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MMRF's new lawyer John Fuiz

http://legaltimes.typepad.com/blt/2013/01/mcdermott-facing-malpractice-lawsuit-in-patent-dispute.html

McDermott Facing Malpractice Lawsuit in Patent Dispute

A former client of McDermott, Will & Emery is suing the firm for legal malpractice, claiming that a former partner improperly accessed confidential information related to patent applications and passed it along to family members.

The complaint (PDF), filed in District of Columbia Superior Court on December 29, is the latest development in a long-running legal saga involving former McDermott client Theranos Inc., and former firm partner John Fuisz. Fuisz didn't represent Theranos, but Theranos and its chief executive officer, Elizabeth Holmes, accused Fuisz of using his position within the firm to access information.

The complaint is against McDermott, not Fuisz, however. Theranos accused the firm of failing to take steps to stop Fuisz, who had an intellectual property practice, from accessing confidential information. Fuisz's family members obtained a patent for a system Theranos claimed it developed first.

In a written statement, McDermott partner and general counsel Alan Rutkoff said the firm "is committed to maintaining the confidentiality of all of the information with which we are entrusted by our clients. The Firm tolerates no exceptions…. The Firm is aware of no misappropriation or any other wrongful conduct by Mr. Fuisz or by any other McDermott lawyer." Rutkoff noted that legal malpractice claims filed against Fuisz by Theranos in a related case were dismissed.

Boies, Schiller & Flexner is representing Holmes and Theranos. Boies partner William Marsillo said in an email message today that although litigation surrounding the patent dispute is still pending in U.S. District Court for the Northern District of California, his clients had to file the case in Washington because a tolling agreement with McDermott was set to expire December 31.

Fuisz, who left McDermott in late 2009 and formed the Fuisz-Kundu Group, said in an email message today that the allegations are "simply void of any basis in reality" and that no materials held by the firm "were ever taken or used for the benefit of anyone else." He said that Holmes' parents were friends with his family and "her parents apparently shared details of Elizabeth's activities that Elizabeth wishes they had not."

The patent at issue involved a system used to analyze bodily fluids. Fuisz's father and brother secured a patent for the system in November 2010, but Theranos claimed that they only did so after gaining access to Theranos' non-public provisional patent applications for a similar system from 2006 and other confidential information.

McDermott "did not exercise reasonable care to prevent its employees, associates, and/or partners, including John Fuisz, from disclosing or using Plaintiffs' confidential information," Theranos alleged in the complaint.

Theranos has a pending lawsuit against Fuisz' father and brother in U.S. District Court for the Northern District of California. The company sued Fuisz as well, but a judge dismissed the legal malpractice claims against him last summer after finding that Theranos failed to file within the state's one-year statute of limitations.

Theranos, in its complaint against McDermott, said that it plans to appeal the decision dismissing Fuisz from the California case, but in the meantime filed its complaint in Washington to avoid running afoul of the city's three-year statute of limitations.

The case is before Judge Craig Iscoe. An initial scheduling conference is scheduled for March 29.