.
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47. DW is now estopped from challenging that the Artz Firm and DW merged in 2007, or
that the partial settlement reached with the insurer for the Artz Firm precludes DW’s further liability
under common law successor, merger, or continuity of enterprise bases.
48. The joining of the Artz Firm and DW was a merger, a continuity of enterprise, or DW
became the Artz Firm’s common law successor. Under the Combination Agreement, “Dickinson
Wright, PLLC (“DW”) and Artz & Artz, P.C. (“A&A”) will be combined…” The Combination
Agreement further provides, “The effective date…of the Transaction shall be June 1, 2007. Upon 0300
consummation of the Transaction, as of the Effective Date, A&A shall cease to be engaged in the - 355 (248) • practice of law and the combined firm shall be known as Dickinson Wright.” Under the heading
“Structure of Transaction,” the parties provided:
As of the Effective Date, the respective law practices of DW and A&A shall be combined and shall continue through DW, a professional limited liability company. Also as of the Effective Date, A&A shall cease to be engaged in the practice of law. On or after the Effective Date, A&A shall SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • retain its corporate existence for the sole purposes of collecting certain accounts receivable…and otherwise winding up its business affairs in an SOMMERS SCHWARTZ, P.C. orderly manner. Upon completion of the winding up of its affairs, A&A shall be dissolved in accordance with applicable law. SUITE 900 • 49. As part of the transaction, per DW’s insistence, the Artz Firm purchased $4 million in tail
liability insurance. Both the Artz Firm and DW knew that this sum was inadequate to satisfy the
2000 TOWN CENTER CENTER TOWN 2000 eventual obligations to Warrior.
50. After this litigation was initiated, the tail liability insurers for the Artz Firm instituted a
declaratory judgment coverage action in which they claimed (a) that there was fraud in the application,
and (b) sought rescission of the tail liability coverage. The carriers pointed out that John A. Artz failed
to disclose the lapse of the ‘216 Reissue in the application for coverage. The insurers tendered back all
or substantially all of the premium paid for the coverage.
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51. As a result of these actions, and by virtue of the Combination Agreement with DW, there
were no available assets, or assets so severely compromised as to be wholly inadequate to satisfy the
liability of the Artz Firm that were left behind in the remnant of the Artz Firm after June 1, 2007. Upon
information and belief, the Artzes and/or DW anticipated that the legal malpractice that was the failure
of the Artz Firm to pay the maintenance fee would result in a legal malpractice claim, and sought to
mask the de facto merger of the Artz Firm and DW so as to try to shield themselves, the Artz Firm, or
DW from liability. 0300
52. The label DW applies to the combination in which the Artz Firm and DW merged - 355 (248) • practices is not controlling if the combination is found to be a merger or de facto merger, a successor-in-
fact, or if DW is found to be a mere continuation of the Artz firm. Under any of these scenarios, the
obligations of the predecessor firm become obligations of the resulting corporation.
53. The purpose of the Combination Agreement (and actual transaction) between the two SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • Firms was to incorporate the old Artz Firm into the new entity with as much of the same structure and
SOMMERS SCHWARTZ, P.C. operation of the Artz Firm as possible. DW obtained the assets of the Artz Firm - - which constituted SUITE 900 • the client base - - by assuming all of the Artz Firm’s former clients (except for BorgWarner which was
found to be conflicted) from the date of the transaction, June 1, 2007. At the same time, under the
Combination Agreement, DW purported to pay the Artz Firm $300,000 for “furniture, fixtures, 2000 TOWN CENTER CENTER TOWN 2000 improvements and other assets” of the Artz Firm. Upon information and belief, the only “asset” that
was of real value was the Artz Firm’s continuing client list, which prominently included Warrior.
54. Under the Combination Agreement, DW and the Artz Firm agreed that billings of the
former Artz Firm until June 1, 2007 would (a) be used for 90 days to pay the compensation of John A.
Artz and John S. Artz (and two other attorneys at DW), (b) to pay the continuing lease obligation on the
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former Artz Firm office space, and (c) pay the pension, payroll tax and other obligations of the Artz
Firm after the merger.
55. As far as Warrior was concerned, one month it was represented by the Artz Firm, the next
it was represented by the same lawyers at DW. Even the billing format was identical with the exception
of the name of the law firm on top. DW took over the appeal on the ‘216 Reissue before the PTO. DW
substituted in as Warrior’s attorneys on the STX Litigation. DW took over other Warrior matters in the
same manner. 0300
56. There was continuity of management as a result of the June 1, 2007 transaction. John A. - 355 (248) • Artz was the head of the Artz Firm. Immediately after the transaction, he became head of the patent
litigation practice area at DW.
57. There was continuity of shareholders after the transaction. There was no change in any
existing DW shareholder as a result of the transaction, and the only pre-merger Artz Firm equity SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • partners were added to DW as equity partners.
SOMMERS SCHWARTZ, P.C. 58. There was a cessation of the Artz Firm’s doing business after the transaction, with the SUITE 900 • only remaining activity being collection of accounts receivable.
59. DW assumed all of the Artz Firm’s obligations necessary for operations as part of the
transaction. DW made provisions for continuing payment on the Artz Firm lease. DW assumed lease 2000 TOWN CENTER CENTER TOWN 2000 obligations on certain Artz Firm equipment. DW provided malpractice insurance for Artz Firm
personnel. DW provided billing, administrative, and personnel sufficient to allow a continuation of the
Artz Firm practice.
60. Before this litigation began, both DW and the Artz Firm recognized that the transaction
was a merger. The pre-joinder confidentiality agreement between the Artz Firm and DW set forth that
“the parties have agreed to commence preliminary discussions concerning a possible merger or similar
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business transaction…” And in correspondence before and after between the Artz Firm and DW, the
parties referred to their joinder as a “merger.” One exchange of e-mails specifically refuted that the deal
was an “acquisition.” In sworn affidavits submitted to the PTO, DW attorneys called the deal a
“merger.” As late as May 12, 2008, John A. Artz, as an equity partner of DW, wrote to Warrior’s
President on DW letterhead and stated:
One of the major reasons, as you know, that Artz & Artz took the step to merge with Dickinson Wright was to make sure that there was sufficient
personnel to take care of all of Warrior’s IP work – and the move insured 0300 that result.
- 355 (248) 61. Warrior’s presence in the Artz Firm client roster was a major reason for the merger. DW •
should be judicially estopped from denying, for litigation purposes, that the joinder of the firms was
anything but a merger, de facto merger, or mere continuation.
H. DW’s Failure To Advise After Merger SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • 62. Shortly after the merger, at least as early as August, 2007, a long-time DW equity partner SOMMERS SCHWARTZ, P.C. not part of the Artz Firm prior to the merger, Edward Pappas, began providing legal services to Warrior SUITE 900 • relating to the STX Litigation. By December, he had billed considerable time to the STX Litigation file.
63. On December 3, 2007, some six months after the merger, the PTO denied the petition to
2000 TOWN CENTER CENTER TOWN 2000 reinstate the ‘216 Reissue filed by the Artzes. The effect of the denial was to leave the ‘216 Reissue
lapsed and the case against STX severely compromised.
64. After the June, 2007 merger, DW expressly owed Warrior a duty to provide impartial
advice concerning the future handling of both the lapse issue and of the STX Litigation.
65. DW failed to explain to Warrior the potential risks and consequences of the patent lapse,
including the opinion that it was highly unlikely that the PTO would reinstate the patent with a
subsequent petition. DW made no other communication, oral or written, to Warrior about the lapse,
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failing as well to advise Warrior throughout its representation that: (a) the Artz Firm and its attorneys
had committed legal malpractice by allowing the patent to lapse, (b) that there had been a prior missed
payment by the Artz Firm, (c) that the Artz Firm had routinely missed making other maintenance
payments, (d) that these facts were relevant to the PTO’s consideration of the petitions, and (e) that STX
was in possession of these potentially case-ending facts.
66. Among the reasons why DW failed to advise Warrior about the consequences of the lapse
was DW’s desire to continue to receive the lucrative Warrior fees. 0300
- 355 (248) • I. DW’s Unsuccessful Second Petition To Reinstate Before the PTO
67. In addition to the other breaches alleged in this Amended Complaint, DW was negligent
in its attempts to have the PTO reinstate the ‘216 Reissue. A second petition to reinstate was filed on
January 8, 2008. DW was negligent in presenting a case to establish that the delay in paying the second SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • maintenance fee was "unavoidable" pursuant to 35 USC § 41 (c) (1).
SOMMERS SCHWARTZ, P.C. 68. The August 6, 2008 decision by the PTO, which denied Defendants' request for SUITE 900 • reconsideration of the original December 3, 2007 decision denying reinstatement, lists several direct
failures by DW to provide the facts and documentation to prove the failure to pay the fee was
"unavoidable." These included the failure to supply the PTO with the death certificate of the clerical 2000 TOWN CENTER CENTER TOWN 2000 employee who allegedly failed to transmit the check for the maintenance fee.
69. DW later filed pleadings in which it explained that it did not support the petition with the
death certificate because it wanted to protect the “privacy” of the employee. DW knew or should have
known that the “privacy” was public knowledge in the available death certificate shown to the Artzes by
STX in February, 2007.
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70. Numerous decisions from the PTO refusing to accept a late-submitted maintenance fee
under Section 41(c)(1) should have made clear to DW that a substantially better-developed factual
argument (such as the one belatedly made to the U.S. District Court in 2009) should have been made to
the PTO during the first petition in 2007 or the second in 2008. Had that argument been better
developed, the ‘216 Reissue could have been reinstated in 2007 instead of 2009, resulting in a better
bargaining position for Warrior vis-à-vis STX, deBeers, and new competitors.
71. Such failure constituted negligence and breach of the duty of care owed Warrior and is 0300
separate and apart from the initial malpractice resulting from failure to pay the '216 second maintenance - 355 (248) • fee.
J. DW’s Failure to Seek a Stay of the Inequitable Conduct Trial
72. By June, 2007, when DW became counsel of record in the STX Litigation, the district SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • court was scheduling the inequitable conduct trial ahead of the remaining infringement case. The
SOMMERS SCHWARTZ, P.C. district court was well-aware that the ‘216 Reissue had lapsed and that a petition to reinstate had been SUITE 900 • filed.
73. DW never asked the district court to stay the entire action pending the PTO’s final
resolution of the lapse issue. 2000 TOWN CENTER CENTER TOWN 2000 74. Such motion should have been made, and if it had been made, would have been granted.
A stay would have placed Warrior on better footing vis-à-vis STX in 2007.
75. Instead, in breach of their duties set forth below, DW agreed for the inequitable conduct
trial to go ahead in the summer of 2008.
16 2:09-cv-12102-GER-DAS Doc # 36 Filed 05/23/11 Pg 17 of 31 Pg ID 526
K. Conflict of Interest Arising From STX Litigation Inequitable Conduct Claims and Trial
76. DW represented Warrior in the bench trial of the inequitable conduct claim by STX,
which took place between July 15 and July 17, 2008. DW did not invite Warrior or its representatives to
attend or testify at the trial. At the time of the trial, the second petition to reinstate the ‘216 Reissue was
still pending before the PTO. The key witness during the trial was John S. Artz, as it was his actions, his
duty to disclose, and his duty of candor and good faith before the PTO during the reissue proceedings
0300 that was at issue in the bench trial.
- 355 (248) 77. Even before the lapse of the ‘216 Reissue was known to DW, a magistrate in the STX •
Litigation expressed concern that the inequitable conduct defense asserted by STX created a potential
conflict of interest vis-à-vis at least John S. Artz, who was both the prosecuting patent attorney and trial
counsel for Warrior. DW did not advise or disclose to Warrior the potential conflict inherent in such
situation. SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • 78. STX also made clear that as part of the inequitable conduct defense, it intended to raise SOMMERS SCHWARTZ, P.C. the issues of the lack of candor by the Artzes in the reinstatement petitions. SUITE 900 • 79. As soon as the Artz Firm merged with DW, Defendant knew or should have known that it
had a conflict of interest in continuing to represent Warrior in the STX Litigation. The conflict arose at
2000 TOWN CENTER CENTER TOWN 2000 the very least because it was clear, or should have been clear to DW (and all of its attorneys participating
in providing services to Warrior) that the Artz Firm’s (and by merger DW’s) failure to pay a
maintenance fee when due is legal malpractice. It was also clear, or should have been clear, that failure
to realize that the patent had in fact lapsed in 2004 and advising Warrior to begin and maintain an
infringement action with a lapsed patent, allowing STX to have standing to further allege its invalidity
and/or unenforceability, was an independent breach of professional duty. It was also clear, or should
have been clear, that due to the length of time between the lapse and the realization of the lapse, any
17 2:09-cv-12102-GER-DAS Doc # 36 Filed 05/23/11 Pg 18 of 31 Pg ID 527
petition to have the patent reinstated by the PTO had little chance of success, and that therefore, the
merits of the STX Litigation, both in terms of potential recovery against STX itself, and the maintained
validity and enforceability of the ‘216 Reissue as against other competitors, were irreparably harmed.
80. The conflict of interest was further made clear when the PTO denied the first petition in
December, 2007. At that point, DW knew or should have known, that the first petition was inadequate
as, at the very least, it failed to attach the death certificate of the clerical employee (a fact known to STX
and relevant to the PTO). DW knew or should have known that the Artzes (who had drafted the relevant 0300
pleadings) were attempting to protect their interests and the interests of their former firm and instead of - 355 (248) • exercising zealous fiduciary responsibilities to Warrior, were not candid with the PTO as to the reasons
for the missed payment.
81. Thus, there existed a clear conflict of interest between DW and Warrior which
culminated in and during the scheduled trial of the inequitable conduct phase of the case. A result SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • adverse to Warrior on STX's inequitable conduct claim (a finding that the ‘216 Reissue was
SOMMERS SCHWARTZ, P.C. unenforceable due to John S. Artz’s failure to disclose the Rule information to the PTO) had at least the SUITE 900 • potential of diminishing or eliminating the claim for damages against DW and/or DW’s new equity
partners, the Artzes, in this present legal malpractice action (since the lost profit claims made in the STX
Litigation would become worthless). 2000 TOWN CENTER CENTER TOWN 2000 82. In other words, it was clear or should have been clear to DW that what was bad for the
client, Warrior, in the STX Litigation was potentially good for DW in this legal malpractice case, thus
representing an unwaivable, unconsented and unconsentable conflict of interest, of which DW was well
aware, and one which it never disclosed to Warrior.
83. Additionally, in violation of its ethical and standard of care duties to keep Warrior
advised of the status and events of the STX Litigation, and to counsel Warrior as to strategy and
18 2:09-cv-12102-GER-DAS Doc # 36 Filed 05/23/11 Pg 19 of 31 Pg ID 528
potential causes of action, DW completely and utterly failed to communicate with Warrior in this regard,
essentially abandoning Warrior in this aspect of the representation.
84. Furthermore, in breach of its fiduciary and zealous representation duties, DW impliedly
threatened (by e-mail and voice message) not to file an important post-trial brief in the inequitable
conduct trial phase of the STX Litigation unless Warrior immediately paid a $100,000 fee, which was
clearly not owed under the circumstances.
0300
L. Settlement of STX Litigation After Abandonment - 355 (248) • 85. In 2008, Warrior became suspicious regarding the manner in which John S. Artz
minimized the lapse of the ‘216 Reissue while the STX Litigation was ongoing, and sought independent
opinions about the potential of the ‘216 Reissue becoming reinstated.
86. Warrior also became concerned about the near total lack of communication from DW and SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • Pappas about the STX Litigation. Communications from DW were not substantive; instead, DW sought
SOMMERS SCHWARTZ, P.C. to minimize the patent lapse as a “blip” and did not provide any counsel concerning STX. SUITE 900 • 87. As the Artzes told the district court in 2006, other lacrosse firms began making inroads in
the business. Warrior realized that due to the lapse of the ‘216 Reissue, other competitors in the lacrosse
stick and other equipment fields had hurriedly entered the market with their own versions of scooped 2000 TOWN CENTER CENTER TOWN 2000 head sticks, thus further eroding Warrior’s industry lead that had previously been protected by the ‘216
Reissue.
88. Warrior was not being advised by DW as to the likelihood of success, or even the
principal issues of the inequitable conduct trial.
89. The inequitable conduct phase of the STX Litigation proceeded through hearing before
the Hon. Julian Abele Cook.
19 2:09-cv-12102-GER-DAS Doc # 36 Filed 05/23/11 Pg 20 of 31 Pg ID 529
90. The sole communication from DW with respect to events of the hearing was contained in
a letter dated August 6, 2008. As the sole substantive analysis of the trial (of a case that he informed
Warrior would cost $300,000), John A. Artz told David Morrow, Warrior’s President, that, “We put in a
strong case and STX’s case was weak.” Despite being Warrior’s counsel of record, DW gave Warrior no
advice as to the overall resolution of the matter.
91. In September, 2008, several weeks after the PTO’s second rejection of the petition to
reinstate, Warrior was given copies of the proposed findings of fact and law submitted by both DW and 0300
STX’s counsel. The pleadings were not accompanied by any analysis, but a form letter signed by a DW - 355 (248) • paralegal. The statements made by STX in the briefs, citing to the culpability of John S. Artz during the
trial, were a shock to Warrior.
92. On August 28, 2008, a few days after the PTO’s second and final rejection of the
reinstatement petition, DW undertook, without any prior notice to or permission from Warrior, to file an SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • action on Warrior’s behalf in U.S. District Court seeking by mandamus to force the PTO to reinstate the
SOMMERS SCHWARTZ, P.C. lapsed ‘216 Reissue – a drastic action which was a far cry from John S. Artz’s initial representation to SUITE 900 • Warrior that the lapse would be easily and readily cured.
93. On September 29, 2008, Warrior was presented with a bill for $60,151.50 for August,
2008 work performed by DW in relation to the STX Litigation, which included descriptions of work 2000 TOWN CENTER CENTER TOWN 2000 performed by unidentified DW lawyers for, among other things, “Legal research regarding legal position
to challenge denial of petition to revive unavoidable delay of payment. Research into uspto [sic]
practices and district court attitudes towards such petitions and percentage of denials. vs. approvals.”
Warrior was never provided with results of the “research,” a legal memo suggesting that such petition be
filed, nor information that such a petition had ever been successful.
20 2:09-cv-12102-GER-DAS Doc # 36 Filed 05/23/11 Pg 21 of 31 Pg ID 530
94. Shortly after the filing, STX sought to intervene in the District Court action, revealing
alleged facts about the Artz Firm not previously known to Warrior. These were essentially the same
facts that STX made known to Judge Cook in 2007 which were not brought to Warrior’s attention.
Some of the revelations about the role played by John S. Artz in the reissue proceedings made by STX,
as well as the concealment of prior missed maintenance fees were a surprise and source of great concern
to Warrior.
95. Warrior was forced to monitor the case from the sidelines. As a result of independent 0300
investigation, and without any advice from DW, Warrior reasonably concluded that the likelihood of - 355 (248) • success of the federal mandamus action filed by DW, was very slim, and if STX continued to press its
intervention case, the likelihood of success was non-existent.
96. Throughout the period of time between the discovery of the lapse and August, 2008,
Warrior’s attorneys of record were not only non-communicative but, worse, had actively misrepresented SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • the situation involving the initial lapse, had failed to communicate the denials by the PTO, were tainted
SOMMERS SCHWARTZ, P.C. by conflict, and had apparently seriously misjudged STX’s determination. SUITE 900 • 97. By August, 2008, Warrior could not trust its attorneys of record, and had no reliable
information from them upon which to make informed decisions. On top of all that, DW was
“blackmailing” Warrior for fees, threatening not to file the Warrior post-trial briefs unless Warrior paid 2000 TOWN CENTER CENTER TOWN 2000 a substantial amount in allegedly overdue fees.
98. Had DW recognized and acted on the conflict of interest in a timely fashion, it would and
should have advised Warrior immediately after the merger that DW could not have continued to
represent Warrior because DW attorneys had a conflict of interest vis-à-vis Warrior. They did not at
least in part because DW wanted Warrior’s lucrative billing account obtained in the merger with the
Artz firm.
21 2:09-cv-12102-GER-DAS Doc # 36 Filed 05/23/11 Pg 22 of 31 Pg ID 531
99. Had DW recognized that a conflict of interest existed, DW would have withdrawn as
attorneys well in advance of the inequitable conduct trial, and would have permitted Warrior to timely
obtain unconflicted representation to advise Warrior as to the ultimate handling and disposition of the
STX Litigation including stay of the inequitable conduct trial. In spite of their professional
responsibility to do so, never did the Artz Firm or DW explain to Warrior why John S. Artz’s alleged
failure to disclose prior art to the PTO (the basis for STX’s allegations of inequitable conduct) during
the re-issue proceedings could have invalidated the ‘216 Reissue. 0300
100. In the absence of any unconflicted advice from DW, Warrior was left effectively - 355 (248) • unrepresented in the STX Litigation from January, 2007 to October, 2008. It was not privy to a full and
frank understanding of the role played by John S. Artz in the reissue of the patent and the subsequent
likelihood that STX could win the inequitable conduct trial. It was not privy to a full and frank analysis
of the likelihood of reinstatement of the ‘216 Reissue by either the second petition to the PTO or the SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • extraordinary mandamus petition filed without its knowledge or consent. It was not privy to a full and
SOMMERS SCHWARTZ, P.C. frank analysis as to STX’s chances of successfully introducing the allegations of the missed maintenance SUITE 900 • fee payment malfeasance in its case or in the mandamus case.
101. Faced with an effective abandonment by its long-standing patent counsel, Warrior settled
the STX Litigation in early October, 2008, on terms less favorable than if DW had complied with its 2000 TOWN CENTER CENTER TOWN 2000 professional duties. Among those terms was STX’s agreement not to seek to intervene in the mandamus
proceeding filed by DW.
102. As a result of the settlement, STX was and continues to be permitted to sell products that
otherwise infringe on the scope of the ‘216 Reissue claims through a license. Among other terms,
Warrior effectively gave up recovery of past and future infringement damages from STX. Had Warrior
22 2:09-cv-12102-GER-DAS Doc # 36 Filed 05/23/11 Pg 23 of 31 Pg ID 532
not been effectively abandoned by DW and Pappas, and had DW recognized and properly acted on the
conflict of interest, Warrior could have bettered its ultimate position in the STX Litigation.
M. Reinstatement of ‘216 Reissue
103. After STX ceased to try to intervene, the PTO agreed to accept the second maintenance
fee and reinstate the ‘216 Reissue effective May 1, 2009. However, as will be elaborated below, the
reinstatement, after the extensive lapse period has done and will do little, if anything, to ameliorate 0300
Warrior’s damages resulting from the lapse in 2004. - 355 (248) •
N. Warrior’s Damages
104. As a direct and proximate result of DW’s malpractice, Warrior has suffered damages in
amounts currently collectively estimated to exceed $33 million. Those damages fall into the following SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • general categories:
SOMMERS SCHWARTZ, P.C. SUITE 900 • 1. Diminution of STX Infringement Claim
105. Prior to the lapse of the ‘216 Reissue in 2004, STX was a primary competitor of Warrior
in the lacrosse head and convoyed product market. The Artz Firm and, later, DW as counsel for Warrior 2000 TOWN CENTER CENTER TOWN 2000 asserting infringement of the ‘216 Reissue, consistently argued in the STX Litigation that Warrior had
suffered millions of dollars of damages based in large part on a theory of lost profits of lacrosse head
products and convoyed sales. The Artz Firm and DW retained Michael Chase and Navigant Consulting
(billed to Warrior) to develop a lost profits theory in the STX Litigation. That theory was based on
DW’s analysis of the lacrosse head market and access to Warrior’s and STX’s sales records. That theory
23 2:09-cv-12102-GER-DAS Doc # 36 Filed 05/23/11 Pg 24 of 31 Pg ID 533
was based on DW’s analysis that beginning in 2003, the only unlicensed competitor in the curved head
lacrosse market to Warrior was STX.
106. Never prior to learning of the ‘216 Reissue lapse, did the Artz Firm or DW inform
Warrior that the infringement claim asserted against STX suffered from any significant problems.
Never did the Artz Firm or DW advise Warrior that the STX Litigation would likely result in anything
other than a multi-million dollar judgment in Warrior’s favor.
107. The malpractice enumerated in this Amended Complaint led to the ‘216 Reissue being 0300
void between 2004 and 2009, a loss of rights to enforce the patent against STX for infringement, and - 355 (248) • loss of ability to effectively enforce any future rights arising from the ‘216 Reissue (which had an
expiration date of 2015) against STX.
108. But for the various forms of malpractice, individually and/or collectively, (first, allowing
the ‘216 Reissue to lapse, second failing to inform of the results that John S. Artz engaged in acts that SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • could gave rise to the unenforceability of the ‘216 Reissue, third, not informing Warrior of the conflict
SOMMERS SCHWARTZ, P.C. of interest and advising Warrior to obtain unconflicted counsel well in advance of the trial, fourth, SUITE 900 • failure to communicate and abandonment, fifth, by failing to adequately seek the reinstatement of the
patent before the PTO in 2007-2008, and sixth, by failing at least to seek a stay rather than agreeing to
the inequitable conduct trial in a highly disadvantaged position), Warrior’s bargaining and litigation 2000 TOWN CENTER CENTER TOWN 2000 position vis-à-vis STX would have been drastically improved. DW’s malpractice proximately and
directly led to the result that the ‘216 Reissue could not prevent STX in the future from selling lacrosse
head products that otherwise infringed the ‘216 Reissue.
109. Using the same methodology employed by the expert hired in the STX Litigation,
Warrior’s expert in this case estimates that but for these acts of malpractice, singly or jointly, Warrior
should have recovered many millions of dollars from STX and could have forced STX to cease making
24 2:09-cv-12102-GER-DAS Doc # 36 Filed 05/23/11 Pg 25 of 31 Pg ID 534
and selling competing lacrosse head products versus the paltry settlement Warrior was forced to accept
if it wished to retain any chance to have the ‘216 Reissue reinstated.
110. DW should be judicially estopped to claim otherwise.
2. Lost Royalties – deBeers & Sons
111. With the ‘216 Reissue in place Warrior had a virtual and legal monopoly on a lacrosse
head considered currently to be the state of the art in the industry. 0300
112. Warrior’s patent allowed it to exclude its competitors from this lucrative market. - 355 (248) • 113. One such competitor is named deBeers & Sons (“deBeers”). Prior to the lapse,
recognizing the legitimacy and effect of Warrior’s patent, deBeers agreed to and did pay Warrior
substantial royalties under a license agreement to be able to produce and market an infringing product.
The agreement is well-known to DW, as it was drafted at least in part by John S. Artz and John A. Artz. SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • 114. The lapse of the ‘216 Reissue very quickly became public knowledge in the lacrosse
SOMMERS SCHWARTZ, P.C. industry, and when deBeers found out that the ‘216 Reissue had lapsed, it promptly stopped making SUITE 900 • royalty payments and sought refund of royalties previously paid under the license agreement. DeBeers
actually sued Warrior on these theories and sought to recover millions of dollars in the form of allegedly
lost profits and in the form of royalty payments it claims were overpaid in the belief that the ‘216 2000 TOWN CENTER CENTER TOWN 2000 Reissue was active.
115. The reinstatement notwithstanding, deBeers indicated that it did not intend to pay in the
future under the agreement. It has pointed out other competitors entering the market during the lapse
period and to the potential for other competitors to try to invalidate the ‘216 based on the STX theory of
inequitable conduct, STX’s pleadings having become a public roadmap for the prosecution of such a
claim. Thus, Warrior has lost a substantial amount of revenue from the deBeers license, and has been
25 2:09-cv-12102-GER-DAS Doc # 36 Filed 05/23/11 Pg 26 of 31 Pg ID 535
forced to expend significant amounts of money in litigation to enforce what rights remain under the
license agreement.
116. But for the various forms of malpractice individually and/or connectively (first, allowing
the ‘216 Reissue to lapse, second failing to inform of the results that John S. Artz engaged in acts that
could gave rise to the unenforceability of the ‘216 Reissue, third, not informing Warrior of the conflict
of interest and advising Warrior to obtain unconflicted counsel well in advance of the trial, fourth,
failure to communicate and abandonment, fifth, by failing to adequately seek the reinstatement of the 0300
patent before the PTO in 2007-2008), Warrior’s position vis-à-vis deBeers was eroded, and its licensing - 355 (248) • rights severely compromised, causing substantial damages.
3. Lost Profits due to Intervening Rights of Other Competitors
117. Under the intervening rights doctrine, competitors with an otherwise infringing product SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • may under certain circumstances enter the market during any lapse period of the infringed patent, to at
SOMMERS SCHWARTZ, P.C. least some degree. There was at least some risk that even STX would be able to claim that it was not SUITE 900 • liable for infringement between 2004 and 2009 even if Warrior had prevailed in the unenforceability
action and the patent was reinstated.
118. Aside from STX, substantial new competitors of Warrior in the curved head and 2000 TOWN CENTER CENTER TOWN 2000 convoyed sales markets entered the market during the five year lapse of the ‘216 Reissue. They remain
in the market vigorously competing against Warrior with products that emulate the patented design
otherwise protected by the ‘216 Reissue. As a direct and proximate result of DW’s malpractice, in the
future Warrior will likely be forced to cede its market share and/or reduce profit it otherwise would have
enjoyed with an unencumbered ‘216 Reissue in place.
26 2:09-cv-12102-GER-DAS Doc # 36 Filed 05/23/11 Pg 27 of 31 Pg ID 536
119. While the presence of new competitors in the market will involve competing legal
arguments, enforcement of whatever rights now remain in the ‘216 Reissue to keep these products out of
the market, or minimize loss of market share, will entail significant expenses separate and apart from
damages set forth above. The bottom line is these competitors are now in the market and what was once
a legal monopoly for Warrior is so no more.
120. But for the various forms of malpractice individually and/or collectively (first, allowing
the ‘216 Reissue to lapse, second failing to inform of the results that John S. Artz engaged in acts that 0300
could gave rise to the unenforceability of the ‘216 Reissue, third, not informing Warrior of the conflict - 355 (248) • of interest and advising Warrior to obtain unconflicted counsel well in advance of the trial, fourth,
failure to communicate and abandonment, and fifth, by failing to adequately seek the reinstatement of
the patent before the PTO in 2007-2008), Warrior has or will suffer damages in the millions of dollars.
SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • 4. Attorney Fees
SOMMERS SCHWARTZ, P.C. 121. Incredibly, the Artz Firm and DW billed Warrior for attempting to correct their own SUITE 900 • malpractice, the subject of DW’s complaint.
122. DW has also billed Warrior several million dollars for representation in the STX
Litigation and related matters. 2000 TOWN CENTER CENTER TOWN 2000 123. Warrior has paid significant fees and DW has now filed suit for the collection of $1.4
million more.
124. These fees should never have been billed and Warrior is entitled to refunds as damages,
and a ruling that no further amounts are due.
27 2:09-cv-12102-GER-DAS Doc # 36 Filed 05/23/11 Pg 28 of 31 Pg ID 537
5. Additional Damages
125. As elaborated, infra, DW has committed other acts of malpractice unrelated to the ‘216
Reissue.
126. Warrior has been proximately damaged by those acts.
O. Additional Breaches of Standard of Care: Non-‘216 Related Matters
127. DW has variously been negligent and has breached its professional duties in the 0300
following additional regards. - 355 (248) • 128. In filing applications relating to a Warrior product known as Spyne (App. #
20081063848) DW improperly claimed priority in violation of Paris Convention Article 4C(4) resulting
in loss of foreign filing rights.
129. Despite having undertaken to do so, DW failed to timely file application for patent SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • protection within one year from first public disclosure precluding Warrior from obtaining patent
SOMMERS SCHWARTZ, P.C. protection for the following products: SUITE 900 • a. King Gloves
Accents U.S.
Application 11/838,442 2000 TOWN CENTER CENTER TOWN 2000 b. Rounded "DV8"
Knob cap U.S.
Application 11/839,016
c. Integral Rounded
Knobbed "DV8"
US Application 60/955,917
28 2:09-cv-12102-GER-DAS Doc # 36 Filed 05/23/11 Pg 29 of 31 Pg ID 538
130. Despite having undertaken to do so, DW failed to timely pay maintenance fees on the
following patent, which potentially may result in intervening rights afforded to competitors: US Patent
6,036,010 for “Game Ball Box and Method for Assembling Same”.
COUNT I – LEGAL MALPRACTICE
131. An attorney client relationship existed or exists between Warrior and DW.
132. DW owed to Warrior the full complement of duties owed by every attorney to every 0300
client, heightened, in this case in the specialty of patent law, in which DW holds itself out as an expert. - 355 (248) • 133. These duties include by way of example, those of a fiduciary, zealous representation, due
care, competency, compliance with the standards extant in the community in which DW practice,
honestly, loyalty, full and fair communication, and observance of ethical standards.
134. As set forth at length above, DW was negligent in the performance of these duties, SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • breached each of these duties, and failed to comport itself: as a fiduciary, ethically and in conformance
SOMMERS SCHWARTZ, P.C. with standards of due care and competency. SUITE 900 • 135. The following chart broadly summarizes these categories of legal malpractice:
Category Statement of Liability
Failure to pay maintenance fee on DW liable for entirety of damages as successor to Artz Firm.
2000 TOWN CENTER CENTER TOWN 2000 ‘216 Breaches of duty forcing Warrior to DW independently liable for breaches of standards of care settle the STX Litigation on relating to candor to client, conflict of interest, zealous unfavorable terms representation, and fiduciary duty.
Failure to effectuate timely DW independently liable for failure of zealous representation reinstatement of ‘216 in appeal to PTO.
Miscellaneous DW directly liable for the matters addressed in ¶¶ 128-130.
29 2:09-cv-12102-GER-DAS Doc # 36 Filed 05/23/11 Pg 30 of 31 Pg ID 539
136. As a direct and proximate result of these breaches and negligence, Warrior has suffered
damages as set forth above in amounts not yet fully determined but estimated to exceed $33 million.
137. For legal malpractice, DW is liable to Warrior for these damages. DW is independently
and vicariously liable.
COUNT II – BREACH OF FIDUCIARY DUTY
138. Warrior realleges Paragraphs 1-137 as if fully set forth herein. 0300
139. DW owed Warrior a fiduciary duty. DW assumed the Artz Firm’s and the Artzes’ earlier - 355 (248) • fiduciary duty to Warrior.
140. The actions enumerated in this Amended Complaint constitute independent breaches of
fiduciary duty.
141. As a result of the breaches, Warrior has suffered damages. SOUTHFIELD, MICHIGAN 48075 LAW OFFICES •
SOMMERS SCHWARTZ, P.C. RELIEF SOUGHT SUITE 900 • Warrior requests judgment against DW as follows:
1. Monetary damages in such amounts as may be proven by Warrior, and which Warrior
2000 TOWN CENTER CENTER TOWN 2000 asserts are believed to be in excess of $33,000,000.00;
2. Costs and attorneys fees;
3. Such other relief as is just.
30 2:09-cv-12102-GER-DAS Doc # 36 Filed 05/23/11 Pg 31 of 31 Pg ID 540
JURY DEMAND
Warrior demands trial by jury.
Respectfully submitted,
SOMMERS SCHWARTZ, P.C.
/s/ David M. Black (P25047) Andrew Kochanowski (P55117) Attorneys for Plaintiff
2000 Town Center, Ste. 900 0300 Southfield, MI 48075 (248) 355-0300
- 355 (248) [email protected] • [email protected] Dated: May 23, 2011
CERTIFICATE OF SERVICE
I certify that on May 23, 2011, I electronically filed the forgoing paper with the Clerk of the SOUTHFIELD, MICHIGAN 48075 LAW OFFICES • Court using the ECF system which will send notification of such filing to all counsel of record on the
SOMMERS SCHWARTZ, P.C. ECF Service List. SUITE 900 •
/s/ David M. Black (P25047) Sommers Schwartz, P.C. 2000 Town Center, Ste. 900
2000 TOWN CENTER CENTER TOWN 2000 Southfield, MI 48075 (248) 355-0300 [email protected]
31