The Walt Disney Co. and Walt Disney Imagineering v. Fulwider Patton Lee & Utecht
Published: Jan. 18, 1997 | Result Date: Nov. 4, 1996 | Filing Date: Jan. 1, 1900 |Case number: BC054224 – $0
Judge
Court
L.A. Superior Central West
Attorneys
Plaintiff
Defendant
Barry G. Kaiman
(Lewis, Brisbois, Bisgaard & Smith LLP)
H. Gilbert Jones
(Lewis Brisbois Bisgaard & Smith LLP)
Experts
Plaintiff
Allen Jensen
(technical)
Defendant
David L. Collins
(technical)
Paul R. Wylie
(technical)
Facts
The "Star Tours" ride system at defendant Disneyland became operational in November 1986. Commencing on Dec. 6, 1986, there were two weeks of unpublished operation, during which 120,000 park guests took the ride. On Jan. 3 and 4, 1987, several thousand more park guests rode on Star Tours. The ride subsequently opened to great fanfare on Jan. 9, 1987, after a widely publicized press party on the evening of Jan. 8, 1987. The plaintiffs, Walt Disney Co. and Walt Disney Imagineering (the creative entity of the parent company), asked defendant Fulwider Patton Lee & Utecht, their patent counsel for more than 30 years, to file a patent application for the unusual method of permitting guests to enter and exit the ride simulator. Pursuant to 35 U.S.C. º102(b), a patent application must be filed within one year of the first public use or offer for sale of the invention. After determining that the pre-Jan. 9, 1987 use was experimental and not public use, the defendant filed the patent application on Jan. 9, 1988 (the one-year anniversary of the official Grand Opening). In May 1990, the plaintiffs terminated the defendant as their patent counsel while this application was pending and retained another patent firm to continue prosecution of the patent. Concerned that the Dec. 6 through 20, 1986 operation was potentially disqualifying, the succeeding law firm submitted an Information Disclosure Statement to the Patent and Trademark Office in connection with a continuation patent application and received a determination from the patent examiner in May 1992 that the pre-Jan. 9, 1987 use was experimental for purposes of the continuation patent. In the meantime, the original patent was issued without this disclosure about the pre-opening activities. As to the main patent, the succeeding law firm then claimed that it was not aware until May or June 1991 that the decision by the defendant to file the patent application on Jan. 9, 1988 instead of Dec. 6, 1987 constituted a "cloud" on the patent and potential malpractice. The lawsuit was not filed until April 29, 1992. During the course of this lawsuit, Disney brought suit in a Florida federal court against the only identified infringer of the continuation patent and obtained a substantial settlement. Before obtaining this settlement, Disney disclaimed the original patent and filed an amended complaint claiming that its original patent was invalid due to the defendant's alleged malpractice. The plaintiffs brought this action against the defendant based on legal malpractice, breach of contract and other theories of recovery.
Settlement Discussions
The plaintiffs made an initial settlement demand for $35 million, then $8 million, lowered to $5 million (policy limits). The defendant made a C.C.P. º998 offer of compromise for $500,000.
Damages
Although damages were not at issue in this bifurcated trial, the plaintiffs originally estimated their alleged losses at in excess of $36 million.
Other Information
The verdict was reached approximately four years and seven months after the case was filed. MEDIATION: A mediation was held on April 17, 1995 before Judge Lester Olson, retired. The jury was not told that the Patent and Trademark Office had found that the pre-Grand Opening activities were permissible experimental use during the prosecution of the continuation patent or that the original patent was abandoned in favor of the continuation patent. The defendant was not permitted to argue that the plaintiffs were estopped from claiming that the pre-Grand Opening activities were impermissible public, non-experimental use after asserting the contrary to the Patent and Trademark Office and the infringer. POST TRIAL MOTIONS: The plaintiffs' motions for new trial and judgment nothwithstanding the verdict were denied on Dec. 13, 1996. The defendant filed a cost bill of $281,204.97 pursuant to C.C.P. º998, including $242,765.93 in expert witness fees. The plaintiffs' motion to tax costs was granted. The court disallowed all of the expert fees without explanation.
Deliberation
4 days
Poll
10-2
Length
6 days
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