With just months until trial, the world’s largest contract manufacturer of electronic components retained Willenken to take over the defense of a case under unenviable conditions.
The forum was the infamously pro-plaintiff Eastern District of Texas (EDTX). The client, accused of breaching a patent licensing agreement, faced an eight-figure damages claim. Prior counsel had not formulated, much less developed, any coherent theory of defense. The plaintiff was notoriously aggressive and well-funded, represented by an international law firm that made its reputation winning cases in the EDTX.
Although the deck seemed stacked against the client, the Willenken team, shortly after being retained, identified a strategy that decisively reversed the momentum. Led by Paul Loh, the team recognized something that all the parties had overlooked: There was no federal subject matter jurisdiction over the action. The parties were non-diverse and the order of dismissal in the prior patent infringement suit failed to reserve the court’s jurisdiction over enforcement of the licensing agreement. On that basis, Paul promptly filed a motion for judgment on the pleadings and advised the client to initiate a declaratory relief action in its home forum overseas.
This quickly turned the tide and forced the plaintiff to play defense. It abandoned its request for affirmative relief and sought, instead, to set aside the prior dismissal order under Fed. R. Civ. P. 60. Concerned about being dragged into a foreign tribunal, the plaintiff also had to file an antisuit injunction to try to forestall the overseas action.
Any leverage that the plaintiff held over the client vanished when, at the pretrial conference, the court, sua sponte, continued the trial and ordered a hearing to determine if it had subject matter jurisdiction over the action. Shortly thereafter, the plaintiff approached the client about settlement. The client was able to extract a highly favorable resolution that not only substantially reduced its monetary obligation but added highly advantageous provisions to the underlying licensing agreement.