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U.S. court rules AT&T's lawyers too late to appeal patent loss

By Andrew Chung

NEW YORK, March 19 (Reuters) - AT&T Inc was too late to appeal a $40 million loss in a patent infringement case because its lawyers did not read key rulings in time, a federal appeals court said on Thursday.

AT&T, which was represented by a team of lawyers from the law firm Sidley Austin, failed to file its notice of appeal within the requisite 30 days after a judge from a federal court in San Antonio denied several of the company's post-trial motions, according to a decision of the U.S. Court of Appeals for the Federal Circuit.

The case began in 2009 when a Colorado company, Two-Way Media Llc, accused Dallas-based AT&T of infringing several Internet media streaming patents. A jury in 2013 found AT&T infringed two of the patents and awarded $27.5 million in damages, to which U.S. District Judge Orlando Garcia added interest, according to court filings.

In October 2013, AT&T filed motions asking Garcia to overturn the verdict, which Garcia denied the next month. The court posted the denials on its docket, but with labels that omitted the actual substance of the rulings.

Attorneys on both sides received emailed notices of the court filings with those labels. The labels were updated with descriptions of the underlying orders a few days later, but no new notices were sent to attorneys.

The Sidley Austin lawyers did not discover the November orders until 51 days later, in January, after the appeal period had expired. The company tried to extend or reopen the appeal period, but Garcia denied the request.

Garcia said it was "troublesome" that none of the 18 lawyers and assistants who received the electronic notices "bothered to read the orders issued by the court." He admonished the attorneys for relying only on emailed notifications.

AT&T appealed, with Sidley Austin partner Carter Phillips arguing it was improperly notified of the orders. The Federal Circuit on Thursday said Garcia did not abuse his discretion in denying the extension because even no notice would not justify an extension.

Sidley Austin did not immediately respond to requests for comment. AT&T declined to comment, while representatives for Two-Way Media could not be reached.

The case is Two-Way Media Llc v AT&T, Inc et al, No. 14-1302, in the U.S. Court of Appeals for the Federal Circuit.

(Reporting by Andrew Chung; Editing by Alexia Garamfalvi and Cynthia Osterman)