Brett Trout
Patent litigation is often complex and high-stakes, but the case involving Leigh Rothschild, Starbucks, and attorney Rachael Lamkin has taken an unusual turn, morphing from a patent infringement lawsuit into allegations of fraud, and now, a defamation battle?.
Patent Infringement: The Spark That Started It All
The legal saga began when Rothschild’s patent-holding entity, Analytical Technologies (AT), sued 20 food service companies for infringing a patent related to mobile restaurant self-checkout?. Rothschild, a well-known figure in the patent monetization game, had acquired the patent from another inventor and quickly launched infringement claims.
Unfortunately for Rothschild, one of the defendants, Starbucks, did not settle quietly. Instead, the 800-pound coffee gorilla took an aggressive stance, filing counterclaims accusing Rothschild of fraud and attempting to hold him personally liable for attorneys’ fees. Starbucks alleged that Rothschild was using AT as a sham entity to shield himself from personal financial responsibility while he extracted settlements? from defendants through AT.
Fraud Allegations: A New Litigation Strategy
Starbucks’ legal team, led by Baker Botts attorney Rachael Lamkin, introduced a rarely-used litigation strategy in targeting Rothschild personally. Lamkin and her team argued that Rothschild was fraudulently transferring settlement funds to a parent company rather than leaving them in AT, preventing defendants from recovering legal costs in the event they successfully defended the patent suit?. Using this argument, Starbucks sought to pierce the corporate veil, presumably to hold Rothschild personally accountable if AT were to attempt to declare bankruptcy after losing the patent suit.
Defamation: The Case Takes Another Turn
As if the case wasn’t already contentious enough, Rothschild responded by suing Starbucks for defamation. His lawsuit claims that comments Lamkin made about his business model—specifically her statement that “we never get the money because the shells go bankrupt”—damaged his reputation?.
Starbucks has since moved to dismiss the defamation suit, arguing that the Florida court lacks jurisdiction and that Lamkin’s comments were made in her personal capacity, not as an official spokesperson for the company?.
Why This Case Matters
This legal battle highlights critical issues in patent litigation:
- The Risks of Patent Monetization: Rothschild, who has been involved in over 1,300 patent cases, represents a growing concern among businesses about non-practicing entities (NPEs)who file frequent patent infringement lawsuits against major corporations?.
- Changing Legal Tactics: Defendants like Starbucks are no longer playing defense but are actively fighting back using fraud claims to challenge the corporate entity shield that many NPEs rely on.
- Defamation Risks for Attorneys: The case raises questions about how lawyers can publicly discuss litigation strategies without facing legal retaliation from opposing parties.
Final Thoughts
What started as a routine patent infringement lawsuit has evolved into a fraud claim and a defamation case, making it one of the more unusual patent battles in recent memory. The outcome could have far-reaching implications for patent law, patent trolls, corporate litigation strategies, and even how attorneys communicate about cases in the media.
For businesses and patent attorneys, this case serves as a reminder that intellectual property litigation is rarely straightforward—often requiring seasoned litigation counsel willing to unlock new strategies, while at the same time anticipating and addressing unusual claims by the other side, whether those are intellectual property claims or not.
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