Seed Co. v. Westerman Ex Rel. Estate of Westerman

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 11, 2016 Decided August 12, 2016

No. 14-7126

SEED COMPANY LIMITED AND SHIGERU TAMAI,

APPELLANTS

v.

ANN G. WESTERMAN, AS THE PERSONAL REPRESENTATIVE OF

THE ESTATE OF WILLIAM F. WESTERMAN, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:08-cv-00355)

Paul T. Meiklejohn argued the cause for appellants. With

him on the briefs was Creighton R. Magid.

Lance A. Robinson argued the cause for Westerman

appellees. With him on the briefs were Mark London and

Christopher Mead.

John P. Glaws IV argued the cause for Kratz appellees.

With him on the brief was Paul J. Maloney.

Before: HENDERSON, KAVANAUGH and SRINIVASAN,

Circuit Judges.

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Opinion for the Court filed by Circuit Judge SRINIVASAN.

SRINIVASAN, Circuit Judge: This case involves a legal

malpractice action arising out of an unsuccessful application

for a patent. Seed Company Limited, a Japanese company, is

led by Shigeru Tamai. Tamai invented a dispenser of

correctional tape enabling users to correct printed documents

by rolling white tape over errors. Seed and Tamai hired legal

counsel in connection with their patent applications. The

effort to obtain a U.S. patent ultimately failed because of

counsel’s noncompliance with Patent Office regulations when

filing a motion related to the application. As a result of the

error, another inventor obtained the patent for the same

invention.

Seed and Tamai sued their attorneys, alleging that they

had committed malpractice when they submitted filings for

the patent application without complying with the Patent

Office regulations. The district court first rejected the

defendants’ argument that the suit was barred by the statute of

limitations. But the court then granted summary judgment in

their favor, ruling that they had exercised reasonable

professional judgment in concluding (erroneously) that their

filings complied with the Patent Office’s rules.

We reverse and remand. We conclude that the statute of

limitations had elapsed with respect to the malpractice claims

against one group of defendants—those who ceased working

on behalf of Seed and Tamai when the law firm engaged in

the representation split into two firms. With regard to the

remaining defendants—those who continued to represent

Seed and Tamai after the breakup of the firm—we find that

the statute of limitations poses no bar to the malpractice

action. On the merits of the claims against those defendants,

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we reverse the grant of summary judgment in their favor and

remand the case for trial.

I.

Seed filed three relevant patent applications listing Tamai

as the inventor: one in Japan, one through the international

Patent Cooperation Treaty (PCT), and one in the United

States. The PCT creates an international system for filing

patents. After filing through the PCT, an inventor can submit

related national applications in various member countries.

The dates of the applications were as follows. On July

31, 1991, Seed filed its Japanese application. The PCT

application followed, on July 24, 1992. In March 1993, Seed

and Tamai retained legal counsel to pursue a U.S. patent. On

March 29, 1993, counsel filed a translation of the PCT

application as Seed’s first U.S. application. On February 15,

1994, they filed another U.S. application as a continuation-in-

part of the first.

On May 9, 1997, the U.S. Patent Office determined that

another inventor, Christopher J. Stevens, had already patented

the same invention. The Board of Patent Appeals and

Interferences thus began interference proceedings to

determine whether Stevens or Tamai had first invented the

device. Whoever could show an earlier patent application

filing date for the same invention (known as a “constructive

reduction to practice,” 37 C.F.R. § 1.637(f)(3) (1997)) would

have priority and receive the sole patent on the invention.

Stevens and Tamai each filed a “motion for benefit,” a

request to credit a U.S. application with the benefit of an

earlier filing date based on a prior patent application for the

same invention in a different jurisdiction. Stevens relied on

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the filing date of his prior United Kingdom patent application.

Tamai did not oppose Stevens’s motion, and the Board

granted him an effective filing date of February 10, 1993.

Tamai relied on the earlier filing dates of Seed’s Japanese and

PCT patent applications.

The Patent Office had promulgated regulations governing

motions for benefit. When a motion for benefit relied on a

foreign patent application filed in a language other than

English, the moving party was required to follow additional

regulations requiring submission of a translation of the

foreign application and an affidavit certifying the accuracy of

the translation. 37 C.F.R. § 1.647 (1997). Both of Seed’s

earlier patent applications (in Japan and through the PCT) had

been written in Japanese. Seed’s counsel filed a translation of

the Japanese application, but they failed to file a translation of

the PCT application.

Because of the failure to include a translation of the PCT

application, the Board denied Tamai’s motion for benefit with

respect to that application. The Board also denied Tamai’s

motion for reconsideration. Although the Patent Board

denied the motion for benefit regarding the PCT application,

it granted the motion with regard to the earlier Japanese

application. Because the Japanese application (filed on July

31, 1991) predated Stevens’s United Kingdom application

(filed on February 10, 1993), the Board granted Tamai

priority.

Stevens appealed to the Federal Circuit, arguing that the

Board could not give Tamai the benefit of the Japanese

application without also crediting the PCT application.

Stevens relied on a statute specifying that the Board can give

a patent application the benefit of an earlier application only if

filed within one year of the prior one. See 35 U.S.C. § 119(a).

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Tamai’s Japanese application fell outside that window

because it predated his U.S. application by more than one

year. The PCT application in theory could create a chain

linking the Japanese application to the U.S. application

without violating the one-year rule because the PCT

application was filed less than one year before the U.S.

application and less than one year after the Japanese

application. But the PCT application had been filed without

the required translation. Without the PCT application,

Stevens argued, the Japanese application alone was too old.

The Federal Circuit agreed with Stevens and held that the

Japanese application could not establish an earlier filing date

without the benefit of the PCT application. Stevens v. Tamai,

366 F.3d 1325, 1331 (Fed. Cir. 2004). And the court, like the

Board, held that Tamai could not benefit from the PCT

application’s filing date because he had failed to file a

translation of the PCT application. Id. at 1332. The court

therefore remanded to the Board to enter judgment in favor of

Stevens, id. at 1335, which the Board did.

Meanwhile, between the time of the initial Board

decision in 2002 and the Federal Circuit appeal in 2004, the

law firm with which Seed and Tamai’s U.S. counsel had been

associated had split into two separate firms. Until October 1,

2003, the attorneys representing Seed and Tamai had been

doing business as part of one firm. On that date, some of

those lawyers left the firm to form Westerman, Hattori,

Daniels, and Adrian LLP. We will refer to them as the

Westerman defendants. The remaining lawyers founded

Kratz, Quintos & Hanson LLP. We will call them the Kratz

defendants. Seed and Tamai (whom we will refer to

collectively as “Seed” from this point forward) took their

business to the new Westerman firm, which continued to

represent them during the Federal Circuit appeal.

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In December 2006, Seed obtained counsel to pursue a

malpractice suit against the Westerman and Kratz defendants.

The defendants and Seed entered into tolling agreements

effective May 3, 2007 (for the Westerman defendants), and

May 10, 2007 (for the Kratz defendants). On February 28,

2008, Seed brought this malpractice action against the

Westerman and Kratz defendants.

The complaint, as amended, contains four counts. The

first two counts, which apply to all defendants, allege that

they committed malpractice by failing to file the translation of

the PCT application (and also by giving erroneous advice

about the implications of Stevens’s appeal to the Federal

Circuit). The third and fourth counts apply only to the Kratz

defendants and are contingent on the dismissal of Seed’s

primary claims under the statute of limitations. The third and

fourth counts allege that, if the statute of limitations bars the

primary claims, the Kratz defendants committed malpractice

by giving Seed erroneous advice about the statute of

limitations.

Following discovery, the defendants moved for summary

judgment and Seed moved for partial summary judgment on

the question of liability. The district court found that the

statute of limitations did not bar any of the claims. But the

court granted the defendants’ motion for summary judgment

on the merits and thus denied Seed’s motion. Because the

court found no violation of the statute of limitations, it

dismissed the third and fourth counts as moot. Seed now

appeals.

II.

We first consider whether Seed’s claims were brought

within the statute of limitations, and we then review the grant

of summary judgment in the defendants’ favor. Before

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turning to these matters, however, we briefly address our

jurisdiction over this appeal. Although no party contests our

jurisdiction, we have an independent obligation to assure that

we have it.

The district court had jurisdiction over this case because

it meets the requirements for diversity jurisdiction. See 28

U.S.C. § 1332(a). While the Federal Circuit has exclusive

jurisdiction over appeals in cases “arising under” federal

patent law, 28 U.S.C. § 1295(a)(1), “state legal malpractice

claims based on underlying patent matters will rarely, if ever,

arise under federal patent law” for purposes of jurisdiction,

Gunn v. Minton, 133 S. Ct. 1059, 1065 (2013). Gunn

involved a different federal jurisdictional statute (28 U.S.C.

§ 1338(a)), but the Court’s guidance about when a case

“arises under” federal patent law also informs the proper

interpretation of the statute at issue in this case (28 U.S.C.

§ 1295(a)(1)), which contains identical operative language.

See Vermont v. MPHJ Tech. Invs., LLC, 803 F.3d 635, 645-46

(Fed. Cir. 2015). This case, like Gunn, involves no forward-

looking questions about any patent’s validity, but instead

solely concerns whether unsuccessful patent applicants can

recover against their attorneys. We therefore have appellate

jurisdiction to review the district court’s decision. 28 U.S.C.

§ 1291.

A.

The threshold question before us is whether the statute of

limitations bars the malpractice claims against either the

Westerman defendants or the Kratz defendants. We review

the application of the statute of limitations de novo. Jung v.

Mundy, Holt & Mance, P.C., 372 F.3d 429, 432 (D.C. Cir.

2004). Because we hear this case under diversity jurisdiction,

we apply the choice-of-law rules of the forum state, here, the

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District of Columbia. The District of Columbia in turn

requires us to apply its rules concerning the statute of

limitations. A.I. Trade Fin., Inc. v. Petra Int’l Banking Corp.,

62 F.3d 1454, 1458 (D.C. Cir. 1995). The burden of proof

rests with the defendants because the statute of limitations is

an affirmative defense. Brin v. S.E.W. Inv’rs, 902 A.2d 784,

800-01 (D.C. 2006).

The statute of limitations for legal malpractice claims in

the District of Columbia is three years. D.C. Code § 12-

301(8) (2001). The limitations period starts to run when “the

right to maintain the action accrues.” Knight v. Furlow, 553

A.2d 1232, 1233-34 (D.C. 1989). The cause of action accrues

when the would-be plaintiff has knowledge of, or by the

exercise of reasonable diligence should have knowledge of,

three items: the injury, its cause in fact, and some evidence of

wrongdoing. Id. at 1234. At that point, the plaintiff is on

inquiry notice of the cause of action, and the statute of

limitations begins to run. Wagner v. Sellinger, 847 A.2d

1151, 1154 (D.C. 2004).

Each group of defendants argues that Seed’s claims

against it are barred by the statute of limitations. The

Westerman defendants’ tolling agreement with Seed took

effect on May 3, 2007, and the Kratz defendants’ tolling

agreement took effect one week later, on May 10, 2007. It is

undisputed that the agreements tolled the statute of limitations

from those effective dates until the date of the complaint. The

question thus is whether the statute of limitations had already

run by the date the tolling agreements took effect. To show

that the claims are barred by the statute of limitations, the

defendants need to demonstrate both that the claims accrued

more than three years before the tolling agreements and that

there was no reason to toll the limitations period during those

three years.

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Seed contests the defendants’ position on both scores: it

contends that its cause of action accrued within three years of

the tolling agreements, and it further argues the statute of

limitations was tolled during the Federal Circuit appeal. With

regard to the latter argument, Seed relies on the “continuous-

representation rule.” That rule tolls the statute of limitations

for a legal malpractice claim during the time the attorney

continues to represent the client in the relevant matter. The

rule aims to avoid putting a client in the position of having to

choose between (i) disrupting an ongoing lawyer-client

relationship to enable bringing a malpractice claim and (ii)

continuing the relationship but relinquishing the claim. See

Bradley v. Nat’l Ass’n of Sec. Dealers Dispute Resolution,

433 F.3d 846, 850 (D.C. Cir. 2005). Under the rule, “when

the injury to the client may have occurred during the period

the attorney was retained, the malpractice cause of action does

not accrue until the attorney’s representation concerning the

particular matter in issue is terminated.” Id. (quoting R.D.H.

Commc’ns, Ltd. v. Winston, 700 A.2d 766, 768 (D.C. 1997)).

The district court addressed the application of the statute

of limitations to the Westerman and Kratz defendants

together, finding that the claims were not time-barred. See

Seed Co. v. Westerman, 62 F. Supp. 3d 56, 62-65 (D.D.C.

2014). The court concluded that the claims had accrued by

March 13, 2003, more than three years before the effective

date of the tolling agreements. Id. at 63. But the court held

that the continuous-representation rule tolled the statute of

limitations. Id. at 63-65. We disagree in part: we conclude

that the continuous-representation rule applies only to the

Westerman defendants, not the Kratz defendants, and that the

first and second counts must therefore be dismissed as they

apply to the Kratz defendants.

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1.

Like the district court, we conclude that the statute of

limitations on the claims against the Westerman defendants

was tolled while the Westerman firm represented Seed during

and after the Federal Circuit appeal. The departure of the

Westerman lawyers to form their own law firm (on October 1,

2003) did not affect the operation of the continuous-

representation rule with respect to the Westerman defendants.

Seed had been notified of the impending split, and, on

September 9, 2003, its agent sent a letter to the existing firm

directing that the new Westerman firm would represent it with

regard to its patent application. After the split, the Westerman

firm continued to represent Seed in pursuing the patent

(although the Kratz firm did not).

The Westerman defendants argue that the continuous-

representation rule did not apply during the Federal Circuit

appeal. We disagree. Although the rule will not always toll

the statute of limitations during an appeal, it is not

categorically inapplicable either. At the least, the rule applies

when the same attorneys continue to represent a client in

connection with the same matter. See De May v. Moore &

Bruce, LLP, 584 F. Supp. 2d 170, 183 (D.D.C. 2008). Here,

the Federal Circuit appeal concerned the same matter for

which the Westerman defendants had been originally hired:

procuring Seed’s patent. The same lawyers at the Westerman

firm continued to represent Seed through the appeal.

Contrary to the Westerman defendants’ argument, this

court’s decision in Bradley, 433 F.3d 846, did not establish

that the continuous-representation rule never applies during

an appeal. Although Bradley observed that the “specific

dispute” for purposes of the continuous-representation rule

“does not include appeals,” id. at 851, the case did not involve

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a situation in which the same lawyer continued to represent

the client on appeal. In fact, Bradley did not involve a

lawyer-client relationship at all. Instead, we assumed that an

analogous continuous-representation rule would apply to a

claim alleging malpractice by an arbitration panel assigned to

resolve the plaintiff’s underlying action; but we held that the

rule would toll the statute of limitations only until the

arbitration panel made its decision, not through the appeal of

that decision in court (at which point the plaintiff of course

had no ongoing relationship with the arbitral panel). See id. at

850-51. To the extent Bradley has implications for the

operation of the continuous-representation rule in the context

of lawyer-client relationships, it did not hold that the rule

never applies during an appeal, even one handled by the same

lawyer who represented the plaintiff at trial. See De May, 584

F. Supp. 2d at 183. Because the relevant appeal here involved

a continued representation by the same lawyers in the same

matter, we hold that the continuous-representation rule tolled

the statute of limitations during the appeal.

Seed and the Westerman defendants also disagree about

when the claims against the Westerman defendants accrued.

We need not resolve the dispute, because, even under the

Westerman defendants’ view, the claims against them were

timely filed. They argue that the claims accrued on March 13,

2003, when the Patent Board denied Tamai’s request for

reconsideration. The Westerman tolling agreement took

effect on May 3, 2007. Seed’s complaint therefore was timely

as long the statute of limitations was tolled until at least May

3, 2004 (three years before the tolling agreement took effect).

The Westerman defendants continued to represent Seed well

past May 3, 2004: at that point, the Federal Circuit had yet to

issue its decision. As a result, the claims against the

Westerman defendants were brought within the statute of

limitations.

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2.

We reach a different conclusion with regard to the claims

against the Kratz defendants. The Kratz defendants’ tolling

agreement took effect on May 10, 2007. We find that the

continuous-representation rule did not toll the statute of

limitations for the claims against them at any point in the

three-year period from May 2004 to May 2007. We further

hold that the claims accrued before May 10, 2004. The

claims against the Kratz defendants are therefore barred by

the statute of limitations.

We join other courts in holding that the continuous-

representation rule does not toll the statute of limitations on a

claim against a firm after the attorney providing the

representation leaves the firm and takes the client’s business

with her. See Dunn v. Rockwell, 689 S.E.2d 255, 275 (W. Va.

2009); Beal Bank, SSB v. Arter & Hadden, LLP, 167 P.3d 666

(Cal. 2007). In that situation, the client is no longer

represented by the original firm. The continuous-

representation rule thus no longer tolls the statute of

limitations for malpractice claims against that firm. That

conclusion accords with the underlying objectives of the rule:

“avoid[ing] unnecessarily disrupting the representation in

which the error occurred” and giving the firm “the

opportunity to remedy, avoid or establish that there was no

error or attempt to mitigate the damages.” R.D.H. Commc’ns,

700 A.2d at 769 (quotation omitted). The rule cannot guard

against unnecessary disruption of ongoing representations or

encourage lawyers to correct their mistakes after the client has

already taken its business to a new firm. See Beal Bank, 167

P.3d at 671.

Consequently, the continuous-representation rule cannot

save Seed’s claims against the Kratz defendants. By the fall

13

of 2003, the Kratz defendants had formed their own firm and

no longer represented Seed in pursuing the patent application

at issue in this case: Seed’s agent confirmed in writing on

September 9, 2003, that the patent case was “entrusted to” the

Westerman firm. J.A. 576. As a result, if the claims accrued

sometime before May 10, 2004, then more than three years

would have elapsed before the May 10, 2007, effective date of

the tolling agreement, and the claims would be time-barred.

The Kratz defendants argue that the claim accrued at the

latest on May 4, 2004, the date of the Federal Circuit’s

decision against Seed. We agree. After the Federal Circuit

issued its decision directing the Patent Board to enter

judgment against Seed, Seed should have known that it would

be denied its patent (an injury) because of the failure to

include a translation of the PCT application (a cause in fact

attributable to the defendants). Seed presses two responses,

neither of which persuades us.

Seed’s first argument is that its claim did not accrue until

September 14, 2004, when the Board entered its post-appeal

judgment on remand from the Federal Circuit. The Federal

Circuit, however, directed the Patent Board to enter judgment

against Seed, see 366 F.3d at 1335, so there was no ambiguity

about what would happen on remand. Seed relies on Wagner,

in which the District of Columbia Court of Appeals held that

a client does not suffer an injury triggering the statute of

limitations at the moment her attorney errs during discovery

or trial. Wagner, 847 A.2d at 1156. But Wagner held only

that the injury arises when the trial court resolves the case, not

that any injury awaits final resolution of an appeal. See id. at

1156-57. This court has already rejected a reading of Wagner

that would require “exhaustion of appeals” before the statute

of limitations begins to run. Bradley, 433 F.3d at 852. And

the District of Columbia Court of Appeals similarly rejected

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an exhaustion-of-appeals rule in its pre-Wagner cases. R.D.H.

Commc’ns, 700 A.2d at 771. The “lingering hope” that an

appellate ruling might lead to a different outcome on remand

is “irrelevant for purposes of determining” the date the statute

of limitations begins to run based on inquiry notice. Bradley,

433 F.3d at 852.

Seed next claims it did not realize that the Federal Circuit

decision meant it had lost its patent claim. It contends that,

even after the Federal Circuit issued its decisions, the

Westerman defendants continued to represent that Seed could

receive a patent by contesting the Federal Circuit decision.

Seed relies on a letter dated May 5, 2004, in which the

Westerman defendants presented a number of possible ways

to deal with the adverse decision, including by petitioning for

rehearing or for review in the Supreme Court. The letter

acknowledged that those options were unlikely to succeed,

but it held open the possibility.

We conclude that Seed had inquiry notice of an injury

upon receiving the Federal Circuit decision. The Federal

Circuit instructed the Patent Board “to enter judgment for

Stevens” (and thus against Tamai) on remand. Stevens, 366

F.3d at 1335. At most, the Westerman defendants’ advice

could have convinced a reasonable party in Seed’s position

that there existed some chance the injury could be resolved in

further appeals. But no reasonable client could conclude that

the possibility of redressing an injury in further proceedings

means that no injury exists in the first place.

Seed thus had inquiry notice of its claim against the Kratz

defendants by May 4, 2004, more than three years before the

effective date of their tolling agreement. Consequently, the

first and second counts against the Kratz defendants were

barred by the statute of limitations.

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3.

We finally consider the application of the statute of

limitations to the third and fourth counts in the complaint, i.e.,

the contingent claims concerning the Kratz defendants’ advice

about the statute of limitations for the claims alleged in the

first and second counts. Seed contends that it sought advice

in 2005 from James Armstrong, a member of the Kratz firm,

about the accrual date for its first two malpractice claims.

Armstrong suggested that those claims had ripened on either

June 10, 2004 or October 18, 2004, such that they would have

been timely when filed. Seed’s claims of malpractice based

on that advice about the statute of limitations is contingent on

its loss of the first two counts on statute of limitations

grounds.

The district court did not dismiss the first two counts on

statute-of-limitations grounds; it dismissed them on the

merits. Because the third and fourth counts were contingent

on the dismissal of at least one of the first two counts on

statute-of-limitations grounds, the court found that the third

and fourth counts were moot. But because we have now

concluded that the claims against the Kratz defendants are

barred by the statute of limitations, the contingent counts must

be adjudicated. We remand for the district court to adjudicate

them in the first instance.

B.

Having concluded that the statute of limitations poses no

bar to the claims against the Westerman defendants, we turn

to considering whether those claims survive summary

judgment. We review grants and denials of summary

judgment de novo. Fenwick v. Pudimott, 778 F.3d 133, 136

16

(D.C. Cir. 2015); George v. Leavitt, 407 F.3d 405, 410 (D.C.

Cir. 2005).

Seed’s claims in this case arise under District of

Columbia law. That law requires a plaintiff to establish three

elements to state a claim of malpractice: “the applicable

standard of care, a breach of that standard, and a causal

relationship between the violation and the harm complained

of.” Biomet Inc. v. Finnegan Henderson LLP, 967 A.2d 662,

664 (D.C. 2009). The standard of care in a legal malpractice

case is the “degree of reasonable care and skill expected of

lawyers acting under similar circumstances.” Morrison v.

MacNamara, 407 A.2d 555, 561 (D.C. 1979). Specialists

must “adhere to a standard of conduct commensurate with”

their “special training and experience.” O’Neil v. Bergan, 452

A.2d 337, 341 (D.C. 1982) (quoting Morrison, 407 A.2d at

560).

The District of Columbia applies the judgmental-

immunity doctrine, under which “an informed professional

judgment made with reasonable care and skill cannot be the

basis of a legal malpractice claim.” Biomet, 967 A.2d at 666.

The Westerman defendants argue that their decision fell

within the protections of the judgmental-immunity doctrine.

The district court agreed and granted them summary

judgment. To affirm, we would need to find no genuine

dispute of material fact about either of the elements of the

doctrine: “that (1) the alleged error is one of professional

judgment, and (2) the attorney exercised reasonable care in

making his or her judgment.” Id.; see Fed. R. Civ. P. 56(a).

Because we find a genuine issue as to both, we reverse the

grant of summary judgment.

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1.

We first examine if there is any genuine issue about

whether the Westerman defendants’ error in failing to file a

translation with the PCT application was one of professional

judgment. All parties agree that Tamai needed the benefit of

the PCT application’s filing date to establish priority over

Stevens in the patent interference proceeding. See p. 5, supra.

The question thus becomes what the Westerman defendants

needed to do to get Tamai the benefit of the PCT application’s

filing date.

The Patent Office had promulgated two pertinent rules.

First, Rule 637 stated that a motion for benefit must serve all

opponents with copies of the relevant earlier application, and

must, “[i]f the earlier filed application is not in English,”

comply with Rule 647. 37 C.F.R. § 1.637(f)(2). Rule 647, in

turn, provides that “[w]hen a party relies on a document or is

required to produce a document in a language other than

English, a translation of the document into English and an

affidavit attesting to the accuracy of the translation shall be

filed with the document.” Id. § 1.647. When the Westerman

defendants filed Tamai’s motion for benefit, however, they

included neither a translation of the PCT application nor an

affidavit attesting to its accuracy. Stevens, 366 F.3d at 1328.

As a result, if a reasonable lawyer would have known that

getting the benefit of the PCT filing date would require

complying with Rules 637 and 647, the Westerman

defendants’ failure to abide by those rules could not have

been an exercise of professional judgment.

The Westerman defendants respond that they reasonably

believed Rules 637 and 647 did not pertain to PCT

applications. Rule 637 applies only to “earlier filed

application[s].” 37 C.F.R. § 1.637(f)(2). The Westerman

18

defendants argue that, when they filed the motion for benefit

in 1997, a reasonable lawyer could have thought that PCT

applications designating the United States did not count as

“earlier filed application[s]” in subsequent national

applications. They rely on the Manual of Patent Examining

Procedure, which as of 1997 stated that a PCT application

was not a separate application but rather an earlier “stage” of

the American application which automatically shared the

same filing date. Manual of Patent Examining Procedure

§ 1893.03(b) (6th ed., Rev. 2, July 1996); see 35 U.S.C. § 363

(1997) (amended 2011). The manual thus directed applicants

“not [to] claim benefit of the filing date of the international

application” in a national application. Manual of Patent

Examining Procedure § 1893.03(c). The Westerman

defendants argue that the manual reflected a reasonable belief

among patent lawyers in 1997: because Rule 637 applied to

motions for benefit and the Westerman defendants did not

believe they needed to file a motion for benefit for the PCT

application, they concluded that the translation requirements

in Rules 637 and 647 did not apply to the PCT application.

We conclude that Seed raises a genuine dispute of

material fact about whether the defendants’ decision could

have been characterized as an exercise of professional

judgment in 1997. Although the manual provides some

evidence in support of the defendants’ claim, Seed also cites

evidence supporting its position. Drawing all inferences in

favor of Seed, we conclude that a factfinder could find the

Westerman defendants’ choice unreasonable.

First, ambiguity about the applicability of the rules’

translation requirement to PCT applications does not

necessarily support the defendants’ claim that they exercised

judgment in failing to file a translation. Typically, the

judgmental-immunity doctrine applies when a lawyer makes a

19

strategic choice between two options, each of which has costs

and benefits. For example, in Biomet, the defendant lawyer

had to decide which arguments to include in the limited space

in his appellate brief. 967 A.2d at 666. But an attorney does

not exercise professional judgment when she interprets

unsettled law in a way that “manifestly risk[s] the loss of [a]

client’s claims” for no plausible advantage. Skywark v.

Isaacson, 202 B.R. 557, 564 (S.D.N.Y. 1996). A factfinder

could infer that a reasonable lawyer would err on the side of

caution by filing the translation if the requirements were

ambiguous and there were no reason not to do so.

Second, the Westerman defendants’ actions did not align

with their purported understanding of the requirements. The

defendants’ claimed interpretation—in which an American

application based on a PCT application was not a separate

application at all—is belied by the fact that they filed a

motion for benefit regarding the PCT application. The

regulation authorizing motions for benefit referenced “an

earlier filed application” just like Rule 637, and it directly

referred readers to Rule 637. 37 C.F.R. § 1.633(f) (1997). If

the Westerman defendants in fact had thought that the PCT

application was not an “earlier filed application”—but rather

an automatically credited earlier stage of the same

application—there would have been no need to file a motion

for benefit at all. But they did file a motion for benefit, and in

the title of that document, they called the PCT application an

“earlier filed application” and referenced Rule 637. J.A. 947.

A reasonable factfinder could infer that the exercise of

professional judgment could not lead to the Westerman

defendants’ seemingly odd hybrid strategy: electing to file a

motion for benefit but without following the proper

procedures for such a motion.

20

Moreover, Seed introduced an affidavit from an expert

attesting that a reasonable patent lawyer in 1997 would have

understood the regulations to require the filing of a translation

in connection with a motion for benefit related to a PCT

application. Any other understanding of the regulations

would make little sense, Seed contends: it would call for the

Board to decide in an interference proceeding whether a PCT

application written in a foreign language patented the same

invention as the one claimed by the other party, but to do so

without a translation of the relevant application. And

although the Federal Circuit’s 2004 decision in Stevens would

not necessarily speak to the state of the law in 1997, Stevens

characterized the application of Rules 637 and 647 to PCT

applications as “very clear.” 366 F.3d at 1335.

For those reasons, we conclude Seed has raised a genuine

dispute of material fact about the requirements a reasonable

patent lawyer would have thought relevant to claiming the

benefit of a prior PCT application in 1997. Whether the

Westerman defendants exercised professional judgment in

choosing not to file a translation is a question for the finder of

fact.

Finally, we briefly address the Westerman defendants’

claim that they thought they did file a translation. In their

view, they exercised their professional judgment in

concluding that the American application itself would qualify

as a translation of the PCT application. But even if the

American application in fact was a translation of the PCT

application, the opposing party and the Patent Office would

not have known it because the American application was not

filed as a translation and included no affidavit attesting to its

accuracy. At the very least, a factfinder could conclude that

no lawyer exercising professional judgment would have

21

considered a document entirely unidentified as a translation to

somehow satisfy a translation requirement.

2.

Seed next argues that the defendants failed to exercise

reasonable care in making the decision not to file the

translation. To fall under the judgmental-immunity doctrine,

the lawyer must “undertak[e] reasonable research of the

relevant legal princip[les] and facts of the given case.”

Biomet, 967 A.2d at 666 (quotation omitted). It is not enough

to “characteriz[e] an act or omission as a matter of judgment.”

Id. (quotation omitted).

The Westerman defendants have introduced no evidence

of their deliberative process in reaching the decision not to

file the translation. They have produced no research,

memoranda, or other internal correspondence about the

applicability of Rules 637 and 647 to PCT applications. Nor

have they submitted any affidavits about their consideration

of such questions. Although the absence of evidence is not

necessarily dispositive, it at least permits a factfinder to draw

an inference that the Westerman defendants did not exercise

reasonable care. That sort of reasonable inference makes

summary judgment for the defendants inappropriate in this

case.

3.

Seed argues that, not only was it wrong to grant summary

judgment in favor of the defendants, but summary judgment

should have been granted in favor of Seed. Although we do

not think the Westerman defendants are entitled to summary

judgment when we weigh the evidence in Seed’s favor, we

similarly do not think Seed is entitled to summary judgment

22

when we make the opposite inferences. The Westerman

defendants raise a genuine dispute of material fact about

whether they could have reasonably thought that Rules 637

and 647 did not apply to PCT applications. The resolution of

that dispute is for the factfinder at trial.

III.

Finally, two of the Westerman defendants argue that they

should be dismissed from the case. Edward Kenehan and the

Westerman firm are listed as defendants only for the second

count of the complaint, which alleges that they gave Seed

erroneous advice about the strength of its arguments in the

Federal Circuit appeal. The district court found that Seed had

withdrawn its second count because it had conceded that there

were no damages stemming from the second count in

particular. Kenehan and the Westerman firm moved to be

dismissed from this appeal because the district court had

found, based on Seed’s concession, that any claims against

them were moot. Seed responds that the defendants’

understanding of its concession is too broad. In Seed’s view,

the second count contained two types of damages: damages

from not accepting a settlement, and damages from

underestimating the importance and finality of the Federal

Circuit appeal, delaying their discovery of their malpractice

claims. Seed admits that it conceded the first type of

damages, but not the second.

We decline to resolve those issues at this stage. Because

the district court found that the claims were brought within

the statute of limitations, it had no occasion to consider

whether the second count alleges damages stemming from

appellants’ failure to pursue their malpractice claims sooner

due to the defendants’ erroneous advice about the significance

of the Federal Circuit appeal (and, if it does, whether Seed

23

waived those damages as well). Our decision requires

answers to those questions: if the allegations in the complaint

cover such a claim and Seed did not concede it, Seed could

seek damages based on the Westerman defendants’ faulty

advice about the timing of its (now dismissed) claims against

the Kratz defendants. We remand to the district court to

interpret the complaint in the first instance and decide

whether Seed waived any remaining claims against Kenehan

and the Westerman firm.

* * * * *

We hold that the first and second counts of the complaint

should be dismissed against the Kratz defendants as barred by

the statute of limitations, and we remand for further

proceedings on the contingent third and fourth counts. With

regard to the Westerman defendants, we reverse the district

court’s grant of summary judgment on the first and second

counts and remand for further proceedings. We also remand

for the district court to decide whether Edward Kenehan and

the Westerman firm should be dismissed from the suit.

So ordered.