AT&T Loses $40M In Patent Infringement Case Due To Lawyers’ Fault

The U.S. telecommunications giant AT&T has lost $40 million in a patent infringement lawsuit because its lawyers did not read key rulings in time, and failed to submit an appeal.

An appeals court said Thursday that the Dallas-based company, which was represented by lawyers from the Chicago-based firm Sidley Austin, missed the 30-day timeframe to appeal against a court ruling, which found AT&T guilty of infringing on a patent for tracking technology owned by Two-Way Media, a Colorado-based company, BBC reported.

Although AT&T has argued that the error made by its attorneys was an “excusable neglect,” the court said that the company’s legal staff with 18 lawyers should have seen the documents.

It was “troublesome” that none of the 18 lawyers and assistants “bothered to read the orders issued by the court,” Orlando Garcia, a Texas district judge, was quoted by BBC, as saying.

Two-Way Media had filed the lawsuit against AT&T in 2009, accusing it of infringing several patents related to Internet media streaming. In 2013, a jury ruled that AT&T infringed two of the patents, and awarded $27.5 million in damages, Reuters reported.

In October last year, AT&T filed motions asking Garcia to upend the court ruling, which the judge denied next month. Lawyers of both sides had received emailed notices of the court filings, while the labels were updated with descriptions of the underlying orders a few days later.

The AT&T lawyers discovered the November court orders 51 days later, after the 30-day appeal window had expired. Although the company tried to extend the period, Garcia denied the request.