Another win for ‘David,’ another loss for ‘Goliath’

D.C. Superior Court judge rejects Akin Gump’s bid to block Xcential’s patent application for bill-drafting software innovation, casts doubt on lobbying giant’s claim their attorney ‘invented’ complex software for legislation

California legislative tech company may proceed with securing patent rights to its innovative new software to modernize and enhance transparency of centuries-old processes of writing and amending federal legislation

WASHINGTON D.C. -- In a second consecutive court defeat in two weeks, Washington D.C. lobbying and law firm giant Akin Gump’s attempt to block a small California legislative technology company’s pursuit of a patent for its innovative bill-drafting application has been denied in D.C. Superior Court.

In making her ruling, Judge Juliet McKenna went even further, telling Akin Gump that its larger effort to claim Xcential Legislative Technologies’ patent and allege trade secret misappropriation and confidentiality violations by Xcential were likely to fail.

“There is not a substantial likelihood that (Akin Gump) will prevail,” McKenna said in her ruling from the bench on Feb. 24.

“(T)o preclude Xcential from moving forward…would discourage invention, it would discourage innovation, it would discourage companies from investing their own resources to try to come up with workable solutions to commonly identified problems,” McKenna said in denying Akin Gump’s motion for a preliminary injunction to halt Xcential’s patent pursuit.

On Feb. 15 the judge rejected Akin Gump’s motions to dismiss Xcential’s four key counterclaims, which accuse Akin Gump of violating Xcential’s software user and confidentiality agreements and theft of trade secrets.

At issue is Xcential Legislative Technologies’ 2019 patent application for a software prototype it named “Bill Synthesis,” which automates some of the most difficult tasks involved in U.S. federal bill drafting. Xcential’s prototype was based on two of the firm’s existing technologies: “Change Set” software and another internal technology later dubbed as “Snapshot,” both of which are components in Xcential’s LegisPro? bill drafting and amending software product. All were developed out of Xcential’s experience with federal and other legislative processes and were demoed to Akin Gump in 2019.

Xcential, a 25-person firm based in Encinitas, Calif., founded in 2002, was described recently in Politico and MPR’s Marketplace as a leading company in bill-drafting technology, helping law-making bodies, including the U.S. House, the U.S. Government Publishing Office, the California Legislature, the U.K. and Scottish Parliaments, the Nova Scotia Registry of Regulations and other governments around the world, modernize the cumbersome, centuries-old processes of drafting and amending laws.

Akin Gump Strauss Hauer & Feld, with more than 900 attorneys and $53 million in federal lobbying revenues alone, sued Xcential in October in D.C. Superior Court, claiming it had misappropriated Akin Gump’s trade secrets and violated its confidentiality agreements in developing Bill Synthesis – an invention that Akin Gump attorney and registered lobbyist Louis Agnello claims he developed prior to meeting with Xcential. Akin Gump has also filed a petition at the U.S. Patent and Trade Office to claim Xcential’s filing for a patent on Bill Synthesis belongs to Akin Gump.

Judge McKenna, however, in her Feb. 24 ruling strongly questioned Akin Gump’s argument that the firm and its attorney had come up with a novel concept for how to draft federal legislation, much less implemented that concept into patentable form. In accusing Xcential of violating the mutual confidentiality agreement and misappropriating trade secrets, Akin Gump relied on the argument that Agnello’s concept for federal bill drafting was original.

“(T)his was not an idea that was unique to Mr. Agnello,” McKenna said. “It appeared that this was something that was widely known on the Hill by individuals who draft legislation, that it was a common complaint and concern, which had been brought to Xcential’s attention prior to discussion with Mr. Agnello.”

The judge also questioned Akin Gump for its 18-month delay in filing the motion for a preliminary injunction – a point echoed during the hearing by Xcential’s attorney in the case, Cynthia Gierhart of Holland & Knight. “If it was really going to be irreparable harm (to Akin Gump and Agnello), they had that opportunity (to file the motion) and waited months to do so.”

“I am convinced…that significantly more harm would result to Xcential and (Xcential CEO, CTO and co-founder Grant) Vergottini should they be precluded from pursuing this patent application,” McKenna said in her ruling against Akin Gump.

Xcential’s leadership was pleased with the ruling and vowed to push on with its counterclaims against Akin Gump and to seek damages from the firm. Those counterclaims include allegations of violations of Xcential’s software license and confidentiality agreements and trade secret misappropriation by Akin Gump and attorney Agnello.

“We are extremely pleased – and not surprised – that Judge McKenna would see through Akin Gump’s meritless attempt to say they thought of how to draft federal legislation – and in the process make a grab for our highly technical software invention,” said Vergottini, the named inventor of Bill Synthesis. “We have said all along that Akin Gump and Agnello’s claims were outrageous.”

“This has been an extremely expensive and damaging episode for Xcential – for our business, our reputation and our employees,” said Xcential President Mark Stodder. “It’s a mystery why Akin Gump would pursue this and harm Xcential in this way. We intend to push forward and make Akin Gump and attorney Agnello bear full responsibility for their actions in this case.”

Akin Gump’s legal efforts against Xcential and its rarely seen USPTO “derivation petition” have drawn scrutiny in the legal technology and patent law communities. The case has been likened to a “David vs. Goliath” battle in the courts, pitting a Biglaw Washington D.C. firm against a small tech company from a California beach town.

Akin Gump’s case was argued by attorney Anthony Pierce, who is the partner in charge of its D.C. office. Xcential is being represented by Holland & Knight attorneys Gierhart and David Donoghue. The case is No. 2022 CA 004744 B, filed in the Civil Division of the Superior Court of the District of Columbia.

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Xcential Legislative Technologies has been working at the forefront of legislative standards and technology innovation since 2002. Its leadership team has decades of experience in legislative document technology, open data standards, government modernization and transparency initiatives. Xcential’s co-founders began work on modernizing the California Legislature’s drafting system in 2002. That was the beginning of Xcential – and LegisPro. Starting in 2004, every legislative proposal moving through the California legislature has been drafted, amended and, if approved, published, and codified on systems and software designed by Xcential. Today Xcential has brought its consulting expertise and LegisPro product line to projects at the U.S. House, the U.S. Government Publishing Office, the U.K. and Scottish Parliaments, the Nova Scotia Registry of Regulations and other governments around the world. The company is based in Encinitas, Calif. Contact Xcential at [email protected] for more information about the company.