Willenken Firm Obtains High Seven-Figure Stipulated Judgment In Patent Indemnity Action

Winter 2012

On behalf of the country's largest gas distribution utility, the Willenken Firm obtained a high, seven-figure stipulated judgment in a patent indemnity action.  The Willenken Firm previously helped the client settle a patent infringement suit involving automated interactive telephone systems.  The vendor who sold the client its accused call system refused to honor its contractual obligation to defend and indemnify the client.

Led by Jason Wilson and Eileen Ahern, the Willenken Firm aggressively and methodically pursued the indemnity action against the vendor.  The Willenken Firm filed a motion for partial summary judgment on the issue of breach of the contractual duty to indemnify.  The court granted the motion, agreeing with the Willenken Firm that the scope of duty was broad enough to cover even claims or liabilities arising from the client's active or passive negligence.

In light of this ruling, the trial of the case was supposed to be narrowed to damages.  Nevertheless, the vendor sought to re-litigate breach, arguing that the scope of its liability should be apportioned to reflect that it provided but one component in the client's overall call system. This theory runs counter to governing indemnity law, which provides that if an indemnitor stands in breach, the amount of the settlement is presumed valid unless the indemnitor proves that the indemnitee's decision to settle was unreasonable or there was a collusive settlement.  Accordingly, the Willenken Firm filed a series of pretrial evidentiary and discovery motions to invalidate the vendor's apportionment theory of damages.

The effort paid off.  At the pretrial conference, the court ruled in favor of the Willenken Firm's motions in limine to preclude the vendor from seeking to apportion its damages.  The vendor immediately caved on the spot.  Subject to its right to appeal, the vendor agreed to a high, seven-figure stipulated judgment, consisting of the full amount of the settlement paid by the client, a majority of the defense costs and fees, as well as prejudgment interest, and the full amount of the client's prevailing party attorney's fees.