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Attorney: Patent Gaffe Cost Pasadena Businessmen Millions

Metamorfyx was working on a keyboard design.

By Bill Hetherman, Staff Writer, City News Service

The two men behind the development of a type of user- friendly computer keyboard lost $30 million because their former lawyers mishandled a patent licensing agreement with Microsoft, an attorney for the plaintiffs told a Los Angeles jury this week.

In his opening statement, lawyer Maxwell Blecher said the counsel who once represented Robert Granadino and Hernan Camacho reached a settlement agreement with the software giant without fully informing their clients.

"They agreed to accept an agreement unheard of and unprecedented in the patent licensing field," Blecher said. "It was a terrible agreement."

But attorney James Murphy, on behalf of defendants Joseph Vanek, Brian Cardoza and Eugene Cummings, said the three did not do anything without the consent of Granadino and Camacho. He said Granadino wanted to avoid a major legal showdown with Microsoft.

"Granadino never wanted to sue Microsoft, knowing full well it could result in the determination of the invalidity of the patents," Murphy said.

Although Blecher said the plaintiffs' patents were affirmed by the U.S. Patent and Trademark Office, Murphy said some of their claims were actually invalidated.

Granadino and Camacho are the owners of the Pasadena-based company Metamorfyx. The keyboard at issue -- spearheaded in development by Camacho and achieved in the early 1990s by teaming up with Granadino -- was designed to reduce users' chances of acquiring Carpal Tunnel Syndrome and other muscle strain afflictions, Blecher said.

Although Microsoft and other companies had already been selling similar keyboards, after Granadino and Camacho obtained their patents, the other companies were obligated to stop offering their versions unless they paid royalties, Blecher said.

The first patents were obtained with a previous law firm, but Granadino kept seeing other ergonomic keyboards in the marketplace and turned to Cardoza for advice, Blecher said. Granadino and Cardoza were friends since childhood, Blecher said.

Cardoza worked for Southern California Edison Co. and was not a patent lawyer, but went to law school with Vanek, a patent attorney who in turn knew Cummings, a top expert in the field, Blecher said.

The attorneys then turned to Gerald Hosier, a renowned patent lawyer once listed by Forbes magazine as the nation's highest paid lawyer with an annual income of $40 million, Blecher said. The legal team was tasked with devising a strategy to enforce Metamorfyx patents against Microsoft and other alleged infringers and hammer out any licensing agreements, Blecher said.

But in a series of meetings and negotiations in the late 1990s, the defendants were overwhelmed by the tactics of the Microsoft legal team, Blecher said.

"They applied no pressure to Microsoft," Blecher said, resulting in a "terrible agreement" which "sold Metamorfyx down the river."

But Murphy said Granadino and Camacho were kept informed every step of the way by his clients. He also said the Microsoft agreement was reviewed and given the nod by the law firm Bryan Cave, where Granadino's wife worked.

Murphy said Granadino's longtime friendship with Cardoza has been negatively impacted by the litigation, which he said proves the adage that "money is at the root of all evil."

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