The Supreme Judicial Court of Massachusetts determined, in a case of first impression, that Massachusetts’s attorney’s lien statute permits placing a lien on a patent (and any proceeds later derived from that patent) for legal fees earned while representing a client before the U.S. Patent and Trademark Office (USPTO). Ropes & Gray LLP v. Jalbert, Case No. SJC-10333 (Mass. S.J.C., July 28, 2009) (Spina, J.)

R&G represented Engage, Inc. (Engage) from approximately June 2002 through May 2003 in connection with the prosecution of various patents. On June 19, 2003, Engage filed bankruptcy petitions under Chapter 11 in Massachusetts. In a filing with the Bankruptcy Court, R&G asserted that it was owed over $100,000 for patent prosecution work, secured by an attorney’s lien under Massachusetts law. Engage sold off its patents and applications before and after filing under Chapter 11.

In the bankruptcy proceedings, Engage’s liquidating supervisor, Jalbert, contended that the attorney’s lien did not apply to patents and that the debt owed to R&G was therefore unsecured. After the bankruptcy court agreed, R&G appealed first to the U.S. District Court, which affirmed the bankruptcy court, and then to the U.S. Court of Appeals for the First Circuit, which decided to certify the following two questions to the Supreme Judicial Court of Massachusetts for its interpretation of Massachusetts law on two issues:

  1. Does the statute grant a lien on patents and patent applications to a Massachusetts attorney for patent prosecution work performed on behalf of a client?
  2. If the statute does grant a lien and the issued patents or patent applications are sold, does the attorney’s lien attach to the proceeds of the sale?

In answering yes to both questions, the Supreme Judicial Court of Massachusetts emphasized that the attorney’s lien protects attorneys “against the knavery of their clients, by disabling the clients from receiving the fruits of recoveries without paying for the valuable services by which the recoveries were obtained.” Further, the Court stated that “[t]he purpose of the lien statute would be eviscerated if an inventor could just sell a valuable property right, one that was obtained by the attorney’s work in the first instance, and pocket the proceeds.” In the end, the Court announced that “[a] patent attorney who successfully secures a patent for his client in proceedings before the USPTO is entitled to the same protection under [the statute] as an attorney who obtains a favorable judgment for his client in court.”

Practice Note: Although the issue had never been raised in Massachusetts, two other states— New York and Minnesota—had previously held that the lien applies to patent prosecution.