Attorneys and Court Reporters May Save Thousands of Dollars If Esquire Deposition Service's Latest Legal Action Is Successful

Do you use Microsoft Word? What if you got a letter from a patent attorney demanding $10,000 to continue using Spell Check? You'd be outraged! Well, this is happening in industries all over America, especially with software. Its like a high-tech Mafia shakedown, but is being done by law firms that have rounded up patents but have never invented a thing!

CHICAGO, IL (PRWEB) November 7, 2003 -- Defendants in a patent infringement lawsuit took an extra step this week that could save court reporters and attorneys nationwide $35 a day to obtain a real-time connection for trials or depositions, beginning January 1, 2004.

Esquire Deposition Services, LLC, filed a motion Wednesday in Northern Illinois District Court asking that 22 of the 26 asserted claims from among the patents that led to the possible $35 connection fee be declared invalid and unenforceable.

In August 2001 Engate, Inc., a patent acquisition company, filed a patent infringement lawsuit against court reporting firms such as Esquire Deposition Services, LLC, Atkinson-Baker, Inc., WordWave, Inc.

The alleged infringement involved software features and functions that allow attorneys to establish a "real time" connection to a court reporter's stenographic equipment so attorneys and judges can read testimony at the exact time the words are recorded.

In 1993, a group of patent attorneys received the first patent in a family of related patents for various real time methods and features, subsequently assigning those patents to a firm they founded called Engate. It is believed that Engate's sole business reason for existence is to acquire patents and earn income from those patents. The original patent holders were James D. Bennett and Lawrence M. Jarvis. Lawrence Jarvis is a partner and Board Member of the McAndrews, Held & Malloy, Ltd., law firm in Chicago which specializes in intellectual property law. Christopher Winslade, also a partner and Board Member of the McAndrews, Held & Malloy firm, is a managing principal of Engate.

On June 13, 2003, Judge Matthew F. Kennelly ruled the defendants were not guilty of any direct infringement. The defendants then asked for charges of indirect infringement to be dismissed and the judge granted Engate's request for an additional 90 days for discovery. On Sept. 11, 2003, Judge Kennelly also denied Engate's motion for reconsideration.

LiveNote, developer of real time software, estimates their software is used in 90 percent of the nation's real-time proceedings. In order to avoid possible litigation, LiveNote obtained a sole and exclusive license to Engates patent portfolio. Pursuant to LiveNotes license plan, a court reporter and attorney will have to pay a "token" of $35 to establish a real-time connection feed, at trial or for a deposition.

LiveNote has presumably agreed to collect and then pass-on a portion of the fee to Engate. LiveNote also has created a licensing plan that allows them to collect the fee for a real-time connection regardless of whether their software is being used. LiveNotes voluntary licensing plan began immediately and its new software release that will contain a locking mechanism is to take effect January 1, 2004.

The LiveNote settlement left Engate in the position that it could lose both lawsuits claiming direct and indirect infringement but still be able to collect a royalty income because of LiveNote's new licensing plan.

Perry Solomon, CEO of WordWave recognized that predicament in October 2003, when he announced he was settling with Engate by buying into the LiveNote licensing plan. "We also believe that the LiveNote/Engate agreement is not a perfect solution for the industry," said Solomon. "However, we estimate that the lawsuit could drag on for several more years, and even if we are ultimately successful, a victory would not protect court reporters or attorneys from being sued individually by Engate."

The only way to break that stalemate was not the lawsuit originally filed in August 2001 which Solomon alludes to but legal action that seeks to declare the Engate patents invalid and unenforceable.

In late September 2003 LiveNote acknowledged that only a ruling that the patents are invalid or unenforceable would eliminate the threat against the rest of the industry. It also indicated that it would be free to terminate its agreement with Engate and stop collecting the fee if the patents held by Engate were ruled to be invalid and unenforceable.

Esquire Deposition Services responded by filing its motion this week.

That filing was good news for Mark Goldman, Executive Director of the National Court Reporters Association. "The only way to achieve a clear, binding, and industry-wide resolution to this matter is for the court to rule on the validity of Engate's patents themselves," said Goldman. "In this way all the confusion and uncertainty that the Engate matter has generated will be eliminated, and everyone who is or could be affected by the Engate patent claims will know exactly where they stand."

In preparation for its defense, Esquire uncovered what it believes to be a solid defense for invalidity based upon "prior art." Kenneth Thorn, CEO of the managing member of Esquire, revealed that Esquires research demonstrates that many of the real time functions for which Engate obtained patent rights were in use in the late 1980s -- well before the first patent was obtained. Esquires motion cites various printed publications describing real time features in use that were not submitted to the patent office when it granted the patents.
                        
"Prior art" consisting of printed publications is often the strongest evidence a challenger can possess when asking that a patent be declared invalid, said Michael Jarvis, General Counsel for Esquire. For that reason, Esquire is confident in its latest motion which if granted will be very good news for thousands of court reporters and attorneys throughout the U.S.

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Media Contact: Scott Lorenz
Westwind Communications
Phone: 734-667-2090
Cell: 248-705-2214
scottlorenz@westwindcos.com