March 14, 2002

THE SAN FRANCISCO DAILY JOURNAL

By Xenia P. Kobylarz

SAN FRANCISCO – In a quarter-century of being a trial lawyer, Terence McMahon has never found a case he couldn’t litigate.

The 51-year-old head of McDermott Will & Emery’s West Coast intellectual property practice has tried everything from fender-bender to complex patent litigation and has built a solid reputation as a top IP litigator.

McMahon’s fearless approach to litigation, backed by a series of major court victories, has earned him the trust of heavyweight IP clients such as Advanced Micro Devices, Microsoft Corp., Logitech, EMC Corp. and Lucasfilm Ltd.

But aside from being known as the go-to-guy for IP owners in distress, the 6-feet-2-inch former high school football player also has established a reputation among law firms as a first-class team builder.

He is credited with inventing San Francisco’s Orrick Herrington & Sutcliffe’s fledgling IP practice. In less than six years, he helped take Orrick’s practice from zero to 70 IP practitioners and establishing a foothold in New York. He attracted to Orrick such prominent clients as Microsoft Corp. and Xerox Corp.

“I know it sounds crazy, but starting from scratch has always appealed to me,” McMahon said during a recent interview.

Since jumping ship to McDermott 13 months ago, McMahon appears to have worked his magic once again. Under his direction, the firm’s Menlo Park office, which had struggled to attract top-rate IP attorneys, nearly doubled its ranks from 12 lawyers to 23 and increased revenues three-fold.

A few weeks ago, the firm moved into new quarters in Palo Alto to accommodate its burgeoning attorney roster.

“We have experienced tremendous growth here, and it only started coming to life in the last year and a half,” said Anthony de Alcuaz, McDermott’s Silicon Valley partner-in-charge.

“He is a source of energy, focus and commitment around here,” de Alcuaz said. “His connections are unsurpassed, and he brings the same intensity which he applies in defending his clients to [building] the firm.”

So what’s the secret behind McMahon’s success? Fellow litigators say his tough image and famed courtroom skills attract not only clients but lawyers as well.

“He likes to win, and he naturally attracts people of the same caliber,” said James McManis, a longtime San Jose trial attorney who has both opposed and collaborated with McMahon.

“He is a chameleon in court,” said veteran IP litigator Allen Ruby, a name partner at San Jose’s Ruby & Schofeld. “He can be the most charming guy and the most likable fellow, but if you’re on the opposing side there is no time to be charmed. You have to fasten your seat belt quick.”

According to McManis, being in court with McMahon is like being in the middle of a hurricane.

“He fills up the courtroom more than any lawyer I’ve ever seen, and he doesn’t make you forget his presence,” McManis said. “He also absorbs the interest of his clients into his bones, which makes him a formidable adversary.”

Kristine Riley, associate general counsel at the software company, Logitech, said McMahon inspires the same fierce loyalty from his clients.

“If you want to pick someone to represent you, if you’re smart you’d pick him,” Riley said. “He is as dedicated as he is intelligent.”

McMahon attributes his success to his willingness to take on anything.

“I try not to turn down potential clients or cases,” McMahon said. “Twenty years ago, if I had turned down the opportunity to try my first copyright case, I probably wouldn’t be here.”

McMahon had maintained a purely commercial litigation practice, trying everything from personal injury cases to complex insurance defense cases, when he made his first foray into IP law. The shift began in 1981, when he successfully defended Apple Corp. in a wrongful termination suit. Impressed with McMahon’s courtroom skills, Apple executives, who were then investigating a Macintosh clone piracy ring, asked if he handled IP cases.

“I said yes without blinking an eye.” McMahon related with a grin. He won his first copyright case by securing a restraining order and preliminary injunction for Apple.

“Next to marrying my wife, going to IP litigation was the best decision I had ever made in my life,” McMahon said, laughing.

His rise to national prominence began in 1987 when he represented Advanced Micro Devices, then a small microchip maker, against a copyright infringement suit filed by Intel Corp. McMahon thwarted Intel’s attempt to block AMD from cloning its 386 and 486 microprocessors. Obtaining a unanimous jury verdict, McMahon saved a billion-dollar business for AMD.

“That truly was one of those rare bet-the-company cases,” McMahon said.

His big win over Intel’s army of lawyers established the Santa Clara University law graduate’s reputation and opened new doors for him. After he wrapped up the AMD-Intel litigation in 1994, Orrick lured him away from his firm of nine years, the now defunct Jackson Tufts Cole & Black.

Orrick, then best known for its municipal bond practice, had been having a hard time getting noticed in Silicon Valley. Firm managers hoped McMahon would inject their lackluster IP practice with some badly needed star power.

It worked. In just three years, McMahon and his team built a 30-lawyer group in Orrick’s Menlo Park office. By the time McMahon moved to McDermott in 2001, Orrick had become a serious player in the IP arena.

“I consider that one of my biggest achievements,” McMahon said.

He is determined to surpass that accomplishment at McDermott.

“Our goal is to grow and build a great team of lawyers here, and we are getting there,” he said.

The 942-lawyer Chicago firm opened its first Silicon Valley office in San Jose in 1997 to complement its growing intellectual property practice on the East Coast. Under the leadership of renowned patent litigator Ray Lupo, McDermott’s IP prosecution, transaction and litigation practice in New York, Boston and Washington, D.C., flourished. But as Lupo built an impressive stable of 130 IP attorneys firmwide, attracting top talent to its outpost in Silicon Valley, the nation’s preeminent high-tech center, proved difficult.

McDermott had launched the effort by hiring four lateral partners, building to 16 attorneys within a year. By 2000, however, the office was down to just eight attorneys, and the departure of three partners and three associates forced McDermott to close the San Jose office that April.

Lupo remained determined to duplicate the firm’s East Coast success in California. He lured de Alcuaz, one of the Bay Area’s more prominent IP attorneys, from Howard Rice Nemerovski Canady Falk & Rabkin to head the office and mount a campaign of aggressive growth.

The pivotal moment in firmly establishing the office, however, came when McMahon signed on, according to Larry Watanabe, the legal recruiter McDermott retained to staff the outpost.

Although it took two years to persuade McMahon to leave Orrick, Watanabe said, it was well worth it.

“He helped spur the growth and build a lot of momentum,” Watanabe said. “It made it a lot easier for us to convince other talents to come over because of Terry McMahon’s name.”

As soon as McDermott installed McMahon as a new partner, the firm lured Wilson Sonsini Goodrich & Rosati’s two top IP litigators, Vera Elson and David Larson, and Rob Blanch, an IP partner from Orrick’s Menlo Park office.

“The Silicon Valley office has just grown immensely since Terry came in,” Lupo said. “He is a real draw for the firm.”

Even this early, the consensus view among the Valley’s legal community is that the McDermott office is finally gaining a foothold.

“I’d say it is now on par with other large general practice firms doing patent litigation,” said Martin Fliesler, name partner at the San Francisco patent firm Fliesler Dubb Meyer & Lovejoy.

“It’s gone from a very small outpost of a Chicago law firm to a very significant office in the Valley,” McManis said.

McMahon hesitates to take all the credit. He credits the firm’s knack for picking all the right people to include in its team.

He is particularly proud that nearly half McDermott’s IP lawyers hold advanced degrees in science and engineering.

“I am the first one to admit that I have limited skills,” said McMahon, who holds an undergraduate degree in commerce but has no technical background. “I need to surround myself with highly qualified and talented people who can help me in litigating complex patent infringement cases.”

Another factor, McMahon said, is the office’s “no-jerk-rule” in hiring partners and associates.

“IP litigation is a team sport,” the former high school football player said. “You can’t work here if you’re not a team player. We help each other out and share the credit.”

McDermott lawyers in Palo Alto are involved in more than half the approximately 60 patent infringement cases currently being litigated by the firm, according to de Alcuaz.

Recently, McMahon and Lupo represented Broadcom Corp. in a patent infringement suit filed by Intel in Delaware. The two lawyers were brought in two months before trial to help Wilson Sonsini lawyers defend Broadcom.

“Our role was to present the company’s story in such a way that the jury understood what a terrific company Broadcom is,” Lupo said. “Terry was instrumental in personalizing this giant company and making the jury care about its financial prospects.”

The jury found Broadcom did not infringe two Intel patents related to video and networking technology.

“I’ve been doing this for 30-plus years, and seeing Terry address a jury is still a learning experience for me,” Lupo said.

Lupo noted that the new building in Palo Alto has room for 50 more attorneys, more than double the current roster of 23.

“We have a wonderful group of people out there, led by the very best patent trial lawyer in the county,” Lupo said. “Of course, we expect to grow even more.”