Defunct Kenyon law firm loses $9 mln appeal in Napster-era fee fight - Reuters
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(Reuters) - A New York state appeals court on Tuesday rejected a law firm's bid to recover more than $9.3 million in attorney fees from an ex-client that invented a system for internet music and film downloads.
New York's Appellate Division, First Department held that the lower court "correctly" dismissed claims made by Kenyon & Kenyon, a defunct intellectual property firm that is now part of Hunton Andrews Kurth.
According to the opinion, Kenyon began representing its former client SightSound Technologies Inc in IP litigation in 1999. With SightSound racking up $1.77 million in unpaid attorney fees, the company and the firm struck a deal that gave Kenyon a security interest on SightSound's IP.
In 2004, SightSound sued music download pioneer Napster for patent infringement, but the case was stalled for years at the U.S. Patent and Trademark Office. Running out of money, SightSound – with Kenyon's blessing – struck a deal with General Electric Co in 2005, ensuring that GE would fund its patent litigation efforts.
The Napster litigation restarted in 2011, and the companies settled the case for $3.1 million in 2012. SightSound told Kenyon the settlement proceeds would go to GE, and the law firm didn't raise any objections until 16 months later, the opinion said.
Kenyon & Kenyon sued SightSound, GE and DMT Licensing LLC, the GE-owned entity that funded SightSound's Napster litigation, in 2014, claiming its unpaid fees had grown to $9.3 million. But New York Supreme Court Justice Andrea Masley held in May that the 16-month delay was fatal to the firm's lawsuit.
Kenyon collapsed and was partially absorbed by Andrews Kurth in 2016. In 2018, Andrews Kurth Kenyon merged with Hunton & Williams to become Hunton Andrews Kurth. Despite these changes, the litigation has continued under Kenyon's name.
Brian Wheelin, a partner at Robinson & Cole who represented GE, DMT Licensing and SightSound Technologies, said GE was pleased with the court's ruling.
An attorney for Kenyon and a spokesperson for Hunton Andrews Kurth did not respond to requests for comment.
The case is Kenyon & Kenyon LLP v. SightSound Technologies LLC, New York Appellate Division, First Department, Appeal No. 15144.
For Kenyon & Kenyon: Louis DeLucia of Ice Miller
For SightSound Technologies Holdings LLC: Matthew Sheppe of Reiss Sheppe
For SightSound Technologies LLC, DMT Licensing LLC and GE: Brian Wheelin of Robinson & Cole
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source: https://www.reuters.com/legal/transactional/defunct-kenyon-law-firm-loses-9-mln-appeal-napster-era-fee-fight-2022-02-15/
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