A missed deadline means that AT&T lawyers can’t appeal a $40 million patent verdict against the telecom giant. Patent-holding company Two-Way Media LLC scored a $27.5 million verdict against AT&T last year following a jury trial in the Western District of Texas. The verdict, which got bumped up to $40 million after interest was added, was the largest patent verdict of the year for a non-competitor case.

AT&T's lawyers at Sidley Austin want to appeal the case, but they can't because they blew a key deadline, according to a ruling (PDF) yesterday from the US Court of Appeals for the Federal Circuit.

After the verdict came out, AT&T's attorneys filed four motions for judgment as a matter of law, or JMOL motions. Such motions are common after trial. Three of AT&T's four JMOL motions were filed under seal. The judge denied the orders and sent out "notices of electronic filing" (NEF) labeled “ORDER GRANTING [] Motion For Leave to File Sealed Document.”

In other words, those three electronic notices didn't clearly state that the orders had been denied, just that they could be filed under seal. It's the denial of the motion that starts the clock ticking for appeal.

AT&T's lawyers say they didn't realize their motions were actually denied until January 15, 2014, after the appeal period expired. They asked for an extension, but the judge refused. That ruling has now been upheld by an appeals court, so unless AT&T can get an en banc rehearing or attention from the Supreme Court—both major longshots—AT&T's case is over now.

Even though the electronic notice didn't give AT&T lawyers the heads-up they wanted, if they had actually checked the docket, they would have seen their motions were denied and the case was over. The notices were also sent to no fewer than 18 attorneys, and the orders were downloaded by legal assistants onto the law firm's internal system—but apparently no one read them.

Finally, the court issued properly labeled notices for the fourth unsealed motion and the bill of costs—two additional indications that the motions had been decided and the time to mount an appeal was upon them.

"In this era of electronic filing... we find no abuse of discretion in a district court’s decision to impose an obligation to monitor an electronic docket for entry of an order which a party and its counsel already have in their possession and know that the clerk at least attempted to enter," wrote Circuit Judge Kathleen O'Malley.

The appeals panel split 2-1, with Circuit Judge Timothy Dyk issuing a dissenting opinion.

Two-Way Media is a patent-holding company with no existing business beyond patent lawsuits—the type of entity sometimes called a "patent troll." Its patents derive from a failed video-streaming business called Netcast. Before suing AT&T over its U-verse service, Two-Way sued Akamai and Limelight, both of which settled; it also sued AOL, which settled in 2008.