Patent Ethics Litigation

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Patent Ethics

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Patent Ethics Litigation David Hricik

1

1 Oxford University Press, Inc., publishes works that further Oxford University’s objective of excellence in research, scholarship, and education. Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Mexico City Nairobi New Delhi Shanghai Taipei Toronto

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Copyright © 2010 by David Hricik Published by Oxford University Press, Inc. 198 Madison Avenue, New York, New York 10016 Oxford is a registered trademark of Oxford University Press Oxford University Press is a registered trademark of Oxford University Press, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of Oxford University Press, Inc. _____________________________________________ Library of Congress Cataloging-in-Publication Data Hricik, David Charles. Patent ethics : litigation / David Hricik. p. cm. Includes bibliographical references and index. ISBN 978-0-19-536709-6 ((pbk.) : alk. paper) 1. Patent lawyers—Professional ethics—United States. 2. Patent suits—United States. I. Title. KF3165.H748 2010 346.7304'86—dc22 _____________________________________________

2009046429

1 2 3 4 5 6 7 8 9 Printed in the United States of America on acid-free paper Note to Readers This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is based upon sources believed to be accurate and reliable and is intended to be current as of the time it was written. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Also, to confirm that the information has not been affected or changed by recent developments, traditional legal research techniques should be used, including checking primary sources where appropriate. (Based on the Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations.)

You may order this or any other Oxford University Press publication by visiting the Oxford University Press website at www.oup.com

Contents

ABOUT THE AUTHOR

xi

CHAPTER 1: Introduction

1

CHAPTER 2: Choice of Law in Federal Court Litigation

3

A. Introduction B. Federal Circuit Choice of Law on Legal Ethical Issues C. Federal Courts Take Different Approaches to Choice of Law on Ethical Issues 1. The “National Standards” Approach to Choice of Law on Legal Ethics 2. Other Approaches to Choice of Law on Legal Ethics D. Conclusion on Choice of Law E. Subject Matter Jurisdiction Over Malpractice Claims Based Upon Conduct Occurring During Patent Litigation CHAPTER 3: Conflicts of Interest A. Introduction B. Conflicts Created by Communications with Prospective Clients C. Assuming an Attorney-Client Relationship Formed, Who Is, or Was, the Client? 1. Inventors a. The Law 2. Business Entities a. The Law 3. Employees and Officers of the Entity Generally Are Not Clients 4. Affiliated Entities Are Generally Not Clients 5. Successor Corporations to Former Clients 6. Assignees of a Patent the Firm Obtained for a Current or Former Client D. Current Client Conflicts 1. Helping Out Behind the Scenes 2. Parallel Patent Litigation

4 6 7 7 9 10 11

13 15 15 18 22 22 26 26 27 28 33 35 36 37 38

vi Contents 3. Increasing a Client’s Risk of Liability Even Without Parallel Litigation 4. Adverse Discovery of a Current Client 5. Positional Conflicts of Interest 6. Implications and Recommendations E. Former Client Conflicts 1. Is the Representation Over? 2. The Protections Afforded to Former Clients

40 42 43 44 45 45 48

a. The Substantial Relationship Test b. Possession of Client Confidences c. Challenging or Interpreting the Firm’s Prior Work

48 53 54

d. The Appearance of Impropriety

55

3. Special Issues Concerning Transferring Lawyers a. Private Practice Migration 4. Impact on a Firm of Hiring Lawyers 5. Impact on a Firm of Departure of Lawyers a. Former Government Officials F. Impact of Disqualification G. Consent to Conflicts 1. Contemporaneous Consent to Conflicts 2. Prospective Consent 3. Post-Wrong Waivers of Malpractice Claims H. Other Justifications for Denial of Disqualification 1. Prejudice or Taint and Balance of Hardships 2. Waiver by Delay in Seeking Disqualification 3. The Hot Potato Doctrine and the “Thrust Upon” Exception 4. Improper Uses of Disqualification Motions and Other Factors CHAPTER 4: Competency, Diligence, and Communication A. Competency B. Diligence C. Communication CHAPTER 5: Pre-Pleading Investigations

55 55 56 60 61 61 62 64 66 69 70 70 70 71 75

77 78 81 82

85

A. Introduction to the Potential Sources of Liability and Sanctions 1. Federal Rule of Civil Procedure 11 2. Exceptional Case Attorney Fee Shifting Under 35 U.S.C. § 285 3. Liability Under the Federal Antitrust Laws 4. Liability Under State Law and Other Federal Statutes

86 86 87 88 90

5. Concluding Introductory Thoughts B. Patentee’s Pre-Suit Letters Charging Infringement C. Patentee’s Pre-Suit Investigation into Charges of Infringement

91 91 94

1. Is the Plaintiff a “Patentee?” 2. Is the Patent in Force? 3. Is the Defendant the Proper Defendant?

95 96 96

Contents vii 4. Is There an Objective Basis, Based Upon Reasonable Investigation, to Allege Infringement? a. Interpretation of Claims b. Application of Claims to Accused Product or Process

97 97 99

D. Invalidity of the Patent 1. Note on ANDA Certifications E. Unenforceability

101 102 103

F. General Issues of Law and Other Papers Beyond Pleadings

103

G. Issues of Privilege and Work Product Concerning Pre-Suit Materials

104

CHAPTER 6: Ethical and Other Constraints on Pre-Suit Investigations

and Pre-Suit Enforcement Efforts

107

A. Ethical Constraints on Pre-Suit Investigations

108

1. Counsel Representing a Party in a “Matter” May Not Communicate with a Person “Represented by Counsel” in that Matter About that Matter a. Rule 4.2 Prohibits Certain Ex Parte Contacts 2. Is There a “Matter?” 3. Does Counsel “Know” the Person “Represented by Counsel” in Terms of Rule 4.2? a. Note on the Impact of Federal Choice of Law Rules b. Current Employees of an Opposing Party 4. Contacts with Current Employees Through Web Sites of the Opposing Party a. Former Employees of an Opposing Party 5. In-House Counsel’s Inability to Alter Rule 4.2 6. Does Model Rule 4.2 Apply to Undercover Investigations? a. Model Rule 4.3 7. Is the Use of an Undercover Investigator “Dishonest” Under Rule 8.4 or Rule 4.1? B. Authority Holding White Lies Are Acceptable C. Authorities Finding White Lies to Be Deceitful CHAPTER 7: Pleading Ethically A. Law Governing Federal Pleadings 1. Federal Rule of Civil Procedure 8 B. Rule 11 Basis C. Pleading Infringement D. Defendants’ Pleadings CHAPTER 8: Expert Witnesses

108 108 109 111 111 113 115 116 120 121 124 127 131 133

137 138 138 139 139 142

145

A. What Is “Expert” Opinion in Patent Litigation? B. Selection C. Preparation of the Report

147 149 151

D. Contents of the Report

152

viii

Contents E. Conflicts of Interest of Experts 1. What Law Applies to Disqualification of Experts, Including Lawyer-Experts? 2. Conflicts of Interests of Experts a. Introduction b. Side-Switching Cases: The Duty of Loyalty for Experts Is Minimal 3. The First Party Must Have Objectively Believed a Confidential Relationship Existed Between It and the Expert 4. The First Party Must Prove It Disclosed Confidential Information to the Expert

154 154 157 157 158 160 162

a. Experts Whose Firms Represent Both Sides to a Dispute

162

b. Experts Retained by an Opponent Who Represents the Movant in Unrelated Matters

164

c. Consulting Experts d. Expert Is Lawyer’s Former Client e. Former Employees as Opposing Experts F. Confidentiality and Experts 1. Basic Distinctions: Consulting and Testifying Experts 2. Disclosure of Testifying Experts’ Files in Related Cases 3. Waiving Privilege and Work Product by Disclosure to Experts 4. Access to Facts Known to and Opinions Held by Consulting Experts 5. Testifying Experts’ Review of Consulting Experts’ Materials 6. Inadvertent Waiver of Expert’s Facts and Opinions 7. Special Note on Consulting Experts 8. Testifying Experts G. Means to Reduce the Problems 1. Ensure that Employee Confidentiality Agreements Are Broad and Enforceable 2. To Help Identify Conflicts, Ask the Expert About Prior Work for the Opposing Party or Opposing Counsel 3. Require the Expert to Sign a Confidentiality Agreement 4. Formalize Retention of the Expert 5. Disclose Information and Get the Expert Working Early 6. Identify Confidential Disclosures as Such 7. Advise the Expert Not to Talk About or Listen to Confidential Information 8. If a Conflict Does Arise, Raise It Promptly with Opposing Counsel a. If the Conflict Cannot Be Resolved, Raise It Promptly with the Court b. Move In Limine to Exclude the Reference to the Conflicting Representation CHAPTER 9: Ethical Issues in the Information Exchange Process

165 165 165 166 166 168 169 170 171 171 172 173 174 174 174 174 175 175 175 176 176 176 176

179

A. Litigation Holds and Spoliation

180

B. Local Rule Requirements

180

Contents ix C. Initial Disclosures 1. Protection of Pre-Pleading Investigatory Materials

181 181

2. Complete Disclosures and Proper Supplementation D. Discovery 1. General Discovery Abuse 2. Improper Ex Parte Contacts During Pendency of a Matter

182 182 182 183

a. Employees and Former Employees b. Ethical and Procedural Limitations on Ex Parte Contacts with Expert Witnesses E. Litigation Mistakes and Misconduct F. Trial Conduct

183 183 189 191

1. In-Courtroom Conduct

191

2. Advocate-as-Witness Disqualification 3. Improper Argument 4. Ex Parte Communications with Jurors

192 192 192

CHAPTER 10: Combining Prosecution with Other Forms

of Representation

193

A. Identifying the Applicable Standards B. Combining Prosecution and Litigation 1. The Possibility of Misuse of Discovery Materials While Prosecuting Applications C. Is Prosecution of Patents by Itself Sufficient to Bar Access to Highly Confidential Information? 1. In re Sibia 2. The Majority View 3. A Suggested Analysis D. A Proposed Prosecution Bar Raises Potential Conflicts and Liability E. Issues to Consider in Crafting Protective Orders 1. Liability and Disqualification of Prosecuting Litigators F. Inequitable Conduct as a Conflict G. Depositions of Prosecuting Litigators 1. Advocate-as-Witness Disqualification H. Combining Opinion and Trial Representations 1. Advocate-as-Witness Disqualification I. The Courts Split on Advocate-as-Witness Disqualification J. What to Do 1. Enhanced Risk of Waiver of Work Product

194 195

2. What to Do K. Conclusion

235 235

195 196 198 202 206 208 212 216 216 218 219 223 224 224 227 227

TABLE OF CASES

237

INDEX

263


About the Author

David Hricik is a Professor of Law at Mercer University School of Law, where he teaches patent law, legal ethics, federal civil procedure, and other courses. He litigated patent cases for 14 years prior to becoming a professor, and has also served as chair of ethics and professionalism committees of both the American Intellectual Property Law Association and the IP Section of the American Bar Association. He has served as an expert for the Office of Enrollment and Discipline and has represented clients in matters before the OED. He also serves as an expert witness in cases involving conflicts, errors, and other issues in IP and other cases.

xi


CHAP T ER

1 Introduction

Since the founding of the Federal Circuit, patent litigation has steadily increased. At the same time, patent damage awards have also regularly increased so that now an award in the millions of dollars does not strike an unusual chord. Because of the increasing amount of patent litigation and the increased stakes, liability for missteps during patent litigation is of increasing concern. Conflicts of interest, mistakes in strategy, and improper arguments are leading to liability and sanctions.1 This book guides patent litigators and others through the minefields of litigation. Many of the problems are common to all civil litigation; others, however, are particular to patent litigation. The book addresses both types but focuses primarily on those more likely to arise in patent, as opposed to general commercial litigation. Apart from the first chapter addressing the oft-overlooked issue of choice of law, this book is essentially organized chronologically, starting with conflicts of interest then turning to the ethical issues that arise during pre-suit investigations and concluding with trial and related matters. It emphasizes cases and other in related areas of litigation. Patent Ethics is the first book of its kind.

1. See, e.g., Axcan Scandipharm, Inc. v. Reed Smith, LLP, 2007 Phila. Ct. Com. Pl. LEXIS 78 (March 26, 2007) (suit based on damages caused by firm that violated duty of loyalty and confidentiality and seeking disgorgement of fees); Tomar Elec., Inc. v. Watkins, 2009 WL 181994 (D. Ariz. Jan. 28, 2009) (removing case pleading, local counsel committed malpractice in patent infringement suit, including submission of flawed jury instructions); see also Fawer, Brian, Hardy & Zatkis v. Howes, 639 So.2d 329 (Ct. App. La. 1994) (suit against firm that, in litigation between husband and wife, had characterized patent as being “worthless” in light of harm accruing to husband in later patent litigation); Dorsey & Whitney LP v. Grossman, 749 N.W.2d 409 (Minn. App. 2008) (recounting fee dispute arising out of patent litigation and discussing related malpractice claim).

1

2

Chapter 1 Introduction

By its nature, some decisions about what to include, or not, were arguably arbitrary. For example, arguably everything is “ethical” because competency is a core obligation that lawyers owe to clients. Decisions had to be made as to where the draw the line, and I tried to use as a boundary the question of whether the issue raised something unique, or at least unusual, because it was patent litigation as opposed to simply complex federal litigation. No doubt there are more topics to be added in future editions.2

2. See also Tomar Electronics, Inc. v. Watkins, 2009 WL 1819994 (D. Ariz. Jan. 28, 2009) (removing case alleging errors in jury instructions in patent case caused adverse judgment); McCubbrey, Bartels & Ward v. D’Amato & Lynch, 2003 WL 21481027 (Ca. App. June 27, 2003) (recounting a Bleak House-like patent litigation).

CHAP T ER

2 Choice of Law in Federal Court Litigation

A. Introduction

4

B. Federal Circuit Choice of Law on Legal Ethical Issues

6

C. Federal Courts Take Different Approaches to Choice of Law on Ethical Issues

7

1. The “National Standards” Approach to Choice of Law on Legal Ethics

7

2. Other Approaches to Choice of Law on Legal Ethics

9

D. Conclusion on Choice of Law

10

E. Subject Matter Jurisdiction Over Malpractice Claims Based Upon Conduct Occurring During Patent Litigation

11

3

4

Chapter 2 Choice of Law in Federal Court Litigation

A. Introduction This chapter addresses the threshold question of how to identify what ethical rules will apply during federal court litigation. By itself, the question of choice of law can be complicated, and it is an inquiry that litigators must undertake with conflicting and sometimes sparse guidance.1 Four sets of ethical rules and the authorities interpreting them can be relevant to determining the ethical, disciplinary, and malpractice issues2 that arise during patent litigation: the Model Code of Professional Responsibility (Model Code)3; the Model Rules of Professional Conduct (Model Rules)4; the disciplinary rules of the state in which the practitioner is also licensed (for example, for practitioners licensed in Washington, D.C., the Washington Rules of Professional Conduct (Washington Rules)5; and to a minimal extent, the code developed by the United States Patent and Trademark Office (PTO), entitled Representation of Others Before the Patent and Trademark Office (PTO Code).6 The Model Code was promulgated by the American Bar Association (ABA) in 1969 and was widely adopted by the states as their disciplinary rules.7 The PTO Code is based upon the Model Code, but it was not adopted by the PTO until 1985.8 Both the Model Code and the PTO Code are allencompassing codes of professional conduct, covering issues ranging from the amount of fees,9 to lawyer advertising,10 to protection of confidential

1. Judith A. McMorrow, The (F)utility of Rules: Regulating Attorney Conduct in Federal Court, S F 13 ALJ-ABA 317 (2000). 2. As explained below, ethical rules are applied by the PTO in disciplinary matters and in deciding disqualification motions, and in some states, ethical rules inform the standard of care applicable in malpractice suits. 3. Model Code of Professional Responsibility () [hereinafter Model code], available at http://www.abanet.org/cpr/mrpc/mcpr.pdf. Note that links to all of the ethics opinions and other rules cited here (as well as every other set on the Web) are available on http://www.legalethics.com or http://www.Hricik.com. 4. Model Rules of Professional Conduct (), available at http://www.abanet.org/cpr/ mrpc/mrpc_home.html [hereinafter Model Rules]. 5. Available at http://www.law.uh.edu/libraries/ethics/RulesofDisciplinaryProcedure/033107. pdf (effective March 31, 2007). 6. PTO Definitions, 37 C.F.R. § 10.1 (2005). 7. “The Model Code was adopted by the [ABA] House of Delegates on August 12, 1969 and subsequently by the vast majority of state and federal jurisdictions.” Annotated Model Rules of Prof. Conduct vii (5th ed. 2003) [hereinafter Ann. Model Rules]. 8. The PTO Code was first proposed in 1984. Practice Before the Patent and Trademark Office, 49 Fed. Reg. 10012–01 (proposed Mar. 16, 1984) (to be codified at pts. 1, 2, and 10). It went through extensive notice and comment periods and was adopted as a final rule on February 6, 1985. Practice Before the Patent and Trademark Office, 50 Fed. Reg. 5158–01 (Feb. 6, 1985). 9. E.g., 37 C.F.R. § 10.36 (2005). 10. E.g., id. § 10.32.

Introduction

information of a client.11 However, the PTO modified the language in the Model Code, so the wording of a particular rule in the PTO Code is not necessarily identical to the wording in the Model Code.12 The ABA promulgated the Model Rules in 1983.13 Most states soon thereafter replaced their versions of the Model Code with their own versions of the Model Rules,14 sometimes making changes to them before adopting them as state disciplinary rules.15 As a result, the wording of a state rule may differ from its Model Rules counterpart, sometimes significantly and occasionally in outcome-determinative ways. Other federal statutes,16 cases applying them,17 internal PTO practice guidelines (principally the Manual of Patent Examining Procedure (MPEP)),18 and cases applying the MPEP19 may also have an impact on litigation matters. Finally, state substantive law—the law of agency, defamation, of fiduciaries, and the like—and state case law may inform either the standard of care or other aspects of a representation that affect liability during patent litigation.20 When a question as to the propriety of lawyer conduct arises during federal court litigation, a lawyer must analyze which ethical rules and whose interpretation of them apply.21 Furthermore, the propriety of some conduct turns on whether a district court must follow the Federal Circuit’s interpretation of the Federal Rules of Civil Procedure or that of the regional circuit in which the district court hearing a patent infringement suit sits. Importantly, when deciding whether a prosecuting litigator may have access to an

11. E.g., id. § 10.57. 12. For a fairly extensive list of the variations among states, see ABA/BNA Lawyers’ Manual on Professional Conduct §§ 01:11–66 (2004). 13. See Ann. Model Rules at viii–ix. 14. Id. at viii. 15. The ABA also made more than 30 amendments to the Model Rules. See Ann. Model Rules, at vii. 16. E.g., 35 U.S.C. § 33 (2005). 17. E.g., Galarowicz v. Comm’r of Patents & Trademarks, 848 F.2d 1245 (Fed. Cir. 1988) (unpublished). 18. The MPEP is the Manual of Patent Examining Procedure and comprises the PTO’s internal guidelines. “While the MPEP does not have the force of law, it is entitled to judicial notice as an official interpretation of statutes or regulations as long as it is not in conflict therewith.” Bristol-Myers Squibb Co. v. Ben Venue Labs., 90 F. Supp. 2d 522, 537 n.7 (D.N.J. 2000). 19. E.g., Molins PLC v. Textron, Inc., 48 F.3d 1172 (Fed. Cir. 1995) (duty of disclosure under MPEP). 20. See, e.g., Monco v. Janus, 583 N.E.2d 575, 581 (Ill. App. 1991) (under state law, a transaction between patent practitioner and client must be “closely scrutinized”). In Chapter 5, we will see that state substantive law can impose liability on lawyers who file suit without proper pre-suit investigation and on those who defame products by inaccurately charging infringement in written publications. 21. See Judith A. McMorrow, The (F)utility of Rules: Regulating Attorney Conduct in Federal Court, S F 13 ALJ-ABA 317 (2000).

5

6


opponent’s proprietary information, the issue of which circuit’s interpretation of the rules of procedure matters greatly. Thus, practitioners must also be aware of the body of case law, addressing when an issue is “unique to patent law” and so is governed by Federal Circuit law, and when it is not and governed by regional circuit law. The fact that the rules differ in wording is important because federal courts hearing patent infringement suits rely upon decisions interpreting the Model Code and Model Rules as well as state versions of the Model Rules in deciding ethical matters even though these rules are worded differently. In addition, tribunals have frequently given differing interpretations even to identically worded rules.22 Nonetheless, the following sections show that all of these ethical rules and decisions interpreting them can bear on matters arising during patent prosecution and litigation.

B. Federal Circuit Choice of Law on Legal Ethical Issues Patent cases must be appealed to the Federal Circuit,23 but Federal Circuit law does not apply to all issues in patent cases. Regional circuit law applies to “procedural” issues, but Federal Circuit law applies to “patent” issues.24 More specifically, the Federal Circuit applies regional circuit law to procedural matters “that are not unique to patent issues,”25 but it applies its own law to procedural matters that “are related to patent issues.”26 The division between issues “unique to patent law” and those that are not can be critical. In its latest pronouncements, the Federal Circuit stated that a procedural issue is subject to Federal Circuit law if it (1) “pertain[s] to” the substance of a patent right, (2) “bear[s] an essential relationship to matters committed to [the Federal Circuit’s] exclusive control by statute,”

22. Most notorious is the variation that courts have given to the scope of whether and if so which current and former employees are “represented by counsel” in terms of Model Rule 4.2. See generally Messing, Rudavsky & Weliky, P.C. v. President & Fellows of Harvard Coll., 764 N.E.2d 825 (Mass. 2002) (discussing the numerous interpretations of this rule). 23. 28 U.S.C. § 1295(a)(1) (2005); see Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 62 USPQ2d 1801 (2002). 24. See Midwest Indus., Inc. v. Karavan Trailers, Inc., 175 F.3d 1356, 1360, 50 U.S.P.Q.2d 1672 (Fed. Cir. 1999). 25. Panduit Corp. v. All States Plastic Mfg. Co., 744 F.2d 1564, 1574–75, 223 U.S.P.Q. 465 (Fed. Cir. 1984). 26. Id. at 1575 n.14.

Federal Courts Take Different Approaches to Choice of Law on Ethical Issues 7

or (3) “clearly implicate[s] the jurisprudential responsibilities of [the Federal Circuit] in a field within its exclusive jurisdiction.”27 The Federal Circuit has so far held that ethical issues are not unique to patent law and has applied the law of the proper regional circuit.28 Accordingly, for instance, a lawyer litigating a case in Texas must consult the approach of the Fifth Circuit, while a litigator in federal court in New York consults the law of the Second Circuit, and so on. While a complete canvas of the varying approaches of federal courts to the issue of choice of law can form the basis of its own book, a brief description of two circuits illustrates the range.

C. Federal Courts Take Different Approaches to Choice of Law on Ethical Issues 1. The “National Standards” Approach to Choice of Law on Legal Ethics Several circuits and district courts follow a “federal law” or “national standards” approach to choice of law in ethical matters. The leading court is the Fifth Circuit. The Fifth Circuit has held that even federal district courts that specifically adopt state disciplinary rules cannot be bound by them; instead, federal law governs “whether and how” the rules are applied.29 In adopting this approach, the Fifth Circuit rejected the reasoning of the district court in Red Eagle Resources Corp. v. Baker Hughes30 that “[a]doption of a local rule specifying a particular code of professional responsibility provides clear guidance to counsel practicing before the Court.” Instead, the Fifth Circuit held that the “district court clearly erred in holding that its local rules, and thus the Texas rules, which [the court] adopted, are the ‘sole’ authority governing a motion to disqualify.”31 The Fifth Circuit held that even the Model Code is merely “useful . . . but . . . not controlling.”32

27. Bose Corp. v. JBL, Inc., 274 F.3d 1354, 1360, 61 U.S.P.Q.2d 1216 (Fed. Cir. 2001). 28. Sun Studs, Inc. v. Applied Theory Assocs., Inc., 772 F.2d 1557, 1566, 227 U.S.P.Q. 81 (Fed. Cir. 1985). 29. In re American Airlines, Inc., 972 F.2d 605, 610 (5th Cir. 1992); see also Resolution Trust Corp. v. Bright, 6 F.3d 336, 341 (5th Cir. 1993). Even though the Model Code has been “superseded” by the Model Rules, in federal court, in several circuits and many district courts, the Model Code is still viable and relevant. See, e.g., In re Dresser Indus., 972 F.2d 540, 544 (5th Cir. 1992). 30. No. H-91-0627, 1992 WL 170614, at *3 (S.D. Tex. Mar. 4, 1992). 31. In re Dresser, 972 F.2d at 543. 32. Id. at 543–44.

8


The Fifth Circuit’s most recent amplification of its approach to determining the ethical standards which govern in federal court occurred in Federal Deposit Insurance. Corp. v. United States Fire Ins. Co.33: The local rules promulgated by the local court itself are the most immediate source of guidance for a district court. Therefore, the [local rules] are not irrelevant to our inquiry. Nonetheless, parties cannot be deprived of the right to counsel of their choice on the basis of local rules alone. Local rules are not the ‘sole’ authority governing motions to disqualify. Motions to disqualify are substantive motions. Therefore, they are decided under federal law. When reviewing the disqualification of an attorney, we must ‘consider the motion governed by the ethical rules announced by the national profession in light of the public interest and the litigant’s rights.’ The norms embodied in the Model Rules and the Model Code are relevant to our inquiry, ‘as the national standards utilized by this circuit in ruling on disqualification motions. Additionally, consideration of the Texas Rules is also necessary because they govern attorneys practicing in Texas generally. . . . 34

Under the Fifth Circuit’s approach, none of these standards controls by itself: “whereas the relevant local and national ethical canons provide a useful guide for adjudicating motions to disqualify, they are not controlling.”35 Federal substantive law controls the conduct of lawyers in federal court, not what any state or voluntary bar association suggests the standard should be. If the various rules do not apply a common standard, the court “must weigh the relative merits of each of the various competing disqualification rules. . . .”36 While cumbersome, the approach of following one set of ethical rules in federal court has been justified on the basis that “slavishly following the different state rules . . . would balkanize litigation.”37 This has some truth to it: on many issues, each state has adopted slightly different approaches to common ethical issues. Thus, in these courts, a patent litigator must analyze, not just the Texas Rules, but the Model Code, the Model Rules, the state rules and, as well,

33. 34. 35. 36.

50 F.3d 1304 (5th Cir. 1995). Id. at 1312, quoting In re American Airlines, Inc., 972 F.2d at 610 (citations omitted). FDIC, 50 F.3d at 1314. Id. See Carbo Ceramics, Inc. v. Norton-Alcoa Proppants, 31 U.S.P.Q.2d 1631 (N.D. Tex. 1994) (“motions to disqualify are determined by applying federal law which may be informed by state and national standards as a federal court in its discretion sees fit to apply.”); Cole v. Avidoso Municipal Schools, 43 F.3d 1373, 1383 (10th Cir. 1994) (adopting In re American Airlines). Courts have extended the Fifth Circuit’s approach, reasoning that “even when a federal court utilizes state ethics rules, it cannot abdicate to the state’s view of what constitutes professional conduct, even in diversity cases.” McCallum v. CSX Transp. Inc., 149 F.R.D. 104, 107 (M.D.N.C. 1993). 37. Rand v. Monsanto, 926 F.2d 596, 600 (7th Cir. 1991).

Federal Courts Take Different Approaches to Choice of Law on Ethical Issues 9

the Restatement of Law Governing Lawyers.38 The lawyer must analyze how each of these “rules” applies to the conduct and how authorities interpreting them have concluded they do and then determine the “national standard” on the issue. We will see various examples of this approach throughout the book.

2. Other Approaches to Choice of Law on Legal Ethics The Ninth Circuit’s position arguably39 stands in stark contrast to the Fifth Circuit’s. The Ninth Circuit reasoned that since “[a]dvance notice is essential to the rule of law [and] since it is desirable that an attorney or client be aware of what actions will not be countenanced,” if the federal district court adopted the California rules in its local rules, they would apply to ethical issues arising in federal court.40 Similarly, other courts have rejected the Fifth Circuit’s approach, reasoning that lawyers must be held only to the rules which they “pledged to follow.”41 There are various other approaches, and again, cataloging them completely is beyond the scope of this book.42 Suffice it to say that choice of law is a critical matter that can be outcome determinative. While it is important to analyze the particular court’s approach to the choice of law issue, it is very difficult when the court has not yet made that decision. Very difficult issues arise when the circuit or district court has not spoken directly to the issue of choice of law. A recent Nebraska patent case illustrates one court’s approach to this question: This court has specifically not incorporated any particular code or ethical rules of professional conduct. Instead, the applicable local rule establishes as a

38. The issue has come up in many patent cases in Texas, where, of course, many patent cases are filed. See, e.g., Biax Corp. v. Fujitsu Computer Sys., Corp., 2007 WL 1466638 (E.D. Tex. May 16, 2007) (applying Fifth Circuit’s approach in context of motion to disqualify in patent infringement case involving former client); Rembrandt Tech., L.P. v. Comcast Corp., 2007 WL 470631 (E.D. Tex. Feb. 8, 2007) (same, but involving current client); Landmark Graphics Corp. v. Seismic Micro Tech., Inc., 2007 WL 735007 (S.D. Tex. Jan. 31, 2007) (same in patent case involving advocate-as-witness disqualification); Grosser-Samuels v. Jaquelin Designs Enterp., Inc., 448 F. Supp. 2d 772 (N.D. Tex. 2006) (same in current client context); Advanced Display Sys., Inc. v. Kent State Univ., 2001 WL 1524433 (N.D. Tex. Nov. 29, 2001) (same in advocate-as-witness and conflict context). 39. There is precedent in the Ninth Circuit for various positions. 40. Paul E. Iancono Structural Eng’r, Inc. v. Humphrey, 722 F.2d 435, 438–39 (9th Cir. 1983) (stating that application of Model Code was also proper in certain instances). See also County of Los Angeles v. Forsyth, 223 F.3d 990, 995 (9th Cir. 2000) (holding “we apply state law in determining matters of disqualification”). 41. In re Potash Antitrust Litig., 1994-1 Trade Cas. ¶ 70,644 n.20 (D. Minn. 1993). 42. See McMorrow, The (F)utility of Rules: Regulating Attorney Conduct in Federal Court, S F 13 ALJ-ABA 317 (2000).

10

Chapter 2 Choice of Law in Federal Court Litigation general rule that an attorney admitted to practice must not engage in “conduct unbecoming of a member of the bar.” The rule permits the court to consult others’ rules or codes of professional conduct if it would be helpful in resolving issues before it. In this case I have utilized the American Bar Association Annotated Model Rules of Professional Conduct, because K & E is a “national law firm,” and because the model rules inform the court on generally applicable standards in concurrent representation issues. The question, however, is to be determined based on federal law.43

Thus, research into the court’s approach to choice of law is required.

D. Conclusion on Choice of Law Federal court choice of law is a complex matter. Because courts often disagree on ethical obligations and do so even when interpreting identically worded disciplinary rules, lawyers must be sure to consult the approach taken by the regional circuit to determine whether and to what extent state law plays a role in determining ethical issues that arise during patent litigation. The propriety of particular conduct can often hinge upon the determination of which rules apply. In addition, courts often rely upon applicable ethical rules in determining the standard of care.44 For that reason, lawyers must

43. Bd. of Regents of the Univ. of Neb. v. BASF Corp., 2006 WL 2385363 (D. Neb. Aug. 17, 2006) (citations omitted) (citing State of Arkansas v. Dean Foods Products Co., Inc., 605 F.2d 380, 383 (8th Cir.1979), overruled on other grounds, In Re Multi-Piece Rim Products Liability Litigation, 612 F.2d 377 (8th Cir.1980)). 44. Some courts hold that applicable ethical rules are admissible as evidence of the standard of care under some circumstances; see, e.g., Two Thirty Nine Joint Venture v. Joe, 60 S.W.3d 896 (Tex. Ct. App. 2001), rev’d on other grounds, 145 S.W.3d 150 (Tex. 2004), while others hold they are inadmissible, see, e.g., Hizey v. Carpenter, 830 P.2d 646 (Wash. 1992). See generally Stephen E. Kalish, How to Encourage Lawyers to Be Ethical: Do Not Use the Ethics Codes as a Basis for Regular Law Decisions, 13 Geo. J. Legal Ethics 649 (2000); Douglas L. Christian & Michael Christian, Twice Bitten: Violations of Ethical Rules As Evidence of Legal Malpractice, 28 The Brief 62 (1999); Gary A. Munneke & Anthony E. Davis, The Standard of Care in Legal Malpractice: Do the Model Rules of Professional Conduct Define It?, 22 J. Legal Prof. 33, 33 (1997/1998); David J. Fish, The Use of the Illinois Rules of Professional Conduct to establish the standard of care in attorney malpractice litigation: An illogical practice, 23 S. Ill. U. L.J. 65 (1998); note, The Evidentiary Use of the Ethics Codes in Legal Malpractice: Erasing a Double Standard, 109 Harv. L. Rev. 1102, 1118 (1996); James I. Sullivan, Impact of Ethical Rules and Other Quasi-Standards on Standard of Care, 61 Def. Couns. J. 100, 101 (1994) (“Analysis of the legal malpractice standard of care frequently requires consideration of the potential impact of ethical rules.”); Teresa Schafer Sullivan, & Thomas H. Blaske, Legal Ethics and Legal Malpractice: A Beauty and a Beast in Search of Each Other, 74 Mich. B.J. 150 (1995); Laura Callaway Hart et al., From Offense to Defense: Defending Legal Malpractice Claims, 45 S.C. L. Rev. 771, 776 (1994).

Subject Matter Jurisdiction Over Malpractice 11

consider whether and to what extent each of the following bears on their conduct: (a) state ethics rules; (b) state substantive law (fiduciary duty, agency, and so on); (c) whether the Federal Circuit or regional circuits have jurisdiction over the issue; (d) “federal” ethical standards, however formulated by the regional circuit; and (e) the appropriate circuit’s law interpreting the Federal Rules of Civil Procedure.

E. Subject Matter Jurisdiction Over Malpractice Claims Based Upon Conduct Occurring During Patent Litigation Although technically not a choice of law issue, it is relevant here to note that the Federal Circuit has held that malpractice cases based upon errors in patent prosecution or litigation may create subject-matter jurisdiction in federal court based upon the so-called “substantial federal question” doctrine.45 Lower courts have generally followed the Federal Circuit’s approach.46 In many instances, as a result, not only do federal courts have subject-matter jurisdiction over patent litigation, they will also have subject-matter jurisdiction over state law malpractice claims that arise out of either negligence during patent prosecution or litigation.

45. Immunocept LLC v. Fulbright & Jaworski, LLP, 504 F.3d 1281, 1285 (Fed. Cir. 2007); Air Measurement Techs., Inc., v. Akin Gump Straus Hauer & Feld, LLP, 504 F.3d 1262, 1272 (Fed. Cir. 2007). But cf. Singh v. Duane Morris LLP, 538 F.3d 334 (5th Cir. 2008) (finding no federal subject-matter jurisdiction over claim arising out of trademark litigation). See generally, Michael Ena, Jurisdictional Issues in the Adjudication of Patent Law Malpractice Cases in Light of Recent Federal Circuit Decisions, 19 Fordham L. Rev. 219 (2008). 46. See, e.g., Harness, Dickey & Pierce, PLC v. Powerhouse Marks, LLC, 2008 WL 4457782 (E. D. Mich. Sept. 29, 2008) (subject-matter jurisdiction over both litigation and prosecution related malpractice claims); Berndt v. Greenwhich Ins. Co., 2008 U.S. Dist. LEXIS 98079 (W.D. Wis. Dec. 2, 2008) (court held it had subject-matter jurisdiction over malpractice claim against patent litigators who had previously defended the malpractice plaintiff in an infringement case because success on claim required proof that patents were invalid); LaBelle v. McGonagle, 2008 WL 3842998 (D. Mass. Aug. 15, 2008) (subject-matter jurisdiction over prosecution malpractice); Byrne v. Wood, Herron & Evans, LLP, 2008 WL 3833699 (E.D. Ky. Aug. 13, 2008) (denying remand of malpractice claim arising out of patent litigation).


CHAP T ER

3 Conflicts of Interest

A. Introduction

15

B. Conflicts Created by Communications with Prospective Clients

15

C. Assuming an Attorney-Client Relationship Formed, Who Is, or Was, the Client?

18

1. Inventors

22

a. The Law

22

2. Business Entities

26

a. The Law

26

3. Employees and Officers of the Entity Generally Are Not Clients

27

4. Affiliated Entities Are Generally Not Clients

28

5. Successor Corporations to Former Clients

33

6. Assignees of a Patent the Firm Obtained for a Current or Former Client

35

D. Current Client Conflicts

36

1. Helping Out Behind the Scenes

37

2. Parallel Patent Litigation

38

3. Increasing a Client’s Risk of Liability Even Without Parallel Litigation

40

4. Adverse Discovery of a Current Client

42

5. Positional Conflicts of Interest

43

6. Implications and Recommendations

44

E. Former Client Conflicts

45

1. Is the Representation Over?

45

2. The Protections Afforded to Former Clients

48

a. The Substantial Relationship Test

48

b. Possession of Client Confidences

53

c. Challenging or Interpreting the Firm’s Prior Work

54

d. The Appearance of Impropriety

55

13

14

Chapter 3 Conflicts of Interest 3. Special Issues Concerning Transferring Lawyers a. Private Practice Migration

55 55

4. Impact on a Firm of Hiring Lawyers

56

5. Impact on a Firm of Departure of Lawyers

60

a. Former Government Officials F. Impact of Disqualification G. Consent to Conflicts

61 61 62

1. Contemporaneous Consent to Conflicts

64

2. Prospective Consent

66

3. Post-Wrong Waivers of Malpractice Claims

69

H. Other Justifications for Denial of Disqualification

70

1. Prejudice or Taint and Balance of Hardships

70

2. Waiver by Delay in Seeking Disqualification

70

3. The Hot Potato Doctrine and the “Thrust Upon” Exception

71

4. Improper Uses of Disqualification Motions and Other Factors

75

Conflicts Created by Communications with Prospective Clients 15

A. Introduction Before a lawyer accepts a representation, she should ensure that doing so will not entail a conflict of interest. This chapter addresses many of the conflicts of interest that can arise in patent litigation. Chapter 11 goes into additional conflicts that can arise when a firm combines patent litigation with other forms of representation, such as prosecution or opinion work. It is important for lawyers to watch both for their own conflicts and those of opposing counsel.1 The need for a lawyer to avoid his own conflicts is obvious, as they can result in disqualification, discipline, malpractice, or simply embarrassment or loss of business. Less obvious may be the need to monitor for opposing counsel conflicts: courts generally hold that many conflicts are waived if not timely raised by the adversely affected client.2 Likewise, sometimes co-counsel’s conflict can be imputed to a firm.3 This chapter analyzes all sides of the equation.

B. Conflicts Created by Communications with Prospective Clients Often, of course, it will be clear that the party moving for disqualification is or was a current or former client: a lawyer who represents an inventor-owner in obtaining a patent obviously has an attorney-client relationship with that

1. In addition, a firm may need to be wary of co-counsel’s conflicts or conflicts affecting joint defendants. For reasons why, see the section in this chapter discussing the impact of a conflict of interest. 2. See, e.g., In re Metoprolol Succinate Patent Litig., 2005 WL 1661509 (E.D. Mo. 2005) (finding waiver due to delay); Buckley v. Airshield Corp., 908 F. Supp. 299 (D. Md. 1995) (no waiver under facts presented). Some courts, such as the Fifth Circuit, hold that certain objections cannot be waived by the client, but instead are matters for the court to resolve. See David Hricik & Jae Ellis, Disparities in Legal Ethics Standards Between State and Federal Judicial Systems: An Analysis and a Critique, 13 Geo. J. Legal Ethics 577 (2000). If a lawyer concludes that his firm or opposing counsel faces a conflict of interest, questions such as waiver, imputation of the conflict, and other matters arise. See Decora Inc. v. DW Wallcovering, Inc., 901 F. Supp. 161 (S.D.N.Y. 1995) (dispute over court’s receipt of in camera submission during disqualification proceeding), mand. denied, 1996 WL 17457 (Fed. Cir. Jan. 3, 1996); Flint Hills Scientific, LLC v. Nikitin, 2002 WL 975881 (D. Kan. March 21, 2002) (same, and analyzing scope of privilege waiver); see also Flint Hills Scientific, LLC v. Davidchack, 2001 WL 1718276 (D. Kan. 2001) (analyzing scope of privilege waiver in disqualification matter). Some of them are discussed in this book in generalities, but, unfortunately, often the law on particular ethical issues varies among the courts, and the application of the law to the facts tends to be highly fact-driven. 3. See Freeman v. Chicago Musical Instrument Co., 689 F.2d 715 (7th Cir. 1982).

16

Chapter 3 Conflicts of Interest

individual. But obligations of confidentiality that can give rise to disqualification of an entire law firm can arise from less than a full-blown attorney-client relationship. Even a preliminary consultation a between lawyer and a prospective client that does not lead to formation of an attorney-client relationship can, nonetheless, result in disqualification of an entire firm.4 The basis is an implied duty of loyalty and confidentiality or an implied attorney-client relationship.5 In this regard, in states that have adopted Model Rule 1.18, that rule will guide courts in disqualification matters. States that have adopted Rule 1.18 provide: (a) A person who discusses with a lawyer the possibility of forming a client-lawyer relationship with respect to a matter is a prospective client. (b) Even when no client-lawyer relationship ensues, a lawyer who has had discussions with a prospective client shall not use or reveal information learned in the consultation, except as Rule 1.9 would permit with respect to information of a former client. (c) A lawyer subject to paragraph (b) shall not represent a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if the lawyer received information from the prospective client that could be significantly harmful to that person in the matter, except as provided in paragraph (d). If a lawyer is

4. See generally, Am. B. Ass’n. Formal Eth. Op. 90-358 (Sept. 13, 1990); Susan Martyn, Accidental Clients, 33 Hofstra L. Rev. 913, 921–29 (2005); Bridget Hoy, Watch What You Say: Avoiding the Accidental Attorney-Client Relationship, 93 Ill. B.J. 22, 24–25 (2005); Kenneth D. Agran, The Treacherous Path to the Diamond-studded Tiara: Ethical Dilemmas in Legal Beauty Contests, Note, 9 Geo. J. Legal Ethics 1307 (1996). 5. See Kearns v. Fred Lavery Porsche Audi Co., 745 F.2d 600, 603 (Fed. Cir. 1984) (in patent infringement case, disqualifying firm due to contact with individual even though he knew firm represented other party because individual thought consent or waiver was possible); DCA Food Indus., Inc. v. Tasty Foods Inc., 626 F. Supp. 54, 58–60 (W.D. Wis.1985) (applying Seventh Circuit law to patent infringement case to determine whether movant had submitted confidential information with reasonable belief that lawyer was acting as his attorney, who shared impressions of strengths and weaknesses of litigation position). For cases outside the patent context, see Lovell v. Winchester, 941 S.W.2d 466, 467–69 (Ky. 1997) (private initial consultation with informal discussion of claims and some type of value judgment obligated attorney to decline representation of opponent); Bays v. Theran, 418 Mass. 685, 639 N.E.2d 720, 722–24 (Mass. 1994) (respecting potential client’s belief that consultation was confidential, when attorney shared basic legal considerations based on plaintiff ’s background summary); Burton v. Burton, 139 A.D.2d 554, 555, 527 N.Y.S.2d 53 (N.Y. App. 1988) (accepting reasonable inference that potential client revealed “confidential or strategically valuable information” during initial consultation to preclude attorney from representing adversary); Taylor v. Sheldon, 172 Ohio St. 118, 173 N.E.2d 892, 895 (Ohio 1961) (“[C]ommunications made by a person to an attorney with the view of retaining the attorney to act on his behalf constitute privileged communications. It might well be said that a tentative attorney-client relationship exists during such period.”).

Conflicts Created by Communications with Prospective Clients 17

disqualified from representation under this paragraph, no lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in such a matter, except as provided in paragraph (d). (d) When the lawyer has received disqualifying information as defined in paragraph (c), representation is permissible if: (1) both the affected client and the prospective client have given informed consent, confirmed in writing, or; (2) the lawyer who received the information took reasonable measures to avoid exposure to more disqualifying information than was reasonably necessary to determine whether to represent the prospective client; and (i) the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; and (ii) written notice is promptly given to the prospective client. For example, in a recent patent case, two lawyers in the Reston, Virginia office of the Finnegan Henderson firm met with representatives of Ambu, a corporation concerned that a party would be infringing a soon-to-be issued patent. During a process of interviewing potential counsel for the infringement suit, Ambu representatives met with the Finnegan Henderson lawyers for two hours and discussed claim interpretation and other issues. Ambu hired other counsel, and Finnegan Henderson was retained by the defendant after Ambu filed its infringement suit.6 The district court held that, even though Ambu did not retain Finnegan Henderson and thus did not form an attorney-client relationship, the preliminary consultation was sufficient to form a relationship able to support disqualification of the firm: “It is well established that a lawyer’s fiduciary obligations exist ‘even in the earliest stages of the relationship,’ including ‘preliminary consultations by a prospective client with a view to retention of the lawyer, although actual employment does not result.’”7 Simply saying “hello” is not enough to support implying an attorney-client relationship, however. Instead, the party moving for disqualification must show that the meeting went beyond “initial or peripheral contacts”8 or the “bare preliminaries of the representation.”9 While the amount of time is one factor, it is not dispositive. Indeed, even “the briefest conversation between a

6. 7. 8. 9.

Laryngeal Mask Co. Ltd v. Ambu A/S, 2008 WL 558561 (S.D. Cal. Feb. 25, 2008). Id., quoting Dept. of Corps v. SpeeDee Oil Change Sys., Inc., 980 P.2d 371 (Cal. 1999). SpeeDee, 980 P.2d 371. Trone v. Smith, 621 F.2d 994, 1000 (9th Cir. 1980).

18 Chapter 3 Conflicts of Interest

lawyer and a client can result in the disclosure of confidences.”10 However, in this context, some courts are more willing to permit “Chinese walls” to be available to prevent imputed disqualification.11 One as yet unsettled issue in some jurisdictions is whether an e-mail from a prospective client, sent unilaterally to the lawyer after the sender viewed the law firm’s Web page, can result in disqualification.12 For the most part, the trend is to hold that a lawyer does not owe an obligation of confidentiality to a person who unilaterally e-mails confidential information to a lawyer, at least where the lawyer has not implicitly invited the communication.13 To guard against misunderstanding, if not disqualification or unnecessary expense, firms should put in place warnings that effectively advise prospective clients that information will not be held in confidence.14 Where an initial consultation has occurred sufficient to invoke protection of the putative client, generally the firm is disqualified if the matter in which it is against its putative client is at least “substantially related” to the matter discussed in the initial consultation: the prospective client who discloses confidential information to a firm in a good faith effort to retain the firm is often treated as a “former client,” in other words.15 However, in some instances, the firm may be able to avoid at least firm-wide imputation of the conflict. If the federal court follows Model Rule 1.18, for example, imputation may be avoided by screening or other measures.

C. Assuming an Attorney-Client Relationship Formed, Who Is, or Was, the Client? Client identity is important for various reasons. Most pertinent here, as a general matter,16 only a current or former client has standing to move to

10. Novo Terapeutisk Lab. v. Baxer Travenol Labs., 607 F.2d 186, 195 (7th Cir. 1979) (en banc). 11. E.g., In re Scantibodies Clinical Lab., Inc., 2002 WL 1334522 (Fed. Cir. May 8, 2002) (applying Ninth Circuit law to deny writ of mandamus to overturn denial of motion to disqualify based upon initial consultation); B.F. Goodrich Co. v. Formosa Plastics Corp., 638 F. Supp. 1050 (S.D. Tex. 1986) (firm not disqualified due to initial consultation). 12. See David Hricik & Chase Edward Scott, Avoiding Conflicts from Client Emails, 11 No. 3. J. Internet L. 1 (Sept. 2007). 13. See David Hricik & Chase Scott, Avoiding Conflicts of Interest from Client E-mails, 11 No. 3 J. Internet L. 1 (Sept. 2007). 14. Id. 15. See id. 16. Nonclient standing to move to disqualify can arise in various contexts. However, and as “a general rule, courts do not disqualify an attorney on the grounds of conflict of interest unless the former client moves for disqualification”; the few “narrow exceptions” to this general rule include cases where “the unethical change of sides [is] manifest and glaring,” thereby

Assuming an Attorney-Client Relationship Formed, Who Is, or Was, the Client? 19

disqualify a lawyer.17 Thus, if a lawyer never represented a particular entity, it cannot prevent the lawyer from acting adversely to it. 18 In patent litigation, lawyers engage in conduct that can be argued to create an implied, or express, attorney-client relationship.19 Care needs to be given to ensuring that misunderstandings about the lawyer’s role do not arise, if for no other reason than to avoid legitimate confusion and cost to the lawyer or his actual clients.20 There are also three common issues concerning client identity which seems to be oft-litigated.21 The first is created by the fact that the Patent Act generally requires patent applications to be filed in the name of the inventor, not the owner or assignee.

17.

18.

19.

20.

21.

“confront[ing] the court with a plain duty to act.” In re Yarn Processing Patent Validity Litig., 530 F.2d 83 (5th Cir. 1976). See, e.g., Concat LP v. Unilever, PLC, 350 F. Supp.2d 796 (N.D. Cal. 2004) (applying exception in case of close corporation in patent suit). See, e.g., Netratings, Inc. v. NPD Group, Inc., 2003 WL 23112305 (D. Del. Dec. 11, 2003) (denying motion to disqualify because movant failed to prove prior attorney-client relationship between it and opposing counsel); Clemens v. McNamee, 2008 WL 1969315 (S.D. Tex. May 6, 2008) (discussing rule and exceptions). See also M.J Woods, Inc. v. Conopco, Inc., 271 F. Supp. 2d 576 (S.D.N.Y. 2003) (affirming arbitration award against party who brought claim against lawyers who represented opposing party to earlier patent litigation). See Kaempe v. Myers, 367 F.3d 958, 71 U.S.P.Q.2d 1147 (D.C. Cir. 2004) (affirming dismissal of malpractice claim against law firm based on conversion of patent rights); Parus Holdings, Inc. v. Banner & Witcoff, Ltd., 585 F. Supp. 2d 99 (N.D. Ill. 2008) (court in part denied firm’s motion to dismiss claims that it had used trade secret of one client to favor another client during patent prosecution); We’re Talkin’ Mardi Grass, LLC v. Davis, 192 F.Supp. 2d 635 (E.D. La. 2002) (analyzing malpractice claim based upon failure to advise corporation of need to have inventor assign his rights); Am. Stock Exchange, LLC v. Mopex, Inc., 230 F. Supp. 2d 333, 52 U.S.P.Q.2d 1385 (S.D.N.Y. 2002) (analyzing claim for constructive trust over patents based on misuse of trade secrets); Bausch & Lomb Inc. v. Alcon Labs., Inc., 64 F. Supp. 2d 233 (W.D.N.Y. 1999) (analyzing claim of indefiniteness and counterclaims of misappropriation of trade secrets, unfair competition, and constructive trust); see generally, Hackett v. Village Court Assocs., 602 F. Supp. 856, 858 (E.D. Wis. 1985) (limited partners could not bring a malpractice claim against partnership’s lawyers); Rose v. Summers, Compton, Wells & Hamburg P.C., 887 S.W.2d 683 (Mo. Ct. App. 1994) (lawyer for limited partnership owes no duty to individual partners upon which they may sue for malpractice); Morin v. Trupin, 711 F. Supp. 97, 103–04 (S.D.N.Y. 1989) (lawyer for partnership cannot be sued by its limited partners). See FMC Corp. v. Guthery, 2009 U.S. Dist. LEXIS 14609 (D. N.J. Feb. 25, 2009) (finding movant did not have reasonable belief that lawyer had represented him in connection with deposition in earlier suit since, among other things, deposition notice stated lawyer was representing another party, not him). In Metamorfyx, LLC v. Belkin Components, 2002 WL 1308633 (N.D. Ill. June 14, 2002), the movant for disqualification worked for a lawyer at the firm targeted by the motion to disqualify, and essentially argued that an implied attorney-client relationship had arisen through casual contact with a lawyer at the firm. State law would control whether an attorney-client relationship exists or existed. See also Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337, 1344 (Fed. Cir. 2004) (concluding in another context that “a special rule affecting attorney-client relationships in patent cases is not warranted”).


Thus, where an employee invents subject matter that is subject to an obligation of assignment to the employee’s corporate employer, the fact that the employee must be involved in prosecution can create the potential for ambiguity. Second, even if the practitioner avoids ambiguity as to whether or not she represents only the corporate employer, ambiguity can still exist as to whether she represents only the corporate employer or affiliated entities (such as parents, subsidiaries, and the like). Finally, patents can be assigned, and so a lawyer may represent a client in obtaining a patent, and yet the patent could be asserted against the lawyer’s client by a subsequent assignee: does the assignee have standing to move to disqualify? The following sections analyze these three issues in detail. A brief word about other client identity and related issues is warranted, however. First, lawyers can be disqualified if during litigation they present a person for deposition. For example, in one recent case, the lawyer presented a patent agent who had prosecuted a patent for his deposition. When, in that litigation, the patent was found invalid, the same firm sued the patent agent and his firm for malpractice. The Federal Circuit affirmed disqualification of the firm since it had represented the patent agent in a substantially related (indeed, the same) matter.22 Second, obligations of confidentiality can arise from duties that are created separately from the attorney-client relationship, such as when a firm conducts due diligence on a third party on behalf of a client. Under some circumstances, exposure to confidential information of a third party can preclude the firm from being adverse to the third party, even when that third party was clearly not a client.23

22. See Touchcom, Inc. v. Bereskin & Parr, 2008 WL 4889148 (Fed. Cir. Oct. 6, 2008) (affirming motion to disqualify firm that had presented patent agent at his deposition in earlier infringement litigation from being adverse to him in subsequent malpractice suit, even though in prior suit firm had also represented his employer). 23. A related issue arose in Strausbourger Pearson Tulcin Wolff, Inc. v. Wiz Tech., Inc., 82 Cal. Rptr.2d 326 (Cal. App. 1999), one of a series of cases involving the question of whether a law firm that receives confidential information from a corporation while acting on behalf of a third party can be disqualified from being adverse to that corporation in later litigation. Only a very few courts have addressed this issue, and their approaches have not been uniform. In Strasbourger, the Stroock firm represented Strasbourger, an investment banking firm, in its capacity as underwriter for Wiz’s public offering. Among other things, Stroock prepared the registration statement, the prospectus ,and other filings, and did due diligence on Wiz. To perform these and other tasks, Stroocks’ lawyers repeatedly met with Wiz personnel, who disclosed information to Stroock as requested. Wiz, as part of the underwriting agreement, agreed to pay Stroock’s fee. Stroock performed blue sky work for Wiz as part of the arrangement. A short time later, Wiz retained Coopers & Lybrand as auditors. Stroock was also Coopers’ counsel. Wiz disclosed certain information to Coopers concerning an SEC investigation. Eventually, Coopers resigned as Wiz’s auditors. Strasbourger thereafter sued Wiz for breaching the underwriting agreement. Strasbourger alleged that Wiz was selling its shares on its own, among other things. In the suit, Strasbourger was represented by Stroock. Wiz then moved to disqualify Stroock. The district court granted


Similarly, under some circumstances, participation by a firm in a joint defense agreement can preclude the firm from becoming adverse, not to just its former client, but to other participants in the joint defense (or prosecution,

the motion to disqualify, finding both that Stroock had represented Wiz and that it should be disqualified for having received Wiz’s confidential information. Strasbourger appealed. On appeal, the California appellate court reversed. The court concluded that Stroock had not represented Wiz because of the precise language of the underwriting agreement at issue. In reaching its conclusion, it distinguished two other decisions that have addressed this or similar fact patterns, stating: Any inference [that Stroock represented Wiz] to the contrary is rebutted by the habit and custom of parties in stock underwriting transactions. The company traditionally pays for the blue sky work done by the underwriter’s counsel. A savvy company involved in a stock offering would not consider the underwriter’s counsel to be its attorney simply because it performed blue sky work for the transaction. Wiz asserts that International Tele-Marine v. Malone & Associates, (D. Colo.1994) 845 F. Supp. 1427 compels a contrary conclusion. The case involved a stock offering with an underwriting agreement under which the underwriter’s counsel was to perform functions similar to those Stroock performed, and the company was to pay the underwriter’s counsel for its blue sky work. The company and the underwriter’s counsel entered into another agreement, however. That agreement was consistent with the underwriting agreement in some respects but also referred to “withdrawal as counsel for the company.” The court found that language could be construed as creating an attorney-client relationship and denied summary judgment. Nothing in International Tele-Marine mandates a finding the evidence here was sufficient to establish an attorney-client relationship, particularly in the absence of any express representation by Stroock. Indeed, the International Tele-Marine court noted the mere performance of blue sky work in an offering does not create an attorney-client relationship between the underwriter’s counsel and the issuing company. Wiz also relies heavily on Jack Eckerd Corp. v. Dart Group Corp. (D. Del. 1985) 621 F. Supp. 725. In Eckerd, Dart wanted to obtain shares in another company, but wanted to avoid the restrictions inherent in being labeled an ‘investment company’ under the Investment Company Act of 1940. It hired First Boston Corporation, an investment banking firm, to advise it. First Boston obtained the services of Fried, Frank, Harris, Shriver & Jacobson (Fried, Frank) in connection with the work. Fried, Frank received permission from Dart’s regular outside counsel to confer with Dart. One of Fried, Frank’s attorneys obtained information from Dart and prepared a complex memorandum discussing the issue. By agreement with First Boston, Dart paid Fried Frank’s fee. When Jack Eckerd Corporation sued Dart later on a substantially related matter, Dart sought to have Fried, Frank disqualified as Eckerd’s counsel. The district court granted the motion, finding there had been at least an implied attorney-client relationship between Fried, Frank and Dart. Although the fact situations of Eckerd and this case are similar, the distinctions mandate a different result. No agreement, like the one here, designated Fried, Frank as First Boston’s counsel. To the contrary, First Boston was required to obtain Dart’s approval of the counsel First Boston obtained for the work. Indeed, the district court in Eckerd found First Boston acted as Dart’s agent in obtaining Fried, Frank. And, unlike the blue sky work here, which inured to Strasbourger’s benefit, the memorandum Fried, Frank prepared affected only Dart’s interests.


for that matter) arrangement.24 Thus, in some circumstances, nonclients with whom the lawyer shared a confidential relationship may have standing to move to disqualify. Lawyers participating in joint prosecution or defense arrangements should, as a consequence, clearly address the issue. One option may be to agree that no lawyer who personally and substantially represents a member to the joint defense arrangement is disqualified from being adverse to other members of the joint defense arrangement or that no lawyer is. Some courts have approved language that accomplishes these results.25

1. Inventors a. The Law Often, practitioners prosecute applications where an inventor is employed and is subject to assign of all inventions to a corporate employer. However, under PTO regulations and the 1952 Act, a “patent must be applied for in the name of the actual inventor or inventors.”26 Corporations cannot be “inventors.”27 Hence, the patent must be prosecuted in the name of the inventor. A practitioner must obtain authority from the inventor to do so.

24.

25. 26.

27.

82 Cal. Rptr.2d at 330 (citations and brackets omitted). The court then rejected Wiz’s other evidence of an attorney-client relationship—including the fact that Stroock had “advised” Wiz of certain legal needs and had made various decisions on its behalf. 82 Cal. Rptr.2d at 331. Finally, the court rejected the argument that Stroock should be disqualified by reason of Wiz’s disclosure of confidential information to Coopers, since Coopers had then passed that information along to Stroock in its capacity as Coopers’ counsel. After noting that “Wiz’s argument on this point is not entirely clear,” 82 Cal. Rptr.2d at 332, the court then rejected Wiz’s reliance on a case that held that disqualification was proper where a nonlawyer had received information while employed as a paralegal. Wiz argued that “the disqualified firm never had an attorney-client relationship with the opposing party and argue[d] for the same result.” 82 Cal. Rptr.2d at 333. The court held that since the information came from Stroock’s client, Coopers, it could not serve as the basis for a motion to disqualify. 82 Cal. Rptr.2d at 334. See In re Gabapentin Patent Litig., 407 F. Supp. 2d 607 (D. N.J. 2005) (finding attorney for one party to joint defense arrangement had implied attorney-client relationship with other members); Essex Chem. Corp. v. Hartford Accident & Indem., 993 F. Supp. 241 (D.N.J. 1998) (same); Wilson P. Abraham Constr. Co. v. Armco Steel Corp., 559 F.2d 250 (5th Cir. 1977). See also DCA Food Indus., Inc. v. Tasty Foods, Inc., 626 F. Supp. 54 (W.D. Wis. 1985) (analyzing whether lawyer who represented employee at his deposition in prior patent infringement case had attorney-client relationship with employer as a result). See U.S. v. Stepney, 246 F. Supp. 2d 1069 (N.D. Cal., Feb. 11, 2003). 37 C.F.R. § 1.41(a); see 35 U.S.C. § 111 (“application for patent shall be made, or authorized to be made, by the inventor . . .”); Comtech, Inc. v. Reuter, 1986 WL 6829 (E.D.N.Y. March 18, 1986) (explaining need for inventor to sign; denying motion to disqualify). Beech Aircraft Corp. v. EDO Corp., 990 F.2d 1237, 1247 (Fed. Cir. 1993).


This creates potentially awkward circumstances during prosecution that can affect litigation.28 Companies generally require assignments by employee-inventors of any invention to the corporation. The PTO requires that practitioners get a Declaration from the inventors at the time that an application is filed or soon thereafter.29 While only a Declaration by the inventors is required, the Declaration is frequently filed as a joint Declaration & Power of Attorney.30 Given the general approach of obtaining the Combined Declaration & Power of Attorney from the inventor, it is perhaps understandable why some inventors operate under the false belief that they, too, were also clients of the practitioner retained by the corporate employer. After all, the employeeinventor will likely have met with or communicated with the practitioner and will have perhaps signed a document-styled “power of attorney.” It is also understandable why these facts can give rise to strategic behavior, such as where in a dispute between inventor and assignee, the inventor’s attorney either seeks to disqualify the assignee’s counsel or attempts to assert a malpractice claim against the assignee’s lawyer, claiming that assignee’s counsel also represented the inventor. Thus, patent litigators must be familiar with the client identity principles that apply during prosecution. As a general rule, courts are properly recognizing that actions which a practitioner takes pursuant to a power of attorney granted by an inventor, subject to an absolute obligation31 of assignment, are not necessarily made during an attorney-client relationship.32 That holding reflects several key points. First, a lawyer does not have to have a power of attorney to act as a lawyer. Likewise, powers of attorney can authorize nonlawyers to act (i.e., patent agents). Thus, a power of attorney does not create an attorney-client

28. During litigation, lawyers should be careful when they represent inventors or other corporate employees during depositions; it may be that doing so will preclude the firm from becoming adverse to the employee in a dispute with the employer. If the lawyer at the time he is presenting the employee for deposition is aware that the employer may have a claim against the employee, then the lawyer likely cannot represent the employee without full disclosure and informed consent. 29. There are of course times when the inventor refuses to sign or cannot be found. In these circumstances, the requirements under 37 C.F.R. § 1.47 are followed. 30. See 37 C.F.R. §§ 1.31 and 1.32. 31. “If doubts exist as to the extent of the inventor’s obligation to assign the invention, the practitioner may need to advise the inventor to seek separate counsel to resolve this question even before work begins on the patent application.” Tarek N. Fahmi, Who’s Your Client? Issues Involved in Representing Inventors and Their Assignees in Patent Matters, 824 PLI/Pat 737, 746 (March 2005). See Dunbar v. Baylor College of Med., 984 S.W.2d 338 (Tex. Ct. App. 1998) (suit against lawyers and others for not disclosing that she was obligated to assign inventions to corporate employer). 32. Nebraska v. Flores, 622 N.W.2d 632 (Neb. 2001) (recognizing that attorney’s actions taken pursuant to a power of attorney were not done in an attorney-client relationship).


relationship.33 Consistent with this, courts generally recognize “the mere existence of a power of attorney may be insufficient to establish a confidential or fiduciary relationship.”34 In a case involving an absolute obligation of assignment, the Federal Circuit held that the execution by an employee of a power of attorney for the benefit of his employer did not create an express or implied attorney-client relationship: “In the present case there was not even a ‘technical’ attorneyclient relationship between Chernoff and Hunter, because of the prior agreement that all rights in the invention belonged to Sun Studs.”35 Thus, where the corporate employer previously had the inventor-employee assign all inventions to the corporation, generally the assignee, not the employee, is deemed to be the only client.36 Several courts in both the disqualification and malpractice context have held that a practitioner who prosecuted a patent did not have an attorney-client relationship with the inventor sufficient to disqualify or impose liability.37

33. See Restatement (Second) Agency § 14H (1974) (“One who holds a power created in the form of an agency authority, but given for the benefit of the power holder or of a third person, is not an agent of the one creating the power.”). See also id. § 387 cmt. a. 34. Transamerica Ins. Fin. Corp. v. Pennmed Consultants, Inc., 1996 WL 605131, *5 (Oct. 18, 1996). See In re State Street Assocs., L.P., B.R. 2005 WL 887151 (Bankr. N.D.N.Y. March 23, 2005) (“A POA does not necessarily create an attorney-client relationship, however”). 35. Sun Studs, Inc. v. Applied Theory Assocs., Inc., 772 F.2d 1557, 1568 (Fed. Cir. 1985) (emphasis added). 36. Synergy Tech & Design Inc. v. Terry, 2007 U.S. Dist. LEXIS 34463 (N.D. Cal. May 2, 2007) (“The listing of Mr. Terry as the individual inventor was made necessary by the rules governing the filing of patents and does not alter the parties’ previous discussions and the memorialization of those discussion in the law firm’s engagement letter with its corporate client.”); Ultimax Cement Mfg. Corp. v. CTS Cement Mfg. Corp., 2007 US Dist. Lexis 44096 (May 7, 2007) (denying motion to disqualify by inventor even though assignment was not executed because power of attorney was granted to benefit assignee, not inventor); In re Ducane Gas Grills, Inc., 320 B.R. 312, 320–21 (Bankr. D. S.C. 2004); University of W. Va. Bd. of Trustees v. Vanvoorhies, 33 F. Supp. 2d 519 (N.D. W.Va. 1998); Telectronics Proprietary, Ltd. v. Medtronic, Inc., 836 F.2d 1332, 1337 (Fed. Cir. 1988); Sun Studs, Inc. v. Applied Theory Assocs., Inc., 772 F.2d 1557, 1568 (Fed. Cir. 1985); Kersey v. Dennison Mfg. Co., 1992 WL 71390, *3 (D. Mass. 1992). See generally, Comtech, Inc. v. Reuter, 1986 WL 6829 (E.D.N.Y. March 18, 1986) (holding that inventor could not have disclosed confidences to lawyer representing his employer). See also Shannon v. Gordon, 670 N.Y.S.2d 887 (N.Y. Sup. Ct. 1998) (affirming dismissal of suit brought by inventor against attorney who had allegedly forged assignment because there was no attorney-client relationship between inventor and attorney). See generally, Gregory E. Upchurch, Intellectual Property Litigation Guide: Patents and Trade Secrets, § 12:8 (“the mere fact that a person executes a power of attorney does not ipso facto create an attorney-client relationship.”); Lisa B. Kole, Ethics in Technology Protection, 573 PLI/Pat 71 (Oct. 1999); Tarek N. Fahmi, Who’s Your Client? Issues Involved in Representing Inventors and their Assignees in Patent Matters, 824 PLI/Pat 737 (2005). 37. E.g., Emory Univ. v. Nova Biogenetics, Inc., 2006 WL 2708635 (N.D. Ga. Sept. 20, 2006) (“a firm prosecuting a patent application on behalf of a company does not form an


However, these general principles, absolute obligations, and basic fact patterns can give rise to fact questions and ambiguity. For example, at least one court has held in the context of a motion to disqualify that the practitioner had represented the inventor and not just the assignee.38 The muddy waters of real life often lead to circumstances that can present a fact question as to who the lawyer represented, particularly in jurisdictions that give weight to the subjective belief of the person claiming to have been a client. Foremost, ambiguity or a fact question requiring trial by jury may arise if the practitioner in the course of prosecuting the application met with the inventor and casually referred to the inventor in correspondence or billing records as a “client.” This type of evidence—common in malpractice cases— has special importance in those jurisdictions that take into account the subjective belief of the person who claims to have been a client.39 In one case, the court found that the practitioner had represented inventors in prosecuting patents, reasoning: In this case, appellee expressly appointed Brooks and Kushman to advance its position in the Patent and Trademark Office. To further that effort, appellee supplied Brooks and Kushman with confidential information. Furthermore, appellee agreed to pay one half of the attorney fees. Finally, Brooks and Kushman were aware that one half of the fees would be indirectly paid by appellee and that appellee would directly benefit from the successful prosecution of the patent application. From these circumstances, the trial court could properly infer that appellee reasonably believed that Brooks and Kushman owed duties to appellee to the same extent that the firm owed duties to appellant and that the confidential information supplied to Brooks and Kushman would not subsequently be used to degrade its interests. Therefore, the factual finding that

attorney-client relationship with any individual inventor required to assign his rights to the company”); Univ. of W. Va. Bd. of Trustees v. Vanvoorhies, 33 F.Supp. 2d 519 (N.D. W. Va. 1998) (same); Shannon v. Gordon, 670 N.Y.S.2d 887 (N.Y. App. Div. 1998) (affirming dismissal of complaint brought by inventor against assignee’s attorney for malpractice). 38. Henry Filters, Inc. v. Peabody Barnes, Inc., 611 N.E.2d 873, 876 (Ct. App. Ohio 1992) (holding in disqualification context that an attorney-client relationship existed between attorneys and inventor because among other things he had supplied attorneys with confidential information and paid half of the fees). See also Grosser-Samuels v. Jaquelin Designs Enterp., Inc., 448 F. Supp. 2d 772 (N.D. Tex. 2006) (lawyers who had power of attorney in trademark registration deemed, without analysis, to be representing that party as a current client). See also Hooper v. Steelplank Corp., 215 U.S.P.Q.2d 329 (E.D. Mich. 1981) (holding that lawyer who handled prosecution for small closely held company represented the companies as well as their principals); cf. Civco Med. Instruments Co. v. Proteck Med. Products, Inc., 2004 WL 1326474 (S.D. Iowa June 4, 2004) (limiting and criticizing Hooper). 39. Even where a party needs to establish objective evidence of an agreement by the lawyer to represent the person as a client, evidence such as this may defeat a lawyer’s motion for summary judgment.

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Chapter 3 Conflicts of Interest Brooks and Kushman had an attorney-client relationship with appellee is supported by substantial evidence and will not be disturbed.40

In another case, a company’s outside counsel met with a corporate officer, who asked counsel to file an application and specifically stated that it should not be assigned to the corporation.41 Because there was clearly an attorneyclient relationship between the inventor and counsel, the court disqualified counsel from representing the company in a subsequent dispute between the company and the officer over title to the patent.42 In addition to these fact patterns, under some state’s laws, a person generally need not establish that he was represented but instead show only that the lawyer knew or should have known that the person thought he was represented or, arguably, that the lawyer was negligent in not recognizing the person’s misapprehension and correcting it.43 Jurisdictions relying on subjective beliefs are particularly troublesome for attorneys who prosecute patents, since they will most frequently interact with an inventor who may not understand his role in patent prosecution as representing only the assignee’s interests.

2. Business Entities a. The Law Patent suits are often brought by and against corporations and other entities. While it is clear that a lawyer who represents a corporation generally cannot be adverse to that particular corporation, difficult questions arise when the lawyer is adverse to a related company, not the corporate client itself. It is of course not uncommon for corporate entities to have various affiliates and subsidiaries.44 It is clear that a lawyer who represents an entity as a matter of law does represent the entity.45 Put the other way, a lawyer-client relationship between a lawyer and a corporate client is between the lawyer and the entity. This is the so-called “entity approach,” which assumes that the “entity” has its own

40. Henry Filters, Inc. v. Peabody Barnes, Inc., 611 N.E.2d 873, 877–78 (Ct. App. Ohio 1992). 41. National Texture Corp. v. Hymes, 282 N.W.2d 890 (Minn. 1979). 42. Id. See also Pain Prevention Lab., Inc. v. Electronic Waveform Labs, Inc., 657 F. Supp. 1486 (N.D. Ill. 1987). 43. See Parker v. Carnahan, 772 S.W.2d 151, 157 (Tex. App.—Texarkana 1989, writ denied) (lawyer has duty to warn person he does not represent him “where the circumstances lead the party to believe that the attorney is representing him”). 44. Plant Genetic Sys., N.V. v. Ciba Seeds, 933 F. Supp. 514 (M.D. N.C. 1996) (denying motion to disqualify patent lawyers who had represented certain entities of corporation). 45. Am. B. Ass’n Model R. 1.13(a) (“A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents.”).


fictional, separate existence apart from the constituents who make decisions on the entity’s behalf. The entity approach has been applied to numerous business entity forms, including partnerships, corporations, associations, joint ventures, limited partnerships, and other entities.46 But the statement that a lawyer who represents an entity represents the entity does not answer the question of whether the lawyer can be disqualified from being adverse to entities related to the entity-client, such as its subsidiaries, affiliates, or parent corporations. As to that question, in the absence of agreement on the issue between lawyer and client,47 the courts disagree.

3. Employees and Officers of the Entity Generally Are Not Clients As a general principle, while a lawyer is free to agree to represent an employee of a corporation, by merely agreeing to represent the company a lawyer does

46. See, e.g., Carlson v. Fredrikson & Byron, P.A., 475 N.W.2d 882, 890 (Minn. Ct. App. 1991) (representation of business does not amount to representation of business’ owner); McCarthy v. John T. Henderson Inc., 587 A.2d 280, 283 (N.J. Super. Ct. App. Div. 1991) (lawyer who represented close corporation could sue another close corporation with same officers and directors since representation of corporation was not representation of individuals); Security Bank v. Klicker, 418 N.W.2d 27, 31 (Ct. App. Wis. 1987) (“a limited partnership has been held to be an entity ‘similar’ to a corporation for purposes of determining attorneyclient relationships.”); Marshall v. Quinn-L Equities, Inc., 704 F. Supp. 1384, 1395 (N.D. Tex. 1988) (if lawyers “represented the limited partnerships . . . this does not magically transform them into counsel” for the limited partners); Meyerland Community Improvement Ass’n v. Temple, 700 S.W.2d 263, 267–68 (Tex. App.—Houston [1st Dist.] 1985, writ ref ’d n.r.e.) (no attorney-client relationship between association’s lawyers and members of association); Fortson v. Winstead, McGuire, Secrest & Minick, 961 F.2d 469, 472–74 (4th Cir. 1992) (no duty owed by counsel for partnership to limited partners). See also Hopper v. Frank, 16 F.3d 92, 95–96 (5th Cir. 1994) (lawyer hired by individual partners to assist in sale of limited partnership assets had attorney-client relationship only with partnership, and so individuals who retained lawyer could not sue for malpractice) (Mississippi law); Quintel Corp. v. Citibank, 589 F. Supp. 1235 (S.D.N.Y. 1984) (lawyer for general partner has no fiduciary duty to limited partners); Rice v. Strunk, 670 N.E.2d 1280, 1289 (Ind. 1996) (lawyer for partnership has no attorney-client relationship with anyone except the managing general partner); Am. Bar Ass’n Comm. On Ethics and Prof. Resp., Formal Op. 91- 361 (1991) (lawyer for partnership represents entity, rather than individual partners); Md. St. B. Ass’n, Inc., Comm. On Ethics, Op. 95-54 (1995) (lawyer of limited partnership may continue representing limited partnership even where general partner is removed and contests removal because lawyer represents partnership, not general partner); Va. St. B. Standing Comm. On Legal Ethics, Op. 1610 (1994) (lawyer representing joint venture of three entities may ethically sue one of those entities on behalf of another client). 47. See Avocent Redmond Corp. v. Rose Electronics, 491 F. Supp. 2d 1000 (W. D. Wash. 2007) (in analyzing motion to disqualify in patent case, lawyer and client agreed that lawyer represented client “and its affiliates”).


not ipso facto represent some or all of its employees. While the lawyer may need to clarify to an employee that the lawyer does not represent his interests, and while inadvertent relationships can be formed,48 the general rule is, without more, a lawyer for a corporation does not represent its employees, officers, or directors: he represents the entity. 49 However, particularly where a close corporation is involved, confusion over client identity can become more acute, and a court more likely to imply an attorney-client relationship between counsel for the corporation and one or more of its agents. Under some circumstances, a court may be more willing to find that representation of the inventor constituted representation of the corporate assignee, as well as the inventor individually.50

4. Affiliated Entities Are Generally Not Clients In most but not all jurisdictions, a lawyer who represents an entity does not, without more, represent its constituents. The clear majority rule is that the mere fact that a lawyer represents an entity does not ipso facto mean that he represents any of the entity’s constituents.51 But the majority of courts, though rejecting a “one big client” approach, also reject an “only the ‘real’ client counts” approach. Neither bright-line approach dominates. As a result, a practitioner unclear in the engagement letter about client identity runs the risk that a court will later deem him to have represented more than just the entity that signed the engagement letter. For example, if a lawyer represents Company A in prosecuting an application, and his firm is asked to represent another client against Company A’s parent corporation, the firm may be disqualified because by representing Company A, the lawyer will be deemed to represent Company A’s parents, affiliates, or other entities. There is no uniform approach among the jurisdictions, and often there are different approaches reflected within a jurisdiction, a client identity

48. Model Rule 1.13 (f) (“In dealing with an organization’s directors, officers, employees, members, shareholders or other constituents, a lawyer shall explain the identity of the client when the lawyer knows or reasonably should know that the organization’s interests are adverse to those of the constituents with whom the lawyer is dealing.”). 49. See Model Rule 1.13(a) (“A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents.”). 50. See Hooper v. Steelplank Corp., 215 U.S.P.Q. 829, 831 (E.D. Mich. 1981). See also Fortner v. Int’l Diving & Consulting Serv., Inc., 1996 WL 50807 (E.D. La. Feb. 8, 1996). 51. See Honeywell Int’l, Inc. v. Phillips Lumileds, 2009 WL 256831 (E.D. Tex. Jan. 6, 2009) (patent case); Pennwalt Corp. v. Plough, Inc., 85 F.R.D. 264 (D. Del. 1980) (Lanham Act case).


in this context.52 Some authorities hold that a lawyer always represents affiliated entities;53 others hold that he never does; and, perhaps a majority, apply a vague, multifactored balancing test. A 1995 American Bar Association opinion54 illustrates the scope of disagreement on the proper way to address “corporate family” conflicts, and the disagreements expressed in that opinion persists in the law today. In that ABA opinion, a majority concluded that representation of one entity does not automatically disqualify the lawyer from being adverse to related entities. Two members of the committee vigorously dissented, which is unusual in an ABA opinion. They took the brightline position that this would always be a conflict that required consent. A third member also dissented and espoused a third approach. The newer version of the ABA Model rules in a comment adopts a middle ground, highly indeterminate weighing test that rejects both the “all” or “nothing” approach to corporate family conflicts: A lawyer who represents a corporation or other organization does not, by virtue of that representation, necessarily represent any constituent or affiliated organization, such as a parent or subsidiary. Thus, the lawyer for an organization is not barred from accepting representation adverse to an affiliate in an unrelated matter, unless the circumstances are such that the affiliate should also be considered a client of the lawyer, there is an understanding between the lawyer and the organizational client that the lawyer will avoid representation adverse to the client’s affiliates, or the lawyer’s obligations to either the organizational client or the new client are likely to limit materially the lawyer’s representation of the other client.55

Thus, the ABA in the comment simply refers to “circumstances” that indicate the affiliate “should be considered a client,” or there is an “understanding,” or the adverse matter will materially limit the lawyer’s ability to be

52. See Eastman Kodak Co. v. Sony Corp., 2004 WL 2984297 (W.D.N.Y. Dec. 27, 2004) (“Determining the existence and nature of conflicts in the context of ‘corporate families’ and the appropriate remedy upon the finding of a conflict can be a difficult and complex undertaking.”); Installation Software Tech. Inc., v. Wise Solutions, Inc., 2004 WL 524829, *3 (N.D. Ill. March 5, 2004) (“mergers and acquisitions have created a unique genre of conflicts”). 53. Ostensibly, this was the conclusion of the court in University of Rochester v. G.D. Searle & Co., 2000 WL 1922271 (W.D.N.Y. Dec. 11, 2000) (in patent case, stating that “there is ample case law which supports the proposition that, for conflict purposes, representation of a subsidiary corporation is equivalent to representation of the parent, and vice-versa”) (collecting cases). 54. ABA in Op. 95-390 (1995). 55. Id.

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adverse to the affiliated entity. This has led to at least three separate “tests” for loyalty under these circumstances:56 1. Is the affiliate de facto a current client of the law firm?57 2. Is there a significant risk that the law firm’s representation of either the current corporate client or the adverse client in the adverse representation will be materially limited by the law firm’s responsibilities to the other client? 3. During its representation of the corporate client, did the law firm learn confidences and secrets from either the client or its affiliate that would be so material to the adverse representation as to preclude the law firm from proceeding?58

Although the New York City Bar Association’s opinion is typical, courts and bar associations that apply these various alternative tests do not do so uniformly.59 Although uniformity is sorely lacking in this area, uniformly the authorities recognize that one important factor in determining whether a separate legal entity should nonetheless be treated as part of the “real” client is whether the same in-house lawyer may be or already is involved in both the matter on which the firm is representing the client and the matter in which the firm will be adverse to the related entity. Another factor that often is identified as important is whether the lawyer in representing the corporate

56. http://www.nycbar.org/Publications/reports/print_report.php?rid’671&searchterm’Corporatefamily%20conflicts;%20duty%20of%20loyalty;%20duty%20to%20preserve%20confidences %20and%20secrets. 57. This turns on various factors: • Does the current corporate client have an objectively reasonable belief that its affiliate has de facto become a current client of the law firm, either because of the law firm’s relationship and dealings with the affiliate during the representation, or because of significant overlaps in personnel and infrastructure between the corporate client and its affiliate? • Do the current corporate client and its affiliate share the same directors, officers, management, or other personnel? • Do the current corporate client and its affiliate share the same offices? • Do the current corporate client and its affiliate share the same legal department (or report to the same general counsel)? • Do the current corporate client and its affiliate share a substantial number of corporate services? • Is there substantial integration in infrastructure between the current corporate client and its affiliate, such as shared computer networks, e-mail, Intranet, interoffice mail, health benefit plans, letterhead and business cards, etc.? Id. 58. Id. 59. See, e.g., Ill. St. B. Ass’n Advisory Op. 95-15 (May 17, 1996); N.Y. County Lawyers’ Ass’n Comm. on Prof. Eth. 684 (June 1991); Cal. St. B. Standing Comm. on Prof. Resp. Op. 1989-113 (1989).


client may have obtained information about the entity to which the firm is adverse.60 Recent patent cases illustrate the indeterminate and subject nature of this inquiry. Foremost, in Honeywell,61 the Eastern District of Texas disqualified a firm from being adverse to an affiliate of a current client. The court reasoned: The first issue is whether Philips Lumileds is a current client of PHJW. Here, the issue centers on whether a corporate affiliation creates a concurrent clientlawyer relationship. The issue of whether a corporate affiliation “ipso facto creates a client-lawyer relationship with every member of a corporate family when one of its members is formally represented by the lawyer” is not addressed in the ABA Model Rules themselves. ABA Comm. on Ethics and Prof ’l Responsibility, Formal Op. 95-390, at 3 (1995). While the fact of corporate affiliation, without more, does not make all of the corporate affiliates a client of a specific lawyer or firm, Model Rule 1.7, however, generally bars a lawyer from accepting representation adverse to an affiliate of a corporate client when “circumstances are such that the affiliate should also be considered a client.” MODEL RULES OF PROF’L CONDUCT R. 1.7, at comment 34; see Formal Op. 95-390. Indeed, whether such a relationship exists almost always depends on an analysis of the specific facts involved. Formal Op. 95-390, at 5. In the parent/subsidiary context, some of the key facts applicable to the analysis include (1) whether the corporation and the subsidiary share a common legal department and management duties, (2) whether the lawyer’s work for a parent corporation benefits a subsidiary, or (3) whether the lawyer’s work for the parent involves collecting confidential information. Id. at 5-6. Analysis of similar factors in this case indicated that Philips Lumileds should be treated as PHJW’s current client.

60. Faughn v. Perez, 145 Cal. App. 4th 592 (Cal. App. 2006) (noting split in California law on the approach to this issue); Discotrade Ltd. v. Wyeth-Ayerst Int’l. Inc., 200 F. Supp. 2d 355 (S.D.N.Y. 2002) (weighing); Colorpix Systems of America v. Broan Mfg. Co., 131 F. Supp. 2d 1499 (D. Conn. 2001) (in applying the weighing approach, the court disqualified the firm, emphasizing that the same in-house lawyer represented both the client-entity and the adverse entity); Gen-Cor, LLC v. Buckeye Corrugated, Inc., 111 F. Supp. 2d 1049 (S.D. Ind. 2000); Baxter Diagnostics, Inc. v. AVL Scientific Corp., 798 F. Supp. 612 (C.D. Cal. 1992) (weighing in patent litigation; disqualifying firm); Teradyne, Inc. v. Hewlett-Packard Co., 1991 WL 239940 (N.D. Cal. June 6, 1991) (weighing in patent suit; disqualifying firm); Md. State Bar Op. 87-19 (weighing); Mass. Bar Op. 3 (1992) (weighing); Pa. Op. 2001-03 (2001) (allowing firm that represents one subsidiary to be adverse to another). 61. Honeywell Int’l, Inc. v. Phillips Lumileds, 2009 WL 256831 (E.D. Tex. Jan. 6, 2009). See Eastman Kodak Co. v. Sony Corp., 2004 WL 2984297 (W.D. N.Y. Dec. 27, 2004) (finding parent and subsidiary should be treated as one entity for purposes of conflicts of interest in patent case); Agilent Tech., Inc. v. Micromuse, Inc., 2004 WL 2346152 (S.D.N.Y. Oct. 19, 2004) (finding with little analysis that firm’s former representation of wholly owned sub “counted” for purposes of disqualifying firm from representing patentee against parent corporation, but denying the motion to disqualify on other grounds).

32 Chapter 3 Conflicts of Interest Here, it is undisputed that (1) Philips Lumileds and the other Philips affiliates share a common legal department, Philips IP & S; (2) Philips and Philips Lumileds share common management, computer networks, and marketing designs; and (3) PHJW currently represents PENAC. As indicated above, Philips IP & S directs intellectual property litigation and licensing strategy for Philips subsidiaries worldwide, including Philips Lumileds. Additionally, while it is generally disputed, PHJW has had broad access to confidential information of various Philips entities, based on its representations of various Philips entities. In fact, Lawrence R. Sidman, a partner at PHJW, stated in his declaration that he had received confidential information concerning PENAC, Philips Consumer Electronics, Philips Healthcare, and Philips IP & S. See Sidman Decl., Ex. 1 to Honeywell’s Resp. Although it is not clear whether PHJW’s representation of PENAC will directly benefit Philips Lumileds, this fact is not dispositive. In addition, some courts have pointed to manifestations to the public as a factor relevant to disqualification. In Eastman Kodak Co. v. Sony Corp., the Western District of New York disqualified counsel after noting, among other factors, that an affiliate’s website “confirms the close family relationship of the two companies, as well as their integrated business operations and interests.” Eastman Kodak Co. v. Sony Corp., 2004 WL 2984297 (W.D.N.Y.2004). Here, both the Philips Lumileds’ website and marketing materials feature the Philips logo. The PENAC website also features the Philips logo. Considering all the facts, the Court is persuaded that Philips Lumileds should be considered a current client of PHJW.62

Judge Robinson engaged in a similarly amorphous analysis in Boston Scientific Corp. v. Johnson & Johnson, Inc.63 In that case, she permitted the Howrey firm to continue a representation adverse to an affiliate of a current client, reasoning in part: Moreover, Howrey’s failure to comply with Model Rule 1.7 is, to a significant degree, due to Wyeth’s conduct. Among other things, Wyeth’s naming conventions, its use of the same in-house attorneys on matters involving different subsidiaries without consistently identifying to Howrey which entity those in-house attorneys were representing, and the willingness of it and its subsidiaries to receive billing invoices for matters on which they were not directly engaged with Howrey, together created significant confusion for Howrey as to which entity or entities it was representing, confusion which is evident from Howrey’s time sheets, its mailing of billing invoices, and the averments of its attorneys in Europe. Wyeth should not now benefit from such obfuscatory conduct. Accordingly, the court declines to disqualify Howrey from the instant suits and instead orders Howrey to maintain its ethical wall.64

62. Id. See also White Mach. Corp. v. Whiting Corp., 567 F.2d 713 (7th Cir. 1977) (disqualifying counsel from representing patentee in infringement suit because for 20 years he had represented the owner of 20 percent of defendant’s shares). 63. __ F. Supp. 2d __, 2009 WL 2600902 (D. Del. Aug. 25, 2009). 64. Id.


Finally, even if the engagement letter specifies that the “real” client is the practitioner’s only client, nothing precludes a practitioner who is representing an entity from also—intentionally or otherwise—forming an express or implied attorney-client relationship with one or more of the entity’s constituents. The Fifth Circuit’s approach in Hopper v. Frank exemplifies the approach to whether a lawyer who represents an entity also has an attorney-client relationship with its constituents. In that case, the court reasoned that, by itself, representing a partnership did not constitute representation of a constituent representation of one of its partners. Instead, the court must look to “such factors as whether the lawyer affirmatively assumed a duty of representation to the individual partner, whether the partner was separately represented by other counsel when the partnership was created or in connection with its affairs, whether the lawyer had represented an individual partner before undertaking to represent the partnership, and whether there was evidence of reliance by the individual partner on the lawyer as his or her separate counsel, or of the partner’s expectation of personal representation. . . .”65 Of course, in real practice the facts and circumstances in Hopper v. Frank can and often do occur. Failing to clarify up front who is and is not the client thus permits entity-constituents to argue, in hindsight, that they “had been” a client. For example, a lawyer representing a corporation may on a daily basis be in contact with individuals; those individuals (who are oblivious to what the ethical rule may say) may become confused about who the lawyer represents, particularly where the individual is a principal in the corporation or other entity being represented. The propriety of lawyers in patent litigation being adverse to affiliated entities has been exhaustively litigated, but the cases split along the lines noted above. For example, in Baxter Diagnostics, Inc. v. AVL Scientific Corp.,66 the court disqualified a lawyer from being adverse to the parent corporation of a former client.67

5. Successor Corporations to Former Clients There are various means by which third parties can acquire corporations and other entities that a law firm represented. At least outside of the circumstance of assignment of patents, courts reason that whether the third party can claim, for purposes of disqualification or malpractice, that it should be treated like a

65. Hopper, 16 F.3d at 95–96 (quoting ABA Op. 91-361 (1991) (internal quotation marks omitted)). 66. 798 F. Supp. 612 (C.D. Cal. 1992). 67. See also Decora Inc. v. DW Wallcovering, Inc., 899 F. Supp. 132 (S.D.N.Y. 1995) (disqualifying firm because parent corporation, now opposing party, had, while firm had been representing its subsidiary, communicated its trade secrets to the firm).

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former client turns on the particular facts.68 If the third party essentially acquires control of the assets and operations of the former client, it may have standing to move for disqualification or to plead malpractice as a former client. While the mere transfer of some assets does not transfer the attorneyclient relationship, a transfer of all assets has not, by some courts, been required.69 For example, a recent case summarized the law as follows: [T]he analytical focus is on whether control of the predecessor organization passed to the successor organization. The cases agree that a mere transfer of some assets without more does not transfer the attorney-client relationship. Cases also hold that a transfer of the relationship can occur in situations involving the sale of less than all the organization’s assets. The cases generally turn on the particular facts and circumstances of the transfers and relationships between the predecessor and successor organization. Since based on particularized facts, whether the various cases are consistent with each other is not readily discernible. Regardless, the better reasoned rule, and the one that appears to be followed by the majority of recent cases, is the general standard enunciated in Soverain and Tekni-Plex. NWI-I summarized it as follows: In Soverain Software LLC v. Gap, Inc., 340 F.Supp.2d 760, 763 (E.D.Tex.2004), the court found that the mere transfer of some assets does not transfer the attorney-client privilege. However, the court noted that such a “bright-line rule does not apply equally to the myriad ways control of a corporation or a portion of a corporation can change hands. Therefore, the court found the more appropriate rule to be ‘whether the attorney-client relationship transfers to the new owners turns on the practical consequences rather than the formalities of the particular transaction. The Soverain court stated that: If the practical consequences of the transaction result in the transfer of control of the business and the continuation of the business under new management, the authority to assert or waive the attorney-client privilege will follow as well. Because the plaintiff in Soverain not only acquired certain assets but also continued to operate the particular enterprise it purchased, the court found that control of the enterprise, and with it the right to assert the attorney-client privilege, passed to the plaintiff.70

68. Parus Holdings, Inc. v. Banner & Witcoff, Ltd., 585 F. Supp. 2d 995 (N.D. Ill. 2008). The question of whether a successor corporation is a “former client” for purposes of disqualification or malpractice has been held by some courts not to be distinct from the question of whether a successor corporation may claim privilege over communications between its predecessor and former counsel. See id. 69. See Coffin v. Bowater Inc., 2005 WL 5885367 (D. Me. May 13, 2005). 70. Parus Holdings, Inc. v. Banner & Witcoff, Ltd., 2008 WL 4601033 (N.D. Ill. Oct. 9, 2008) (citations omitted).


An interesting example of successor standing arose in a recent patent malpractice case, Greene’s Pressure Treating & Rentals, Inc. v. Fulbright & Jaworski, L.L.P.71 There, Fulbright provided a noninfringement opinion to a corporation. Later, certain assets of that corporation were acquired by a third party. Then the patentee retained Fulbright to sue that third party for infringement. The third party settled the case but then sued Fulbright for breach of fiduciary duty. Fulbright obtained summary judgment because the third party had only acquired certain assets of Fulbright’s former client and so had not succeeded to the attorney-client relationship between Fulbright and its former client. On the other hand, the Northern District of Indiana found that a successor had standing to move to disqualify its predecessor’s former patent counsel.72 The court found that the successor was a “mere continuation” of the former client.73 What remains to be seen is whether courts will follow the following line of cases, which hold that assignment of a patent does not “transfer” the attorney-client relationship with this line of cases. While not in direct conflict, they are in tension with each other.

6. Assignees of a Patent the Firm Obtained for a Current or Former Client A lawyer should obviously be careful about challenging the validity of a patent that the lawyer obtained for a former client. A lawyer who argues, for example, that he failed to provide an adequate written description of an invention could win the invalidity case but prove his own malpractice. But where, for example, validity turns on novelty or nonobviousness and on art that the practitioner was unaware of, the risk of a malpractice claim is lessened. Nonetheless, attacking a patent still owned by the lawyer’s former client would obviously be adverse and also be a substantially related matter.74 Where, however, the former client has assigned the patent to a third party, who was never a client of the lawyer, then the lawyer would not be acting adversely to a former client. That has been the conclusion of the Federal Circuit and the courts that have addressed the issue.75

71. 72. 73. 74.

178 S.W.3d 40 (Tex. App.—Houston [1st Dist.] 2005, no pet.). Monon Corp. v. Wabash Nat’l Corp., 764 F. Supp. 1320 (N.D. Ind. 1991). Id. at 1322. See Abyst Tech., Inc. v. Empak, Inc., 962 F. Supp. 1241 (N.D. Cal. 1997) (firm disqualified from representing accused infringer where two of its current partners had, while at another firm, prosecuted the patents-in-suit). 75. Telectronics Proprietary, Ltd. v. Medtronic, Inc., 836 F.2d 1332, 1336 (Fed. Cir. 1988) (“assignment of a patent does not transfer an attorney-client relationship”). See SMI Indus. Canada Ltd. v. Caelter Indus., Inc., 586 F. Supp. 808, 815 (N.D.N.Y. 1984) (same); Plant Genetic Sys.,

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D. Current Client Conflicts Courts generally hold that, absent unusual circumstances, a lawyer may not be adverse to a current client, even in an unrelated matter.76 Generally, too, this obligation is imputed to all lawyers associated with a firm: if one lawyer is representing a company in a matter, no lawyer may be adverse to that client, even in a matter completely unrelated to the representation of the client. Patent litigation presents a variety of ways for lawyers to act against the interests of clients and in ways prohibited by the ethical rules,77 even when

N.V. v. Ciba Seeds, 933 F. Supp. 514 (M.D. N.C. 1996) (“mere assignment of a patent is not sufficient to establish an attorney-client relationship”); In re Yarn Processing Patent Validity Litig., 530 F.2d 83, 90 (5th Cir. 1976) (same); Civco Med. Instruments Co. v. Protek Med. Prods., Inc., 2004 WL 1326474 (S.D. Iowa June 4, 2004) (attorney represented inventor; patents later assigned; corporation’s argument that in prosecuting the applications that were later assigned the attorney also rejected it was rejected by the court, even in the close corporation context). See also Beghin-Say v. Rasmussen, 212 U.S.P.Q. 614 (Comm’r. Pat. 1980) (no attorney-client relationship between inventor’s attorney and inventor’s assignee, even though the attorney prosecuted the patent after it had been assigned). Cf. Am. Roller Co. v. Budinger, 513 F.2d 982 (3rd Cir. 1975). 76. See Concat LP v. Unilever PLC, 350 F. Supp. 2d 796 (N.D. Cal. 2004) (explaining that prohibition applies strictly, even if matters are totally unrelated); (collecting cases). As a general principle, absent informed consent, adverse concurrent representations are prohibited. Id. Some courts have permitted adverse representations against current clients in circumstances, particularly if the concurrent representation is unrelated and is in a different office from the adverse representation. E.g., Boston Scientific Corp. v. Johnson & Johnson Inc., __ F. Supp. 2d __, 2009 WL 26000902 (D. Del. Aug. 25, 2009); Elonex I.P. Holdings, Ltd. v. Apple Computer, Inc., 142 F. Supp. 2d 579 (D. Del. 2001) (court reasoned that firm could be adverse in a patent infringement to a current client that it represented, as local counsel, in an unrelated patent matter); Kinzenbaw v. Case, LLC, 2004 WL 1146462 (N.D. Iowa May 20, 2004) (denying motion to disqualify based upon various factors, including approaching trial and inadvertence of conflict); Research Corp. Tech. Inc. v. Hewlett-Packard Co., 936 F. Supp. 697 (D. Ariz. 1996) (denying motion to disqualify where representation of adversary had been brief, unrelated, and inadvertent); Parkinson v. Phonex Corp., 857 F. Supp. 1474 (D. Utah 1994) (same); see also In re Dresser Indus., Inc., 972 F.2d 540 (5th Cir. 1992) (in dicta court stated that in exceptional circumstances a lawyer may be adverse to a current client); Lemelson v. Apple Computer Inc., 28 U.S.P.Q.2d 1412 (D. Nev. June 4, 1993) (court weighed interests rather than automatically disqualifying firm, but disqualified firm). Other courts reject an automatic approach and permit the firm to prove that its representation will not be affected by concurrently being adverse to its own client. See University of Rochester v. G.D. Searle & Co., 2000 WL 1922271 (W.D.N.Y. Dec. 11, 2000) (patent case; collecting cases). 77. As a general principle, economic impact alone is insufficient: a lawyer who succeeds in representing one client may allow that client to compete better economically with another client, but that is not adverse. See Model Rule 1.7, cmt. 6 (“[t]here may not be a conflict if the simultaneous representation concerns . . . competing economic interests. . . .”); see generally Shire Labs. Inc. v. Nostrum Pharma., Inc., 2006 WL 2129482 (D. N.J. July 26, 2006) (fact that lawyer’s representation of one client in a patent suit “may be harmful” to another client’s “financial interests” insufficient to constitute adversity).

Current Client Conflicts

the client is not a named party to any infringement suit.78 For example, suppose a firm represents a patentee against a nonclient, but a firm’s client is likely to be sued later for infringing that same patent. While claim preclusion doctrines will not bind the client to any findings made in the first suit, and so as a legal matter the client will not be bound by any findings such as those as to claims scope, for example, as a practical matter an earlier court’s interpretation of a patent may have some impact on a later court’s views. Is that adverse “enough” to be “adverse”? What if the suits are proceeding in parallel? What if they are proceeding in parallel before the same judge? This section addresses adversity in the context of current clients and patent litigation. Some things are pretty simple: representing a patentee against a current client in an infringement suit constitutes an adverse representation. Conduct that does not involve the traditional “across the v” litigation has also been held to be unethical. Indeed, if the cases are any indication, there are few bright lines, and instead, infinite combinations may lead to a finding of adversity. This next section addresses some of those circumstances. We will see that even suits in which a firm represents a patentee against a nonclient can be “adverse” to a client of the firm.

1. Helping Out Behind the Scenes A firm that cannot represent a party opposing a current client in litigation also cannot help some other firm to do the same thing, trying to avoid adversity solely by not making an appearance in court.79 Put the other way, if a firm would be disqualified if it appeared in court, it can’t avoid disqualification by simply acting only out of court. In some ways, a firm that tries to help out “behind the scenes” can be portrayed in even a harsher light than a firm that

However, at least one court has assumed that a firm that knows that its client intends to sue another client breaches its fiduciary duty by not warning the other client. Universal Mfg Co. v. Gardner, Carlton & Douglas, 207 F. Supp. 2d 830 (N.D. Ill. 2002) (dismissing claim because attorneys’ fees incurred in defending suit were not compensable damages). 78. See generally, Michael Lynn, Divining Adversity: A Modified Total Fairness Approach to Current-Client Direct-Adversity Conflicts Arising in Patent Litigation, 36 Am Intell. Prop. L. Q. J. 233 (2008) (discussing issue of current client adversity and proposing multifactor test to measure it). 79. E.F. Hutton & Co. v. Brown, 305 F. Supp. 371, 378–79 (S.D. Tex. 1969) (disqualifying New York firm that had represented employee from assisting Houston firm from litigating against him in substantially related matter). But cf. Touchcom, Inc. v. Bereskin & Parr, 2008 U.S. App. LEXIS 23271 (Fed. Cir. Oct. 6, 2008) (refusing to rule on whether counsel who had not entered an appearance on appeal was disqualified).

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appears in court, since the failure to appear can be characterized as a strategic, cynical decision designed to “hide” the conflict.80 In patent litigation, clearly this case means that if a firm is precluded from acting openly in court—because, for example, the opposing party is a current client of the firm—then the firm cannot avoid the conflict by simply not formally appearing in court. The problem, as we will see, is that adversity can exist even if the opposing party is not a current client of the firm, as next shown.

2. Parallel Patent Litigation Suppose, as it happens, a firm is approached by a patentee with a list of possible infringers. The firm determines, however, that of the, say, five possible targets, one is a client of the firm. As shown earlier, the firm cannot represent the patentee against its client. Nor can it help some other firm in that suit. Suppose the patentee-client retains the firm but only to sue the nonclient defendants. It retains another firm to act separately and file suit against the first firm’s client. Is the first firm, nonetheless, disqualified from representing the patentee against nonclients? Two district courts have addressed this issue in the context of patent litigation.81 Naturally, they split on their answer to the question. In the first case, Enzo Biochem, Inc. v. Applera Corp.,82 the court found no adversity; a month later, the second court in Rembrandt Technologies, LP v. Comcast Corp.,83 did. The cases are fact intensive. The Rembrandt court distinguished Enzo and ordered disqualification, as follows: In Enzo, the Hunton firm represented a client in a patent case against one defendant. The same plaintiff, represented by the Greenberg firm, sued a different defendant. Some of the same patents were asserted in both cases. A client of the Hunton firm, GE, later acquired the defendant being sued in the second case. The Hunton lawyers representing the plaintiff in the first case aided, to a certain extent, the Greenberg lawyers representing the plaintiff in the second case. GE contended that the Hunton firm’s concurrent representation of Enzo in the first case and the GE subsidiary sued by Enzo in the second case amounted to an

80. See Patriot Scientific Corp. v. Moore, 2006 WL 994747 (Fed. Cir. Apr. 12, 2006) (“it does not mater that [the lawyer] was acting as a litigation consultant, rather than [the adverse party’s] attorney”). 81. Another court disqualified a firm in a different and more complicated but related context. Flo-Con Sys., Inc. v. Servsteel, Inc., 759 F. Supp. 456 (N.D. Ind. 1990) (firm could not represent company that acquired patentee in suit against former client or third party). 82. 468 F.Supp. 2d 359 (D. Conn. 2007). The Enzo court in part viewed the matter as a “positional conflict of interest,” an issue discussed below. 83. 2007 WL 470631 (E.D. Tex. Feb. 8, 2007).

Current Client Conflicts impermissible conflict of interest. GE intervened in the first case and moved to disqualify the Hunton firm. The court evaluated the evidence and concluded that GE had not demonstrated a sufficient showing of direct adversity. The court stated that “while the construction of [the plaintiff ’s] patents applicable to the infringement claims brought against two separate accused infringers . . . implicates pretrial Markman overlap, the trials of how those constructions apply to the respective accused products or conduct are wholly separate.” Enzo, 2007 WL 30338 at *7 (emphasis added). As a result, the court refused to disqualify the Hunton firm from representing the plaintiff in the first case. The court agrees with Enzo that the mere possibility of overlapping Markman proceedings is insufficient to show direct adversity, particularly when the trials of how the constructions apply to accused products or conduct varies from defendant to defendant. Here, in contrast to Enzo, F & R is not simply advocating claim construction positions that might, at some later date, adversely impact Time Warner. F & R advocates that the Comcast defendants infringe the patents because the defendants comply with industry standards. In particular, F & R advocates in this case that Comcast infringes because it adheres to the ATSC standard for United States Patent No. 5,43,627 (“the 627 patent”) and DOCSIS for United States Patent Nos.5,852,631, 4,937,819, and 5,719,858 (“the 631, 819, and 858 patents”). The practical significance of Rembrandt’s infringement theory is to indict for patent infringement all major cable companies who follow the industry standards. A finding of infringement and an injunction issued by this court against a cable company for compliance with industry standards would have a significant practical effect on Time Warner. There are additional distinctions between this case and the Enzo decision that lead the court to find the requisite direct adversity. Rembrandt filed its cases in the same district. Its case against Time Warner is pending before the same judge at roughly the same time as this case, but this case was filed first. Although it is true that the claim construction rulings in this case would not be binding on Time Warner, there is a likelihood that the positions taken by F & R in this case could, as a practical matter, prejudice Time Warner in subsequent proceedings. As a result, on these facts, this court reaches a different conclusion from the one in Enzo. F & R’s representation of Rembrandt in this case is directly adverse to Time Warner.84

Thus, a firm may have a conflict of interest even where it is not adverse to a current client, and even if it is not helping a firm to sue a current client, if there is “enough” practical impact to establish direct adversity. In Enzo, there was not enough—the court viewed the firm as merely taking different positions of law before different trial courts, which it viewed as merely a routine matter—but the fact that the patent covered a standard, the litigation was pending before the same judge, and the other facts tipped the scales in Rembrandt.

84. Id.

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3. Increasing a Client’s Risk of Liability Even Without Parallel Litigation Suppose a law firm is representing a client adverse to a nonclient, but in the course of that representation, it may uncover evidence that might lead someone else to sue a client. Is that adverse? Even without parallel litigation, but somewhat similarly, there are circumstances “in which a lawyer’s pursuit of a client’s lawsuit or defense may be at odds with or detrimental to the interests of a person or entity that has not been joined in the litigation but is being represented by the lawyer in a different litigation or transactional matter.”85 Identifying precisely when this sort of indirect adverse representation becomes an ethical violation is “difficult.”86 As we’ll see soon, “difficult” may be a severe understatement, at least in the middle of the infinite spectrum of circumstances that can arise. On one end of the spectrum, there are some relatively easy cases. For example, representing a plaintiff against a defendant who impleads a third-party defendant who is a client is adverse: if the nonclient is liable to the plaintiff, then the impleaded client is liable to the defendant.87 Similarly, adversity can arise short of actual impleading of the client such as when a lawyer in a case against a nonclient will give the nonclient the ability to seek indemnity against a client.88 Another relatively clear case of adversity arose in Board of Regents of the University of Nebraska v. BASF Corp.89 There, Kirkland & Ellis (K&E) had been defending Monsanto in a significant state court breach of contract action for several years when its lawyers were retained by the BASF to defend it in a suit filed by University of Nebraska. The dispute between the University and

85. ABA/BNA Lawyer’s Manual on Professional Conduct 51:111 (2001). 86. Id. 87. Richmond Am. Homes of N. Cal., Inc. v. Air Design, Inc., 2002 Cal. App. Unpub. LEXIS 6948 (Cal. App. July 25, 2002) (finding adversity because procedural rules allow third-party defendants to defend against a third-party complaint by alleging that the defendant had no liability to the plaintiff ); Pressman-Gutman Co., Inc. v. First Union Nat’l Bank, 459 F.3d 383 (E.D. Pa. 2004), on reconsideration, Pressman-Gutman Co., Inc. v. First Union Nat’l Bank, 2004 U.S. Dist. LEXIS 23991 (E.D. Pa. Nov. 30, 2004), mand. denied, Pressman-Gutman Co., Inc. v. First Nat’l. Bank, 459 F.3d 383 (3d Cir. 2006). See also Axcan Scandipharm, Inc. v. Reed Smith, LLP, 2007 Phila. Ct. Com. Pl. LEXIS 78 (March 26, 2007) (suit based on damages caused by firm that violated duty of loyalty and confidentiality and seeking disgorgement of fees). 88. See Snapping Shoals Elec. Membership Corp. v. RLI Ins. Corp.,2006 WL 1877078 (N.D. Ga. July 5, 2006) (firm disqualified from asserting claim against nonclient that would result in a client owing the nonclient indemnity). See also Commonwealth Scientific & Industrial Research Organisation v. Toshiba Am. Info. Sys., Inc., 2008 U.S. App. LEXIS 22114 (Fed. Cir. Oct. 23, 2008) (indemnity obligation from client to accused infringer created adversity, but disqualification denied on other grounds). 89. 2006 WL 2385363 (D. Neb. Aug. 17, 2006).


BASF was over whether BASF had any rights in certain patents; the University contended it did not. K&E did not represent BASF, and thus there appeared to be no conflict. Accordingly, K&E prepared to file a counterclaim that would, among other things, seek to enjoin the university from licensing the technology to anyone else. After the suit was filed, but before BASF answered, the university granted an exclusive license to Monsanto. K&E attorney Mr. Asaff contacted Monsanto’s Mr. Hoerner and, ostensibly at least, obtained his consent to permit K&E to continue to represent BASF even though if BASF won, BASF would own the patent rights and so the license Monsanto had taken would be worthless and, worse, probably indicated infringement. Not surprisingly, the court found the case to be adverse (though the motion to disqualify was denied on other grounds, as will be explained further). The court summarily stated, “there is now a conflict of interest for K&E. . . .”90 On the other end of the spectrum, simply because a victory by a lawyer for a client will allow a current client to compete economically against a client does not mean the lawyer is representing any adverse interests. As a general matter, most states recognize that “adversity” cannot be stretched so far as to include mere economic competition.91 In the middle are those “difficult” cases. Two somewhat famous nonpatent cases illustrate the fact intensive, difficult, and arguably subjective nature of this inquiry. In the first, National Medical Enterprises, Baker Botts was representing a client against a nonclient. A former client, Cronen, alleged that while representing its client, Baker Botts might uncover evidence that might lead to criminal charges being brought against him. The Texas Supreme Court found that Baker Botts was acting adversely to Cronen even though Cronen was not a party to the suit, and there was no litigation planned by anyone against him: Even if Baker & Botts is correct that resolution of the pending case will leave Cronen unscathed, Cronen’s anxiety that his former law firm is now vigorously advancing the same allegations that have swirled around him for so long is certainly understandable. The chances of being struck by lightning are slight, but not slight enough, given the consequences, to risk standing under a tree in a thunderstorm. Cronen is not likely to be struck by lightning in the pending

90. Id. The court also, however, apparently believed that unless the matter adverse to Monsanto was related to the firm’s work for Monsanto, that disqualification was not necessary. Id. That dictum would not likely be followed in most courts. 91. For an interesting case analyzing this principle in a complex patent context, see Shire Labs., Inc. v. Nostrum Pharma., Inc., 2006 WL 2129482 (D. N.J. July 26, 2006) (refusing to disqualify firm even though current representation would have adverse economic impact on a current client). See also Andrew Corp. v. Beverly Mfg. Co., 415 F. Supp. 2d 919 (N.D. Ill. 2006) (holding that firm acted adversely to current client when it gave opinion letter to client about another client’s patent).

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42 Chapter 3 Conflicts of Interest case, even though he is in the midst of a severe thunderstorm, but he is entitled to object to being forced by his former lawyer to stand under a tree while the storm rages on.92

The second, the well-known case of Fund of Funds,93 illustrates this point. In Fund of Funds, Morgan Lewis represented Client A. With Meister as cocounsel, it then represented Client B in a suit against King. At the time the King suit was filed, Morgan Lewis knew that Client A intended to sue Client B. At this time, Morgan Lewis repeatedly advised Meister that it could not “make the case” against Client B and said Morgan Lewis lawyers would not participate in any consideration of wrongdoing by its Client B. Nonetheless, the court held that Morgan Lewis was disqualified because it had violated its duty of loyalty to Client B because the firm had examined documents which touched on Client B’s liability to Client A and had otherwise investigated and assisted in the prosecution of a claim against a current client.94 In light of these cases, adversity can arise even where the firm is doing its best to avoid “making the case” against its client, and even where no impleader has taken place and may even not be contemplated. “Directly adverse” representations can arise in a variety of ways, apart from the circumstance of taking action that will result in liability against a client. For example, current clients have argued that their firms may not argue a “position” that affects their rights.95

4. Adverse Discovery of a Current Client The American Bar Association and several courts and bar associations have concluded that adverse discovery of a client constitutes an “adverse

92. Nat’l Med. Enterp. v. Godbey, 924 S.W.2d 123, 133 (Tex. 1996). 93. Fund of Funds, Ltd. v. Arthur Andersen & Co., 567 F.2d 225 (2d Cir. 1977) (trial counsel disqualified for receiving assistance from law firm which breached its duty of undivided loyalty). 94. Id. 95. See Flying J Inc. v. TA Operating Corp., 2008 WL 648545 (D. Utah March 10, 2008) (denying motion to disqualify, though finding a conflict of interest, where firm could be creating arguments, facts, and positions in litigation against a nonclient that “could be applied” by “third parties” to the client in litigation in which the firm would not be involved). In NHBA Eth. Comm. Formal Op. 1989-90/17 (Aug. 25, 1990), the committee concluded that a firm could not represent a general contractor in pursuing a claim against a lender where doing so would expose its other client, a developer, to a claim by the lender. (Although the opinion is couched in terms of material limitations, the issue could also be viewed as one of adversity.) See also Kirkland & Ellis v. CMI Corp., 1996 WL 559951 (N.D. Ill. Sept. 30, 1996) (dismissing malpractice claim, for lack of proof of causation of damages against firm which allegedly represented companies that would be harmed by adverse judgment against nonclient in patent suit); Kirkland & Ellis v. CMI Corp., 1996 WL 674072 (N.D. Ill. Nov. 19, 1996) (seeking certification to appeal).


representation” that triggers the conflict of interest rules.96 A few courts have extended this concept to former clients.97 The target of the discovery must, however, have been a current or former client.98 The reason this is a conflict to some courts is because the “spectacle of an attorney skewering her own client on the witness stand in the interests of defending another client demeans the integrity of the legal profession and undermines confidence in the attorney-client relationship.”99 However, often courts permit the conflict to be alleviated by permitting separate counsel to conduct the adverse discovery. As the ABA explained: There are possible circumstances . . . where it would be particularly unfair to the litigation client to require it to choose between . . . discovery of an important third party witness, on the one hand, and replacing trial counsel on the other. In such circumstances the desirability of some practical solution to the problem of the lawyer’s (and the lawyer’s colleagues’) conflicting loyalties, and the more fundamental problem of the conflicting interest of the two clients involved is patent. In some instances, a sufficient solution may be to provide for other counsel, also representing litigation counsel, to deal with the client-witness: where local counsel as well as principal counsel are involved in a litigation, the disqualification applying to one of these will not ordinarily affect the other. In other circumstances, a satisfactory solution may be the retention of another lawyer solely for the purpose of examining the principal lawyer’s client.100

Thus, retention of separate counsel to conduct the adverse discovery may obviate the conflict.101

5. Positional Conflicts of Interest A positional conflict of interest is rare because it is narrowly defined. A comment to most state rules explains that ordinarily it is not a conflict for a lawyer

96. See ABA Ethics Op. 92-367 (1992) (discovery against current client is an “adverse representation”); In re Cendant Corp. Sec. Litig., 124 F. Supp. 2d 235, 241 (D. N.J. 2000); Committee on Legal Ethics v. Frame, 433 S.E.2d 579 (W.Va. 1993). 97. See, e.g., Selby v. Revlon Consumer Prods. Corp., 1997 WL 587472 (N.D. Tex. Sept. 17, 1997); Swanson v. Wabash, Inc., 585 F. Supp. 1094, 1097 (N.D. Ill. 1984). 98. Griffin-El v. Beard, 2009 WL 292802 (E.D. Pa. Sept. 8, 2009). 99. Hernandez v. Paicius, 134 Cal. Rptr.2d 756 (Cal. App. 2003). 100. ABA Formal Eth. Op. 92-367 (1992). See In re Motion to Quash Deposition Subpoena to Lance Wagar, 2006 WL 3699544 (N.D.N.Y. 2006); Sykes v. Matter, 316 F. Supp. 2d 630, 633 (M.D. Tenn. 2004); Swanson v. Wabash, Inc., 585 F. Supp. 1094, 1097 (N.D. Ill. 1984) (same with respect to former client); St. B. of Mich. Standing Comm. on Prof. Ethics Op. No. RI-218 (Aug. 16, 1994). 101. See NYC Ass’n. B. Comm. Prof. & Jud. Eth. Formal Op. No. 2001-3 (July 6, 2001) (describing how to properly limit the scope of representation of a client under this and other circumstances).

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to argue one side of a legal question before a district court, and for another lawyer to take the opposite side of that question in another district court.102 Specifically, many states have a comment that provides: Ordinarily a lawyer may take inconsistent legal positions in different tribunals at different times on behalf of different clients. The mere fact that advocating a legal position on behalf of one client might create precedent adverse to the interests of a client represented by the lawyer in an unrelated matter does not create a conflict of interest. A conflict of interest exists, however, if there is a significant risk that a lawyer’s action on behalf of one client will materially limit the lawyer’s effectiveness in representing another client in a different case; for example, when a decision favoring one client will create a precedent likely to seriously weaken the position taken on behalf of the other client. Factors relevant in determining whether the clients need to be advised of the risk include: where the cases are pending, whether the issue is substantive or procedural, the temporal relationship between the matters, the significance of the issue to the immediate and long-term interests of the clients involved and the clients’ reasonable expectations in retaining the lawyer. If there is significant risk of material limitation, then absent informed consent of the affected clients, the lawyer must refuse one of the representations or withdraw from one or both matters.103

Thus, a firm advocating in the Federal Circuit for a proposition that is contrary to the position of a client in a district court in a patent matter must assess these factors to determine whether a “positional conflict” exists.104 As noted before, at least one court has held that arguing for different claim interpretations in different district courts should be viewed as a positional conflict and analyzed as such.105

6. Implications and Recommendations Two principles emerge. First, adversity does not depend upon appearing in court against a client; it can arise even when a firm does not actually appear in a case, and even if the case is not filed against its own client. Second, disqualification often turns, not on the normal bright line that accompanies the prototypical “across the v” conflict but instead on the facts and circumstances of each case. The consequences may not be as clear, however. Whenever a firm knows that its patentee-client contemplates parallel litigation, the firm should analyze whether that litigation could result in either

102. Model Rule 1.7, cmt. 24. 103. Id. 104. For a comprehensive review of positional conflicts of interest, see John S. Dzienkowski, Positional Conflicts of Interest, 71 Tex. L. Rev. 457 (1993). 105. Enzo Biochem, Inc. v. Applera Corp., 468 F. Supp. 2d 359 (D. Conn. 2007).

Former Client Conflicts

adversity under the facts and circumstances or the need to communicate and coordinate with a firm representing the patentee to a degree prohibited by the principle that “helping out behind the scenes” is improper. Either circumstance could be deemed to be unethical and warrant disqualification. Second, firms ought to consider an issue not litigated in any of these cases: the risk that the patentee-client may later claim that the firm’s ability to represent its interests were materially limited by the firm’s representation of the party accused of infringement in the parallel case, the impleader action, or the possible later claim. “You pulled your punches in the suit against the nonclient in order to avoid creating a record that could harm your client,” will be the gist of the allegation.106 Fee forfeiture and other remedies may be available to the patentee if the firm, for example, failed to obtain a broad Markman construction in order to avoid infringement by its other client. The ultimate lesson may be that firms should monitor for conflicts in patent litigation closely. The nature of patent litigation, with sometimes common multiple defendants, Markman rulings, and indemnity obligations, means that care and attention may be the only way to spot the issues.

E. Former Client Conflicts 1. Is the Representation Over? Various circumstances can make it difficult to determine precisely when, if ever, an attorney-client relationship ended. Yet the end of an attorneyclient relationship is extremely significant for purposes of conflicts of interest since a lawyer may be adverse to a former client but just not in certain categories of matters. If the representation has not ended, however, then the “per se” current client rule applies.107 Which rule applies can be outcome determinative.108

106. See Berkeley Ltd. Partnership v. Arnold, White & Durkee, 118 F. Supp. 2d 668 (D. Md. 2000) (counsel allegedly failed to assert infringement claims against third party because it was a client); Kirkland & Ellis v. CMI Corp., 1996 WL 559951 (N.D. Ill. Sept. 30, 1996) (dismissing malpractice claim, for lack of proof of causation of damages against firm which allegedly represented companies that would be harmed by adverse judgment against nonclient in patent suit); see also University of Rochester v. G.D. Searle & Co., Inc., 2000 U.S. Dist. LEXIS 19030 (N.D. N.Y. Dec. 11, 2000) (firm dropped client before suing it; that client then sued firm for doing so). 107. See generally NYC Ass’n. B. Comm. Prof. & Jud. Eth. Formal Op. No. 2001-3 (July 6, 2001) (noting per se rule applicable generally everywhere except Texas). As noted above, it does overstate it to say that firms are always disqualified from being adverse to current clients. 108. See Mindscape, Inc. v. Media Depot, Inc., 973 F. Supp. 1130 (N.D. Cal. 1997) (lawyer was disqualified from unrelated adverse representation because he had not yet corrected mistake on patent by recording proper assignee); Shearing v. Allergan, Inc., 1994 WL 382450

45


Of course, if the lawyer and client expressly recognize the relationship has ended, such as by a letter from the lawyer to the client so noting, then the question is easy to answer.109 On the other end of the spectrum, if the lawyer is currently representing the client in a matter, then the representation is ongoing.110 In between are the difficult cases, including those where a client has some history of consistently retaining the same firm to represent it in matters, but, at the time the adverse representation arises, the firm is not representing the party in a matter.111 As a general principle, courts apply the same concepts that determine whether an attorney-client relationship has ended as they do in determining whether one was ever formed.112 Thus, if mutual intent to form an attorney-client relationship is required, so too it is required to determine whether that relationship has ended.113 Obviously, in most matters it will be simple: the lawyer will have never represented the client previously, and the lawsuit in which it did represent it will have been settled.114 But various fact patterns particular to patent practice raise additional concerns.115 An agreement by the firm to calendar and pay maintenance fees has been suggested to constitute an on-going attorney-client relationship. There is a

109. 110.

111.

112. 113. 114.

115.

(D. Nev. Apr. 5, 1994) (disqualifying firm from undertaking unrelated adverse patent matter even though it had not done work for “current” client in over two years); Balivi Chem. Corp. v. JMC Ventilation Refrigeration, LLC, 2008 WL 131028 (D. Idaho Jan. 10, 2008) (reserving ruling on the issue for factual investigation as to when adversity arose). Artromick Int’l, Inc. v. Drustar, Inc., 134 F.R.D. 226 (S. D. Ohio 1991) (recognizing that express termination was easy to spot). Manoir Electroalloys Corp. v. Amalloy Corp., 711 F Supp. 188 (D. N.J. 1989) (firm sued party who was current client because other lawyer in firm had sent the party a letter that same day to set up an appointment). IBM Corp. v. Levin, 579 F.2d 271 (3rd Cir. 1978); Ehrich v. Binghampton City School Dist., 210 F.R.D. 17, 25 (N.D.N.Y. 2002) (present client rule applies if “an attorney simultaneously represents clients with differing interests even though the representation ceases prior to filing the disqualification motion); Gen-Cor, LLC v. Buckeye Corrugated, Inc., 111 F. Supp. 2d 1049 (S.D. Ind. 2000) (generally, “a client is a current client if the representation existed at the time the complaint was filed); Ransburg Corp. v. Champion Spark Plug Co., 648 F. Supp. 1040 (N.D. Ill. 1986) (fact that client fired firm after it sued it did not mean former client rule applied). Artromick Int’l, Inc. v. Drustar, Inc., 134 F.R.D. 226 (S. D. Ohio 1991). Id. See G.D. Searle & Co. v. Nutrapharm, Inc., 1999 WL 249725 (S.D.N.Y. Apr. 28, 1999) (treating movant as former client because firm had “terminated performing any substantive work on the patents by the time of the filing of the complaint”). See also Applied Tech. Ltd. v. Watermaster of Am., Inc., 2009 U.S. Dist. LEXIS 25183 (March 26, 2009) (fact that movant received bulk-mailed newsletters did not mean it was necessarily a current client). See also Applied Tech. Ltd. v. Watermaster of Am., Inc., 2009 U.S. Dist. LEXIS 25183 (March 26, 2009) (fact that lawyer had registered trademark for client did not indicate ongoing relationship since registration was a “finite act”).


split on this issue,116 but I believe that the better rule is that, absent additional circumstances, the bare calendaring of a maintenance fee is insufficient to create an attorney-client relationship. When a firm provides an opinion of counsel to a client, it obviously does so as part of an attorney-client relationship. No doubt, a party who receives an opinion of counsel could contend that they had an “ongoing” relationship with the firm because, should suit be filed, it intended to have the firm “continue” its representation of the client.117 In addition, it is not uncommon for clients who have received opinions to return to the firm with additional or more specific questions. When do such representations end? The on-again, off-again client perhaps creates the most difficult or, at least, unpredictable fact pattern. Courts are leery of holding that a client who has repeatedly returned to a firm over the years is a former client simply because, at a particular moment in time, the firm was not representing it.118 Nonetheless, whether a “repeat client” is a “current client” obviously turns on the facts,119

116. See Oregon Op. 2005-146 (2005) (reasoning that the recipients of maintenance fee reminders “in the absence of . . . a clear statement [that no attorney-client relationship exists] may reasonably believe that there is a continuing relationship”). The PTO in its recent notice and comment took the same position. See Notice of Proposed Rulemaking Changes to Representation of Others Before the United States Patent and Trademark Office, 68 Federal Register 69442, 69467 (December 12, 2003). However, in Strojirenstvi v. Seisakusho, 2 USPQ2d 1222 (Comm’r Pat. & Trademarks Aug. 29, 1986), the commissioner stated that a client was a former client even though the firm was “paying maintenance fees” because calendaring was merely a “ministerial” service. In CardioGrip Corp. v. Mueller & Smith, LP, 2008 U.S. Dist. LEXIS 2627 (S.D. Ohio Jan. 14, 2008), the court also intimated that sending reminders of maintenance fee due dates did not create an attorney-client relationship, basing its holding on undisputed testimony of the practitioner that reminders were sent as a courtesy and in the hopes of obtaining fees for being retained to pay the maintenance fees. The Court of Appeals of Michigan has also held that the “ministerial task of sending a reminder letter” did not continue a prior attorney-client relationship. Wright v. Rinaldo, 2008 Mich. App. LEXIS 1411 (July 10, 2008). 117. See Chapter 11, however (describing the risks of combining litigation and opinion work in the same case). 118. See, e.g., Kabi Pharmacia AB v. Alcon Surgical, Inc., 803 F. Supp. 957, 962 (D. Del. 1992) (rejecting the argument that “the alleged ‘sporadic’ nature of [the law firm’s] work supports a finding that there was not an on-going attorney-client relationship. Nor does a lull in its work . . . support such a finding.”); Oxford Sys., Inc. v. Cellpro, Inc., 45 F. Supp. 2d 1055, 1060 (W.D. Wash. 1999) (under Washington law, client’s reasonable belief that it was a current client was sufficient where it had a long-term relationship with firm but no thenpending matter); Lemelson v. Apple Computer Inc., 28 U.S.P.Q.2d 1412 (D. Nev. June 4, 1993) (client was current client even though no attorney time had been billed in many months and representation was in an isolated tax assessment matter). 119. See, e.g., Unique Sports Generation, Inc. v. LGH-III, LLC, 2005 US Dist. LEXIS 22133 (S.D. N.Y. Sept. 30, 2005); Cleverly Minded Ltd. v. Anthony Sicari Apparel Group Indus., 2003 U.S. Dist. LEXIS 855 (S.D. N.Y. Jan 23, 2003).

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and so to avoid uncertainty, counsel should consider using formal “disengagement” letters.

2. The Protections Afforded to Former Clients Generally, as a former client, the movant must establish (1) that it was a former client, (2) that the current matter is adverse to it, and then (3) one of three alternatives: (a) that the current matter is substantially related to the prior representation, (b) that it actually disclosed confidential information that can be used against the movant in the current matter, or (c) that the attorney is “attacking” work product created for the former client. The first two elements are discussed earlier in this chapter.120 a. The Substantial Relationship Test As noted in Chapter 2, the Federal Circuit has stated that federal courts would have subject-matter jurisdiction over certain legal malpractice claims arising out of malpractice during patent litigation or prosecution. As a result, any appeal would be to the Federal Circuit. The Federal Circuit has held that it would apply regional circuit law to the question of what constitutes a “substantial relationship,” as that is not a matter “unique to patent law.”121 Consequently, although any appeal will be to the Federal Circuit, it would apply regional circuit law to the question of whether a lawyer is disqualified. The regional circuits do not take a uniform approach to the question of how to determine whether a substantial relationship exists. Instead, they vary wildly, and it is very likely that a former representation that would be “substantially related” to an adverse matter in one circuit would not be in another. The disagreements are many and often only implicit. Some are clear. For example, some courts place the burden to prove a substantial relationship on the moving party, while others place the burden to show the representation is proper on the firm seeking to avoid disqualification.122 Others allow the lawyer to rebut the presumption that during the prior representation of

120. Other law may apply where, for example, a lawyer involved in a patent suit is a former patent examiner or other government employee. See generally Kearney & Trecker Corp. v. Giddings & Lewis, Inc., 452 F.2d 579 (7th Cir. 1972). Federal Circuit regulations also limit the ability of former clerks to appear before it. 121. Touchcom, Inc. v. Bereskin & Parr, 2008 WL 4889148 (Fed. Cir. Oct. 6, 2008) 122. See Avocent Redmond Corp. v. Rose Electronics, 491 F. Supp. 2d 1000 (W. D. Wash. 2007) (collecting cases).


the movant, he gained access to confidential information, while others do not.123 To illustrate, in the Second Circuit, the movant must bear a “heavy burden” of establishing that the substantial relationship is “patently clear” by proving that the prior representation and the adverse matter are “identical” or “essentially the same.”124 This requires examining whether the facts necessary to the first representation are necessary to the adverse representation.125 Similarly, in the Fifth Circuit, the movant must “delineate[] with specificity the subject matters, issues, and causes of action presented in the former representation,” and a “superficial resemblance between the present and prior representations is insufficient.”126 The focus in the Fifth Circuit is on common factual and legal issues between the current and former representations.127 Somewhat distinctly, in the Seventh Circuit, whether two matters are substantially related turns on whether a lawyer “could have obtained confidential information in the first representation that would have been relevant in the second.”128 The “determination of whether there is a substantial relationship turns on the possibility, or appearance thereof, that confidential information might have been given to the attorney in relation to the subsequent matter in which disqualification is sought.”129 Although they differ at the margins, under each approach, determination of whether an adverse representation is substantially related to a prior representation is, under any of these approaches, also a fact-intensive inquiry. Generally, if the adverse matter involves the same patent that the lawyer was substantively involved in obtaining for a client or previously litigated for it, a substantial relationship is very likely to exist.130 In contrast, by itself, the fact

123. See Parkland Corp. v. Maxximum Co., 920 F. Supp. 1088 (D. Idaho 1996); Millburn Marketing Assocs. v. Parker Labs, Inc., 1994 WL 228531 (D. N.J. May 17, 1994); Elan Transdermal Ltd. v. Cygnus Therapeutic Sys., 809 F. Supp. 1383 (N.D. Cal. 1992). 124. Applied Tech. Ltd. v. Watermaster of Am., Inc., 2009 U.S. Dist. LEXIS 25183 (March 26, 2009). 125. Applied Tech. Ltd. v. Watermaster of Am., Inc., 2009 U.S. Dist. LEXIS 25183 (March 26, 2009) (denying motion to disqualify). 126. Duncan v. Merill, Lynch Pierce Fenner & Smith, Inc., 646 F.2d 1020, 1029 (5th Cir. 1981). See In re Riles, 2000 WL 1062086 (Fed. Cir. July 20, 2000) (applying Duncan in patent disqualification proceeding and denying petition for mandamus seeking to reverse finding of substantial relationship). See also Uniweld Prods., Inc. v. Union Carbide Corp., 385 F.2d 992 (5th Cir. 1967) (prior representation in patent cases not substantially related to later suit in trademark and unfair competition case). 127. In re American Airlines, 972 F.2d 605 (5th Cir. 1992). 128. Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263, 1266 (7th Cir. 1983). 129. Westinghouse Elec. Corp. v. Gulf Oil Corp., 588 F.2d 221, 224 (7th Cir. 1978). See Novo Terapeutisk Laboratorium A/S v. Baxter Travenol Labs, Inc., 607 F.2d 186, 195 (7th Cir. 1979). 130. Sun Studs, Inc. v. Applied Theory Assocs., Inc., 772 F.2d 1557 (Fed. Cir. 1985) (suit challenging validity of patent obtained for client is substantially related to work obtaining the

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50


that the representation involved a trademark on the patented product in issue in the subsequent adverse suit would not mean a substantial relationship existed. Beyond that, matters turn on the facts.131 All courts agree, likewise, that the moving party need not actually disclose the confidential information that it shared with the lawyer; instead, the burden is to show a substantial relationship.132 The following table summarizes principal cases by result. As a general principle, they recognize that simply because a lawyer represented a client in a patent matter does not mean he can never be adverse to it in a patent case;133 much more is needed than that. The particular cases obviously turn on their facts as well; as noted above, the particular court’s approach to determination of whether an adverse representation is “substantially related” to a prior representation looks at the following: Substantial Relationship Found

No Substantial Relationship Found

In re Superguide Corp., 2001 WL 1000700 (Fed. Cir. Aug. 13, 2001) (denying petition for mandamus where district court found substantial relationship between work lawyer had done for movant as lead national counsel, including work on particular license agreement that was subject of subsequent adverse representation); In re Riles, 2000 WL 1062086

In re Fresenius USA, Inc. v. Baxter Int’l, Inc., 107 Fed. Appx. 910 (Fed. Cir. July 29, 2004) (denying petition for writ of mandamus to overturn disqualification of firm that was adverse to former client where its lawyers had prosecuted patents-in-suit); In re Yamaha Corp., 1995 WL 412843 (Fed. Cir. June 30, 1995) (providing little analysis);

patent); Iverness Med. Switzerland GMBH v. Acon Labs., Inc., 2005 WL 1491233 (D. Mass. June 23, 2005); Abyst Tech., Inc. v. Empak, Inc., 962 F. Supp. 1241 (N.D. Cal. 1997) (law firm disqualified from representing an accused infringer where two current partners had prosecuted the patent-in-suit while at another firm); Hilleby v. FMC Corp., 1992 WL 455436 (N.D. Cal. 1992) (lawyers could not challenge patents obtained for former client); Amgen, Inc. v. Elanex Pharma., Inc., 32 U.S.P.Q.2d 1688 (W.D. Wash. May 11, 1994) (lawyers had handled appellate litigation involving the patent-in-suit). 131. See Avocent Redmond Corp. v. Rose Electronics, 491 F. Supp. 2d 1000 (W. D. Wash. 2007) (finding substantial relationship between prior licensing work and subsequent infringement suit). 132. See Atasi Corp. v. Seagate Tech., 847 F.2d 826, 829 (Fed. Cir. 1988); Trone v. Smith, 621 F.2d 994, 998 (9th Cir. 1980); In re Am. Airlines, Inc., 972 F.2d 605 (5th Cir. 1992); Abyst Tech., Inc. v. Empak, Inc., 962 F. Supp. 1241 (N.D. Cal. 1997); Parkland Corp. v. Maxximum Co., 920 F. Supp. 1088 (D. Idaho 1996); Amgen, Inc. v. Elanex Pharma., Inc., 32 U.S.P.Q.2d 1688 (W.D. Wash. May 11, 1994); Elan Transdermal Ltd. v. Cygnus Therapeutic Sys., 809 F. Supp. 1383, 1388 (N.D. Cal. 1992). 133. Cf. Duncan v. Merill, Lynch Pierce Fenner & Smith, Inc., 646 F.2d 1020 (5th Cir. 1981) (lawyer could be adverse to former client in securities fraud suit even though it had represented the former client in many security fraud suits). See In re Riles, 2000 WL 1062086 (Fed. Cir. July 20, 2000) (applying Duncan in patent disqualification proceeding).


Substantial Relationship Found


(Fed. Cir. July 20, 2000) (denying petition for mandamus seeking to reject district court finding of substantial relationship, but with little analysis, even though adverse suit involved different patents than prior representation); Atasi Corp. v. Seagate Tech., 847 F.2d 826 (Fed. Cir. 1988) (lawyer had represented opposing party as a client on same patent while at other firm); Sun Studs, Inc. v. Applied Theory Assocs., Inc., 772 F.2d 1557 (Fed. Cir. 1985) (law firm was attacking patents it had obtained for its former client) (applying Ninth Circuit law); Gen’l Elec. Co. v. Valeron Corp., 608 F.2d 265 (6th Cir. 1979) (holding but providing little detail as to why prosecution work was substantially related to subsequent litigation); Emle Indus., Inc. v. Patentex, Inc., 478 F.2d 562 (2d Cir. 1973) (lawyer disqualified where former suit included allegations of illegal control of corporation and identical issue would be involved in patent litigation against former client); Innovation Ventures, Inc. v. N2G Distributing Inc., 2009 U.S. Dist. LEXIS 66295 (E.D. Mich. July 31, 2009) (substantial relationship between prior patent work and later trade dress case on same product); Stratagene v. Invitrogen Corp., 225 F. Supp.2d 608 (D. Md. 2002) (substantial relationship between work on parent application and patent-in-suit, which was divisional of the parent); Hewlett-Packard Co. v. Cooper, 1999 WL 33921317 (N.D. Cal. March 12, 1999) (finding substantial relationship but with little factual discussion); Asyst Tech., Inc. v. Empak, Inc., 962 F. Supp.2d 1241 (N.D. Cal. 1997)

Am. Roller Co. v. Budinger, 513 F.2d 982 (3rd Cir. 1975) (prosecution of related patents nonetheless not substantially related to current patent suit); Reliant Pharmaceuticals, Inc. v. Par Pharmaceuticals, Inc., 2008 WL 1826036 (D. Del. Apr. 23, 2008) (denying motion to disqualify in part because transferring lawyer had only worked on matter for 2.5 hours to review a contract unrelated to subsequent infringement action and no evidence supported assertion that lawyers had advised client of issues that related to patentin-suit); Talecris Biotherapeutics, Inc. v. Baxter Int’l Inc., 491 F. Supp.2d 510 (D. Del. 2007) (finding no substantial relationship even though patent in prior litigation was allegedly invalidating prior art in current suit); Microsoft Corp. v. Commmonwealth Scientific & Industrial Org., 2007 WL 4376104 (E.D. Tex. Dec. 13, 2007) (denying motion to disqualify by former client because it failed to explain how related patent applications pertained to litigation); Biax Corp. v. Fujitsu Computer Sys. Corp., 2007 U.S Dist. LEXIS 35770 (E.D. Tex. May 16, 2007) (no substantial relationship between either prior representation in litigation or prosecution); In re Metoprolol Succinate Patent Litig., 2005 WL 1661509 (E.D. Mo. 2005) (former case involved different chemical composition); Civco Med. Instruments Co. v. Protek Med. Prods., Inc., 2004 WL 1326474 (S.D. Iowa June 4, 2004) (little analysis); Agilent Tech., Inc. v. Micromuse, Inc., 2004 WL 2346152 (S.D.N.Y. Oct. 19, 2004) (former representations

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(law firm was attacking patents it had obtained for its former client); Buckley v. Airshield Corp., 908 F. Supp. 299 (D. Md. 1995) (prior patent suit and adverse suit involved same patent); Decora Inc. v. DW Wallcovering, Inc., 899 F. Supp. 132 (S.D.N.Y. 1995) (same patent involved); Millburn Marketing Assocs. v. Parker Labs, Inc., 1994 WL 228531 (D. N.J. May 17, 1994) (finding substantial relationship where lawyer now representing infringer had drafted patent at time it had begun to market infringing product and which allegedly infringed); Amgen, Inc. v. Elanex Pharma., Inc., 32 U.S.P.Q.2d 1688 (W.D. Wash. May 11, 1994) (lawyers had previously handled appellate litigation involving the patent-in-suit); Asset Convservation, Inc. v. Chapman Indus. Corp., 147 F.R.D. 12 (disqualifying firm from representing third-party defendant; they had previously represented the defendants/third-party plaintiffs in that matter); Elan Transdermal Ltd. v. Cygnus Therapeutic Sys., 809 F. Supp. 1383 (N.D. Cal. 1992) (lawyers had represented the now-former client on foreign counterpart to patent-in-suit); Monon Corp. v. Wabash Nat’l Corp., 764 F. Supp. 1320 (N.D. Ind. 1991) (representation where attorney made patentability determination substantially related to later suit involving that same patent); Flo-Con Sys., Inc. v. Servsteel, Inc., 759 F. Supp. 456 (N.D. Ind. 1990) (same patent in former and current suits); Kearns v. Fred Lavery/Porsche Audi Co., 573 F. Supp. 91 (E. D. Mich. 1983) (same patent in initial consultation as in adverse matter); Moss v. Moss Tubes, Inc., 1998 WL 641362 (N.D.N.Y.

concerning corporate governance, financing, and various patent and trademark matters not shown to be substantially related to patent infringement suit); Etna Prods. Co., Inc. v. Tactica Int’l, Inc., 234 F. Supp. 442 (S.D.N.Y. 2002) (former matters not substantially related to suit involving design patent); Power Mosfet Techs., LLC v. Siemens AG, 2002 WL 32785219 (E.D. Tex. Sept. 30, 2002) (even though earlier patent litigation involved very similar patents, court found no substantial relationship); McCook Metals LLC v. Alcoa, 2001 WL 58959 (N.D. Ill. Jan. 18, 2001) (trademark search not substantially related to later patent infringement suit even though both involved the same industry); Plant Genetic Sys., N.V. v. Ciba Seeds, 933 F. Supp. 514 (M.D. N.C. 1996) (prior work on patent related to electromechanical bombardment was not substantially related to genetically engineered seed corn); Ciba-Geigy Corp. v. Alza Corp., 795 F. Supp. 711 (D.N.J. 1992) (no substantial relationship where prior work and present work both involved transdermal patches but of qualitatively different chemicals); Hunter Douglas, Inc. v. Home Fashions, Inc., 811 F. Supp. 566 (D. Colo. 1992) (lawyer had worked on trademark application unrelated to patent in suit); Hydril Co. v. Multiflex, Inc., 553 F. Supp. 552 (S.D. Tex. 1982) (no substantial relationship even though prior representation and adverse matter both involved “encapsulated control lines” because products were “significantly different”); Moyroud v. Itek Corp., 528 F. Supp. 707 (S.D. Fla. 1981) (holding attorney’s prior representation of defendant




Sept. 9, 1998) (same patents); Koehring Co. v. Manitowoc Co., 418 F. Supp. 1133 (E.D. Wis. 1976) (prior litigation involved same patents; rejecting argument that there was no substantial relationship because different claims were involved).134

in suit involving photo-typesetting patents was not substantially related to subsequent suit involving other patents in same field); Koehring Co. v. Manitowoc Co., 418 F. Supp. 1133 (E.D. Wis. 1976) (firm disqualified from defending patent suit based on same patents on which it had previously represented the patentee, even though suits involved different patent claims).

134 The

key is to examine what confidences reasonably were likely conveyed in the prior representation and to determine whether those confidences are pertinent to the current adverse matter.135

b. Possession of Client Confidences A less-often used basis for disqualification is proof by the movant that as a former client, it imparted confidential information to the now-adverse firm. Disqualification under this prong does not require proof of a substantial relationship between the two matters; however, it does require proof of the actual confidences that were transmitted by the former client.136 A motion filed under this “prong” may require submission of information to the court for it to review in camera and cannot rest on the presumptions that accompany the substantial relationship test. Nonetheless, it may be a significant basis to disqualify where, for example, in a wide-ranging and

134. See also W.L. Gore & Assocs., Inc. v. Int’l Med. Prosthetics Research Assocs., Inc., 745 F.2d 1463 (Fed. Cir. 1984) (analyzing antitrust claims); Elantec Semiconductor Inc v. Cooper, 1999 WL 33921316 (N.D. Cal. March 10, 1999); CITC Indus., Inc. v. Manow Int’l Corp., 1978-1 Trade Cases P 61,947 (S.D.N.Y. 1978) (analyzing whether trademark work on shoes was substantially related to later antitrust claim involving a patent on shoes, and concluding it was not). 135. See Reliant Pharm., Inc. v. Par Pharm., Inc., 2008 U.S. Dist. LEXIS 33461 (Apr. 23, 2008) (in reconstructing prior representation, court determined confidences pertinent to subsequent adverse matter were likely not imparted). 136. Biax Corp. v. Fujitsu Computer Sys. Corp., 2007 U.S Dist. LEXIS 35770 (E.D. Tex. May 16, 2007) (movant failed to meet burden of proof); Ciba-Geigy Corp. v. Alza Corp., 795 F. Supp. 711 (D. N.J. 1992).

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ostensibly unrelated prior representation the client disclosed to the lawyer information that is pertinent to the specific adverse representation. c. Challenging or Interpreting the Firm’s Prior Work As noted, a lawyer generally cannot become adverse to a former client on a substantially related matter; as a result, if a lawyer was substantively involved in obtaining a patent for a client, he could not represent a client adverse to the patentee in a suit over infringement or validity of that patent. Courts have so held.137 But assignment of a patent does not carry with it the attorney-client relationship. Does this mean that a lawyer is free to attack a patent that he obtained for a former client, so long as it no longer owns the patent? This path is fraught with risk, but it has been permitted. Specifically, the Federal Circuit permitted attorneys to do so, stating: Telectronics does concede that it would be unusual to have counsel impeaching their own work product. But that is not this case. Rackman and Nealon’s continued representation is subject to the condition that the proof of invalidity of the ’242 patent will be limited to prior art that was not known at the time that the application was prosecuted. No change in any position taken during the prosecution of the ’242 patent is required to recognize the significance of that art. Similarly, no change in position is required on the infringement issue because Telectronics’ allegedly infringing products were not first produced until some time after the issuance of the ’242 patent. Although counsel for Telectronics may have to testify when a particular piece of prior art became known to them, patent owners and attorneys are often asked that question during discovery, and no disqualification is required.138

Other courts have reached the same conclusion.139

137. E.g., Asyst Tech., Inc. v. Empak, Inc., 962 F. Supp. 1241 (N.D. Cal. 1997) (“Few people are more likely to have confidential information with which to attack the validity of a patent than the lawyers who prosecuted it.”). The court’s statement is, of course, inconsistent with the obligation under Rule 1.56 for practitioners to disclose to the office information that is material to patentability of a claim; confidential information that is material to patentability must be disclosed, not withheld. A lawyer who attacks the validity, or enforceability, of a patent that it obtained for a client faces serious malpractice risks whether or not he possesses confidential information. That fact, coupled with the conclusion that attacking the validity of a patent obtained for a former client has led the few courts that have faced this fact pattern to disqualify the lawyers. See id. (collecting cases). It is an interesting question whether this is correct, since the substantial relationship test is designed to protect confidentiality, rather than loyalty. 138. Telectronics Proprietary, Ltd. v. Medtronic, Inc., 836 F.2d 1332, 1336 (Fed. Cir. 1988). 139. Caelter Indus., Inc., 586 F. Supp. 808, 815 (N.D.N.Y. 1984) (finding no appearance of impropriety where firm based invalidity arguments on art it was not, at the time of prosecution, aware of).


The risks that lawyers who attack a patent that they obtained for a former client face are several, even if it is ethically permissible. For example, if the lawyers raise Section 112 issues, they may be creating the record necessary for their former client to file suit, if any sort of harm accrues to the former client as a result of the invalidation of a patent that it sold to the defendant, such as by way of warranty. Likewise, if the lawyers establish invalidity based upon then-known prior art, the assignee might have a claim against the former client. Although courts have not yet addressed these fact patterns, they could raise “adversity” to the former client. d. The Appearance of Impropriety Some jurisdictions have, and some still rely, at least rhetorically, on the concept that a lawyer should be disqualified if the representation creates the “appearance of impropriety.”140 This book does not analyze the scope of that concept since it has been eliminated as a basis for disqualification in most states, and its contours, in any event, vary wildly among the jurisdictions that do apply the concept.141

3. Special Issues Concerning Transferring Lawyers a. Private Practice Migration Particularly in recent years, lawyer mobility has dramatically increased. Combined with that trend is the recent development of large “full service” firms acquiring, and sometimes later divesting themselves of, patent boutiques. Lateral movement by lawyers among firms creates ethical issues and particularly conflicts of interest. Most jurisdictions follow the doctrine of imputed disqualification. While lawyers are associated at a firm, each is imputed with the conflicts that affect the others.142 However, once an association ends—such as when a lawyer quits one firm to go to another—imputation ends. This affects both the firm that the lawyer leaves, as well as any firm that he migrates to. A lawyer who leaves a firm is no longer affected by the conflicts of other lawyers at the firm.

140. E.g., Grosser-Samuels v. Jaquelin Designs Enterp., Inc., 448 F. Supp. 2d 772 (N.D. Tex. 2006) (analyzing continued vitality of this standard in the Fifth Circuit); Lemelson v. Synergistics Research Corp., 504 F. Supp. 1164 (S.D.N.Y. 1981) (denying motion to disqualify based on this standard). 141. See Monon Corp. v. Wabash Nat’l Corp., 764 F. Supp. 1320 (N.D. Ind. 1991) (lawyer who advised that invention was patentable and who had drafted claims for it disqualified in suit alleging it did not meet the conditions for patentability). 142. See generally, Model Rule 1.10. There are some specific exceptions, but they are generally narrow (including those relating to attorney-client sexual relationships under Rule 1.8).

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At the same time, the firm is no longer imputed with conflicts that “belong” solely to the departed lawyer. This next section briefly analyzes both issues.

4. Impact on a Firm of Hiring Lawyers Once a lawyer leaves a firm, he is no longer imputed with conflicts that affect only other lawyers at the firm. If only other lawyers at the departed firm represented Exxon and the departed lawyer did not otherwise acquire confidential information about Exxon, he could be adverse to Exxon in any matter once he left the firm. However, if he personally represented Exxon, or if he actually acquired confidential information about Exxon, he may be disqualified from being adverse to Exxon and, further, this conflict is imputed to any firm that hires him. Put simply, when a lawyer leaves a firm, what he did and what he learned goes with him and is, in most jurisdictions, irrebuttably imputed to lawyers at any firm the lawyer becomes employed by or affiliated with. A lawyer can be said to be “tainted” with prior knowledge and representations; if the lawyer is not so tainted, then the firm can be adverse to former clients of the newly hired lawyer’s former firm.143 Generally, this means that when a firm hires a lawyer,144 every lawyer at that firm is imputed with all of the migrating lawyer’s disqualifications: if that newly hired lawyer could not undertake a representation because it is adverse to the lawyer’s former client in a substantially related matter, for example, no lawyer at the new firm may do so—absent the former client’s informed consent.145 Much as with former client conflicts, there are two general areas of concern to the hiring firm: the first is that it identify every representation undertaken

143. See Dieter v. Regents of Univ. of Cal., 963 F. Supp. 908 (E.D. Cal. 1997) (lawyer not tainted so firm not disqualified from representing patentee against accused infringer); Boston Scientific Corp. v. Johnson & Johnson Inc., __ F. Supp. 2d __, 2009 WL 2600902 (D. Del. Aug. 25, 2009) (denying motion to disqualify patent firm from being adverse to current client due in part to screen established by firm); Amgen v. Elanex Pharma., Inc., 160 F.R.D. 134 (W.D. Wash. 1994) (noting availability of screening in some circumstances to rebut presumption of shared confidences). 144. In most circumstances, imputation applies whether the lawyer is made partner, associate, or “of counsel” to the firm. See Atasi Corp. v. Seagate Tech., 847 F.2d 826, 829 (Fed. Cir. 1988) (imputing conflict of “of counsel” lawyer to firm). 145. In re DW Wallcovering, Inc., 1996 WL 17457 (Fed. Cir. 1996) (denying petition for writ of mandamus seeking to overturn order disqualifying firm even though it had set up screen around migrating lawyer); Atasi Corp. v. Seagate Tech., 847 F.2d 826, 829 (Fed. Cir. 1988) (affirming disqualification of firm despite screen); Abyst Tech., Inc. v. Empak, Inc., 962 F. Supp. 1241 (N.D. Cal. 1997) (law firm disqualified from representing an accused infringer where two current partners had prosecuted the patent-in-suit while at another firm); Hitachi, Ltd. v. Tatung Co., 419 F. Supp. 2d 1158 (N.D. Cal. 2006) (refusing to permit screening under circumstances of case even though lawyer claimed not to recall anything about representation).


by the lawyer at his former firm(s); the second, and more difficult inquiry, is to identify any information that the lawyer may have acquired, even though it was not in the course of representing a client. If the lawyer left a small firm that had weekly meetings where each lawyer discussed upcoming events, a lawyer may have acquired confidential information about a client even while not representing it.146 This is sometimes called “water cooler talk.”147 Identifying whether a potential lateral hire acquired confidences outside the confines of a representation is, by its nature, more difficult. Recollections of every hallway conversation or e-mail exchange will not be perfect. If the hiring firm knows, however, that there is a pending matter between the two firms, it should obtain assurances from the departing firm that the lawyer did not acquire confidential information about that matter, so that it is not disqualified from an ongoing matter by hiring the lawyer. Again, client consent may be an option and, in some jurisdictions, a law firm can avoid disqualification by hiring a new lawyer by creating a screen, even without client consent. In cases of doubt, a firm can seek a ruling that it would not be disqualified in a particular case due to hiring of lawyers from another firm.148 Despite the breadth of imputed disqualification, there are exceptions or limitations on it. Foremost, as noted, a lawyer, once he leaves a firm, is no longer imputed with the representations of other lawyers at that firm. The vast majority of the jurisdictions reject “double imputation,” such that a migrating lawyer is imputed with the representations of lawyers at her old firm, and those imputed representations are reimputed at the new firm.149 Second, it may be that, though the lawyer personally represented a client while at a former firm, the lawyer did not do so “enough” to count for purposes of imputed disqualification at the new firm. Often it is clear whether the lawyer personally represented the client in a matter “enough” to count.150 Lead trial counsel on a matter that went to trial obviously represented the client “enough” so that his new firm will be imputed with that conflict.

146. See, e.g., EZ Paintr Corp. v. Padco, Inc., 222 U.S.P.Q. 310 (D. Minn. Nov. 9, 1983) (reasoning that “it is certainly reasonable to assume that in a firm of only seven attorneys discussions concerning this case may have taken place”). 147. See Papst Motoren GMbH & Co. v. Kanematsu-Goshu (U.S.A.), Inc., 629 F. Supp. 864 (S.D.N.Y. 1986) (holding that “small talk” did not rise to level of representation). 148. See Engineered Prods. Co. v. Donaldson Co., Inc., 290 F. Supp. 2d 974 (N.D. Iowa 2003) (addressing a motion for “qualification” in patent infringement case). 149. See, e.g., American Can Co. v. Citrus Feed Co., 436 F.2d 1125, 1129 (5th Cir. 1971); Inverness Medical Switzerland GMBH, 2005 WL 1491233 (D. Mass. June 23, 2005); American Sterilizer v Surgikos, 1992 U.S. Dist. LEXIS 21542 at *11 (N.D. Tex. 1992). See generally Ferguson et al., Conflicts in Intellectual Property Law: A Brief Survey, 616 PLI/Pat 539 (Sept. 2000) (collecting cases). 150. See Lucent Tech., Inc. v. Gateway, Inc., 2007 U.S. Dist. LEXIS 35502 (S.D. Cal. May 15, 2007) (lawyer billed several thousand hours on precise matter).

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Sometimes, however, a lawyer who was only peripherally involved in a representation of the former client may not have realistically been exposed to client confidences.151 Under those circumstances, the lawyer may be able to avoid personal disqualification, and thus the firm avoids imputed disqualification.152 The amount of time the lawyer spent representing the client is one factor in this determination, but it is not dispositive.153

151. See, e.g., Reliant Pharmaceuticals, Inc. v. Par Pharmaceuticals, Inc., 2008 WL 1826036 (D. Del. Apr. 23, 2008) (denying motion to disqualify in part because transferring lawyer had only worked on matter for two and one-half hours to review unrelated contract); Talecris Biotherapeutics, Inc. v. Baxter Int’l Inc., 491 F. Supp. 2d 510 (D. Del. 2007) (denying disqualification motion based on transferring lawyer’s brief, stale representation of client). 152. See Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 518 F.2d 751, 757 (2d Cir. 1975); Talecris Biotherapeutics, Inc. v. Baxter Int’l Inc., 491 F. Supp. 2d 510 (D. Del. 2007) (giving weight to fact that lawyer had been involved only early in litigation in denying motion to disqualify new firm); Iverness Med. Switzerland GMBH v. Acon Labs., Inc., 2005 WL 1491233 (D. Mass. June 23, 2005) (migrating lawyer had been only involved in procedural, not substantive, issues in patent case at prior firm); Eberle Design, Inc. v. Reno A&E, 354 F. Supp. 2d 1093 (D. Ariz. 2005) (holding that firm which hired lawyer who had spent nine hours drafting voir dire questions in pending suit did not personally and substantially participate and denying motion to disqualify hiring firm); Papyrus Tech. Corp. v. N.Y. Stock Exchange, Inc., 325 F. Supp. 270 (S.D.N.Y. 2004) (considering whether e-mails to lawyer were sufficient to establish attorney-client relationship with him); Melea Ltd. v. Steelcase, Inc., 2003 WL 21816814 (E.D. Mich. July 14, 2003) (lawyer had been involved in minor discovery issue in prior patent case and so was not disqualified from later patent infringement suit involving same patent); Dieter v. Regents of the Univ. of Cal., 963 F. Supp. 908 (E.D. Cal. 1997) (finding lawyers had no involvement in matter at prior firm and so were not even personally disqualified, and so firm was not imputed with disqualification); Buckley v. Airshield Corp., 908 F. Supp. 299 (D. Md. 1995) (considering but rejecting contention that lawyer had only minimal involvement in prior patent suit); Hunter Douglas, Inc. v. Home Fashions, Inc., 811 F. Supp. 566 (D. Colo. 1992) (analyzing lack of proof that lawyer had been substantively involved in prosecution of patent-in-suit and denying motion to disqualify); N.Y. Institute of Tech. v. Biosound, Inc., 658 F. Supp. 759 (S.D.N.Y. 1987) (noting lawyer had only been “administratively” involved in prosecuting patent-in-suit, and denying disqualification); See also Stratagene v. Parsons Behle & Latimer, 315 F. Supp. 2d 765 (D. Md. 2004) (dismissing malpractice claims against lawyer who had not personally represented plaintiff in prior patent matters). For a case discussing the scope of this exception, see Intelli-Check, Inc. v. Tricom Card Tech., Inc., 2008 WL 4682433 (E.D.N.Y. Oct. 21, 2008). For a case involving migrating summer associates in a patent case, see Actel Corp. v. Quicklogic Corp., 1996 WL 297045 (N.D. Cal. May 29, 1996). See also Panduit Corp. v. All States Plastic Mfg. Co., 744 F.2d 1564, 1574–75, 223 U.S.P.Q. 465 (Fed. Cir. 1984) (discussing ability of migrating lawyer to establish that, though working on a matter, he did not gain confidential information); W.L. Gore & Assocs., Inc. v. Int’l Med. Prosthetics Research Assocs., Inc., 745 F.2d 1463 (Fed. Cir. 1984) (same). Counsel in doubt as to whether a migrating lawyer is “tainted” by a representation have filed motions to “approve screening” prior to hiring the attorney. See U.S. Filter Corp. v. Ionics, Inc., 189 F.R.D. 26 (D. Mass. 1999) (denying motion). 153. Elan Transdermal Ltd. v. Cyguns Therapeutic Sys., 809 F.Supp. 1383, 1388 (N.D. Cal. 1992) (fact that attorneys billed only three and one-fourth hours did not preclude disqualification).


Second, a few jurisdictions permit unilateral “screening” of incoming disqualified lawyers to avoid disqualification of the hiring firm under some circumstances,154 but the majority do not, instead requiring consent which can include screening as a part of the consent.155 Absent controlling authority, a firm should not rely on a unilateral screen to avoid imputation of a conflict.156 Taken together, when a firm is deciding whether to hire a lawyer, it must (a) identify which matters the lawyer personally represented clients, and (b) attempt to discern if the lawyer acquired confidential information about clients of other firm lawyers through “water cooler talk.”157 Any confidences that were merely imputed to the lawyer at his former firm no longer “count.”158 If the lawyer is “tainted” in either manner, then the hiring firm must examine

154. Massachusetts, for example, permits a hiring firm to avoid imputed disqualification. See Iverness Med. Switzerland GMBH v. Acon Labs., Inc., 2005 WL 1491233 (D. Mass. June 23, 2005) (applying the Massachusetts rule). See Kennecott Corp. v. Kyocera Int’l, Inc., 15 U.S.P.Q.2d 1745 (Fed. Cir. 1990) (denying petition for mandamus where district court had denied motion to disqualify in part based upon screening of incoming lawyers); N. Am. Philips Corp. v. Am. Vending Sales Inc., 29 U.S.P.Q.2d 1817 (N.D. Ill. 1993) (denying motion to disqualify because ‘federal law’ in Seventh Circuit permitted screening under the circumstances); Hunter Douglas, Inc. v. Home Fashions, Inc., 811 F. Supp. 566 (D. Colo. 1992) (allowing screening). In a case from California, the Federal Circuit predicted that California federal courts might allow for screening of migrating lawyers. In re Yamaha Corp., 1995 WL 412843 (Fed. Cir. June 30, 1995) (denying petition for writ of mandamus denying motion to disqualify in part because firm had set up screening). In unusual cases, district courts have permitted the presumption that a migrating lawyer shares confidential information upon arriving at a new firm to be rebutted. In the first type, it was in part because the new firm fired the lawyer promptly learning of the conflict. Carbo Ceramics, Inc. v. Norton-Alcoa Proppants, 155 F.R.D. 158 (N.D. Tex. 1994). In the second, it was because of the attenuated nature of the conflict, among other things. Papyrus Tech. Corp. v. N.Y. Stock Exchange, Inc., 325 F. Supp. 270 (S.D.N.Y. 2004); McCook Metals LLC v. Alcoa, 2001 WL 58959 (N.D. Ill. Jan. 18, 2001). Other courts have at least entertained the possibility of screening, though finding it ineffective under the facts presented. E.g., EZ Paintr Corp. v. Padco, Inc., 222 U.S.P.Q. 310 (D. Minn. Nov. 9, 1983). 155. See, e.g., W.L. Gore & Assocs., Inc. v. Int’l Med. Prosthetics Research Assocs., Inc., 745 F.2d 1463 (Fed. Cir. 1984) (rejecting screening); Ultradent Prods., Inc. v. Dentsply Int’l, Inc., 344 F. Supp. 2d 1306 (D. Utah 2004); Engineered Prods. Co. v. Donaldson Co., Inc., 290 F. Supp. 2d 974 (N.D. Iowa 2003) (rejecting screening). 156. Lucent Tech., Inc. v. Gateway, Inc., 2007 U.S. Dist. LEXIS 35502 (S.D. Cal. May 15, 2007) (rejecting firm’s argument that screen was acceptable under the facts). 157. See Lucent Tech., Inc. v. Gateway, Inc., 2007 U.S. Dist. LEXIS 35502 (S.D. Cal. May 15, 2007) (despite lateral lawyer listing Lucent as former client, firm nonetheless showed up adverse to it in same matter in which that lawyer had represented Lucent); Intelli-Check, Inc. v. Tricom Card Tech., Inc., 2008 WL 4682433 (E.D.N.Y. Oct. 21, 2008) (merging firms did not include in conflicts checks former clients of lateral hires). 158. Panduit Corp. v. All States Plastic Mfg. Co., 744 F.2d 1564 (Fed. Cir. 1984) (explaining that double imputation—imputing knowledge from the first firm, to the migrating lawyer, to the second firm, is not proper).

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whether the applicable rules permit screening, or if not ,whether client consent is an option. The firm may have the burden to show that the migrating lawyer was not exposed to confidences at the former firm.159 In mid-2009, the American Bar Association adopted a new version of its rule respecting screening. While, as yet, no state has adopted the rule, it may influence courts into permitting screening in more circumstances. That rule provides: (a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9, unless (1) the prohibition is based on a personal interest of the disqualified lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm; or (2) the prohibition is based upon Rule 1.9(a) or (b) and arises out of the disqualified lawyer’s association with a prior firm, and (i) the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; (ii) written notice is promptly given to any affected former client to enable the former client to ascertain compliance with the provisions of this Rule, which shall include a description of the screening procedures employed; a statement of the firm’s and of the screened lawyer’s compliance with these Rules; a statement that review may be available before a tribunal; and an agreement by the firm to respond promptly to any written inquiries or objections by the former client about the screening procedures; and (iii) certifications of compliance with these Rules and with the screening procedures are provided to the former client by the screened lawyer and by a partner of the firm, at reasonable intervals upon the former client’s written request and upon termination of the screening procedures.160

5. Impact on a Firm of Departure of Lawyers If all of the lawyers who personally represented a client depart a firm, the firm may be able to be adverse to its former client, even in the same or a

159. See Freeman v. Chicago Musical Instrument Co., 689 F.2d 715 (7th Cir. 1982) (remanding to determine whether migrating lawyer had learned confidences at his former firm where he went from firm that was representing the patentee to firm that was representing the accused infringer during pending litigation). 160. Although the rule sounds as if it permits screening other than for migrating lawyers, the intent of the ABA was to permit screening only as to migrating lawyers.

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substantially related matter. In most jurisdictions, whether the lawyers who remain at the firm are disqualified turns on whether any lawyer still with the firm possesses confidential information.161 A minority of courts holds that the imputation of conflicts persists, however, and cannot be rebutted by a showing that no lawyer at the firm possesses confidences.162 If a lawyer that has been involved in representing the former client remains at the firm but was only peripherally involved in the representation, the firm may be able to avoid disqualification if the lawyer’s involvement was so peripheral that there was no realistic chance that confidences were disclosed to him.163 If there is a subsisting relationship between the firm and a “tainted” lawyer, however, disqualification by reason of the presumption of shared confidences is still appropriate.164 a. Former Government Officials Particular statutes and other regulations apply to former PTO and other government officials who transfer to private practice. Those will be addressed in subsequent editions of this book.165

F. Impact of Disqualification Obviously, a firm that is disqualified can no longer represent the client in the matter. As a general rule, however, a disqualified firm is permitted to assist new counsel with becoming familiar with the case and is permitted to turn its files and work product over to replacement counsel.

161. Oxford Sys., Inc. v. Cellpro, Inc., 45 F. Supp. 2d 1055, 1065 & n.3 (W.D. Wash. 1999) (emphasizing that the question is not whether any lawyer who had personally represented the client but is still at the firm possesses confidential information, but instead is whether any lawyer at the firm does). 162. Elan Transdermal Ltd. v. Cygnus Therapeutic Sys., 809 F. Supp. 1383, 1392–94 (N.D. Cal. 1992) (continuing, also, to hold that even if the presumption that lawyers remaining at the firm had no confidences, the presumption had not been rebutted). 163. This is the mirror image of the situation discussed above, where the migrating lawyer, though personally representing the client, had not been exposed to the client’s confidences. 164. Schloetter v. Railoc of Indiana, Inc., 546 F.2d 706 (7th Cir. 1976) (affirming disqualification of firm in part because tainted lawyer continued some sort of association with former firm). 165. See, e.g., Ah Ju Steel Co. v. Armco, Inc., 680 F.2d 751 (CCPA 1982) (analyzing whether former ITC attorney was disqualified in private litigation); Gen’l Elec. Co. v. U.S., 215 Ct. Cl. 928 (Ct. Cl. 1977) (former government lawyer had represented United States in related patent matters and was now adverse to them).


However, where there is substantial proof of risk of misuse of confidences by a firm, courts have prevented disqualified counsel from turning over work product to replacement counsel.166 On the other hand, because of the harsh impact and expense, courts do look carefully before imposing a turnover bar.167 In addition to possible impact on replacement counsel, co-counsel can also be disqualified under some circumstances. For example, a firm that described itself as “affiliated” with disqualified patent counsel was disqualified.168 Similarly, a firm that assists another firm in a representation in which the first firm is conflicted can be disqualified.169

G. Consent to Conflicts The preceding portion of this chapter identified conflicts of interest. Consent by a client can, in almost all instances, cure common conflicts. Some conflicts are not consentable, whether in advance or otherwise. As a general principle, a lawyer cannot ask for consent, and so consent is ineffective even if granted, if a disinterested lawyer would conclude that any affected client should not agree to the conflict presented.170 The question, essentially, is whether a disinterested lawyer would conclude that a lawyer faced with the conflict could, nonetheless, represent the clients adequately.171 Generally, this unconsentable conflict includes asserting a claim for one client against another client in the same proceeding.172 In addition, transactions can also create unconsentable conflicts of interest: Lawyer has been asked by Buyer and Seller to represent both of them in negotiating and documenting a complex real-estate transaction. The parties are in sharp disagreement on several important terms of the transaction. Given such

166. See In re Anticancer, Inc., 2006 U.S. App. LEXIS 31177 (Fed. Cir. Nov. 30, 2006) (denying mandamus where district court had found disqualified counsel’s work product “tainted” and so ordered it turned over to the court, not replacement counsel). 167. See Actel Corp. v. Quicklogic Corp., 1996 WL 297045 (N.D. Cal. May 29, 1996) (rejecting turnover bar). 168. Mustang Enterp, Inc. v. Plug-in Storage Sys., Inc., 874 F. Supp. 881 (N.D. Ill. 1995). 169. Elantec Semiconductor Inc. v. Cooper, 1999 WL 33921316 (N.D. Cal. March 10, 1999); Gen’l Elec. Co. v. Industra Prods., Inc., 683 F. Supp. 1254 (N.D. Ind. 1988) (denying motion to disqualify firm that had been associated with conflicted firm, holding firm rebutted presumption that confidences were shared among co-counsel). 170. N.Y.C. Eth. Op. 2006-1 (Feb. 17, 2006). 171. See, e.g., Ass’n. B. City of N.Y. Formal Op. 2004-02 (2004) (discussing disinterested lawyer test); Midfirst Bank v. Curtis, 2006 WL 2787485 (N.D. Ill. Sept. 22, 2006) (finding disinterested lawyer would not even seek consent to dual representation under circumstances). 172. See Model Rule 1.7(a).

Consent to Conflicts differences, Lawyer would be unable to provide adequate representation to both clients.173

“Similarly, in a transactional setting in which the parties’ interests are inherently antagonistic, such as when one party is a hostile bidder and the other an unwilling target in a corporate takeover, or when lawyers in the same law firm would be required to negotiate substantive business terms head-tohead, simultaneous representation generally will be ethically prohibited.”174 But most conflicts are consentable. Among the factors that determine whether a particular conflict is consentable include: (a) the nature of the conflict and the possibility of an adverse effect on the exercise of the lawyer’s independent professional judgment; (b) the likelihood that client confidences or secrets in one matter will be relevant to the other representation; (c) the ability of the lawyer or law firm to ensure that confidential information of the affected clients will be preserved, including through screening and other information-control devices; (d) the sophistication of the client and the client’s ability to understand the reasonably foreseeable risks of the conflict; and (e) if the firm is still representing the waiving client when the conflict arises, whether the lawyer’s relationship with the clients is such that the lawyer is likely to favor one client over another.175

Consent to permit a firm or lawyer to act despite a conflict of interest can come in various forms and at least at three different times. As to form, sometimes clients simply “waive” the conflict, while at other times they insist that the firm take certain precautions such as establishing a “screen” or “Chinese wall” to ensure that confidential information is not misused. As to time, consent can be in advance, after the conflict has arisen but before the firm has acted, and even after the firm has undertaken improper action against a client or former client. When consent is obtained in advance or at the time of the conflict, the firm must obtain informed consent of each affected client, which can come after full disclosure by the lawyer.176 The next two sections analyze that question in the specific context of advanced versus contemporaneous consent. On the other hand, if the firm has acted improperly, then it must seek not simply consent but waiver of the malpractice claim that the client has against it; that requires more than merely informed consent after full disclosure, and is analyzed in the third subsection here.

173. Restatement 3d of Law Governing Lawyers § 122, Illustration 10. 174. ABCNY Formal Opinion 2001-2 (2001). See generally Pearson v. First NH Mortgage Corp., 200 F.3d 30, 41 (1st Cir. 1999) (“under the governing ethical rules, some conflicts of interest are considered so fundamental that even an anxious prospective client is deemed incapacitated from providing informed consent”). 175. N.Y.C. Eth. Op. 2006-1 (2006). 176. Celgene Corp. v. KV Pharm. Co., 2008 WL 2937415 (D. N.J. July 29, 2008).

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Thus, in the first two instances, the client must give informed consent after full disclosure. Informed consent requires that the lawyer explain to the client the risks of the proposed representation.177 There is no one-size-fits-all definition of informed consent. Rather, it is a “difficult” inquiry “necessitating a case-by-case factual analysis.”178 Although there is as yet no uniform answer, the better reasoned rule is that the lawyer must prove that the client gave informed consent after full disclosure.179 Finally, some jurisdictions require that the consent be “confirmed in writing” even though the actual disclosure need not be written.180 A written disclosure obviously creates a record and is not subject to conflicting memories.

1. Contemporaneous Consent to Conflicts When a conflict arises, as a general rule,181 each affected client may provide consent after full disclosure and continue the representation. Full disclosure and consent are not formalities. Instead, the lawyer must communication “information reasonably sufficient to permit the client to appreciate the significance of the matter in question.”182 Although there are no bright-line rules, clearly some courts apply a multifactor test to analyze whether informed consent after full disclosure was obtained. Specifically, the factors they examine include: (1) the waiver’s breadth; (2) its temporal scope, i.e., whether it waived only current conflicts or applied to all conflicts in the future; (3) the quality of the conflict discussion between attorney and client; (4) the specificity of the waiver; (5) the nature of the actual conflict, i.e., whether the attorney sought to represent both clients in the same dispute or in unrelated matters; (6) the sophistication of the client; and (7) the interests of justice.183

An example is Board of Regents of the University of Nebraska v. BASF Corp.184 There, Kirkland & Ellis (K&E) had been defending Monsanto in a

177. See, e.g., Model Rule 1.0(e). 178. In re Gabapentin Patent Litig., 407 F. Supp. 2d 607, 612 (D. N.J. 2005). 179. See Celgene Corp. v. KV Pharm. Co., 2008 WL 2937415 (D. N.J. July 29, 2008), citing Int’l Bus. Mach. Corp. v. Levin, 579 F.2d 271, 282 (3d Cir. 1978). 180. E.g., Model Rule 1.7. 181. Many states do not permit lawyers to represent two clients with claims against each other in the same court. See, e.g., Model Rule 1.7(b). Certain other representations that are not typical to patent litigation can also create nonconsentable conflicts of interest, as noted above. 182. Model Rules terminology. 183. See Concat LP v. Unilever, PLC, 350 F. Supp. 2d 796, 820 (N.D. Cal. 2004). 184. 2006 WL 2385363 (D. Neb. Aug. 17, 2006). See also Concat LP v. Unilever, PLC, 350 F. Supp. 2d 796, 820 (N.D. Cal. 2004) (finding prospective consent ineffective); In re Agouron Pharma., Inc., 1999 WL 187637 (Fed. Cir. March 1, 1999) (denying petition for writ of

Consent to Conflicts

significant state court breach of contract action for several years when its lawyers were retained by the BASF to defend it in a suit filed by the University of Nebraska. The dispute between the university and BASF was over whether BASF had any rights in certain patents; the university contended it did not. K&E did not represent BASF, and thus there appeared to be no conflict. Accordingly, K&E prepared to file a counterclaim that would, among other things, seek to enjoin the university from licensing the technology to anyone else. After the suit was filed but before BASF answered, the university granted an exclusive license to Monsanto. K&E attorney Mr. Asaff contacted Monsanto’s Mr. Hoerner and, ostensibly at least, obtained his consent to permit K&E to continue to represent BASF, even though if BASF won, BASF would own the patent rights, and so the license Monsanto had taken would be worthless and, worse, probably indicated infringement. The court rejected the argument that there had been informed consent: I conclude that Monsanto’s consent was not “informed” so as to excuse K & E’s continued representation of BASF. First, the evidence establishes that the discussion between Mr. Asaff and Mr. Hoerner was anything but thorough. While Mr. Asaff states now that he discussed a number of possible conflicts, he does not now state what possibilities were discussed, nor possible ramifications of them. It appears from his declaration that the closest he came to such a discussion was informing Mr. Hoerner that “an alleged ‘exclusive’ license grant from the Board to Monsanto was ineffective.” He does not state that he told Hoerner BASF’s position was directly in conflict with Monsanto’s interest in the subject technology. Further, his “confirming” letter did even less. Mr. Hoerner’s affidavit is to the effect that he did not give the matter much critical attention; indeed, he did not even initiate the normal internal review procedures for evaluating possible conflict situations. I find that puzzling, given the enormity of the stakes in this litigation; it begs the question of whether that attitude was the product of his own lack of attention, or being misled by Mr. Asaff, or something else. In any event, the evidence before the court is insufficient to demonstrate that Monsanto was “aware of the relevant circumstances and of

mandamus asserting that district court had erred in finding prospective consent informed). In a footnote, the court wrote: His characterizing of the “possible” conflict as “indirect adversity” is misleading; even giving K & E the benefit of its argument that it did not know-exactly-the particulars of the technology claimed to be the subject of both contracts, and even though it did not know-exactly-the terms of Monsanto’s contract, how BASF’s position, taken with the contemporaneous filing of its counterclaim, that it holds a “non-exclusive” license was only a “potential” conflict with Monsanto’s claim to an “exclusive” license eludes me. Moreover, the letter does not even allude to-much less recount with particularity-what Mr. Asaff now says was Mr. Hoerner’s only “condition” on K & E’s continued representation of BASF, that separate counsel depose any Monsanto witnesses. Id.

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66 Chapter 3 Conflicts of Interest the material and reasonably foreseeable ways that the conflict could have adverse effects on [its] interests,” nor that it agreed “to a proposed course of conduct after the lawyer has communicated adequate in-formation and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.” I conclude that K & E has not shown that it engaged in the type of disclosure demanded by its fiduciary obligation to Monsanto, and as a result, Monsanto has not given K & E its informed consent to continue representing BASF in this case.185

2. Prospective Consent There is nothing per se unethical with asking a client in advance to consent to a later-arising adverse representation.186 Although, as noted, the conflict that arises later may be unconsentable, this fact does not make asking for advanced consent improper; it means that when the conflict does later arise, the lawyer must determine whether he may properly continue to represent each affected client.187 As with contemporaneous consent, the client must be truly informed, with the standard often stated as being “knowing, intelligent and voluntary.”188 Although the applicable standard is the same—informed consent after full disclosure—prospective consent is as a practical matter more difficult to obtain than consent after a conflict has arisen, for the obvious reason that it is easier to make full disclosure once the conflict is known; before then, there is some degree of speculation.189 Advance consent is, however, possible. The key is the degree of disclosure and its relationship to the nature of the later adverse representation. One bar association put it slightly more specifically, stating that “the client or prospective client should be advised of the types of possible future adverse representations that the lawyer envisions, as well as the types of clients or matters that may present such conflicts.”190 As one court further explained: The extent of the necessary disclosure is what is important. . . . [T]his is a question that must be conscientiously resolved by each attorney in the light of the particular facts and circumstances that a given case presents. It is utterly insufficient simply to advise a client that he, the attorney, foresees no conflict of interest and then to ask the client whether the latter will consent to the multiple

185. 186. 187. 188.

Id. N.Y.C. Eth. Op. 2006-1 (Feb. 17, 2006). This point is discussed further at the end of this section. Celgene Corp. v. KV Pharm. Co., 2008 WL 2937415 (D. N.J. July 29, 2008), quoting In re Dolan, 384 A.2d 1076 (N.J. 1978). 189. Celgene Corp. v. KV Pharm. Co., 2008 WL 2937415 (D. N.J. July 29, 2008). 190. N.Y.C. Legal Ethics Op. No.724.

Consent to Conflicts representation. This is no more than an empty form of words. A client cannot foresee and cannot be expected to foresee the great variety of potential areas of disagreement that may arise in a real estate transaction of this sort. The attorney is or should be familiar with at least the more common of these and they should be stated and laid before the client at some length and with considerable specificity. Of course all eventualities cannot be foreseen, but a great many can.191

Likewise, states that follow the Model Rules emphasize that there must be sufficient disclosure—in the agreement or otherwise192—showing the client was reasonably advised of the material risks: The effectiveness of such waivers is generally determined by the extent to which the client reasonably understands the material risks that the waiver entails. The more comprehensive the explanation of the types of future representations that might arise and the actual and reasonably foreseeable adverse consequences of those representations, the greater the likelihood that the client will have the requisite understanding. Thus, if the client agrees to consent to a particular type of conflict with which the client is already familiar, then the consent ordinarily will be effective with regard to that type of conflict. If the consent is general and open-ended, then the consent ordinarily will be ineffective, because it is not reasonably likely that the client will have understood the material risks involved. On the other hand, if the client is an experienced user of the legal services involved and is reasonably informed regarding the risk that a conflict may arise, such consent is more likely to be effective, particularly if, e.g., the client is independently represented by other counsel in giving consent and the consent is limited to future conflicts unrelated to the subject of the representation.193

Given the fact-intensive nature of what constitutes “adequate” disclosure, bright lines are hard to draw. However, on one end of the spectrum, blanket or generic prospective consents that cover any conflict that might develop at any time are generally insufficient to constitute informed consent after full disclosure, if no further details as to the nature of the conflict, the risks involved, and the like, are made.194 For example, an open-ended, vague agreement by a client to permit a firm to be adverse, but simply not in substantially related matters, is insufficient.195 In Worldspan, L.P. v. Sabre Group Holdings, Inc.,196 the court held that consent was not informed where a letter did not specifically identify the potential adverse party but did mention its ultimate

191. Celgene Corp. v. KV Pharm. Co., 2008 WL 2937415 (D. N.J. July 29, 2008), quoting In re Lanza, 65 N.J. 347, 352–53, 322 A.2d 445 (N.J. 1974). 192. Celgene Corp. v. KV Pharm. Co., 2008 WL 2937415 (D. N.J. July 29, 2008). 193. This language is from states following Model Rule 1.7 cmt. 22. 194. See Concat LP v. Unilever, PLC, 350 F. Supp. 2d 796, 820 (N.D. Cal. 2004) (noting consent was “almost a blank check”); N.Y.C. Eth. Op. 2006-1 (Feb. 17, 2006). 195. Celgene Corp. v. KV Pharm. Co., 2008 WL 2937415 (D. N.J. July 29, 2008). 196. 5 F. Supp. 2d 1356 (N.D. Ga. 1998).

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parent corporation and stated only that the client was consenting to “adverse representations” in matters that were not “substantially related”—without specifically stating that adverse litigation was included.197 On the other end of the spectrum, an advance consent that specifies the party with whom the client eventually becomes adverse and, further, specifies the type of dispute will likely be held to constitute informed consent, particularly if the consenting client is represented in the matter or has access to independent counsel.198 The Restatement (Third) Law Governing Lawyers provides likewise focuses on the specificity of the disclosure: “A client’s openended agreement to consent to all conflicts normally should be ineffective unless the client possesses sophistication in the matter in question and has had the opportunity to receive independent legal advice about the consent,” and generalized advance waivers are “ineffective unless the client possesses sophistication in the matter” and the client “receive[d] independent legal advice about the consent.”199 The Restatement, however, recognizes that advance consent is more likely to be based on full disclosure where the consent is matter specific, and the eventual conflict is, in fact, that matter: On the other hand, particularly in a continuing client-lawyer relationship in which the lawyer is expected to act on behalf of the client without a new engagement for each matter, the gains to both lawyer and client from a system of advance consent to defined future conflicts might be substantial. A client might, for example, give informed consent in advance to types of conflicts that are familiar to the client. Such an agreement could effectively protect the client’s interest while assuring that the lawyer did not undertake a potentially disqualifying representation.200

The Restatement then illustrates when it is appropriate to use matterspecific advance consent: 2. Law Firm has represented Client in collecting commercial claims through Law Firm’s New York office for many years. Client is a long-established and sizable business corporation that is sophisticated in commercial matters generally and specifically in dealing with lawyers. Law Firm also has a Chicago office that gives tax advice to many companies with which Client has commercial dealings. Law Firm asks for advance consent from Client with respect to conflicts that otherwise would prevent Law Firm from filing commercial claims on

197. Id. 198. See generally Nathan Crystal, Enforceability of General Advance Waivers of Conflicts of Interest, 38 St. Mary’s L.J. 859, 865 (2007) (presenting a range of advance consents from general to specific and discussing each). 199. Restatement (3d) of the Law Governing Lawyers § 122(1), cmt. d (2000). 200. Id.

Consent to Conflicts behalf of Client against the tax clients of Law Firm’s Chicago office. If Client gives informed consent the consent should be held to be proper as to Client. Law Firm would also be required to obtain informed consent from any tax client of its Chicago office against whom Client wishes to file a commercial claim, should Law Firm decide to undertake such a representation. The facts being otherwise as stated in Illustration 2, Law Firm seeks advance consent from each of its Chicago-office corporate-tax clients to its representation of any of its other clients in matters involving collection of commercial claims adverse to such tax clients if the matters do not involve information that Law Firm might have learned in the tax representation. To provide further assurance concerning the protection of confidential information, the consent provides that, should Law Firm represent any client in a collection matter adverse to a tax client, a procedure to protect confidential information of the tax client will be established. Unless such a tax client is shown to be unsophisticated about legal matters and relationships with lawyers, informed consent to the arrangement should be held to be proper.201

Thus, under some circumstances, disclosure adequate to support a finding of prospective consent can exist.202 Where independent counsel represents the client in the matter, for example, and the lawyer does not conceal or misrepresent the facts, a court will likely find consent to have been informed.203 In one recent case, a firm representing a client in a patent case became adverse to it in a trademark case.204 As the defendant in the trademark case, the client moved to disqualify. The court denied the motion to disqualify because the prospective consent clearly identified the adverse client and matter.205 Finally, and significantly, even if informed consent after full disclosure was obtained prospectively, at the time the conflict arises, the lawyer must evaluate whether he can continue to represent the client adequately despite the existence of a conflict of interest.206

3. Post-Wrong Waivers of Malpractice Claims Where the lawyer has already acted improperly, then the client has a malpractice or breach of fiduciary duty claim against the lawyer. In some states, informed consent after full disclosure is not enough to obtain a client’s

201. 202. 203. 204.

Id. See generally ABA Formal Op. 05-436 (2005). Id. Visa U.S.A., Inc. v. First Data Corp., 241 F. Supp. 2d 1100 (N.D. Cal. 2003). See generally Elonex I.P. Holdings, Ltd. v. Apple Computer, Inc., 142 F. Supp. 2d 579, 584–85 (D. Del. 2001) (finding client had given prospective consent). 205. Id. 206. See N.Y.C. Ass’n. B. Comm. Prof. & Jud. Eth. Op. 2006-1 (Feb. 17, 2006).

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consent to waive a malpractice claim; instead, the client must at least be advised to consult with independent counsel. Even when not required, however, advising a client in writing to consult with outside counsel will reduce the likelihood of later controversies over the enforceability of the release.207

H. Other Justifications for Denial of Disqualification 1. Prejudice or Taint and Balance of Hardships As explained in the chapter on choice of law, a number of courts, but not all, insist that a violation of the disciplinary rules is not by itself sufficient to warrant disqualification. While not all courts have done so, many but not all have spelled out precisely what more beyond a violation of the rules is required. Many express this as a requirement that allowing the lawyer to proceed as counsel would “prejudice” or “taint” the trial or litigation.

2. Waiver by Delay in Seeking Disqualification Although lawyers often use the term “waive” to refer to a consent to a conflict, in fact, waiver doctrine has its own separate role. Waiver often arises where a litigant delays in filing the motion to disqualify after learning of the conflict of interest. No bright-line rule exists, but delays of over a year clearly jeopardize a party’s right to seek disqualification of opposing counsel.208 Not all conflicts can be waived. Some courts hold that the public interest in integrity of the proceedings cannot be waived by counsel.209

207. See Brosnan v. Gillin, Jacobson, 2003 WL 1558257 (Cal. App. March 26, 2003) (in connection with settling patent case, firm agreed to cut its fees but only if client agreed to release it from malpractice claims, and firm insisted client consult with outside counsel before signing release). 208. See, e.g., Central Milk Producers Co-op. v. Sentry Food Stores, Inc., 573 F.2d 988, 991–92 (8th Cir.1978) (delay of two years after discovery of factual basis for motion held to be waiver); Kearns v. Chyrslter Corp., 771 F. Supp. 190 (E.D. Mich. 1991) (no waiver with five month’s delay). 209. See, e.g., Monon Corp. v. Wabash Nat’l Corp., 764 F. Supp. 1320 (N.D. Ind. 1991).

Other Justifications for Denial of Disqualification 71

3. The Hot Potato Doctrine and the “Thrust Upon” Exception When firms have become adverse or been asked to become adverse to current clients, they sometimes have responded by “dropping” the client, so that it becomes a “former client.” As a consequence, the firm may be adverse to the “former” client but just not in substantially related matters and a few other sorts of matters. As a general matter, these efforts have failed. Courts have not permitted firms to drop clients “like a hot potato” in order to treat it like a former client for purposes of conflicts of interest. Thus, as a general matter, conflicts are measured at the time adversity arises, not when the motion to disqualify is filed or at some later point.210 Where a firm properly undertakes a matter adverse to a party—because it was a former client and the matter is not substantially related, or the opponent never had been a client—events after the suit is filed can create conflicts of interest.211 For example, a law firm might sue a company that it has never represented, only to have a client acquire the opposing party, thus placing the firm in the position of suing a subsidiary of a current client.212

210. Parkinson v. Phonex Corp., 857 F. Supp. 1474 (D. Utah 1994) (magistrate erred in applying former client standard where firm had concurrently represented client and adversary). See also Static Control Components, Inc. v. Dallas Semiconductor Corp., 2003 WL 21666582 (M.D.N.C. July 16, 2003) (whether firm improperly discontinued work for current client in order to treat it as former client for purposes of disqualification became moot when case was dismissed). 211. N.Y.C. Ass’n. B. Comm. on Prof. & Jud. Eth. Formal Op. 2005-05 (June 2005) 212. See Eastman Kodak Co. v. Sony Corp., 2004 WL 2984297 (W.D.N.Y. Dec. 27, 2004) (a firm that had deliberately avoided representing conflict suddenly found Kodak acquiring one of its long-standing clients); Installation Software Tech. Inc., v. Wise Solutions, Inc., 2004 WL 524829, *3 (N.D. Ill. March 5, 2004) (denying firm’s motion to withdraw from case and instead relying on flexible approach in corporate merger context); Gould, Inc. v. Mitsui Mining & Smelting Co., 738 F. Supp. 1121 (N.D. Ohio 1990) (holding firm could pick which client it continued to represent). In contrast, where a law firm merges with a firm that represents an opposing party, the firm cannot rely upon the “thrust upon” conflict in most circumstances. Picker Int’l, Inc. v. Varian Assocs., Inc., 869 F.2d 578 (Fed. Cir. 1989); see generally Phila. B. Ass’n Prof. Guidance Comm. Op. No. 2001-4 (June 2001) (discussing conflicts arising from merger of two law firms in patent context). But see Intelli-Check, Inc. v. Tricom Card Tech., Inc., 2008 WL 4682433 (E.D.N.Y. Oct. 21, 2008) (permitting firm to continue to represent long-standing client despite merging with firm that had a personally disqualified lawyer). As noted earlier in this chapter, some courts hold that a firm cannot be adverse to a subsidiary of a current client, while others hold that ownership by a client of an adversary is not enough, while others adopt various middle-ground approaches. That body of law would also need to be consulted.

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States following the Model Rules recognize this possibility—that a client’s actions will “thrust” a conflict on the lawyer. Specifically, a comment to Model Rule 1.7 provides: Unforeseeable developments, such as changes in corporate and other organizational affiliations or the addition or realignment of parties in litigation, might create conflicts in the midst of a representation, as when a company sued by the lawyer on behalf of one client is bought by another client represented by the lawyer in an unrelated matter. Depending on the circumstances, the lawyer may have the option to withdraw from one of the representations in order to avoid the conflict. The lawyer must seek court approval where necessary and take steps to minimize harm to the clients. See Rule 1.16. The lawyer must continue to protect the confidences of the client from whose representation the lawyer has withdrawn. See Rule 1.9(c).213

Often this takes place in the context of corporate mergers, where a current client acquires a company that is an adversary of the firm in an existing matter. However, “thrust upon” conflicts are not so limited. An interesting distinct example of a conflict that a court held to be a “thrust upon” conflict arose in a patent suit, Board of Regents of the University of Nebraska v. BASF Corp.214 There, Kirkland & Ellis (K&E) had been defending Monsanto in a significant state court breach of contract action for several years, when its lawyers were retained by BASF to defend it in a suit filed by the University of Nebraska. The dispute between the university and BASF was over whether BASF had any rights in certain patents; the university contended it did not. K&E did not represent BASF, and thus there appeared to be no conflict. Accordingly, K&E prepared to file a counterclaim that would, among other things, seek to enjoin the university from licensing the technology to anyone else. After the suit was filed, but before BASF answered, the university granted an exclusive license to Monsanto. Subsequently, Monsanto moved to intervene in the case to protect its interests. Nearly a year after the conflict had been recognized, Monsanto moved to disqualify K&E. The court denied the motion because it found the facts fit within the “thrust upon” exception. In reaching that conclusion, however, the court also

For other examples of thrust upon conflicts, see Tipton v. Canadian Imperial Bank of Commerce, 872 F.2d 1491, 1498 (allowing counsel to withdraw and treating client like former client after discovery of conflict); Florida Ins. Guar. Ass’n., Inc. v. Carey Canada, Inc., 749 F. Supp. 255, 260 (S.D. Fla. 1990) (allowing firm that withdrew upon immediately discovering conflict to treat movant as former client). 213. Model Rule 1.7, cmt. 7. 214. 2006 WL 2385363 (D. Neb. Aug. 17, 2006).


required K&E to take steps to ensure the sanctity of Monsanto’s confidential information: K & E argues that it was Monsanto that created the conflict in the first place, by its contracting with plaintiff in January, 2005, and in any event, the direct conflict did not arise until Monsanto became a party to this case, thus “thrusting” the conflict on K & E. Although Monsanto argues that this doctrine does not apply in this circumstance, I disagree. At the time K & E commenced its representation of BASF in this dispute FN8—sometime near the date of the filing of the complaint herein on November 17, 2004—it had represented BASF for a number of years. Prior to the DPL litigation, K & E had not represented Monsanto. When this case was filed, there was no notion that any other party was involved, much less a current client that would be taking a position adverse to BASF. The conflict arose with the contract between the plaintiff and Monsanto in January, 2005. From K & E’s perspective it was an “unforeseeable development” as that term is used in Model Rule 1.7. Principle 5 following that rule requires K & E to take steps to minimize harm to the clients. In this case wholly different litigation teams from K & E are representing BASF in this case and Monsanto in the DPL litigation; none of the lawyers involved has represented the other client. Monsanto has argued that K & E lawyers have been privy to “millions of pages of Monsanto’s confidential records and information regarding recombinant DNA gene technology, including technology relating to herbicide resistance and other is-sues associated with Monsanto’s biotechnology business strategy,” and have “worked very closely with numerous top level executives, scientists, and lawyers at Monsanto in . . . discussing . . . Monsanto’s biotechnology and acquisition strategies.” However, it has produced no evidence describing any specific items of such information, documents, biotechnology or acquisition strategies which have been shared with K & E, and no evidence that any such information relates to BASF’s claims in this litigation, and no evidence that any such information has been shared between the two teams of lawyers at K & E. More importantly, even if such information has been shared, there is in this record no showing of any resulting prejudice to Monsanto in either this case or the Mississippi case. Should the motion to disqualify be denied, K & E would still be required to keep inviolate the confidential information and trade secrets of Monsanto; in this regard it may be that the proverbial “Chinese wall” would be necessary to keep such information—both Monsanto’s and BASF’s—from the lawyers for the other client.215

Although fact-intensive in its scope, the proposition that licensing and other activities can constitute “thrust upon” conflicts has the clear potential to reduce conflicts of interest in patent litigation.

215. Id.

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An even more liberal view of the “thrust upon” exception was found to have been proper by the Federal Circuit in a recent case. In Commonwealth Scientific & Industrial Research Organisation v. Toshiba Am. Info. Sys., Inc.,216 the Townsend firm filed suit on behalf of the patentee, CSIRO, against several defendants for infringing a patent related to Wi-Fi technology. One of the defendants purchased equipment from a nonparty, Marvell, which had agreed to indemnify the defendant for any infringement liability. Townsend represented Marvell in unrelated matters. Marvell knew that Townsend represented CSIRO but did not advise Townsend that it was obligated to indemnify the defendant. Marvell intervened to disqualify the Townsend firm, arguing that Townsend was adverse to it because Marvell would have to indemnify the defendant if Townsend was successful in its representation of CSIRO. Townsend had not known of the indemnity obligation at the time it filed the suit. The district court held that, as a result, this was a “thrust upon” conflict and allowed the firm to avoid disqualification by applying the more lenient “former client” conflict rules. The district court relied on Comment 5 to A.B.A. Model Rule 1.7, which states: Unforeseeable developments, such as changes in corporate and other organizational affiliations or the addition or realignment of parties in litigation, might create conflicts in the midst of a representation, as when a company sued by the lawyer on behalf of one client is bought by another client represented by the lawyer in an unrelated matter. Depending on the circumstances, the lawyer may have the option to withdraw from one of the representations in order to avoid the conflict. The lawyer must seek court approval where necessary and take steps to minimize harm to the clients. See Rule 1.16. The lawyer must continue to protect the confidences of the client from whose representation the lawyer has withdrawn. See Rule 1.9(c).217

The Federal Circuit affirmed, relying on the district court’s determination that it was Marvell’s purposeful failure to disclose the existence of the indemnity agreement that had allowed Townsend to move forward with the suit.218

216. 2008 U.S. App. LEXIS 22114 (Fed. Cir. Oct. 23, 2008). 217. Id. quoting A.B.A. Model Rule 1.7, cmt. 5. 218. Id. See also Asset Conservation, Inc. v. Chapman Indus. Corp., 147 F.R.D. 12 (disqualifying firm from representing third-party defendant; they had previously represented the defendants/ third-party plaintiffs in that matter); See Eastman Kodak Co. v. Sony Corp., 2004 WL 2984297 (W.D.N.Y. Dec. 27, 2004) (granting motion to disqualify by using “flexible approach” to disqualification in context of acquisition).


4. Improper Uses of Disqualification Motions and Other Factors This chapter cannot conclude without the observation that, particularly in a down economy, parties sometimes use disqualification motions to accomplish goals that are actually incompatible with the legal system, including unnecessarily driving up costs and depriving a party of counsel without sound reason to do so. In many jurisdictions, as a result, courts will examine delay by the movant and other facts and circumstances to ensure that disqualification is not only necessary but properly sought. Notions of unclean hands, waiver, delay, and strategic use are often taken into account in determining whether, even if an ethical violation has occurred, disqualification is the proper remedy. Again, however, this is an issue not particular to patent cases and one that varies wildly by circuit and district court. As a result, a lawyer analyzing an ethical issue must carefully examine regional circuit law and any district court precedent for guidance.


CHAP T ER

4 Competency, Diligence, and Communication

A. Competency

78

B. Diligence

81

C. Communication

82

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78

Chapter 4 Competency, Diligence, and Communication

The core duties of competency, diligence, and communication are critical in patent practice, as in many forms of representation. Although critical, the duties do not create too many issues particular to patent litigation. As with any civil case, patent litigators must act diligently to bring claims on behalf of their clients—particularly in light of the six-year damages period and the availability of laches and estoppel as defenses—and must also communicate effectively with their clients during litigation. As a result, this chapter only generally describes these duties, but that fact should not be interpreted as denying their importance.

A. Competency Most states require that lawyers provide competent representation to a client and generally state that doing so “requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”1 Although many of the chapters in this book could generally be lumped into the subject of “competency,” there is a threshold in patent practice that deserves a preliminary discussion. Obviously, many of the same issues of competency that are implicated in patent litigation are also implicated in any civil suit.2 The requirement of competency can create unique issues in patent litigation. Unlike some other forms of litigation, patent litigation can require knowledge of a fairly complex body of substantive law, of intricate and sometimes arcane rules of procedure, and, at least in some cases, of complex and cutting-edge technology. Accordingly, before undertaking to represent a client in a patent suit, a lawyer should ensure that he is competent to do so. Being licensed to practice law is not sufficient to indicate competency in most patent cases.3 This is because of the relative complexity and specialized

1. See Model Rule 1.1. 2. See Harsco Corp. v. Kerkam, Stowell, Kondracki & Clarke, PC., 965 F. Supp. 580 (malpractice claim based on firm’s failure to raise best mode defense in Rule 50 motion during trial); Biomet, Inc. v. Finnegan Henderson LLP, 967 A.2d 662 (D.C. App. 2009) (holding firm used reasonable judgment not to appeal award of punitive damages in prior infringement suit, thereby waiving the point); see also M.J. Woods, Inc. v. Conopco, Inc., 271 F. Supp. 2d 576 (S.D.N.Y. 2003) (holding malpractice claims against defense counsel in prior patent infringement suit barred by issue preclusion due to prior arbitration of related claims). 3. Many states have a comment to their rules that, by negative implication, indicates that a general license to practice would generally not be enough to evidence competency in a patent suit. Specifically, a comment to Rule 1.1 in many states provides: In determining whether a lawyer employs the requisite knowledge and skill in a particular matter, relevant factors include the relative complexity and specialized nature of the matter,

Competency

nature of most patent matters. Much like bankruptcy, patent law is based upon a federal statute, has a complex regulatory scheme, and, further, patent cases are often subject to specialized rules of civil procedure.4 Thus, in addition to being licensed to practice and generally familiar with federal court litigation, a lawyer should ensure that he is knowledgeable in patent law and procedure so as to be able to spot, analyze, and address the common substantive patent issues that arise. In addition, in many cases, the technology itself will create competency questions. Although not every patent case requires a technological expert, the majority will. A lawyer, however, has nondelegable duties under Rule 11 to ensure that allegations and legal and factual positions taken are not frivolous. Thus, the lawyer must to an extent be able to comprehend and evaluate the conclusions reached by a technical expert. Accordingly, in most cases, either a technical expert must be involved, but in all cases the lawyer must be able to assess and analyze the technical expert’s opinions. This need to understand both the law and facts is obviously not unique to patent law: competent representation in any matter “includes inquiry into and analysis of the factual and legal elements of the problem, and use of methods and procedures meeting the standards of competent practitioners. It also includes adequate preparation.”5 But, because generally the stakes in patent litigation can be high (for both the patentee and accused infringer), the law is more complex than in virtually any other practice area and the

the lawyer’s general experience, the lawyer’s training and experience in the field in question, the preparation and study the lawyer is able to give the matter and whether it is feasible to refer the matter to, or associate or consult with, a lawyer of established competence in the field in question. In many instances, the required proficiency is that of a general practitioner. Expertise in a particular field of law may be required in some circumstances. A lawyer need not necessarily have special training or prior experience to handle legal problems of a type with which the lawyer is unfamiliar. A newly admitted lawyer can be as competent as a practitioner with long experience. Some important legal skills, such as the analysis of precedent, the evaluation of evidence and legal drafting, are required in all legal problems. Perhaps the most fundamental legal skill consists of determining what kind of legal problems a situation may involve, a skill that necessarily transcends any particular specialized knowledge. Although there are no doubt patent infringement suits that a general practitioner could undertake, those would be the exception and not the rule. 4. See, e.g., N.D. Cal. Patent Local Rules. 5. Model Rule 1.1, cmt. 2. Related to this point, several lawsuits have been brought against counsel who represented accused infringers for failing to analyze whether the infringement claims were “advertising injury” in terms of the client’s insurance policy; the argument being that analyzing insurance coverage was part of competent representation of counsel for an accused infringer. E.g., Darby & Darby, PC v. VSI Int’l, Inc., 701 N.Y.S.2d 50 (Sup. Ct. App. Div. 2000). Even though these cases have generally failed, counsel should consider advising clients to determine whether there is insurance coverage available, even though it is not implied as part of representing an accused infringer. Id.

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factual subject matter complex, patent practice is different and does require “more” than a law license and some experience in civil litigation.6 A lawyer who is not competent essentially has three options if he wants to represent a client in an infringement suit. Two of them involve associating counsel who is competent. First, the lawyer and client can agree to limit the scope of the representation to matters in which the lawyer is competent. 7 This by necessity would require associating patent counsel on the case.8 However, it is a means for litigators to agree, for example, to handle aspects of the case that do not require specialized patent or technical knowledge or to do so only with the facilitation of co-counsel. The second means to take on a case in which the lawyer is not competent is through necessary study.9 This often is a viable option where a lawyer has handled patent cases but just not in the particular area of technology. A lawyer with a mechanical engineering background can, for example, readily become competent to handle a case involving a mechanical patent, even in a subject area in which the lawyer has no real experience. It is less likely that a general litigator with a technical background could “study” patent law enough to become competent in the area, however, because of the complexities involved. In either case, the lawyer would need to ensure the client understood that the lawyer was going to “go to school” on the client’s dime.

6. See Tomar Electronics, Inc. v. Watkins, 2009 WL 1819994 (D. Ariz. Jan. 28, 2009) (removing case alleging errors in jury instructions in patent case caused adverse judgment); Berndt v. Greenwich Ins. Co., 2008 WL 5114269 (W.D. Wis. Dec. 2, 2008) (denying motion for summary judgment by patent firm that had represented client previously in patent litigation that resulted in an adverse judgment); Kirkland & Ellis v. CMI Corp., 1999 WL 92257 (N.D. Ill. Feb. 11, 1999) (denying firm’s motion for summary judgment on affirmative defense that it had improperly handled damages side of patent infringement case for which firm was suing for fees); Campcore, Inc. v. Matthews, 689 N.Y.S.2d 814 (N.Y. Sup. Ct. App. Div. 1999) (dismissing suit for failure to state a claim); In re SMEC, Inc., 160 B.R. 86 (M.D. Tenn. 1993) (claim that lawyers failed to advise client concerning risk of infringement under doctrine of equivalents where prior case resulted in million dollar judgment); Wilco Marsh Buggies & Draglines, Inc. v. XYZ Ins. Co., 520 So.2d 1292 (Ct. App. La. 1988) (dismissing on limitations ground malpractice claim against lawyers who had represented client in patent litigation, in part basing suit on allegation lawyer did not have knowledge of “specialized patent law”); Sherman Indus., Inc. v. Goldhammer, 683 F. Supp. 502 (E.D. Pa. 1988) (granting summary judgment on limitations grounds claim that firm had improperly advised defendant about damages in prior patent suit); Saveca v. Reilly, 488 N.Y.S.2d 876 (N.Y. Sup. Ct. App. Div. 1985) (malpractice suit based on failure to research venue, personal jurisdiction, and patent office proceedings). 7. Model Rule 1.1, cmt. 2. 8. In some circumstances, of course, even a seasoned patent litigator or patent prosecutor may need to associate with specialized counsel. See generally Ciocca v. Neff, 2005 WL 1473819 (S.D.N.Y. June 22, 2005) (alleging patent practitioner failed to abide by standard of care in obtaining an expert to appraise value of patents). 9. Model Rule 1.1, cmt. 2.

Diligence

Finally, the third way for a lawyer who is not competent in either the technology or the law is to associate a lawyer on the case who is competent and will be guided in the case by that lawyer.10 This latter option happens frequently in patent practice, where lawyers with significant patent experience “support” the “trial lawyers” who are better skilled at litigation. This form of a mixed team is often the best way to address patent cases. Finally, in those rare cases where an emergency presents itself and referral to or association with a competent lawyer is impractical, a lawyer can give advice or assistance but only to the extent reasonably necessary in the circumstances.11

B. Diligence Lawyers owe the duty of diligence to all clients; breach of this duty is often called “neglect.” A related but distinct obligation is to represent clients diligently.12 In patent litigation, various deadlines are imposed by the Federal Rules of Civil Procedure, certain parts of the Patent Act (such as the Section 282 notice), as well as potentially by district court local rules. Missing deadlines can show incompetency as well as breach of the duty of diligence.13 The overlap between diligence and duty is not complete, but it is substantial. For example, missing deadlines can result in a violation of the duty of competency, the duty of diligence, or both. Significantly, some jurisdictions hold that prejudice to the client is not required to establish violation of the duty of diligence.14 Thus, even though missing deadlines could result in loss of defenses or claims, or inability to put on evidence, some jurisdictions allow for a finding for breach of the duty of diligence to be based solely on undue delay and not require harm. Likewise, some courts hold that missing a deadline is not required; undue delay by itself can subject a lawyer to discipline.15

10. See Model Rule 1.1, cmt. 2. 11. Model Rule 1.1, cmt. 2. 12. See Model Rule 1.3 (“A lawyer shall act with reasonable diligence and promptness in representing a client.”). 13. See People v. Miller, 35 P.3d 689 (Colo. 20010) (lawyer failed to file suit before limitations ran). 14. See, e.g., In re Lewis, 689 A.2d 561 (D. D.C. 1997). 15. See, e.g., People v. C de Baca, 948 P.2d 1 (Colo. 1997) (lawyer delayed in filing a complaint because he had been disbarred and told client of delay only just before limitations would have run).

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C. Communication Again, in all representations, lawyers owe clients the duty to keep the client reasonably informed about the matter.16 In part, this obligation exists because certain decisions during the litigation process are for the client to make, and a client who is not kept reasonably informed cannot, as a result, properly exercise that obligation.17 Thus, because the decision whether to settle a case belongs to the client, failure to communicate settlement offers or demands violates the duty of communication.18 One counterintuitive duty is the duty to communicate their mistakes to their clients. A lawyer who makes a mistake has an obligation to disclose that mistake to his client.19 The obligation becomes more intuitive if you consider that the failure of a lawyer to convey such information to his client is because the lawyer’s interest in avoiding a possible grievance or malpractice claim conflicts with the obligation to inform the client of the potential claim. This aspect of this issue can be particularly an issue in cases where the firm is representing the patentee in litigation where it obtained the patent for the client. In addition, attempts to cover up a breach of the duty of competency or diligence can result in violation of the duty of communication.20 Lawyers who fail to file suit, but then create fictitious settlement documents, have been found to have neglected a matter and also breached the duty of communication.21 Finally, patent litigation also raises various disqualification and related issues that may need to be communicated to the client. As is discussed in Chapter 11, a lawyer who prosecuted the patent in suit, or who gave an opinion of counsel, may be unable to serve as trial counsel. Likewise, if the litigation firm also represents the client in prosecution matters, there may be the need to create “prosecution bars” that limit the ability of the firm to represent the client fully, either in the litigation or in prosecution.

16. Model Rule 1.4 17. Model Rule 1.4, cmt. 1 18. See, e.g., Hartford Accident & Indem. Co. v. Foster, 528 So.2d 255 (Miss. 1988) (lawyer must fully explain all ramifications of any offer to settle a case). 19. See, e.g., In re Schoeneman, 891 A.2d 729 (D. D.C. 2006) (lawyer disciplined for telling client its case was “fine” even though it had been dismissed). 20. See, e.g., In re Mays, 495 S.E.2d 30 (Ga. 1998) (lawyer falsely told client it had prevailed in case, even though he had failed to file it and was instead paying the “judgment” in installments out of his own pocket). 21. In re Gibson, 991 P.2d 277 (Colo. 1999).

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Somewhat conversely, information that any person learns from litigation that is material to patentability of a pending application must be disclosed to the patent office.22 For example, the MPEP states: Where the subject matter for which a patent is being sought is or has been involved in litigation, the existence of such litigation and any other material information arising there from must be brought to the attention of the Patent and Trademark Office. Examples of such material information include evidence of possible prior public use or sales, questions of inventorship, prior art, allegations of “fraud,” “inequitable conduct,” and “violation of duty of disclosure.” Another example of such material information is any assertion that is made during litigation which is contradictory to assertions made to the examiner. Such information might arise during litigation in, for example, pleadings, admissions, discovery including interrogatories, depositions, and other documents and testimony.23

Thus, a client who is substantively involved in the prosecution of related applications to the patent-in-suit in may not understand that material information learned during litigation must be disclosed to the patent office. These obligations may need to be communicated to the client by prosecution counsel. Litigation counsel, if aware that this has not been done, should communicate the duty to the client.

22. Nilssen v. Osram Sylvania, Inc., 504 F.3d 1223, 1234 (Fed. Cir. 2007). 23. MPEP § 2001.06, citing Environ Prods., Inc. v. Total Containment, Inc., 43 U.S.P.Q.2d (BNA) 1288, 1291 (E.D. Pa. 1997). See also 37 C.F.R. 1.565 (requiring disclosure of litigation during reexamination proceedings); MPEP § 1442.04 (disclosure during reissue proceedings).


CHAP T ER

5 Pre-Pleading Investigations

A. Introduction to the Potential Sources of Liability and Sanctions

86

1. Federal Rule of Civil Procedure 11

86

2. Exceptional Case Attorney Fee Shifting Under 35 U.S.C. § 285

87

3. Liability Under the Federal Antitrust Laws

88

4. Liability Under State Law and Other Federal Statutes

90

5. Concluding Introductory Thoughts

91

B. Patentee’s Pre-Suit Letters Charging Infringement

91

C. Patentee’s Pre-Suit Investigation into Charges of Infringement

94

1. Is the Plaintiff a “Patentee?”

95

2. Is the Patent in Force?

96

3. Is the Defendant the Proper Defendant?

96

4. Is There an Objective Basis, Based Upon Reasonable Investigation, to Allege Infringement?

97

a. Interpretation of Claims

97

b. Application of Claims to Accused Product or Process

99

D. Invalidity of the Patent

101

1. Note on ANDA Certifications

102

E. Unenforceability

103

F. General Issues of Law and Other Papers Beyond Pleadings

103

G. Issues of Privilege and Work Product Concerning Pre-Suit Materials

104

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Chapter 5 Pre-Pleading Investigations

A. Introduction to the Potential Sources of Liability and Sanctions Various rules, federal statutes, and state substantive law (in the form of claims for malicious prosecution and the like) require that lawyers not invoke the power of any court without good reason. This section addresses four principal sources of obligations of inquiry and investigation commonly raised in patent suits. The purposes behind requiring pre-suit investigation are many and include weeding out frivolous claims and defenses, reducing the scope of what is in controversy, and eliminating unnecessary disputes over facts. But pre-suit and pre-answer investigation would no doubt occur even without legal requirement, since litigation itself is expensive, and counsel for both parties are generally interested in prevailing, and asserting meritless claims or defenses is generally perceived to indicate weakness, not strength, and so can diminish the value of strong claims or defenses.1

1. Federal Rule of Civil Procedure 11 Federal Rule of Civil Procedure 11 provides in part: (a) Signature. Every pleading, written motion, and other paper must be signed by at least one attorney of record in the attorney’s name—or by a party personally if the party is unrepresented. The paper must state the signer’s address, e-mail address, and telephone number. Unless a rule or statute specifically states otherwise, a pleading need not be verified or accompanied by an affidavit. The court must strike an unsigned paper unless the omission is promptly corrected after being called to the attorney’s or party’s attention. (b) Representations to the Court. By presenting to the court a pleading, written motion, or other paper—whether by signing, filing, submitting, or later advocating it—an attorney or unrepresented party certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: (1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation; (2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law; (3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and

1. See Robert B. Fitzpatrick, Plaintiff ’s Pre-Trial Strategies, ALI-ABA (July 8, 1996).

Introduction to the Potential Sources of Liability and Sanctions (4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.2

As with all suits filed in federal court, before a patent suit can be filed, a lawyer must comply with Federal Rule of Civil Procedure 11 by conducting an adequate pre-suit investigation as to the law and facts underlying the allegations of infringement that will be made in the complaint.3 So, too, a defendant must investigate in compliance with Rule 11 before filing a motion or pleading in response to a patent infringement suit.4 Because of the stakes often involved, as well as the complexity often associated with patent suits, however, it often takes significant effort to comply. The Federal Circuit applies regional circuit law to motions for sanction under Rule 11, since they are not unique to patent law.5 Fortunately, in the main Rule 11 has been interpreted relatively consistently across the circuits, at least at a high level. Although at the margins there are significant differences that could be outcome determinative in a particular case, generally the courts hold that a frivolous claim or pleading for Rule 11 purposes is one that is “legally or factually ‘baseless’ from an objective perspective” and made without “a reasonable and competent inquiry.”6 Thus, if the pleading or other paper was not objectively baseless, then the amount of inquiry is irrelevant; it is only if the pleading or paper is objectively baseless that the reasonableness of the factual and legal investigation matters.7

2. Exceptional Case Attorney Fee Shifting Under 35 U.S.C. § 285 Second, Section 285 provides that a “court in exceptional cases may award reasonable attorneys’ fees to the prevailing party.”8 The statute authorizes fee

2. Fed. R. Civ. P. 11. 3. Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295 (Fed. Cir. 2004); View Eng’g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981, 986 (Fed. Cir. 2000). See Eon-Net, L.P. v. Flagstar Bancorp, Inc., 239 F.R.D. 609 (W.D. Wash. 2006) (“Rule 11 is not about “after-the-fact investigation,” and consulting with experts after fling to craft “colorable” arguments does not cure a Rule 11 violation.”) (quoting Judin, 110 F.3d at 785). 4. Rule 11 applies to all pleadings and signed documents, not just those of the plaintiff. See Fed. R. Civ. P. 11. 5. Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295 (Fed. Cir. 2004). 6. Christian v. Mattel, Inc., 286 F.3d 1118, 1127 (9th Cir. 2002). 7. See, e.g., Eon-Net, L.P. v. Flagstar Bancorp, Inc., 239 F.R.D. 609 (W.D. Wash. 2006) (imposing sanctions under Rule 11 for inadequate pre-suit investigation). 8. 35 U.S.C. § 285 (2000).

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shifting—awarding the accused infringer its attorneys’ fees, for example— where the prevailing party establishes that the suit was “objectively baseless.”9 In its most common form, “exceptional case” liability arises if the patentee loses the suit,10 although it also operates where the patentee wins the suit. A patentee who files an infringement suit can be liable for “exceptional case” damages if it acts “manifestly unreasonable in assessing infringement.”11 Significantly, liability can be imposed even if the patentee files suit but then voluntarily dismisses.12 The Federal Circuit applies its own law to claims under Section 285, since they are unique to patent law.13 Exceptional cases include those involving “‘inequitable conduct before the [Patent and Trademark Office]; litigation misconduct; vexatious, unjustified, and otherwise bad faith litigation; a frivolous suit or willful infringement.’”14 Even if one of these types of conduct is present, the district court must “weigh intangible as well as tangible factors: the degree of culpability of the infringer, the closeness of the question, litigation behavior, and any other factors whereby fee shifting may serve as an instrument of justice.”15

3. Liability Under the Federal Antitrust Laws Third, antitrust liability can arise, and in rare circumstances a patentee can be found liable for bad faith litigation or bad faith enforcement or publicity of a patent.16 Likewise, in some circumstances, an affirmative claim for relief, under state law or federal antitrust laws, can arise through enforcement of an invalid or unenforceable patent, for other forms of litigation involving patents.17

9. Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295 (Fed. Cir. 2004). 10. See generally Digeo, Inc. v. Audible, Inc., 505 F.3d 1362 (Fed. Cir. 2007) (examining exceptional case liability in contest of purchase of “as is” patents); Brooks Furn. Mfr’g, Inc. v. Dutailer Int’l, Inc., 393 F.3d 1378 (Fed. Cir. 2005). 11. Eltech Sys. Corp. v. PPG Indus., Inc., 903 F.2d 805, 809–10 (Fed. Cir. 1990). See Taurus IP, LLC v. DaimlerChrysler Corp., 559 F. Supp. 2d 947 (W.D. Wis. 2008) (finding case exceptional). 12. Micromesh Technology Corp. v. American Recreation Products, Inc., (N.D. Cal. 2007). 13. Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295 (Fed. Cir. 2004); Superior Fireplace Co. v. Majestic Prods. Co., 270 F.3d 1358, 1377 (Fed. Cir. 2001). 14. Superior Fireplace Co. v. Majestic Prods. Co., 270 F.3d 1358, 1377 (Fed. Cir. 2001); see Brooks Furn. Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378 (Fed. Cir. 2005) (describing additional forms of conduct that can violate Section 285). 15. Nat’l Presto Indus., Inc. v. West Bend Co., 76 F.3d 1185, 1197 (Fed. Cir. 1996). Accord Superior Fireplace Co. v. Majestic Prods. Co., 270 F.3d 1358, 1377 (Fed. Cir. 2001); see Modine Mfg. Co. v. Allen Group, Inc., 917 F.2d 538, 543 (Fed. Cir. 1990) (similar test). 16. Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 295 (Fed. Cir. 2004). 17. See, e.g., Abbott Labs. v. Brennan, 952 F.2d 1356 (Fed. Cir. 1992) (state law and antitrust counterclaims filed arising out of disputed result in interference proceeding).

Introduction to the Potential Sources of Liability and Sanctions

The Federal Circuit applies regional circuit law to antitrust claims, since they are not unique to patent law.18 Although a full discussion of the federal antitrust laws is beyond the scope of this book, some general principles relate directly to the issue of pre-suit inquiry. A suit for infringement, without more, is generally exempt from the antitrust laws even if the patent provides some market power; however, a patentee is subject to antitrust liability for the anticompetitive effects of that suit if the accused infringer proves either of two things.19 First, the accused infringer may prove that the asserted patent was obtained through “Walker Process” fraud—that is, knowing and willful fraud.20 Walker Process claims are a form of antitrust claim that are seldom made and even more rarely established. To succeed, on a claim for Walker Process fraud, the antitrust claimant—the accused infringer in the earlier suit—must show: 1. That the asserted patent was obtained by knowingly and willfully misrepresenting the facts to the PTO during prosecution; 2. That the party enforcing the patent—the plaintiff in the prior antitrust suit—was aware of the fraud when bringing the suit; 3. Independent and clear evidence of deception; 4. A clear showing that the patent would not have issued but for the misrepresentation or omission; and 5. The necessary additional elements to establish a violation of the antitrust laws.21

Second, the accused infringer may prove the earlier suit was “‘a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor.’”22 There is both an objective and subjective element to this substantive legal claim. First, the accused infringer must prove that the lawsuit was objectively baseless—in the sense that no reasonable litigant could realistically expect success on the merits. If an objective litigant could conclude that the suit was reasonably calculated to lead to a favorable outcome, an antitrust claim based on the sham exception fail.

18. Filmtec Corp. v. Hydranautics, 67 F.3d 931 (Fed. Cir. 1996). 19. In re Indep. Serv. Orgs. Antitrust Litig., 203 F.3d 1322, 1326 (Fed. Cir. 2000); Nobelpharma, 141 F.3d at 1068. 20. Nobelpharma, 141 F.3d at 1068 (citing Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 177, 86 S. Ct. 347, 15 L.Ed.2d 247 (1965)). 21. See In re Netflix Antitrust Litig., 506 F. Supp. 2d 308 (N.D. Cal. 2007) (granting defendant’s motion to dismiss Walker Process claim). 22. Id. (quoting E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 144, 81 S. Ct. 523, 5 L.Ed.2d 464 (1961)).

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Only if challenged litigation is objectively meritless may a court examine the litigant’s subjective motivation. An improper subjective motivation exists when the baseless lawsuit conceals “an attempt to interfere directly with the business relationships of a competitor,”23 through the “use [of] the governmental process—as opposed to the outcome of that process—as an anticompetitive weapon.”24

4. Liability Under State Law and Other Federal Statutes Fourth, actions in federal court can give rise to state law claims for malicious prosecution and the like.25 Obviously, the existence and scope of these torts vary by state, and a particularized discussion is beyond the scope of this book. In addition to Rule 11, other laws inspired by tort reform efforts can require pre-suit investigation as well.26 Likewise, other federal statutes in rare circumstances can apply to patent suits. For example, 28 U.S.C. § 1927 provides that any person “admitted to conduct cases in any court of the United States . . . who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses and attorneys’ fees reasonably incurred because of such conduct.”27 Where multiple suits are filed without basis, violations of Section 1927 have been found, but the cases are not common.28

23. E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 144, 81 S. Ct. 523, 5 L.Ed.2d 464 (1961). 24. City of Columbia v. Omni Outdoor Advertising, Inc., 499 U.S. 365, 380, 111 S. Ct. 1344 (1991) (emphasis in original). 25. See Dominant Semiconductors SDN. BHD. v Osram GMBH, 524 F.3d 1254 (Fed. Cir. 2008) (discussing liability for bad faith litigation and bad faith publicity of patent rights); Taurus IP, LLC v. DaimlerChrysler Corp., 559 F. Supp. 2d 947 (W.D. Wis. 2008) (analyzing award of attorneys’ fees for breach of contract action related to patent infringement suit); Verve, LLC v. Hypercom Corp., 2006 WL 2390505 (D. Ariz. Aug. 16, 2006) (discussing claims for malicious prosecution and abuse of process for filing patent suit under Arizona state law); PSN Ill., Inc. v. Ivoclar Vivadent, Inc., 2005 WL 2347209 (N.D. Ill. Sept. 21, 2005) (analyzing counterclaims to infringement suit under state and federal law). See also Carter v. Ozoeneh, 2009 WL 3003836 (W.D. N.C. Sept. 16, 2009) (claims by former client that current litigation was actionable). The assertion of state law claims can implicate preemption and related doctrines. See Zenith Elec. Corp. v. Exzec, Inc., 182 F.3d 1340, 1349 (Fed. Cir. 1999); Pro-Mold and Tool Co. v. Great Lakes Plastics, Inc., 75 F.3d 1568, 1575 (Fed. Cir. 1996). 26. See, e.g., Hinchman v. Gillette, 618 S.E.2d 387 (W.V. 2005) (contrasting statutory pre-suit certificate with state version of Rule 11 in separation of powers challenge). 27. 28 U.S.C. § 1927 28. Verve, LLC v. Hypercom Corp., 2006 WL 2390505 (D. Ariz. Aug. 16, 2006) (concluding that attorney violated Section 1927 in patent suit). See also Baldwin Hardware Corp. v. Franksu

Patentee’s Pre-Suit Letters Charging Infringement

5. Concluding Introductory Thoughts Each basis for sanctions and liability has its particular elements and requirements. What follows focuses principally on Rule 11, since it is the more common basis for imposition of sanctions for inadequate pre-suit inquiry. Although they do vary in their elements and requirements, often if Rule 11 has not been violated during pre-suit investigation, then the courts tend to also hold that liability under the other bases is not established.29

B. Patentee’s Pre-Suit Letters Charging Infringement It is typical for patentees to send letters to accused infringers before filing a lawsuit in an effort to provide notice of infringement and to settle the dispute prior to litigation. It is less typical but still common for patentees to send letters to customers of a possible infringer and warn the customer that his conduct constitutes infringement. State and federal law can impose liability, under limited circumstances, on patentees who send these letters and thus result in suits against counsel for incompetently drafting them,30 and on some occasions can result in liability of patentee’s counsel directly to the accused infringer for violations of state and federal law.31

Enterp. Corp., 78 F.3d 550 (Fed. Cir. 1996) (affirming award based on litigation misconduct); Great Am. Ins. Co. v. Godwin Pappas Ronquillo, LLP, 2008 WL 1881320 (N.D. Tex. March 6, 2008) (pleading involving insurance coverage dispute over sanctions in prior patent infringement case). 29. E.g., Prism Technologies LLC v. Verisign, Inc., 2008 WL 4426135 (D. Del. Sept. 30, 2008) (basing denial of finding exceptional case in part on denial of finding Rule 11 violation). 30. E.g., Conditioned Ocular Enhancement, Inc. v. Bonaventura, 458 F. Supp. 2d 704 (N.D. Ill. 2006); Classen Immunotherapies, Inc. v. King Pharma., Inc., 403 F. Supp. 2d 451 (D. Md. 2005); Waterloov Gutter Protection Sys. Co v. Absolute Gutter Protection, LLC, 64 F. Supp. 2d 398 (D. N.J. 1999) (recognizing that state law claims like defamation and unfair competition, if any, arise from letters sent to customers of accused infringers). A somewhat distinct issue of competency arises from drafting letters accusing a party of infringement: there are ways to write this type of letter in a way that avoids creating declaratory judgment jurisdiction over the dispute. Counsel should take care to draft the letter in a way that minimizes the risk that the accused infringer will be able to preemptively file a declaratory judgment action of noninfringement in its home forum, or some forum less hospitable to the patentee. See generally Peter E. Heuser and Robert A Shlachter, If You’re Going to Do It, Do It Right, Or. St. B. Bull. (April 2009) (discussing this and other pitfalls to pre-suit communications, including the potential for letters and communications to be used to establish personal jurisdiction over the patentee). 31. See ISI Int’l Inc., v. Borden Ladner Gervais LLP, 316 F.3d 731, 733 (7th Cir. 2003) (suit by party targeted by letters against patentee’s lawyers); Waterloov Gutter Protection Sys. Co v.

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Owing to a 2008 Federal Circuit decision, these claims will be rare. In general, the Federal Circuit has stated that “federal patent law bars the imposition of liability for publicizing a patent in the marketplace unless the plaintiff can show that the patent holder acted in bad faith” and so “bad faith must be alleged and ultimately proven, even if bad faith is not otherwise an element of the tort claim.”32 The court reasoned that the purpose of requiring the plaintiff to plead and prove “bad faith” is to permit patentees to publicize their patent rights without incurring liability under state or federal law.33 The court has even extended it to statements made after the notice of allowance but before issuance of the patent.34 “Bad faith” in this context has both subjective and objective components: not only must the defendant have subjectively acted in bad faith, the plaintiff must prove that the defendant’s statements—whether made pre- or postlitigation35—were “objectively baseless.”36 Under this recent line of Federal Circuit decisions, this bad faith must be alleged and proven even if there is fraud or misrepresentations or product disparagement occurs in the letters, or if there is commercial advertising or promotion in terms of the Lanham Act.37

32.

33.

34.

35.

36. 37.

Absolute Gutter Protection, LLC, 64 F. Supp. 2d 398 (D. N.J. 1999) (counterclaim by accused infringer against patentee’s lawyers). Dominant Semiconductors SDN, BHD v. Osram GmBH, 524 F.3d 1254, 1260 (Fed. Cir. 2008). See Hunter Douglas, Inc. v. Harmonic Design, Inc., 153 F.3d 1318, 1336–37 (Fed. Cir. 1998), overruled on other grounds, Midwest Industries, Inc. v. Karavan Trailers, Inc., 175 F.3d 1356 (Fed. Cir. 1999) (requiring plaintiff to plead and prove bad faith to prevail on state law tort claims based upon statements of infringement in the marketplace); Contech Stormwater Solutions, Inc. v. Baysaver Tech., Inc., 534 F. Supp. 2d 616 (D. Md. 2008) (requiring bad faith and other elements of state law tort claims for pre-suit letters); Zenith Electronics Corp. v. Exzec, Inc., 182 F.3d 1340, 1353–54 (Fed. Cir. 1999) (adopting the bad-faith requirement for Lanham Act claims). See Hunter Douglas, 153 F.3d at 1336 (“[I]n a case involving a patentholder’s conduct in . . . publicizing a patent, if the plaintiff were to fail to allege that the defendant patentholder was guilty of . . . bad faith in the publication of a patent, then the complaint would be dismissed for failure to state a claim upon which relief can be granted because of federal preemption.”). Judkins v. HT Window Fashion Corp., 529 F.3d 1334, 1337, 1342 (Fed. Cir. 2008). Other courts have applied the requirement in other contexts. E.g., Foboha GmbH v. Gram Tech., Inc., 2008 WL 4619795 (N.D. Ill. Oct. 15, 2008) (statements made during pending reexamination). The “objectively baseless” standard was first applied to “pre-litigation” infringement letters (e.g., cease-and-desist letters). See Globetrotter Software, Inc. v. Elan Computer Group, Inc., 362 F.3d 1367, 1377 (Fed.Cir.2004). In Dominant, the court held that the “‘objectively baseless’ standard applies to publicizing a patent in the marketplace as well as to pre-litigation communications.” 524 F.3d at 1260 n. 5. GP Indus., Inc. v. Eran Indus., Inc., 500 F.3d 1369, 1374 (Fed. Cir. 2007). See also ISI Int’l Inc., v. Borden Ladner Gervais LLP, 316 F.3d 731, 733 (7th Cir. 2003) (holding that “letters sent to customers do not come within the scope of ” the Lanham Act and so are not actionable).

Patentee’s Pre-Suit Letters Charging Infringement

Even if bad faith can be alleged, the remaining elements of any cause of action must be established.38 Courts distinguish between claims based upon the filing of litigation, and claims based upon pre-suit communications with customers or accused infringers.39 Claims based on prefiling conduct and communications are discussed here; claims and potential sanctions and liability for merely filing a lawsuit are discussed in the next section; claims and sanctions based on conduct during litigation itself, rather than the mere filing of it, are discussed in Chapter 9. Prefiling communications with customers of potential infringers raise thornier problems,40 as well as delicate business issues since they also might be customers of the patentee who are unlikely to be happy with the possible supply interruption and other hassles that patent infringement litigation with a supplier can create. With respect to the liability issues presented, claims have been made under both state and federal law, and so with respect to the state law claims, the contours of potential liability vary by state.41 In addition to the “bad faith” requirement created by the Federal Circuit, a state’s “litigation privilege” often affords a defense to many claims.42 Courts generally find some pre- and most post-litigation communications subject to a litigation privilege,43 which is often characterized as “absolute.”44 Significantly, however, it is “absolute” if at all only with respect to state law claims: federal claims are not subject to a state law litigation privilege.45 Even with respect to state law claims, the litigation privilege does not bar all

38. Some of the decisions cited in this section pre-date the Federal Circuit’s imposition of a “bad faith” requirement and so need to be read with that in mind. 39. PSN Ill., Inc. v. Ivoclar Vivadent, Inc., 2005 WL 2347209 (N.D. Ill. Sept. 21, 2005). 40. As noted elsewhere, First Amendment rights to petition government may protect a patentee’s communications with and threats of infringement against a potential party; but the same does not necessarily hold true with respect to communications with customers. See Open LCR.Com, Inc. v. Rates Techn., Inc., 112 F. Supp. 2d 1223, 1233–34 (D. Colo. 2000) (discussing the scope of Noerr-Pennington immunity and state litigation privilege in context of communications between patentee and customers of accused infringer). 41. E.g., Conditioned Ocular Enhancement, Inc. v. Bonaventura, 458 F. Supp. 2d 704 (N.D. Ill. 2006); Contech Stormwater Solutions, Inc. v. Baysaver Tech., Inc., 534 F. Supp. 2d 616 (D. Md. 2008). 42. See Waterloov Gutter Protection Sys. Co v. Absolute Gutter Protection, LLC, 64 F. Supp. 2d 398 (D. N.J. 1999) (analyzing whether state or federal “litigation privilege” applied to claims against patentee and its counsel and concluding state law applied). 43. See New Jersey Sports Prods., Inc. v. Bobby Bostick Promotions, LLC, 963 A.2d 890 (N.J. Super. Ct. 2007) (collecting cases holding that litigation privilege applies to prelitigation letters sent “bear” on subsequent litigation); Waterloov Gutter Protection Sys. Co v. Absolute Gutter Protection, LLC, 64 F. Supp. 2d 398 (D. N.J. 1999) (noting state had extended privilege to pre-suit communications “made in contemplation of litigation”) (collecting cases). 44. E.g., PSN Ill., Inc. v. Ivoclar Vivadent, Inc., 2005 WL 2347209 (N.D. Ill. Sept. 21, 2005). See generally T. Leigh Anenson, Absolute Immunity from Civil Liability: Lessons for Litigation Lawyers, 31 Pepp. L. Rev. 915 (May 2004). 45. Steffes v. Stepan Co., 144 F.3d 1070, 1074 (7th Cir. 1998) (collecting cases).

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claims in some states.46 However, where the charge is made in an advertisement or press release, the litigation privilege may not apply in some states.47 Although there is likely little risk associated with the typical use of a letter of infringement sent to either an accused infringer or its customers, clear guidelines are impossible to provide, given the differences in state substantive law, the undeveloped nature of federal claims, and the differing scope of state litigation privileges, a few points can be made: • The letter should come only after at least some analysis of the claims and accused product, to avoid objective baselessness; • Press releases or public pronouncements should be kept to a minimum, since they are often outside the scope of the state litigation privilege; • The letter should not disparage the accused product or its maker; and • The letter should come from counsel, not the patentee; • Counsel should discuss the possible risks, though minimal, with the client.48

C. Patentee’s Pre-Suit Investigation into Charges of Infringement Once a suit is filed in federal court, various additional sources of liability and responsibility arise. Foremost, the Federal Circuit has warned that a patent holder must “be prepared to demonstrate to both the court and the alleged infringer exactly why it believed before filing the claim, exactly why it believed that it had a reasonable chance of proving infringement.”49 If the patent owner cannot show that it had an objectively reasonable basis for filing the suit, then the court must examine the adequacy of the lawyer’s investigation into the suit.50 If the plaintiff can show neither sufficient objective evidence to file suit nor an adequate investigation, then “ordinarily” this should “result in the district court expressing its broad discretion in favor of Rule 11 sanctions, at least in the absence of a sound excuse or considerable

46. E.g., Conditioned Ocular Enhancement, Inc. v. Bonaventura, 458 F. Supp. 2d 704 (N.D. Ill. 2006). 47. Classen Immunotherapies, Inc. v. King Pharma., Inc., 403 F. Supp. 2d 451 (D. Md. 2005) (press release alleging infringement not protected by litigation privilege). 48. New Jersey Sports Prods., Inc. v. Bobby Bostick Promotions, LLC, 963 A.2d 890 (N.J. Super. Ct. 2007); St. Paul Fire & Marine Ins. Co. v. Birch, Stewart, Kolasch & Birch, LLP, 379 F. Supp. 2d 183 (D. Mass. 2005) (firm sued for not explaining risk that sending letter could entail). 49. View Eng’g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981, 986 (Fed. Cir. 2000). 50. Dome Patent LP v. Permeable Tech., Inc., 190 F.R.D. 88, 91 (W.D.N.Y. 1999).

Patentee’s Pre-Suit Investigation into Charges of Infringement 95

mitigating circumstances.”51 State law claims, such as malicious prosecution, have also been based upon faulty pre-suit investigations, whether or not Rule 11 is satisfied.52 While Rule 11 applies to all civil suits in federal court, it has special force in patent cases where the district court has, in addition, adopted local rules requiring disclosures in patent cases. As it will be explained more fully, a patentee can violate both Rule 11 and a district court’s local rules by failing to conduct adequate pre-suit discovery. What is “reasonable” obviously varies with the facts. In addition, the Federal Circuit has held that whether a litigant has complied with Rule 11 turns on law not unique to patent law, and so regional circuit law controls.53 Thus, what may be proper in one circuit may be improper in another, even though the Federal Circuit will hear any ultimate appeal. However, there are some basic steps that competency requires and which may be necessary to avoid liability for attorneys’ fees or damages under both federal or state law.

1. Is the Plaintiff a “Patentee?” First, the lawyer representing the plaintiff must investigate whether the party proposed to be named as plaintiff is a “patentee” under the act.54 If the patent was issued to the named party, and there have been no subsequent transfers, assignments, or conveyance of any rights under the patent, this is often a simple matter. However, where the initial assignee has sold or otherwise conveyed some or all rights represented by the patent, investigation into whether the transfer was sufficient to give the proposed named plaintiff standing as a “patentee” is required.55 In some circumstances, proper pleading may require more than one plaintiff be named. The failure to reasonably investigate this threshold

51. Id. See Pellegrini v. Analog Devices, Inc., 2008 WL 2329403 (Fed. Cir. July 2, 2008) (finding no abuse of discretion in district court’s finding of Rule 11 violation and award of sanctions). 52. Verve, LLC v. Hypercom Corp., 2006 WL 2390505 (D. Ariz. Aug. 16, 2006) (addressing motions for sanctions and for claims under state law). 53. Manildra Milling Corp. v. Ogilvie Mills, Inc., 76 F.3d 1187, 1183 (Fed. Cir. 1996); Centillion Data Systems, LLC v. Convergys Corp., 2006 WL 20777 (S.D. Ind. 2006). 54. See, e.g., FieldTurf, Inc. v. Southwest Recreational Labs, Inc., 235 F. Supp. 2d 708 (E.D. Ky. 2002), vacated in part, FieldTurf, Inc. v. Southwest Research Recreational Indus., Inc., 357 F.3d 1266 (Fed. Cir. 2004); Verve, LLC v. Hypercom Corp., 2006 WL 2390505 (D. Ariz. Aug. 16, 2006). 55. See Shatterproof Glass Corp. v. PPG Indus., Inc., 1995 WL 5609 (Fed. Cir. Jan. 6, 1995) (holding that plaintiff ’s counsel should have determined that its client was no longer a patentee but reversing district court’s finding that failure to do so was grossly negligent).

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question of standing has led firms to be sanctioned under Rule 11 as well as other mechanisms, such as Section 1927 and inherent power.56

2. Is the Patent in Force? Second, the patent must still be in force, at least if future damages or injunctive relief is sought, or must have expired within six years of filing suit. Maintenance fees are due on patents every few years, and if they are not paid, the patent lapses.57 Competent counsel can easily discern whether maintenance fees have been paid. If they have not, there are means to revive the patent that is available under some circumstances.58 Even an expired patent has value, since in most circumstances, damages accruing six years prior to its expiration may be recovered. Nonetheless, a pleading seeking damages based upon on an expired patent probably should inform the defendant that only past damages, and not injunctive relief, are being sought to avoid charges of improper conduct.

3. Is the Defendant the Proper Defendant? Third, the plaintiff’s lawyer must ensure he is naming the proper defendant. “Requiring parties to determine with accuracy that they are suing the correct parties . . . is the most basic factual inquiry in any law suit.”59 Suing a party that as a matter of law does not infringe—because, for example, it does not even make the accused product—can result in sanctions.60 While usually this is straightforward, if the defendant is part of a complex interrelated corporate structure, more investigation may be required than in run-of-the-mill cases.

56. See, e.g., FieldTurf, Inc. v. Southwest Recreational Labs, Inc., 235 F. Supp. 2d 708 (E.D. Ky. 2002), vacated in part, FieldTurf, Inc. v. Southwest Research Recreational Indus., Inc., 357 F.3d 1266 (Fed. Cir. 2004); Digeo, Inc. v. Audible, Inc., 505 F.3d 1362 (Fed. Cir. 2007) (even when patents are purchased “as is,” no additional inquiry is required of patentee). 57. See generally, Michels v. U.S., 72 Fed. Cl. 426 (Fed. Cl. Ct. 2006) (holding it was not an unconstitutional taking for government to let patent lapse due to nonpayment of statutorily mandated maintenance fees). 58. See also Kasha v. Roth & Goldman, P.C., 2008 WL 690916 (Cal. Super. Ct. Jan. 12, 2006) (complaint alleging firm had advised patentee that a third-party’s patent had lapsed, and so the client invested money developing a product, but then learned the patent had been reinstated). 59. Classen Immunotherapies, Inc. v. Biogen IDEC, 381 F. Supp. 452, 457 (D. Md. 2005), quoting Callahan v. Schoppe, 864 F.2d 44, 46–47 (5th Cir. 1989). 60. See Fraser v. High Liner Foods (U.S.A.), Inc., 2009 WL 1951894 (Fed. Cir. July 8, 2009) (in affirming sanctions, court noted that plaintiff ’s counsel “did not even inquire as to the existence of these defendants prior to bringing suit”).


4. Is There an Objective Basis, Based Upon Reasonable Investigation, to Allege Infringement? Fourth, and less straightforward than the first three, there must be reasonable factual and legal investigation of the allegation of direct infringement of at least one claim of one patent-in-suit owned by the proposed plaintiff.61 What constitutes “reasonable” investigation can be a fact intensive issue. At a “bare minimum,” the plaintiff must “apply the claims of each and every patent that is being brought into the lawsuit to an accused [product or process] and conclude that there is a reasonable basis for a finding of infringement of at least one claim of each patent.”62 If this is not done, the plaintiff must be in position to offer “an explanation for its failure.”63 “Failure to do so . . . should ordinarily result in . . . [Rule 11] sanctions.”64 In the patent infringement suits (and despite the fact that regional circuit law controls), the Federal Circuit has “interpreted Rule 11 to require, at a minimum, that an attorney interpret the asserted patent claims and compare the accused device with those claims before filing a claim alleging infringement.”65 The difficult issues are (1) how deeply the legal investigation into claim meaning must go and (2) how sophisticated the analysis of the accused product must be. a. Interpretation of Claims The threshold issue concerns interpreting the claims. An accusation of infringement can be made only after the claims have been analyzed. Because claim

61. See generally Pellegrini v. Analog Devices, Inc., 2008 WL 2329403 (Fed. Cir. June 5, 2008) (finding Rule 11 violation where no evidence that direct infringement in the United States had occurred in suit charging infringement under Section 271(f)). 62. View Eng’g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981, 986 (Fed. Cir. 2001); see Classen Immunotherapies, Inc. v. Biogen IDEC, 381 F. Supp. 2d 452 (D. Md. 2003) (dismissing suit but refusing to sanction despite failure to investigate infringement). 63. View Eng’g., 208 F.3d at 986. 64. Id. 65. Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 295 (Fed. Cir. 2004), citing Antonious v. Spalding & Evenflo Companies, Inc., 275 F.3d 1066, 1072 (Fed. Cir. 2002); View Eng’g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981, 986 (Fed. Cir. 2000); Judin v. United States, 110 F.3d 780, 784 (Fed. Cir. 1997); S. Bravo Sys., Inc. v. Containment Techs. Corp., 96 F.3d 1372, 1375 (Fed. Cir. 1996) (affirming sanctions where lawyers relied on lay client to determine infringement). In some cases, the fact that regional circuit law applies may be outcome determinative. For example, the Fourth Circuit tends to take a more lenient approach to Rule 11 inquiries. See De Technologies, Inc., v. Dell Inc., 2006 WL 4677984 (W.D. Va. Feb. 28, 2006) (applying Fourth Circuit’s more relaxed standard to motion for sanctions based on inadequate pre-suit investigation and finding no violation).

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interpretation involves a question of law, it is subject to Rule 11(b)(2), which requires that all legal assertions be nonfrivolous.66 The problem the courts struggle with is the amount of effort and analysis required. Are full-blown Markman-type analyses required, or is something less sufficient? This is troublesome because, prior to construction of the claims by the district court, there is always some doubt about infringement. Courts, however, in analyzing Rule 11 motions hesitate to impose too great of an obligation on patentees with respect to claim construction, if the patentee in fact has conducted some level of analysis. “Claim interpretation is not always an exact science, and it is not unusual for parties to offer competing definitions of even the simplest claim language.”67 Thus, the question is not whether the “pre-filing interpretation of the asserted claims was correct, but only whether it was frivolous.”68 The preliminary nature of the inquiry, as well as the uncertainty regarding claim meaning, led one panel of the Federal Circuit to emphasize the limited nature of the inquiry into the details of the claim analysis: Qwest asks the Court to delve into the merits of Centillion’s infringement analysis; in other words, Qwest asks the Court to interpret a key claim of the ’270 patent before any claim construction hearing has been held or motion for summary judgment has been filed. The Court refuses to make these types of determinations at this stage of the litigation. Cf. Cooter & Gell v. Harmarx Corp., 496 U.S. 384, 396, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990) (stating that determination that a Rule 11 sanction is appropriate “is not a judgment on the merits,” nor even “a district court’s assessment of the legal merits of the complaint,” but rather “requires the determination of a collateral issue: whether the attorney has abused the judicial process, and, if so, what sanction would be appropriate”). To the extent that Qwest’s current motion seeks a determination on the merits, it is premature and the Court declines Qwest’s invitation to decide the merits on the current record. To the extent that Qwest seeks to assert that Centillion’s allegations of infringement are legally flawed and frivolous on their face, the Court cannot agree at this stage of the litigation.69

To sum up, while the claims must be construed, the question is whether the legal determination of claim meaning is frivolous.70 Thus, adopting a claim construction that “ignores the plain language of the disclosure” violates Rule 11.71 Given the reversal rate of district courts of claim construction rulings,

66. 67. 68. 69. 70. 71.

Antonious v. Spalding & Evenflo Companies, Inc., 275 F.3d 1066, 1072 (Fed. Cir. 2002). Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 295 (Fed. Cir. 2004). Id. Centillion Data Sys., LLC v. Convergys Corp., 2006 WL 20777 (S.D. Ind. Jan. 04, 2006). Antonious v. Spalding & Evenflo Companies, Inc., 275 F.3d 1066, 1072 (Fed. Cir. 2002). Eon-Net, L.P. v. Flagstar Bancorp, Inc., 239 F.R.D. 609, 618 (W.D. Wash. 2006), aff ’d in part, 2007 WL 2818634 (Fed. Cir. Sept. 27, 2007).


it would be hard to require more of lawyers at the outset of litigation to do much more than this, and in fact the cases suggest that a good faith effort to objectively construe claims is all that is required;72 doing nothing is not enough, but full-blown claim analysis is not. Where, exactly, the amount of effort required is a fact-dependent inquiry. b. Application of Claims to Accused Product or Process Reasonable inquiry into whether, as construed, the claims read on any accused product or process made by the targeted defendant is the important second step.73 The determination that a product infringes is an allegation of fact, and so is subject to Rule 11(b)(3).74 The amount of investigation required is subject to only a few bright lines. On one end of the spectrum, failing to conduct any analysis of a publicly available and easily analyzed or reverse-engineered accused product clearly fails to meet the standard Rule 11 requires with respect to analyzing infringement.75 For example, in Judin v. United States,76 the Federal Circuit held that the district court abused its discretion in not awarding sanctions where the patentee could have purchased an accused device relatively inexpensively, compared with the cost of litigation, and had not compared the accused device with the patent claims prior to filing suit.77 Similarly, relying entirely on a lay client to apply the claims is also improper.78 On the other end of the spectrum, a lawyer who tests accused products that can be reverse engineered79 or otherwise meaningfully broken down to be analyzed and compares the products to the claims by way of competently80

72. See Eon-Net, L.P. v. Flagstar Bancorp, Inc., 239 F.R.D. 609, 616–17 (W.D. Wash. 2006), aff ’d in part, 2007 WL 2818634 (Fed. Cir. Sept. 27, 2007). 73. See Dome Patent LP v. Permeable Technologies, Inc., 190 F.R.D. 88 (W.D.N.Y. 1999). 74. Antonious v. Spalding & Evenflo Companies, Inc., 275 F.3d 1066, 1074 (Fed. Cir. 2002). 75. View Eng’g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981, 986 (Fed. Cir. 2001) (imposing Rule 11 sanctions where patent holder performed no independent claim construction or written infringement analysis); Judin v. U.S., 110 F.3d 780, 784 (Fed. Cir. 1997) (Rule 11 violated where neither patentee nor attorney attempted to obtain accused device or compare it with patent claims); Verve, LLC v. Hypercom Corp., 2006 WL 2390505 (D. Ariz. Aug. 16, 2006) (analyzing state law claims where patentee “never obtained any Hypercom product and he was unsure whether he used or observed any Hypercom product” before filing suit). 76. 110 F.3d 780 (Fed. Cir. 1997). 77. Id. at 784. 78. Antonious v. Spalding & Evenflo Companies, Inc., 275 F.3d 1066, 1074 (Fed. Cir. 2002). 79. Refac Int’l, Ltd. v. Penn Nutrients, Inc., 962 F.2d 1048 (Fed. Cir. 1992). 80. For an example of incompetently prepared claim charts, see Eon-Net, L.P. v. Flagstar Bancorp, Inc., 239 F.R.D. 609 (W.D. Wash. 2006); Micromesh Tech. Corp. v. Am. Recreation Prods., Inc., 2007 WL 2501783 (N.D. Cal. Aug. 30, 2007).

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prepared claim charts will meet the standard required by Rule 11, even if it turns out that there is no infringement.81 In between, there are various practical problems that the courts do consider in deciding how much effort is enough to satisfy the Rule 11 standard. In some circumstances, Rule 11 will require physical examination of the accused product, at least where it is readily and easily accessible.82 Yet sometimes doing so may be practically difficult, if not impossible. Little investigation can as a practical matter be done to ascertain whether a competitor in its private factory is practicing a process covered by another patent, since permission to physically examine the plant is not likely to be granted.83 However, reasonable steps may require approaching the owner of the factory with concerns and seeking information about the process used, subject, of course, to appropriate protective orders and prosecution bars.84 Likewise, the intangible nature of some patents, particularly so-called business method patents, may preclude or limit pre-suit inquiry.85 Finally, there may be multiple, very similar products that might infringe: “it is not always necessary for the plaintiff’s attorneys to inspect each product separately . . . At a minimum, however, the evidence uncovered by the patent holder’s investigation must be sufficient to permit a reasonable inference that all the accused products infringe.”86 Related to this is whether “claim charts” are required. A claim chart is, of course, an accepted and common way to “map” the interpreted claim onto the accused product or process. A few courts have stated that claim charts

81. See, e.g., Cambridge Prods., Ltd. v. Penn Nutrients, Inc., 962 F.2d 1048 (Fed. Cir. 1992); Dome Patent LP v. Permeable Technologies, Inc., 190 F.R.D. 88 (W.D.N.Y. 1999); Rates Technology Inc. v. Mediatrix Telecom, Inc., 2007 WL 1987787 (E.D.N.Y. June 29, 2007) (claim charts and other evidence showed reasonable investigation). See also Rohm & Haas Co. v. Brotech Corp., 127 F.3d 1089 (Fed. Cir. 1997) (relying on various factors to conclude that district court erred in finding pre-suit investigation violated Rule 11); Valley Recreation Products, Inc. v. Arachnid, Inc., 1994 WL 530818 (Fed. Cir. Sept. 30, 1994) (same). 82. See generally Intamin, Ltd. v. Magnetar Tech., Corp., 483 F.3d 1328 (Fed. Cir. 2007) (Rule 11 did not require patentee to cut open metal devices where it analyzed other information that was available to form a reasonable basis for asserting infringement); Eon-Net, L.P. v. Flagstar Bancorp, Inc., 239 F.R.D. 609 (W.D. Wash. 2006) (criticizing counsel for relying on advertisements about accused products rather than acquiring commercially available versions). 83. Cambridge Prods., Ltd. v. Penn Nutrients, Inc., 962 F.2d 1048 (Fed. Cir. 1992) (affirming denial of sanctions where missing information was not accessible to plaintiff ); Dome Patent LP v. Permeable Tech., Inc., 190 F.R.D. 88, 91–92 (W.D.N.Y. 1999) (denying sanctions where missing information “is obviously within the exclusive knowledge and control of [the defendant] at this time”). 84. See Hoffman-La Roche Inc. v. Invamed Inc., 213 F.3d 1359 (Fed. Cir. 2000) (pre-suit inquiry was reasonable in part because patentee asked accused infringer to disclose its process, but it refused to do so). 85. De Technologies, Inc., v. Dell Inc., 2006 WL 4677984 (W.D. Va. Feb. 28, 2006). 86. Antonious v. Spalding & Evenflo Companies, Inc., 275 F.3d 1066, 1075 (Fed. Cir. 2002).

Invalidity of the Patent 101

were, at least under the circumstances, required. This is probably a factdependent issue, but prudence dictates that, if not formal claim charts, lawyers use some reasonable analytical method to compare the claims to the accused products or processes. Often this will be a claim chart, since it is familiar to patent practitioners, but it need not always be, since reasonableness, not bright lines, is the norm under Rule 11 and other pertinent law governing pre-suit investigations.

D. Invalidity of the Patent Both plaintiffs and defendants must conduct reasonable inquiry concerning invalidity of the patent-in-suit. The patentee generally has a far easier duty to satisfy.87 For the patentee, the Federal Circuit has held that the patentee can rely on the statutory presumption of validity in 35 U.S.C. § 282 to support its belief that the patent was valid.88 In addition, if licenses have been taken under the patent, this also provide additional evidence of validity.89 Accordingly, in the absence of actually knowing before filing suit of strong, clear, and convincing evidence of invalidity,90 a patentee probably need do to avoid violating Rule 11. Because of this presumption, however, more investigation is required of a defendant before alleging invalidity, whether pled in a declaratory judgment complaint or an answer asserting invalidity. Assertions of invalidity must also be based upon reasonable inquiry under Rule 11 and taking into account the clear and convincing evidence standard. Certain obligations may prove to be bright lines: in the case of allegedly invalidating prior art, for example, a lawyer should at minimum ensure that there is a reasonable basis for asserting the invalidating art is “prior art” under one of the subsections of Section 102. This often can be accomplished by looking at the date of a printed publication and comparing it to the filing date of a U.S. patent. On the other hand, some issues may require additional investigation. For example, where public accessibility is an issue—such as where a dissertation allegedly anticipates a claim, but the lawyer knows no facts concerning whether and if so when it became “publicly accessible” and so “prior art”

87. See generally, VData, LLC v. Aetna, Inc., 2006 WL 3392889 (D. Minn. Nov. 21, 2006). 88. Avia Group Int’l, Inc. v. L.A. Gear Cal., Inc., 853 F.2d 1557, 1562 (Fed. Cir. 1988); Q-Pharma, 360 F.3d at 1303; Micromesh Tech. Corp. v. Am. Recreation Prods., Inc., 2007 WL 2501783 (N.D. Cal. Aug. 30, 2007). 89. Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 295 (Fed. Cir. 2004). 90. See Thermocycle Int’l, Inc. v. A.F. Hinrichsen Sales Corp., 1991 WL 120299 (S.D.N.Y. June 26, 1991).

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under Section 102—reasonable investigation is required into the factors underlying accessibility. The lawyer must conduct a reasonable investigation to support a nonfrivolous basis to assert that the dissertation was publicly accessible prior to the critical date.

1. Note on ANDA Certifications Although it can be characterized as something other than a pre-suit inquiry, the filing of a Paragraph IV letter under the Hatch-Waxman Act must also be done with care. “The joint operation of §§ 271(e) and 285 require the . . . infringer to display care and regard for the strict standards of the HatchWaxman Act when challenging patent validity. . . . The Hatch-Waxman Act thus imposes a duty of care on an ANDA certifier.”91 The negligent filing of a letter is not enough; instead, there must be bad faith or “baseless” certification. 92 Increasing the risk of filing an ANDA letter is the context in which the certification must be made. Foremost, an ANDA filing must be filed without the benefit of discovery which, of course, can alter or change the legal theories that best support an argument of invalidity, noninfringement, or unenforceability. (The latter defense, of course, is not likely to be apparent from the public record in some instances.) In Takeda Chem. Indus., Ltd. v. Mylan Labs., Inc.,93 two generic drug companies filed an abbreviated new drug application (ANDA), certifying that certain patents were invalid as obvious. During litigation, however, the two companies shifted their obviousness argument to a different basis than asserted in their ANDA filing, and they also raised an inequitable conduct defense that was not included in the ANDA filing. The district court eventually held the patents valid and enforceable, and the Federal Circuit affirmed. In the next move, the patentee asked the district court to find the case “exceptional”—because of the weakness of the arguments and, in addition, due to litigation misconduct (that finding will be discussed). The district court found the case exceptional and so awarded the patentee nearly $17 million in attorneys’ fees. The Federal Circuit affirmed, holding the district court had not clearly abused its discretion in finding the case exceptional. In reaching that conclusion, the court emphasized that it was not the fact that one defendant had moved away from the invalidity arguments presented in its ANDA filing but instead was the fact that its ANDA filing itself was “baseless” and contained

91. Yamanouchi Pharma. Co. v. Danbury Pharmacal Inc., 231 F.3d 1339, 1347 (Fed. Cir. 2000). 92. Takeda Chem. Indus., Ltd. v. Mylan Labs., Inc., 549 F.3d 1381 (Fed. Cir. 2008). 93. See id.

General Issues of Law and Other Papers Beyond Pleadings

“insidious” scientific errors, ultimately supporting the conclusion that it had been filed in “bad faith.”94 With respect to the other, its own 30(b)(6) witness had undermined the linchpin of the obviousness argument presented in its ANDA filing.95

E. Unenforceability Again, both patentee and accused infringer have obligations relating to unenforceability. But, also again, the obligations on patentee are less.96 A patent is presumed valid and enforceable and so, absent strong, clear, and convincing evidence known to the patentee of unenforceability of the patent-in-suit, no further investigation would normally be necessary. As for the defendant, whether pled in a declaratory judgment complaint or an answer asserting unenforceability, allegations of inequitable conduct must also be based upon reasonable inquiry.97 While the amount of investigation is substantively no different for allegations of unenforceability rather than invalidity, as a practical matter the Federal Circuit’s repeated condemnations of unnecessary and ill-conceived allegations of inequitable conduct as a practical matter indicate that more investigation may be required. After all, a practitioner is accusing someone of intentionally deceiving the patent office—a very serious matter—and that can result in loss of registration as well as malpractice liability.

F. General Issues of Law and Other Papers Beyond Pleadings Obviously, Rule 11 applies to all aspects of patent litigation to the same extent it applies to other federal suits. Thus, other allegations in pleadings have been found to violate Rule 11. In one patent declaratory judgment case, the patentee’s lawyers filed a counterclaim against the plaintiff and his lawyer. This caused the lawyer to

94. 95. 96. 97.

See id. See id. See generally VData, LLC v. Aetna, Inc., 2006 WL 3392889 (D. Minn. Nov. 21, 2006). In re Hayes Microcomputer Prods., Inc. Patent Litig., 982 F.2d 1527, 1546 (Fed. Cir. 1992) (“Although we deplore such unfounded accusations of inequitable conduct as occurred here, we nevertheless uphold the district court’s denial of sanctions under Fed. R .Civ .P. 11.”); Serious Materials, LLC v. Supress Prods., LLC, 2008 WL 754878 (N.D. Cal. March 21, 2008) (denying sanctions for having pled inequitable conduct).

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withdraw from representing his client. Later, the lawyer filed a suit against the patentee’s counsel for violating his constitutional rights. The court was not amused and granted Rule 11 sanctions on the lawyer for filing the suit.98 However, the Federal Circuit has recognized that novel legal claims do not always violate Rule 11.99 Finally, it bears emphasizing that although the focus of this chapter is on pleadings, legal arguments and factual averments made in any filed paper can violate Rule 11, as the rule applies to all filed papers, not merely pleadings.100 Thus, litigation misconduct and other improper conduct in the form of improper legal or factual arguments can violate Rule 11, as seen in Chapter 9.

G. Issues of Privilege and Work Product Concerning Pre-Suit Materials It may be important that all documents genuinely created to satisfy a Rule 11 obligation, and in anticipation of litigation, be properly recorded and recognized as such, and for two reasons. First, if noninfringement is eventually found, the documents and other work can be used to rebut any Rule 11 motion filed by the accused infringer. Second, and of more general importance, they should be created in such a way that they can be identified during litigation and protected from discovery. Generally, of course, documents and other information subject to the attorney-client or work product privileges are protected from disclosure. Documents created to satisfy the pre-suit investigation requirements under Rule 11 may be privileged, but more likely they will fall within the work product protection, which generally provides greater protection. However, if a document is prepared ahead of litigation, but not in anticipation of it, it may be discoverable.101 The point at which a document is prepared “in anticipation of litigation,” and thus can be claimed as work product, is not bright, but it can be critical. Careful documentation may help to protect borderline documents from disclosure. For example, over the objection of the patentee-plaintiff that they were work product, the Eastern District of Texas ordered the production of

98. Thomason v. Norman E. Lehrer, P.C., 182 F.R.D. 121 (D. N.J. 1998). 99. Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc., 96 F.3d 1390 (Fed. Cir. 1996) (patentee’s claim for injunctive relief against nonparty did not justify award of sanctions under Rule 11). 100. Antonious v. Spalding & Evenflo Companies, Inc., 281 F.3d 1258 (Fed. Cir. 2002). 101. See Reedhycalog UK, Ltd. v. Baker Hughes Oilfield Operations, Inc., 2007 WL 1217897 (E.D. Tex. Apr. 24, 2007).

Issues of Privilege and Work Product Concerning Pre-Suit Materials

pre-suit tests that analyzed the accused products.102 The patentee’s witness gave conflicting testimony as to whether the patentee was anticipating litigation at the time they were conducted, and so the court ordered their production because the patentee had “failed to show that the primary purpose of the testing was to prepare for litigation.”103 It is important for counsel to create the record necessary to sustain a claim of work product if, in fact, testing or other analyses are done in anticipation of litigation. This is because if a “document would have been created regardless of whether litigation was expected to ensue, the document is deemed to have been created in the ordinary course of business and not in anticipation of litigation.”104 Thus, to the extent practicable, documents created at the request of an attorney by an engineer or scientist to determine infringement or some other issue in litigation should be so noted, particularly if litigation is not imminent or obviously on the horizon.

102. Id. 103. Id., 2007 WL 1217897 at *3. 104. Id., 2007 WL 1217897 at *2, citing United States v. El Paso Co., 682 F.2d 530 (5th Cir. 1982).

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CHAP T ER

6 Ethical and Other Constraints on Pre-Suit Investigations and Pre-Suit Enforcement Efforts

A. Ethical Constraints on Pre-Suit Investigations 1. Counsel Representing a Party in a “Matter” May Not Communicate with a Person “Represented by Counsel” in that Matter About that Matter a. Rule 4.2 Prohibits Certain Ex Parte Contacts 2. Is There a “Matter?”

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108 108 109

3. Does Counsel “Know” the Person “Represented by Counsel” in Terms of Rule 4.2?

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a. Note on the Impact of Federal Choice of Law Rules

111

b. Current Employees of an Opposing Party

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4. Contacts with Current Employees Through Web Sites of the Opposing Party

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a. Former Employees of an Opposing Party

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5. In-House Counsel’s Inability to Alter Rule 4.2

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6. Does Model Rule 4.2 Apply to Undercover Investigations? a. Model Rule 4.3

121 124

7. Is the Use of an Undercover Investigator “Dishonest” Under Rule 8.4 or Rule 4.1?

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B. Authority Holding White Lies Are Acceptable

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C. Authorities Finding White Lies to Be Deceitful

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Chapter 6 Ethical and Other Constraints on Pre-Suit Investigations

A. Ethical Constraints on Pre-Suit Investigations As seen in Chapter 5, Rule 11 and other state and federal law generally require reasonable investigation prior to making a statement of law, an assertion of fact, or a denial of an averment. As a result, an attorney must conduct adequate presuit investigation before filing a pleading or other paper is filed. Likewise, any motion must be supported by adequate investigation into the law and facts.1 Factual investigation comes in two broad forms: informal investigation and formal discovery. Formal discovery is generally available only after pleadings are closed, and in limited circumstances under Federal Rule of Civil Procedure 27, beforehand. Thus, support for many pleadings will be available only through informal investigation, not formal discovery. Similarly, support for assertions in motions may more readily be available and be more cheaply available, through informal investigation rather than formal discovery; these efforts, too, are limited by ethical rules. Informal investigation has enormous benefits over formal discovery and obviously should be encouraged and allowed, absent countervailing interests. It is cheaper and more efficient (particularly with respect to cooperative nonparty witnesses). For example, thorough pre-suit investigation may result in fewer lawsuits, since it will uncover facts establishing that liability does not exist. Yet, it is during informal investigations that other ethical rules can inhibit compliance with the requirement of investigation underlying Rule 11 and similar state and federal laws. While none of the rules or law discussed here limit the ability of a lawyer to conduct adequate legal investigation, at least to the extent that term is understood to mean investigation into statutes, regulations, or the common law. But several common ethical rules do limit the ability to conduct pre-suit investigation into the facts—including facts necessary to make legal arguments. This chapter now turns to these limitations.

1. Counsel Representing a Party in a “Matter” May Not Communicate with a Person “Represented by Counsel” in that Matter About that Matter a. Rule 4.2 Prohibits Certain Ex Parte Contacts Rule 4.2 in states that follow the Model Rules provides: In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another

1. See Chapter 9; Ideal Instruments, Inc. v. Rivard Instruments, Inc., 245 F.R.D. 381 (N.D. Iowa 2007).

Ethical Constraints on Pre-Suit Investigations 109 lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order.

Thus, for the rule to apply, the lawyer must be representing a client, must be communicating about the subject of the representation, and must be communicating with a person the lawyer “knows” to be represented by counsel “in the matter.” Thus, the rule does not apply if the lawyer is not representing a client. Beyond that, the lines are less bright.

2. Is There a “Matter?” The timing of the investigation may be critical to whether contact with an opposing party, or an employee thereof, violates Rule 4.2. If the contact occurs before a “matter” exists, or counsel knows the person is represented by counsel in that matter, then Rule 4.2 does not apply.2 While the concept is clear at the margins, it is hazy in the middle. On one end of the spectrum, once suit is filed, a “matter” exists. But a “matter” can exist before litigation is filed. Two similar cases illustrate the factors that courts consider in determining whether, prior to filing suit, a “matter” exists. In the first, Jorgenson v. Taco Bell Corp.,3 Taco Bell sought to disqualify a lawyer who, prior to filing an employment discrimination suit, had hired a private investigator who had interviewed the alleged harasser and two other employees. Taco Bell argued that the lawyer should have known that once suit was filed, the employees would be represented by counsel, and so the contacts were improper. The court rejected the argument, and refused to disqualify the lawyer. In so doing it stated: Taco Bell’s proposal has wide and troubling implications. Under it, counsel for a plaintiff who is a tort victim would risk disciplinary action by interviewing adverse parties or their employees, if that counsel “should have known” such interviewees would be represented by some unidentified counsel after a complaint is filed. Reasonable investigations by counsel in advance of suit being filed to determine the bona fides of a client’s claim would be precluded. Every plaintiff ’s attorney should know, for example, that some defense counsel will, with rare exceptions, be provided by a liability insurance carrier to represent its insured after the filing of a complaint alleging acts within the ambit of the coverage. Similarly, every defense counsel should know that frequently an injured plaintiff who may, without counsel, preliminarily negotiate with the

2. See generally, Weider Sports Equip. Co. v. Fitness First, Inc., 912 F. Supp. 2d 502 (D. Utah 1996). 3. 58 Cal. Rptr.2d 178 (Cal. App. 1996).

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Chapter 6 Ethical and Other Constraints on Pre-Suit Investigations liability carrier’s representative, will ordinarily retain counsel to file suit if no settlement is reached. In these situations, Taco Bell’s proposed expansion of the application of rule 2-100 [California’s version of Model Rule 4.2] would arguably mean that both plaintiff and defense attorneys would be subjected to disciplinary action for violating rule 2-100 if they directed interviews of claimants or alleged tortfeasors, although no determination to file suit had been made and no lawyer to file or defend it had been retained. Taco Bell contends that it had unidentified “house counsel,” as Jorgensen’s attorney “should have known,” available to communicate with Jorgensen’s attorney before her investigator conducted interviews of its employees. Taco Bell reasons that Jorgensen’s lawyer had to first identify its house counsel and seek that counsel’s permission to interview Taco Bell’s employees to avoid violation of rule 2-100. Numerous corporations in America have full or part-time house counsel. That knowledge or presumptive knowledge does not trigger the application of rule 2-100, unless the claimant’s lawyer knows in fact that such house counsel represents the person being interviewed when that interview is conducted.4

In the second, Shoney’s, Inc. v. Lewis,5 the court disqualified a lawyer who had taken precomplaint statements from two of the defendant’s managers while investigating whether to file a sexual harassment suit. The court held there was a matter, and the lawyer knew the employees were represented in it, because the lawyer had discussed the matter with the employer’s lawyer before contacting the employees. The court suppressed the statements gained through the improper contact.6 Some courts have gone further and held that a “matter” can exist before suit is filed, and any communication occurs between counsel. In a recent patent case from Pennsylvania, the court rejected the argument that without a pending suit and despite the lack of communication between counsel, a matter did not exist.7 If there is a matter, the communication must be about the matter. The lawyer may freely discuss something other than the “matter” in which she represents a client, as a comment to the rule makes clear: “This rule does not prohibit communication with a represented person, or an employee or agent of such a person, concerning matters outside the representation. For example, the existence of a controversy between a government agency and a private party, or between two organizations, does not prohibit a lawyer from either from communicating with nonlawyer representatives of the other

4. Jorgensen, 58 Cal. Rptr.2d at 180 5. 875 S.W.2d 514 (Ky. 1994). 6. See Inorganic Coatings, Inc. v. Falberg, 926 F. Supp. 517 (E.D. Pa. 1995) (disqualifying lawyer in trademark infringement action under facts similar to Shoney’s). 7. Penda Corp. v. STK, LLC, 2004 WL 1628907 (E.D. Pa. July 16, 2004) (excluding evidence).

Ethical Constraints on Pre-Suit Investigations 111

regarding a separate matter.”8 While in a disciplinary case, distinctions about the meaning of “matter” matter, they do not in the real world because of the risk of the client not remembering the conversation as clearly “unrelated” as the lawyer did, or of a court characterizing the contact as involving the same “matter” even if the lawyer did not subjectively think it did. Care needs to be given when a contact is made about some other “matter,” including considering whether to obtain consent to record the conversation to avoid misunderstandings.

3. Does Counsel “Know” the Person “Represented by Counsel” in Terms of Rule 4.2? “Knowledge” is defined to include not just actual knowledge but also knowledge that can be inferred from the circumstances.9 Thus, subjective knowledge is not required. A few states have modified their version of Rule 4.2 to require, ostensibly, less than knowledge but rather utilize a “should have known” standard. A comment to Iowa’s Rule 4.2, for example, provides: The prohibition on communications with a represented person only applies in circumstances where the lawyer knows that the person is in fact represented in the matter to be discussed. This means that the lawyer has actual knowledge of the fact of the representation; but such actual knowledge may be inferred from the circumstances. Thus, the lawyer cannot evade the requirement of obtaining the consent of counsel by closing eyes to the obvious.10

Thus, prior to pending suit, if a lawyer knows the opposing party is represented by counsel because he has discussed the matter with the opponent, the strictures of Rule 4.2 likely apply. In some states, a “should have known” or “it was obvious” standard applies. When a natural person is the opposing party, there is little to analyze under this prong. However, if an entity (corporation, partnership, etc.) is the opposing party, the meaning of the term “represented by counsel” in Rule 4.2 is counter intuitive and, also, not uniform among the states. This section addresses how courts have interpreted “represented by counsel” as applied to entities. a. Note on the Impact of Federal Choice of Law Rules Patent litigation is filed in federal court. In federal court, many circuits hold that state rules do not control, even if the local rules of the court specifically

8. Rule 4.2, cmt. 4. 9. Model Rule 1.0 (terminology). 10. Iowa Rule 32:4.2, cmt. (emphasis added; citation omitted).

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adopt the state rules. Instead, “federal law” applies to ethical issues.11 The federal district court in McCallum faced this issue in the context of an ex parte contact with employees of a party opponent, reasoned as follows: This court has adopted a code of conduct in its local rules. Local Rule 505 utilizes the Code of Professional Responsibility promulgated by the Supreme Court of North Carolina. Notwithstanding, this Court must look to federal law in order to interpret and apply those rules. That is, even when a federal court utilizes state ethics rules, it cannot abdicate to the state’s view of what constitutes professional conduct, even in diversity cases. Therefore, while this Court has adopted the North Carolina Professional Code as its code of conduct, it still must look to federal law for interpretation of those canons and in so doing may consult federal case law and other widely accepted national codes of conduct, such as the ABA Model Rules. In addition, the Court may presume the attorney to be familiar with and bound by the ethical rules of the courts in which the attorney is admitted to practice.12

The court rejected the plea from the attorney whose conduct was at issue to follow only the North Carolina rules: This Court may apply its ethical code of conduct to out-of-state attorneys who practice before this Court and can sanction conduct which takes place in other states. By choosing to litigate in this Court, counsel submit to this Court’s federal law interpretation of ethical canons wherever the conduct takes place. Plaintiffs’ counsel has not shown that the interpretation set out today is in direct contradiction of any duty imposed by the state where he was admitted to practice or where the conduct occurred. Even if those states permitted the conduct at issue, that does not give an attorney permission to operate in contravention of the ethical duties as determined by this Court. If there is a disparity between ethical obligations of different states, counsel’s only choice is to follow the more expansive duty or seek guidance from this Court.13

Likewise, in a Maryland Federal district court analyzed for the first time, the propriety of ex parte contacts with former employees of a party opponent. Noting that the Maryland Rules of Professional Conduct were merely “the point of departure” for its analysis, the court analyzed authorities applying the Model Code, the Model Rules, and the Restatement of the Law Governing Lawyers.14 The court held that ex parte contacts with former employees could be improper even though Maryland’s bar opinions had held precisely

11. 12. 13. 14.

E.g., In re Dresser Indus., 972 F.2d 540 (5th Cir. 1992). McCallum, 104 F.R.D. at 108 (citations omitted). McCallum, 149 F.R.D. at 112 (emphasis added). Camden, 910 F. Supp. at 1118.


the opposite.15 Although recognizing that the law regarding ex parte contacts was “blurry” and that the question was one of first impression, the court disqualified the lawyers for violating its newly minted rule, stating: The issue is not whether counsel incorrectly interpreted unsettled law, but whether [counsel] displayed an inappropriate disregard for the unsettled nature of that law. . . . [As] appellee stated in Cagguila [v. Wyeth Lab, Inc., 127 F.R.D. 653 (E.D. Pa. 1989)], ‘in such an uncertain area of ethical conduct, we believe that a prudent attorney would have given notice to opposing counsel of the intent to take such a statement.’16

Thus, care must be given not only to the interpretation of the state rule but to any federal decisions on point. Determining the “national standard” on the scope of who is “represented by counsel” under Rule 4.2 is difficult at best. b. Current Employees of an Opposing Party ABA Model Code DR7-104(a) provides that a lawyer shall not: Communicate or cause another to communicate on the subject of the representation with a party the lawyer knows to be represented by another lawyer in that matter unless the practitioner has the prior consent of the other practitioner representing such other party or is authorized by law to do so.

Courts have split on the scope of the prohibition in DR7-104(a) as applied to corporate party current employees, disagreeing on which employees should be considered to be “represented” by a lawyer representing the corporation.17 Courts had reasoned: 1. only ex parte communications with those in the “control group”—were prohibited; 2. only ex parte communications with “upper level” personnel—broader than the “control group”—were prohibited; 3. only ex parte communications with any agent with authority to bind the corporation were prohibited; or 4. all ex parte communications were prohibited.18

With respect to Model Rule 4.2 a comment explains that the rule prohibits contacts “with [1] persons having a managerial responsibility on behalf of

15. See id. at 1119. 16. Camden, 910 F. Supp. at 1124, quoting University Patents, Inc. v. Kligman, 737 F. Supp. 325, 329 (E.D. Pa. 1990) (quoting Cagguila v. Wyeth Lab, Inc., 127 F. R. D. 653 (E.D. Pa. 1989)). 17. See Brown v. St. Joseph County, 148 F.R.D. 246, 249–51 (N.D. Ind. 1993). 18. See Brown, 148 F.R.D. 253–54 (collecting cases).

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the organization, and [2] with any other person [a] whose act or omission in connection with that matter may be imputed to the organization for purposes of civil liability or [b] whose statements may constitute an admission on the part of the organization.”19 The comment has been subject to wide-ranging interpretations, particularly the comment with respect to the “admissions” prong.20 To exhaustively survey the interpretations would take a law review article. A recent case catalogs the potential categories of current employees who may be subject to Rule 4.2, and in this particular jurisdiction, all of them are: 1. Current officials of the corporation or organization who have managerial responsibility; 2. Other current corporate or organizational employees whose act or omission in connection with the matter may be imputed to the corporation or organization for purposes of civil or criminal liability; 3. Those who are responsible for implementing the advice of the corporation’s or organization’s lawyers; 4. Any members of the corporation or organization whose own interests are directly at stake in a representation; and 5. An agent or servant of the corporation or organization whose statements concerns a matter within the scope of the agency or employment, which statement was made during the existence of the relationship and which is offered against the corporation or organization as an admission.21

Because the rule has been subject to disparate interpretations, careful analysis should be given to whether a particular current employee comes within the scope of the prohibition. Indeed, as next shown, the rules themselves are not always identical to the Model Rule, thus making predictability that much more difficult. Under the “National Standard” approach to determining the rules of ethics governing attorney conduct in federal court litigation, consideration must be given to the approach of the Model Code, the Model Rules, and any applicable state rules. Thus, an attorney seeking to contact a present employee of a party opponent must carefully evaluate the propriety of the contact under each of these three approaches and weigh the relative merits of each. If the contact is improper under one or more approaches, extreme care should be given before engaging in any ex parte contact.

19. Model Rule 4.2, cmt. 3. 20. See, e.g., Camden v. Maryland, 910 F. Supp. 1115 (D Md. 1996) (collecting cases which take varying approaches). 21. Paulson v. Plainfield Trucking, Inc., 210 F.R.D. 654, 657–58 (D. Minn. 2002) (citing and collecting cases).


4. Contacts with Current Employees Through Web Sites of the Opposing Party Is a visit to an opponent’s Web site during litigation a violation of such rules? Put the other way, does anything prevent an adversary during litigation from accessing an opponent’s Web page and gleaning information from it and then using it against the site owner? The Oregon Bar Association addressed this issue.22 It recognized that the digital nature of the contact was irrelevant: if the contact was prohibited in the real world, then it was prohibited in the digital one, too.23 Thus, since a lawyer can obviously read a 10-K filed by its opponent or its annual report, a lawyer who reads information posted on a Web site is not violating the rule. While a passive review of publicly accessible information does not violate the rule against ex parte contacts, Web sites are often interactive. The Oregon Bar Association distinguished between different degrees of interactivity: Some Web sites allow the visitor to interact with the site. The interaction may consist of providing feedback about the site or ordering products. This kind of one-way communication from the visitor to the Web site also does not constitute communicating “with a person” as that phrase is used in DR 7-104. Rather, it is the equivalent of ordering products from a catalog by mailing the requisite information or by giving it over the telephone to a person who provides no information in return other than what is available in the catalog . . . . . . A more interactive Web site allows the visitor to send messages and receive specific responses from the Web site or to participate in a “chat room.” A visitor to a Web site who sends a message with the expectation of receiving a personal response is communicating with the responder. The visitor may not be able to ascertain the identity of the responder, at least not before the response is received. In that situation, a lawyer visiting the Web site of a represented person might inadvertently communicate with the represented person. If the subject of the communication with the represented person is on or directly related to the subject of the representation, the lawyer violates DR 7-104. For example, assume Lawyer B’s client is a retailer in whose store a personal injury occurred. Lawyer A could visit the store and purchase products without the consent of Lawyer B, and could ask questions about the injury of clerks and other witnessed not deemed represented for purposes of DR 7-104. Lawyer A could not, however, question the store owner or manager or any clerk whose conduct was at issue in the matter. That same analysis applies if Lawyer B’s client operates an “e-store.” Lawyer A could visit the “e-store” site and review all posted information, purchase products, and respond to surveys or other requests for feedback from visitors. Lawyer A could not send a demand letter or an inquiry

22. Oregon St. B. Ass’n. Op. No. 2001-164 (Jan. 2001). 23. Id.

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Chapter 6 Ethical and Other Constraints on Pre-Suit Investigations through the Web site requesting information about the matter in litigation unless Lawyer A knew that the inquiry would be answered by someone other than Lawyer B’s client (or, if the client is a corporation, someone deemed represented).24

Thus, passively entering an opponent’s Web site does not implicate the rule against ex parte contacts. Information on a Web page is not “confidential” and can be used against a client in a matter. Only if the contact crosses into an improper “interactive inquiry” can the rule be violated. There is one error—and it is important—in the Oregon opinion. Under the Oregon opinion, a lawyer may not contact a person through the Internet unless the lawyer knows the person is not represented. This is incorrect, loose language.25 The Oregon Bar Association’s opinion takes the prohibition against ex parte contacts too far. Unless the lawyer knows the person with whom she is interacting is “represented” in terms of Model Rule 4.2, the contact should be proper. That issue will be discussed more fully, concerning “knowledge.” a. Former Employees of an Opposing Party Courts interpreting DR7-104(a) also had applied different interpretations to prohibitions against contacting former employees, including: 1. all ex parte communications were prohibited; 2. only ex parte communications with former employees whose acts or omissions could be attributed to the corporation were prohibited; 3. only ex parte communications with former managerial or “upper level” employees were prohibited; or 4. no ex parte communications with former employees were prohibited.26

By the late 1980s, most states adopted versions of ABA Model Rule 4.2.27 Courts had, however, split as to whether, and if so, how the rule applied to ex parte contacts with former employees. The source of the split was the comment to Model Rule 4.2, quoted just above. Focusing on the comment, courts had inconsistently interpreted the state rules, some courts concluding that they did not apply to former employees, one holding that its state rule barred all communication, and others concluding that its rule permitted ex parte communication under certain circumstances.28

24. 25. 26. 27. 28.

Id. See below. See Hanntz v. Shiley, 766 F. Supp. 258, 271 (D.N.J. 1991). See, e.g., University Patents, Inc. v. Kligman, 737 F. Supp. 325 (E.D. Pa. 1990). See Valassis v. Samelson, 143 F.R.D. 118 (E.D. Mich. 1992) (collecting cases).


A very few courts had adopted a virtually absolute ban on ex parte contacts with all but the lowest-level former employees.29 Although other courts have rejected the total ban, including the judge who authored the PSE & G opinion himself,30 the total ban still has some support: The PSE&G decision is appealing in several respects. First, it provides a brightline test for members of the bar seeking to comply with ethical rules. Second, it advances one of the policy goals underlying the ethical rule: to protect parties and witnesses from overreaching by attorneys. Third, it arguably aids in the development of clear factual records in the sense that it fosters use of depositions. While depositions are admittedly a more expensive discovery technique than informal, ex parte interviews, they protect all the rights of all parties without unduly favoring or prejudicing” either, and they Afar more reliable and ethically sound” than informal discovery tools.31

In 1991, the ABA specifically stated that Model Rule 4.2 did not apply to former employees under any circumstances.32 Since that time, almost every decision has reasoned that the state counterparts to Rule 4.2 do not apply to former employees.33 However, the earlier authority remains “good law” in many states, and some contrary decisions came after the 1991 ABA opinion.34 This means that

29. Public Serv. Elec. & Gas Co. v. Associated Elec. & Gas Ins. Serv., Ltd., 745 F. Supp. 1037 (D. N.J. 1990). 30. See Andrews v. Goodyear Tire & Rubber Co., Inc., 2000 WL 175098 (D. N.J. 2000). 31. Shearson Lehman Bros., Inc. v. Wasatch Bank, 139 F.R.D. 412, 416 (D. Utah 1991) (quoting PSE&G). 32. ABA Formal Op. 91-359 (1991). 33. See Smith v. Kansas City So. Ry. Co., 87 S.W.3d 266 (Mo. App. 2002); Shearson, 139 F.R.D. at 417–18; Brown, 148 F.R.D. at 253–54. See also Ohio Comm’n on Grievances and Discipline Op. 96-1 (Feb. 2, 1996) (no bar to ex parte contacts with former employees). The vast majority of courts have concluded that the rule does not apply, at all, to former employees. See, e.g., Johnson v. Ohio Dept. Of Youth Serv., 231 F. Supp. 2d 690 (N.D. Ohio 2002) (“Ex parte contact with a former employee is not, however, prohibited.”); In re Grievance Proceeding, 2002 WL 31106389 (D. Conn. July 19, 2002) (prohibition of 4.2 does not apply to former employees); Wallace v. Valentino’s of Lincoln, 2002 WL 31323811 (D. Neb. Oct. 17, 2002) (“ former employees of a corporate party may be interviewed by adverse counsel without the permission of the corporate counsel if the former employees are not individually represented in the same matter”); Humco, Inc. v. Noble, 31 S.W.3d 916 (Ky. 2000) (“A former employee with no present relationship with the organizational party is not a “party’ under the rule . . .”); Hanntz v. Shiley, Inc., 766 F. Supp. 258, 267 (D.N.J. 1991) (the policies of Rule 4.2 “do not justify a wholesale restriction on discovery of factual information, damaging or not”); DuBois v. Gradco Systems, Inc., 136 F.R.D. 341, 345 (D. Conn. 1991). 34. See, e.g., Schwartz v. Hood, 2002 WL 974678 (D. Mass. May 8, 2002) (“I will not distinguish between former and current employees since their statements and wrongful acts could be equally imputed to the defendant for purposes of liability.”); Camden, 910 F. Supp. at 1120–22; Rent Club, Inc. v. Transamerica Finance Corp., 811 F. Supp. 651, 657–58 (M.D. Fla. 1992).

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the scope of “represented by counsel” could be based upon cases decided before the 1991 ABA opinion, and it could be difficult to get a court to reject prior state law decisions on the strength of the ABA’s 1991 opinion.35 In addition, some state rules may in fact be broader than, even though worded the same as, Model Rule 4.2. Even now, the precise scope of Rule 4.2 as it applies to former employees is an open question in some jurisdictions.36 A recent opinion from South Carolina illustrates how difficult predicting what a rule is even where only a single state’s rules might apply and thus understates the difficulty in federal court litigation (as well, for that matter, in states where there as yet no clear judicial interpretation of the state version of rule 4.2): The Committee admonishes the Bar to be careful when contemplating contact with former employees. “The attorney who seeks [prior] court approval does not risk an ethical violation, but one who does not acts at his or her own peril.” In re Aircrash Disaster, 909 F.Supp. 1116 (N. D. Ill. 1995). Such an interview is “a veritable minefield in which. . . . short and tentative steps are the most appropriate.” Driggs Reorg. Corp. v. Driggs, 217 B.R. 67 (D. Md. 1988). Because the American Bar Association Standing Committee on Ethics and Professional Responsibility or the South Carolina Ethics Advisory Committee provides a particular analysis and interpretation of Rule of Professional Conduct 4.2, does not mean that a particular court in or outside the State of South Carolina will draw the same conclusions. Of particular note is that federal law governs the conduct of attorneys in federal courts. In re Snyder, 472 U.S. 634, 645 n.6 (1985). In the State of New Jersey, for example, three separate Federal District Court judges came up with three separate tests for allowing ex parte contacts with former employees. See, Public Service Electric & Gas Co. v. Associated Electric & Gas Insurance Services Ltd., 745 F. Supp 1037 (D. NJ 1990); Curley v. Cumberland Farms, Inc., 134 F.R.D. 77 (D. N.J. 1991); and In re The Prudential Insurance Co. of America Sales Practices Litigation, 911 F.Supp. 148 (D. N.J. 1995). To add confusion, the judge in the PSE & G case reversed his position recently in Andrews v. Goodyear Tire & Rubber Co., Inc., 2000 WL 175098 (D. N.J. 2000). The Southern District of New York engaged in an excellent analysis of the issue, reaching the conclusion that interviews with former employees were allowed in Polycast Technology Corp. v. Uniroyal, Inc., 129 F.R.D. 621 (S.D. N.Y. 1990). Likewise, courts in Illinois, Michigan, and Connecticut have allowed contact with former employees. Orlowski v. Dominick’s Finer Foods, Inc., 937 F.Supp. 723 (N.D. Ill. 1996); Valassis v. Samuelson, 143 F.R.D. 118 (E.D. Mich. 1992); and

35. See Park, 1996 WL 450263 at *1–2 (attempting to reconcile Florida’s conflicting cases and Opinion 91-359). 36. E.g., Patriarca v. Center for Living & Working, Inc., 778 N.E. 2d 877 (Mass. Sup. Jud. Ct. 2002) (“The question of the general applicability of rule 4.2 to former employees is one we need not address because, on the facts presented, the former employees in question would not have been protected, even while employed, from ex parte contact by rule 4.2.”).

Ethical Constraints on Pre-Suit Investigations 119 Dubois v. Gradco Systems, Inc., 136 F.R.D. 341 (D. Conn. 1991). In Virginia, ex parte contacts with former employees have been precluded where the former employee’s statements may impute liability to the former employer. Armsey v. Medshares Management Services, Inc., 184 F.R.D. 569 (W.D. Va. 1998). In Florida, some courts draw the line not on the nature of the prior employment, but rather on the former employee’s knowledge. Contact may be had with any ex-employee, but no confidential information may be elicited. Rent Club Inc. v. TransAmerica Rental Finance Corp., 811 F.Supp. 651 (M.D. Fla. 1992). In another case, however, a Florida court decided that ex-employees can be freely interviewed ex parte, but only subject to a series of guidelines that range from counsel identifying him or herself as adverse to the former employer to counsel delivering all of his or her work product to the other side, listing the employees contacted and all interview notes. Lang v. Reedy Creek Improvement District, 888 F.Supp. 1143 (M.D. Fla. 1995). Without being mindful of the views of various courts and jurisdictions on this subject, attorneys may find their evidence excluded and themselves disqualified from further representation. See, Zachair Ltd. v. Driggs, 965 F.Supp. 741 (D. Md. 1997). It is the interpretation of this Committee, however, that Rule 4.2 does not, at present, preclude ex parte communications with former employees. Any other interpretation “should be made by a duly promulgated amendment to the rule itself, rather than by the gloss of caselaw.” Davidson Supply Co., Inc. v. P.P.E., Inc., 986 F.Supp. 956, 958 (D. Md. 1997) (disagreeing with the Zachair opinion and relying upon the interpretation of Rule 4.2 given by the Maryland State Bar Association). COMMITTEE NOTE: This issue engendered much discussion among the committee members. Some members were of the opinion that a lawyer could not properly communicate ex parte with a former employee who was a member of the former employer’s control group. Others believed that it was improper for a lawyer to communicate with a former employee whose act or omission may be imputed to the organization for purposes of civil or criminal liability.37

Under the “national standards” approach to determining the rules of ethics governing attorney conduct in federal court litigation, consideration must be given to the approach of the Model Code, the Model Rules, and the relevant state’s rules. Once again, an attorney seeking to contact a former employee of a party opponent must carefully evaluate the propriety of the contact under each of these three approaches and weigh the relative merits of each. If the contact is improper under one or more approaches, extreme care should be given before engaging in any ex parte contact: as shown below, improper ex parte contacts may result in severe sanctions, including disqualification, thus obviating any savings achieved by avoiding the costs associated with formal discovery.

37. S.C. B. Ethics Advisory Comm. Op. 01-01 (2001).

120 Chapter 6 Ethical and Other Constraints on Pre-Suit Investigations

5. In-House Counsel’s Inability to Alter Rule 4.2 One basic point seems agreed upon, and it is a point important in patent litigation. Simply because the potential opponent has in-house counsel, it does not mean a matter is pending and the lawyer “knows” of representation in that matter. Because many patents are owned by corporations, it is common for patentees, as well as potential accused infringers, to have in-house counsel. However, the general rule is that a matter does not exist, and a lawyer is not deemed to know that a corporation has counsel in a matter, simply because it has in-house counsel: Taco Bell contends that it had unidentified “house counsel,” as Jorgensen’s attorney “should have known,” available to communicate with Jorgensen’s attorney before her investigator conducted interviews of its employees. Taco Bell reasons that Jorgensen’s lawyer had to first identify its house counsel and seek that counsel’s permission to interview Taco Bell’s employees to avoid violation of rule 2-100. Numerous corporations in America have full or part-time house counsel. That knowledge or presumptive knowledge does not trigger the application of rule 2-100, unless the claimant’s lawyer knows in fact that such house counsel represents the person being interviewed when that interview is conducted.38

Instead, “the mere existence of general counsel, without any particular involvement in the matter in issue, is insufficient to render a corporation ‘represented.’”39 “Particular involvement” occurs when the organization “has specifically referred the matter to house counsel.”40 The fact that a represented organization has in-house (or outside) counsel does not mean that every employee is covered by Rule 4.2, as the foregoing shows. As a corollary, counsel for an entity cannot “unilaterally create or impose representation of employees by corporate counsel” because that would “impede the course of investigation leading to or following the filing of a lawsuit.”41

38. 39. 40. 41.

Id. Miano v. AC & R Advertising, Inc., 148 F.R.D. 68, 80 (S.D.N.Y. 1993). Id. Terra Int’l, Inc. v. Mississippi Chem. Corp., 913 F. Supp. 1306 (N.D. Iowa 1996); see La Jolla Cove Motel & Hotel Apts., Inc. v. Superior Court, 121 Cal. App.4th 773 (Ct. App. Cal. 2004) (in-house counsel cannot assert blanket representation of all current employees); Patriarca v. Center for Living & Working, Inc., 778 N.E.2d 877 (Sup. Jud. Ct. Mass. 2002) (same); Humco, Inc. v. Noble, 31 S.W.3d 916 (Ky. 2000) (knowledge that company has in-house counsel does not mean lawyer “knows” all its employees are represented by counsel); ABA Formal Eth. Op. 95-396 (1995) (general counsel cannot ethically assert blanket representation of all current and former employees); Sup. Ct. Ohio Bd. Of Comm’rs on Grievances & Discipline Op. No. 2005-3 (Feb. 2005) (same); Phila. Eth. Op. 97-6 (July 1997) (same).


6. Does Model Rule 4.2 Apply to Undercover Investigations? Two Intellectual Property (IP) cases recently both found violations of Rule 4.2 where the conduct occurred after litigation had commenced. A third found a violation beforehand—the latter, first. In Penda Corp. v. STK, LLC,42a lawyer contemplating a patent infringement suit asked his paralegal to make calls to determine whether, for purposes of venue, infringing sales were occurring in the district. The paralegal, on her own, decided to say that her husband was looking for the product—a bedliner for a pick-up truck—when she made the calls. The court held that the customer service manager that the paralegal contacted was a person “represented by counsel” because he could make admissions against his corporate employer. The court held that her contacts were covered by Rule 4.2— even though they occurred prior to filing suit—and excluded evidence as a result of the violation. There were also two cases where the contact occurred afterward. In the first, Midwest Motor Sports, Inc. v. Arctic Cat Sales, Inc.,43 the defendants had hired an undercover investigator to pose as ordinary consumers and attempt to purchase snowmobiles that they were not authorized to sell. In deciding that Rule 4.2 had been violated, the court held that the contacts with the defendant’s owner, made for the purpose of obtaining admissions, violated Rule 4.2’s prohibition against contacts with “represented persons.” A similar result was reached in a 2007 patent case decided by Judge Robinson of Delaware.44 After suit had been filed, the law firm representing a patentee purchased on the open market, an accused infringing product and retained an employee of the opposing party to assist in setting it up. The court reasoned: Given Mr. Lin’s position and level of responsibility with respect to the Alcatel System, and because he was directed (as an employee of a represented party) to engage in conduct directly relevant to the subject matter of this litigation by F & R,5 the court finds that F & R violated Model Rule 4.2.45

42. 43. 44. 5.

2004 WL 1628907 (E.D. Pa. July 16, 2004). 144 F. Supp. 2d 1147 (D.S.D. 2001), aff ’d, 2003 WL 22382960 (8th Cir. 2003). Microsoft Corp. v. Alcatel Business Systems, 2007 WL 4480632 (D. Del. 2007). [Court’s footnote 5: “In the alternative, F & R was neither forthright nor disinterested when it consciously put Mr. Lin, without the benefit of legal representation, in the unwitting position of being directed to engage in conduct that has direct consequences vis à vis his employer and the subject matter of this litigation, conduct that violates Model Rules 4.1(a), 4.3 and 8.4(c).”] 45. Id.


On the other hand, several courts have concluded that, even if technically violated by undercover investigations that obtain admissions from “represented” employees, for policy reasons not expressed in the rule, contacts that are not designed to solicit privileged information even if they solicit admissions does not violate the rule. In Gidatex, S.rL. v. Campaniello Imports, Ltd.,46 the defendants filed a motion in limine to exclude evidence obtained prior to filing suit by the plaintiff’s undercover investigators from defendants’ sales clerks that showed that the defendant had not complied with the plaintiff’s cease and desist letter. The evidence showed that the investigators had misrepresented their purpose and identities in determining whether trademark violations were not ongoing. The court held that Rule 4.2 was “technically” violated, since the sales clerks’ statements were being offered as “admissions,” and the clerks were “represented by counsel” even though suit had not been filed, because of the “permanent adversarial status of the parties.” 47 However, the court then held: Although Bailey’s conduct technically satisfies the three-part test generally used to determine whether counsel has violated the disciplinary rules, I conclude that he did not violate the rules because his actions simply do not represent the type of conduct prohibited by the rules. The use of private investigators, posing as consumers and speaking to nominal parties who are not involved in any aspect of the litigation, does not constitute an end-run around the attorney/ client privilege. Gidatex’s investigators did not interview the sales clerks or trick them into making statements they otherwise would not have made. Rather, the investigators merely recorded the normal business routine in the Campaniello showroom and warehouse.48

The court emphasized that its “analysis of the technical requirements of the disciplinary rules only underscores my earlier conclusion that these rules do not apply in the context of this case.”49 Finally, even though the investigation occurred postcomplaint (to ferret out violation of an injunctive order), a similar result was reached in Apple Corps. Ltd. v. International Collectors Society.50 There, the plaintiff filed a motion for civil contempt, alleging the defendants had violated a prior order enjoining the defendants from selling certain stamps bearing likeness of The Beatles except in a manner approved by the court. After the order had been entered, the plaintiff’s attorney had her secretary order some of the

46. 47. 48. 49. 50.

82 F. Supp. 2d 119 (S.D.N.Y. 1999). 82 F. Supp. 2d at 124–25. 82 F. Supp. 2d at 125–26. 82 F. Supp. 2d at 126, n.3. 15 F. Supp. 2d 456 (D.N.J. 1998).


stamps in a manner that had not been approved by the court. Specifically, she had her several people call the defendants using false names and giving false reasons for why they wanted to order the stamps. The defendant sold the stamps in ways that were not approved by the court. In addition to opposing the motion, the plaintiff sought sanctions, arguing that the defendants had acted unethically in using undercover investigators to procure the stamps.51 Under New Jersey’s rule, however, only members of the “litigation control group” are covered by New Jersey’s rule 4.2.52 As a result, the contacts did not violate Rule 4.2. In dicta, however, the court also reasoned that Rule 4.2 could not be violated by the sort of typical undercover investigation: There is no evidence that any of Plaintiffs’ investigators asked the sales representatives any questions about instructions given or received with regard to Beatles/ Lennon stamps. Plaintiffs’ investigators did not ask the sales representatives about Defendants’ practices or their own practices or policies with regard to Beatles/Lennon stamps. The sales representatives’ communication with Plaintiffs’ counsel and investigators were limited to recommending which stamps to purchase and accepting an order for Sell-Off Stamps. The investigators did not ask any substantive questions other than whether they could order the Sell-Off Stamps. The only misrepresentations made were as to the callers’ purpose in calling and their identities. They posed as normal consumers. The investigator did not make any misrepresentation that he or she was a Beatles/ Lennon Club member. In most instances, Plaintiffs’ investigators told the sales representative that he or she was not a Beatles/Lennon Club member. Furthermore, Defendants charged all of Plaintiffs’ investigators’ the higher, non-member price for the Sell-Off Stamps. RPC 4.2 cannot apply where lawyers and/or their investigators, seeking to learn about current corporate misconduct, act as members of the general public to engage in ordinary business transactions with low-level employees of a represented corporation. To apply the rule to the investigation which took place here would serve merely to immunize corporations from liability for unlawful activity, while not effectuating any of the purposes behind the rule. Accordingly, Ms. Weber’s and Plaintiffs’ investigators’ communications with Defendants’ sales representatives did not violate RPC 4.2.53

The net impact of these decisions should be disconcerting, since they rely upon policies that may or may not be adopted by other courts or by the disciplinary agency responsible for licensing the lawyer involved. Even assuming

51. The district court struggled mightily with the issue of choice of law, since the lawyers who engaged in the conduct were licensed in New York, but the court was in New Jersey, which did not have a rule specifying which rules applied. 15 F. Supp. 2d at 472–73. The court ultimately held that New Jersey’s rules applied. 52. 15 F. Supp. 2d at 474. 53. 15 F. Supp. 2d at 474–75 (citations omitted).

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Rule 4.2 is not violated, however, the lawyer must still be concerned with whether Rule 4.3 is implicated. a. Model Rule 4.3 Unrepresented Persons are Protected by Rule 4.3 Many jurisdictions have rules like Model Rule 4.3, and, if so, provide: In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer’s role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding. The lawyer shall not give legal advice to an unrepresented person, other than the advice to secure counsel, if the lawyer knows or reasonably should know that the interests of such a person are or have a reasonable possibility of being in conflict with the interests of the client.

This rule, though innocuous in the abstract, probably creates as a practical matter a larger barrier to compliance with Rule 11. Some courts have required “counsel contacting [unrepresented persons] to advise them of (1) counsel’s representative capacity; (2) counsel’s reasons for seeking the interview; (3) the interviewee’s right to refuse to be interviewed; and (4) the interviewee’s right to have his or her own counsel present.”54 For example, a Georgia federal court stated: The Court will require, however, that plaintiffs comply with Model Rule 4.3 as it relates to a lawyer’s dealings with unrepresented persons. Accordingly, prior to making any ex parte contact with former employees of the defendant airlines, plaintiffs must deliver to the former employee a letter informing her of the nature of the lawyer’s role in the matter giving occasion for the contact, including the identity of the lawyer’s client and the fact that the witness’s former employer is an adverse party. Counsel must also inform the former employee that she has no obligation to talk with plaintiffs’ counsel. The Court will not require, as requested by defendants, that the letter include the name, address, and telephone number of the relevant corporate defendant’s counsel.55

The structure of the pre-suit investigation may bear on whether Rule 4.3 applies. Some argue that the typical undercover investigation is not the type of conduct covered by these rules. Based in part on this, the leading commentators argue that Rule 4.3 does not apply: Like Rule 4.2, this Rule is clearly limited to circumstances where the lawyer is acting as a lawyer—in this case, “dealing on behalf of a client.” Moreover, the

54. Terra, 913 F. Supp. at 1323 (collecting cases). 55. In re Domestic Air Transp. Antitrust Litig., 141 F.R.D. 556 (N.D. Ga. 1992).

Ethical Constraints on Pre-Suit Investigations 125 prohibitions embodied in the Rule—on stating or implying to the unrepresented person addressed that the lawyer is disinterested, and on allowing such a person to persist in misunderstanding the lawyer’s role—clearly have application only to a lawyer who is acting as a lawyer. Like Rule 4.2, Rule 4.3 is intended to prevent a lawyer from taking advantage of a third party. While Rule 4.2 turns upon the actual conduct of the lawyer, however, Rule 4.3 turns upon the presumed expectations of the third party in dealing with a lawyer. Thus, both of the prohibitions in Rule 4.3 rest on the premise that a person acting in the capacity of a lawyer engenders expectations as to probity and candor that the ethical rules require a lawyer to honor. A lawyer acting as a lawyer but disguising his identity as such in dealing with an unrepresented person can also violate Rule 4.3 because, although he is acting as a lawyer, he has allowed that person to misunderstand that fact. Since Rule 4.3 rests upon assumed expectations of persons dealing directly with lawyers, it should have no vicarious applicability to lawyers supervising the activities of undercover investigators and testers, for the latter by definition do not represent themselves as acting on behalf of a lawyer, and so cannot engender expectations of the sort that Rule 4.3 is intended to protect. No unrepresented person is realistically likely to apply his or her expectations of lawyers to an investigator or tester. Rule 4.3 could apply, however, to the activities of an investigator who represented himself as acting on behalf of a lawyer.56

Several courts have accepted this conclusion. One court suggested in dicta that Rule 4.3 did not apply, reasoning: Rule 4.3, Utah Rule of Professional Conduct treats contact with unrepresented persons. Icon, by this argument, assumes Thompson was not represented, either in an individual capacity, which he was not, or as a corporate representative which has not been established. The invocation of Rule 4.3 accepts Thompson’s status as that of a non-represented person. Under Rule 4.3 the lawyer, in dealing with such a person, is not to imply that the lawyer is not disinterested. However, Rule 4.3 may apply only to lawyers not investigators since the expectations are those of the unrepresented person dealing with a lawyer. It has been suggested the rule “should have no vicarious liability to lawyers supervising the activities of undercover investigators and testers, for the latter by definition do not represent themselves as acting on behalf of a lawyer so they cannot engender expectations of the sort that Rule 4.3 is to protect.” No unrepresented person is realistically likely to apply his or her expectations of lawyers to an investigator or tester. Rule 4.3 could apply, however, to the activities of an investigator who represented himself as acting on behalf of a lawyer. Icon has not shown a basis for invocation of Rule 4.3 under this analysis.57

56. Isbell, 8 Geo J. Legal Ethics at 825 (footnotes omitted). 57. Weider Sports Equip. Co. v. Fitness First, Inc., 912 F. Supp. 2d 502, 511–12 (D. Utah 1996) (citations omitted) (quoting the Isbell article).

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In the trademark context, the court in Apple Corps. Ltd. v. International Collectors Society,58 stated: The attorney disciplinary rules also restrict an attorney’s communications with an unrepresented party. New Jersey RPC 4.3 specifically provides protection for unrepresented employees. RPC 4.3 states that: In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer’s role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding . . . It is clear from the language of RPC 4.3 that it is limited to circumstances where an attorney is acting in his capacity as a lawyer—“dealing on behalf of a client.” Therefore, its prohibitions on allowing the unrepresented person to misunderstand that the lawyer is disinterested only apply to a lawyer who is acting as a lawyer. Like RPC 4.2, RPC 4.3 was intended to prevent a lawyer who fails to disclose his role in a matter from taking advantage of an unrepresented third party. Plaintiffs’ counsel and investigators in testing compliance were not acting in the capacity of lawyers. Therefore, the prohibitions of RPC 4.3 do not apply here. RPC 4.3 does not apply to straightforward transactions undertaken solely to determine in accordance with Rule 11 of the Federal Rules of Civil Procedure, the existence of a well-founded claim—in this case a claim of contempt.59

At least one court has held,, however, that Rule 4.3 and the admonitions required apply to undercover investigations, and another has indicated the possibility exists. The federal court for the District of South Dakota reasoned: When an attorney or an investigator or other agent for the attorney attempts to conduct an ex parte interview with a current employee of an adversary organization or corporation, Rule 4.3 . . . controls. *** The attorney or investigator shall: (1) fully disclose his or her representative capacity to the employee, (2) state the reason for seeking the interview as it concerns the attorney’s client and the employer, and (3) inform the individual of his or her right to refuse to be interviewed. The attorney or investigator shall not, under any circumstances, seek to obtain attorney- client or work product information from the employee.60

58. 15 F. Supp. 2d 456, 476 (D. N.J. 1998). 59. (Citations omitted). 60. 144 F. Supp. 2d at 1157 (citation omitted).


Similarly, in the patent case involving F&R, the court stated that Rule 4.3 might apply to and prevent undercover investigations, though it did not reach that issue, relying instead on the holding that the contacts violated Rule 4.2. Even if Rule 4.3 does not apply, the investigating attorney has some additional complications. The Apple court’s statement that the investigation must before it is begun comply with Rule 11 obviously creates some additional issues: ostensibly, a lawyer may not use undercover investigators to determine whether a claim exists; he may use it only to confirm an otherwise well-founded claim. This creates, as one court observed, a “troubled” relationship between Rule 4.2 and the requirement in Rule 11 that lawyers conduct adequate pre-suit investigations: If read literally, and implying the broadest possible interpretation for the term admission, a construction could arise from the argument that any communication that could fit under Rule 801(d)(2)(D) F.R.E [defining “admissions”] would be prohibited, therefore, virtually any communication with an organization employee would be prevented without the organization’s counsel being present or contacted if the organization is a party. This could prevent any pretrial inquiry that would gather evidence from an employee of an organization. In most instances, this would block acquisition of important evidence about corporate practices e.g. civil right violations, age discrimination, improper corporate or labor practices, improper commercial practices, and frauds. This application of Rule 4.2 would preclude, prior to litigation, the gathering of the necessary factual information to determine if a valid claim for relief could be maintained and in its most exaggerated context leave a party without a factual basis to assert an avenue of redress. The troubling features of this application of Rule 4.2 are observed in In re Air Crash Disaster Near Roselawn, Indiana, 909 F. Supp. 1116 (D.N.D.Ill.1995). The purpose of preserving attorney/client integrity is not involved where there is no protected interest under the attorney/ client relationship standard of Upjohn. The concern for the coercion of an employee who may make a statement and to protect against exploitation can be dealt with in the context of the conduct of counsel and the trustworthiness of the statement. The rule does not protect against organizational counsel’s own misconduct in interviewing organizational employees. Further, Rule 4.2 creates an “ethical minefield” for counsel, therefore, the court finds the suggested conclusion in In re Air Crash Disaster, supra not to be fully acceptable.61

7. Is the Use of an Undercover Investigator “Dishonest” Under Rule 8.4 or Rule 4.1? Even if Rule 4.2 does not apply and Rule 4.3 does not require the lawyer or investigator to reveal his true identity and admonish the interview subjects to

61. Weider, 912 F. Supp. at 508–09 (citations and footnotes omitted).


obtain their own lawyers, Rules 4.1 and 8.4 may be implicated, since a lawyer who hires an investigator to conduct a deceitful investigation may be indirectly misrepresenting material facts or engaging in dishonest conduct. If so, those rules are violated. Model Rule 4.1 requires that “in the course of representing a client,” a lawyer not knowingly “make a false statement of material fact . . . to a third person” or “fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting in a criminal or fraudulent act by a client. . . .” Model Rule 8.4(c) prohibits engaging “in conduct involving dishonesty, fraud, deceit, or misrepresentation.” Only a few courts and bar associations have addressed the precise issue of whether it is ethical for a lawyer to hire a third party to contact an actual or potential party who must misrepresent himself to obtain potential evidence of wrongdoing, including that of trademark or patent infringement. The authorities that have addressed the issue have split.62 Further, they have split even while interpreting identically worded rules. With this split, and with a lack of case law on the issue in most jurisdictions, lawyers who rely upon undercover investigations or “white lies” during investigations do so at some peril. Having said that, in many cases, evidence gathered by undercover investigations is used without challenge and no doubt under the assumption by all involved that dissembling during investigations is neither unethical nor sanctionable.63 It also appears fairly settled that government lawyers, such as those involved in criminal investigations64 and even bar grievance investigations,65 may use undercover investigations and the “deception” that accompanies them. However, despite the fact that deception is often used and unchallenged, it is an open question in most jurisdictions as to whether deception in civil

62. See Michael Bonsignore, Rules Exist for a Reason: A Commentary on Lawyers Hiring Investigators to Partake in Deceptive Tactics, 21 Geo. J. Legal Ethics 655 (2008); Gerald B. Lefcourt, Fighting Fire with Fire, 36 Hofstra L. Rev. 397 (2007); Kathryn M .Fenton, Ask the Ethics Experts: Ethical Implications of Lawyer Participation in Undercover Investigations and Other Covert Activities, 16 SUM Antitr. (2002). 63. See generally, Isbell 8 Geo. J. Legal Ethics at 797–802 (discussing numerous cases where evidence gathered in undercover investigations was admitted without questioning whether the practice in some way implicated legal ethical issues). See also Sanfill of Ga. Inc. v. Roberts, 502 S.E. 2d 343, 344 (Ct. App. Ga. 1998) (investigator called defendant to find location of former employee). 64. See Utah St. B. Ethics Advisory Comm., Op. No. 02-05 (March 18, 2002) (noting that both the ABA and other states had found undercover investigatory practices ethical when conducted by government lawyers to gather evidence); U.S. v. Parker, 165 F. Supp. 2d 431, 476 (W.D.N.Y. 2001) (holding that the rule prohibiting deceit “does not apply to prosecuting attorneys who provide supervision and advice to undercover investigations”). 65. See Virginia Eth. Op. 1842.


litigation violates the ethics rules.66 At least three rules are implicated when a lawyer directs that a nonlawyer, such as a legal assistant or independent investigator, to provide false information (including a fake name) to third parties: whether the conduct constitutes an impermissible ex parte contact with a “represented party” under Model Rule 4.2; whether any statements made must comply with Model Rule 4.3, governing unrepresented parties; and whether a dissembling investigator violates either Model Rule 4.1 or 8.4, which prohibit deceitful conduct. First, to be clear, if the lawyer cannot engage in the conduct, then he cannot induce a nonlawyer to engage in the conduct for him. A lawyer cannot simply use an investigator to do what he cannot do.67 For example, a lawyer cannot hire an investigator to contact a person who is “represented by counsel” in terms of Rule 4.2 and obtain information. Nor, if the person is not “represented by counsel” under Rule 4.2, may an attorney hire an investigator to engage in a contact that violates Rule 4.3.68 Thus, the question of whether a lawyer may engage in “deceit” or dishonesty during undercover investigations becomes paramount. If he cannot do it, he cannot request others to do it for him. In the abstract, acting “ethically” would certainly include acting “honestly.” Many would say that honesty is one of the core values of the legal profession. In that regard, disciplinary rules specifically require lawyers be “truthful” in statements to others; require them to disclose material facts to avoid committing fraud; and prohibit them from engaging “in conduct involving dishonesty, fraud, deceit or misrepresentation.” 69

66. See id. (“We do not address in this opinion and specifically reserve the issue of whether the analysis and result of this opinion apply to a private lawyer’s investigative conduct that involves dishonesty, fraud, misrepresentation or deceit.”); Am. B. Ass’n Comm. On Ethics and Professional Responsibility Formal Op. 01-422 (2001) (“The Committee does not address in this opinion the application of the Model Rules to deceitful, but lawful conduct by lawyers, either directly or through supervision of the activities of agents and investigators, that often accompanies nonconsensual recording of conversations in investigations of . . . discriminatory practices, and trademark infringement. We. . . . leave for another day the . . . question of when investigative practices involving misrepresentations of identity and purpose nonetheless may be ethical.”). 67. See, e.g., In re Environmental Ins. Declaratory Judgment Actions, 600 A.2d 165 (N.J. Super. Ct. 1991); Upjohn Co. Aetna Cas. & Sur. Co. 768 F. Supp. 1186 (W.D. Mich. 1991). 68. Model Rule 5.3 (responsibilities of lawyer for activities of supervised nonlawyers). The Ethics 2000 version of the comments to Model Rule 4.2 provide: “Communications authorized by law may also include investigative activities of lawyers representing governmental entities, directly or through investigative agents, prior to the commencement of criminal or civil enforcement proceedings.[ ] This implies that a communication is not “authorized by law[ ] where the lawyer conducting the activity is not representing a government entity. 69. Model Rules 4.1; 8.4(c). In addition, by violating Rule 8.4, the lawyer could violate Rule 4.4. See Isbell, 8 Geo. J. Legal Ethics at 826. In addition, an investigation that is illegal is clearly unethical.


Yet when lawyers are attempting to prove various wrongs, they often need to resort to tactics that clearly do not involve full disclosure of material facts and which clearly do involve deceit. For example, in employment or housing discrimination, it may be helpful for a lawyer to have minorities apply for jobs or seek to rent an apartment in order to obtain recordings or other evidence demonstrating that the would-be or actual defendant is violating the law. Likewise, in trademark disputes, it may be helpful to the trademark owner to purchase a product to demonstrate that “knock-offs” are being sold, in violation of the trademark.70 These undercover investigations by their nature require that the actors be less than honest. These investigations also often include the use of surreptitious tape-recording or videotaping—an activity which can be illegal in some states and may be unethical in others. The minority applicant does not, in fact, want the job; the trademark owner, in fact, wishes the item were not available and has no need for it. In both circumstances, the goal of the contact is to gather evidence, not to rent an apartment or buy a product or service. They no doubt assist the victim of the wrong by permitting evidence to be gathered that could not be obtained were total honesty required. Whether this form of inarguably dishonest and deceitful conduct violates the rules in the context of civil litigation is a question that has split the courts, bar associations, and commentators. No one seems to dispute, for example, that a person who dissembles as to his purpose or identity in making a contact is, in fact, making a misrepresentation of material fact. The rules prohibit doing so. That is where the disagreement begins. On the one hand, perhaps a majority of authorities reason that the fact that the conduct violates the rules does not end the inquiry: the issue should be whether the deeper issue of whether the conduct furthers the goals of the profession and not whether when viewed literally, the conduct violates the rule. Values, not literalism, matters most, some say, and the values of being free from discrimination or freedom from infringement of property rights exceeds the values furthered by enforcing a strict interpretation of the rules. Others, however, say that because disciplinary rules are quasi-criminal rules, the violation of which can result in forfeiture of the right to practice law, a rule which does not mean what it says should be amended.71 Further, they point out that the use of deception imposes costs on innocent people, as well as actual wrongdoers: a company that is not infringing a trademark or

70. Lawyers may not circumvent their ethical obligations by hiring a nonlawyer to do the work for them. Model Rule 5.3(c)(1) (providing that a lawyer is responsible for conduct by a nonlawyer that violates the rules if the lawyer “orders or, with the knowledge of the specific conduct, ratifies the conduct involved”). 71. See Sean Keveney, The Dishonesty Rule: A Proposal for Reform, 81 Tex. L. Rev. 381, 398 (2002).

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committing discrimination but which has its time and resources consumed by those who are not actually interested in buying its products or renting its homes is harmed. One could imagine, also, lawyers using testers in order to create cases where there had been no prior complaint of discrimination.

B. Authority Holding White Lies Are Acceptable Commentators have argued that the Model Rules can, and should ,be interpreted as not prohibiting misrepresentations made by testers.72 There are both statutory construction and policy arguments that have been mustered to hold that what is clearly a misrepresentation by an investigator is not a “misrepresentation” in terms of Rule 8.4(c). The leading commentators explored the statutory construction argument: That principle [of statutory construction] would require that Rule 8.4(c) apply only to misrepresentations that manifest a degree of wrongdoing on a par with dishonesty, fraud, and deceit. In other words, it should apply only to grave misconduct that would not only be generally reproved if committed by anyone, whether lawyer or nonlawyer, but would be considered of such gravity as to raise questions as to a person’s fitness to be a lawyer. Investigators and testers, however, do not engage in misrepresentations of the grave character implied by the other words in the phrase [dishonesty, fraud, deceit] but, on the contrary, do no more than conceal their identity or purpose to the extent necessary to gather evidence. 73

One case adopted this statutory construction argument.74 The policy argument has been used to justify several cases holding that investigators’ misrepresentations are not “misrepresentations.” In Apple, for example, the court essentially reasoned that Rule 8.4(c) should not be construed to cover the “misrepresentations” article to conclude that the rule simply did not apply to misrepresentations regarding identity or purpose, reasoning: Undercover agents in criminal cases and discrimination testers in civil cases, acting under the direction of lawyers, customarily dissemble as to their identities

72. David B. Isbell & Lucantonio N. Salvi, Ethical Responsibility of Lawyers For Deception by Undercover Investigators and Discrimination Testers: An Analysis of the Provisions Prohibiting Misrepresentation Under the Model Rules of Professional Conduct, 8 Geo. J. Legal Ethics 791, 811–26 (1995). 73. Isbell, 8 Geo. J. Legal Ethics at 817 (footnotes omitted). 74. Apple Corps. Ltd. v. Int’l Collectors Soc’y, 15 F. Supp. 2d 456 (D.N.J. 1998). See also Jane Shay Wald, Trademark Searches and Investigations, 668 PLI/Pat 9 (Nov. 2, 2001) (discussing cases).

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Chapter 6 Ethical and Other Constraints on Pre-Suit Investigations or purposes to gather evidence of wrongdoing. This conduct has not been condemned on ethical grounds by courts, ethics committees or grievance committees. This limited use of deception, to learn about ongoing acts of wrongdoing, is also accepted outside the area of criminal or civil-rights law enforcement. The prevailing understanding in the legal profession is that a public or private lawyer’s use of an undercover investigator to detect ongoing violations of the law is not ethically proscribed, especially where it would be difficult to discover the violations by other means. *** Plaintiffs could only determine whether Defendants were complying with the Consent Order by calling [Defendants] directly and attempting to order [The Beatles] stamps. If Plaintiffs’ investigators had disclosed their identity and the fact that they were calling on behalf of Plaintiffs, such an inquiry would have been useless to determine [Defendants’] day-to-day business practices in the ordinary course of business.75

Similarly, the trademark case of Gidatex, S.rL. v. Campaniello Imports, Ltd.,76 recognized that statements by undercover investigators were “technical” violations of rules prohibiting misrepresentations, but nonetheless stated: As for DR 1-102(A)(4)’s prohibition against attorney “misrepresentations,” hiring investigators to pose as consumers is an accepted investigative technique, not a misrepresentation. The policy interests behind forbidding misrepresentations by attorneys are to protect parties from being tricked into making statements in the absence of their counsel and to protect clients from misrepresentations by their own attorneys. The presence of investigators posing as interior decorators did not cause the sales clerks to make any statements they otherwise would not have made. There is no evidence to indicate that the sales clerks were tricked or duped by the investigators’ simple questions such as “is the quality the same?” or “so there is no place to get their furniture?” *** These ethical rules should not govern situations where a party is legitimately investigating potential unfair business practices by use of an undercover posing as a member of the general public engaging in ordinary business transactions with the target. To prevent this use of investigators might permit targets to freely engage in unfair business practices which are harmful to both trademark owners and consumers in general. Furthermore, excluding evidence obtained by such investigators would not promote the purpose of the rule, namely preservation of the attorney/client privilege.

75. 15 F. Supp. 2d at 475. 76. 82 F. Supp. 2d 119 (S.D.N.Y. 1999).

Authorities Finding White Lies to Be Deceitful In this case, Gidatex had a right to determine whether Campaniello had complied with Gidatex’s “cease and desist” letter dated October 16, 1997. The evidence gathered by the investigators demonstrates that defendants’ employees informed consumers that plaintiff ’s business no longer exists and that the other brands of furniture sold by Campaniello are “the same” as the Saporiti Italia brand. Neither of these statements are true. Courts have recognized the relevance of such evidence.77

C. Authorities Finding White Lies to Be Deceitful The Oregon Supreme Court wrote the seminal case explaining that the rules literally do not permit white lies. In re Gatti,78 The case presents multiple ironies. Several years before the relevant events, Gatti had previously complained to the bar about the conduct of the Department of Justice (DOJ) in using undercover investigators to pose as injured workers for purposes of infiltrating chiropractors’ and lawyers’ offices in a sting involving fraudulent workers’ compensation claims. The lawyer’s complaint was rejected by the bar, which advised him in writing that government lawyers “have more latitude in carrying out the agency’s regulatory powers in a surreptitious fashion than members of the Bar in the private sector.”79 Later, the lawyer made some phone calls and introduced himself under false pretenses in order to gather information for possible litigation. A complaint was filed with the bar against the lawyer, arguing that he violated disciplinary rules by making false statements in conducting this investigation. After rejecting the argument that the bar was estopped from asserting that his misrepresentations constituted an ethics violation because the bar had advised him that government lawyers conducting such investigations did not violate the rules, the court concluded that the lawyer had committed willful violations of the rules since he had misrepresented his identity in conducting the investigation.80 The court then turned to whether the rule should be interpreted to allow for an exception for misrepresentations limited “only to identity or purpose and made solely for purposes of discovering information. . . .”81 Noting that various civil rights and other organizations had filed amicus briefs

77. 78. 79. 80. 81.

82 F. Supp. 2d at 122 (footnotes and citations omitted). 8 P.3d 966 (Or. 2000). 8 P.3d at 969. 8 P.3d at 974. Id.

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supporting this view, the court reasoned that as a court it was powerless to create an exception: As members of the Bar ourselves—some of whom have prior experience as government lawyers and some of whom have prior experience in private practice—this court is aware that there are circumstances in which misrepresentations, often in the form of false statements of fact by those who investigate violations of the law, are useful means for uncovering unlawful and unfair practices, and that lawyers in both the public and private sectors have relied on such tactics. However, ORS 9.490(1) provides that the rules of professional conduct “shall be binding upon all members of the bar.” (Emphasis added.) Faithful adherence to the wording of DR 1–102(A)(3), DR 7–102(A)(5), ORS 9.527(4), and this court’s case law does not permit recognition of an exception for any lawyer to engage in dishonesty, fraud, deceit, misrepresentation, or false statements. In our view, this court should not create an exception to the rules by judicial decree. Instead, any exception must await the full debate that is contemplated by the process for adopting and amending the Code of Professional Responsibility. See ORS 9.490(1) describing process for formulating rules of professional conduct). Furthermore, this court is prohibited from inserting into ORS 9.527(4) an exception that the statute does not contain. ORS 174.010. That statute applies to a member of the bar “whenever * * * [t]he member is guilty of willful deceit or misconduct in the legal profession[.]” We decline to adopt an exception to DR 1–102(A)(3) and DR 7–102(A)(5), and we are without authority to read into ORS 9.527(4) an exception that the statute does not contain. Those disciplinary rules and the statute apply to all members of the Bar, without exception.82

The Oregon court reached the same conclusions in In re Ositis,83 where the attorney had hired an investigator to misrepresent his identity by posing as a journalist in conducting some telephone interviews related to potential litigation. The court reiterated the reasoning of Gatti, rejecting the argument that “an exception from the broad disciplinary rule prohibiting misrepresentation is necessary if lawyers are to succeed in discovering and rooting out wrongful conduct. . . .”84 The court stated that “faithful adherence” to wording of the rule, as well as to its precedent, did not “permit recognition of an exception for any lawyer to engage in dishonesty, fraud, deceit, misrepresentation, or false statements.”85 Eventually, however, the Oregon legislature amended

82. 83. 84. 85.

8 P.3d at 976 (citations and internal quotation marks omitted). 40 P.3d 500 (Or. 2002). 40 P.3d at 502. Id. See also Sequa Corp. v. Lititech, Inc., 807 F. Supp. 653 (D. Colo. 1992) (holding that a lawyer who believes that another lawyer has violated the rules must report it, not engage in his own investigation that relies upon dissembling and misrepresentation).

Authorities Finding White Lies to Be Deceitful

the rule to permit an exception for efforts “to obtain information on unlawful activity through the use of misrepresentations or other subterfuge.”86 In addition to this authority, some authority could be read to require disclosure by the investigator of the full facts. For example, the authorities, in regard to the propriety of ex parte contacts with unrepresented persons, suggest that full disclosure is required. Georgia’s bar association, for example, wrote that while it was appropriate to engage in an ex parte contact with a former employee, since the former employee had the right to decide whether to give evidence against its former employer, “it would be unethical to use deceit and false pretenses to deny the former employee is or her right.”87 A Pennsylvania bar opinion recently addressed this issue in the context of Facebook, the popular social networking site.88 The inquirer was a lawyer who had deposed a woman who stated in her deposition that she had a Facebook page. The lawyer believed the page would reveal information that he could use to impeach her testimony. Knowing, however, that she would not “friend” him on Facebook, he proposed to have an assistant use a fake name and hope to gain access to her page, and to then provide the information to him, which he would then use at trial to impeach her. The Pennsylvania bar association briskly said no to his request, labeling his plan “deceptive.” It reached this conclusion even assuming she let every other person who asked to be her friend onto her page: “Even if, by allowing virtually all would-be ‘friends’ onto her FaceBook . . . pages, the witness is exposing herself to risks like that [identifying information that is disclosed to the world], excusing deceit on that basis would be improper. Deception is deception, regardless of the victim’s wariness in her interactions on the internet and susceptibility to being deceived.”89 Finally, Judge Robinson in the F&R patent case indicated that undercover investigations after suit is filed may violate Rule 8.4(c), though she based her holding on other grounds.

86. Or. D.R. 1-102(D). See Arthur Garwin, Covert Work OK, 1 No. 6 Am. B. Ass’n J. E-Report 9 (Feb. 15, 2002). 87. St. B. of Ga. Formal Advisory Op. No. 94-3 (Sept. 1994). 88. Pa. Eth. Op. 2009-02 (March 2009). 89. Id.

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CHAP T ER

7 Pleading Ethically

A. Law Governing Federal Pleadings 1. Federal Rule of Civil Procedure 8

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B. Rule 11 Basis

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C. Pleading Infringement

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D. Defendants’ Pleadings

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A. Law Governing Federal Pleadings Patent litigation implicates many of the Federal Rules of Civil Procedure, but complying with Rules 8 and 9 raises issues of particular importance. Rule 8 is implicated by all pleadings; Rule 9 by those which allege fraud or mistake. Complying with the rules is important to clients because failure to properly plead can result in dismissal, at first without prejudice, under Rule 12(b)(6) and eventually with prejudice, if there are multiple failures to comply with the rules.1 Both motion practice and repleading drive up the costs of litigation, often unnecessarily and to the detriment of the client, the opposing party, and the court. Accordingly, ethical lawyering requires compliance with the rules governing pleading. Patent infringement raises particular pleading problems.

1. Federal Rule of Civil Procedure 8 Rule 8 sets standards for both patentees and accused infringers. Rule 8(a) applies to claims, while Rule 8(b) applies to defenses: (a) Claims for Relief. A pleading that states a claim for relief must contain: (1) a short and plain statement of the grounds for the court’s jurisdiction, unless the court already has jurisdiction and the claim needs no new jurisdictional support; (2) a short and plain statement of the claim showing that the pleader is entitled to relief; and (3) a demand for the relief sought, which may include relief in the alternative or different types of relief. (b) Defenses; Admissions and Denials. (1) In General. In responding to a pleading, a party must: (A) state in short and plain terms its defenses to each claim asserted against it; and (B) admit or deny the allegations asserted against it by an opposing party.2

The two somewhat similarly require, for the patentee, a “short and plain statement of the claim” and for the accused infringer, “in short and plain terms its defenses to each claim.”

1. Classen Immunotherapies, Inc. v. Biogen Idec, 381 F. Supp. 2d 452 (D. Md. 2005) (infringement allegations dismissed under Rule 12(b)(6) for failure to comply with Rule 8). 2. Fed. R. Civ. P. 8.

Pleading Infringement 2. Federal Rule of Civil Procedure 9(b) Federal Rule of Civil Procedure 9(b) provides in full: In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.3

Outside the patent context, this rule has been held to generally require that in instances alleging fraud or mistake, the pleading include, to comply with Rule 9(b)’s heightened pleading requirement, the complaint must (1) identify the speaker, (2) state where and when the statements were made, (3) specify the statements that the Plaintiffs contend are fraudulent, and (4) explain why the statements were fraudulent.4 Despite the seemingly liberal language of the second sentence of the rule, malice, intent, knowledge, and other conditions of a person’s mind must be alleged at least in accordance with Rule 8.5

B. Rule 11 Basis As explained in the prior chapter, a pleading must also be well grounded in fact and in law. Accordingly, both the patentee and accused infringer must engage in reasonable pre-pleading investigation. This chapter focuses on the next step: ethically and properly pleading charges of infringement and defenses of invalidity and unenforceability.

C. Pleading Infringement For 50 years, these terms were construed in light of Conley v. Gibson’s6 statement that a case should not be dismissed unless there were no facts which would support recovery. As a result, patentees “routinely filed complaints that simply laid out jurisdiction and venue, identified a patent, claimed a sufficient ownership interest in the patent, and claimed that defendant infringed the patent.”7 In line with Conley v. Gibson, courts had relatively consistently

3. Fed. R. Civ. P. 9(b). Unlike most other provisions in Rule 9, 9(b) requires greater, not lesser, detail in pleading. 4. Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1068 (5th Cir.1994); Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir.1993). 5. Ashcroft v. Iqbal, 1129 S. Ct. 1937 (2009). 6. 355 U.S. 41, 47 (1957). 7. R. David Donoghue, The Uneven Application of Twombly in Patent Cases: An Argument for Leveling the Playing Field, 8 J. Marshall Rev. Intell. Prop. L. 1, 1(2008).

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held that it was not required for the patentee to allege which particular product infringed specific claims.8 This was generally premised on the holding in the seminal decision of Conley v. Gibson. However, in 2007 the Supreme Court in Bell Atlantic v. Twombly,9 required more of Rule 8 than Conley had required.10 Just over a year later, the Court emphasized the need for greater detail once again. First, the Court emphasized that, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.”11 Second, although Federal Rule of Civil Procedure 8(a)(2) only requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief,” “a formulaic recitation of the elements of a cause of action will not do[.]”12 The claim must include well-pleaded factual allegations, which if true, “plausibly give rise to an entitlement to relief.”13 If a complaint does not include sufficient factual allegations “‘to raise a right to relief above the speculative level’” and “‘to raise a reasonable expectation that discovery will reveal evidence of’ ” the asserted claim, then the claim must be dismissed.14 The federal courts in patent cases have not imposed a stringent reading, despite these pronouncements. In a 2-to-1 decision, for example, the Federal Circuit in McZeal v. Sprint Nextel Corp.15 held that “a patentee need only plead facts sufficient to place the alleged infringer on notice as to what he must defend.”16 The court specifically stated that the patentee “is not required to specifically include each element of the claims of the asserted patent”17 and instead pointed to Form 18 of the Federal Rules of Civil Procedure, which “includes only the following elements: (1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that defendant has been infringing the patent by “making, selling, and using [the device] embodying the patent”; (4) a statement that the plaintiff has given the

8. E.g., DX/DY Voice Processing, Inc. v. Teligence Corp., 2007 WL 2463305 (E.D. Wash. Aug. 28, 2007) (denying motion to dismiss because Rule 8 “does not require that the plaintiff plead with particularity the specific patent claims that have been infringed, just that the plaintiff give ‘fair notice’ of the claim and its basis.); VData, LLC v. Aetna, Inc., 2006 WL 3392889 (D. Minn. Nov. 21, 2006). 9. 127 S. Ct. 1955 (2007). 10. Id. 11. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). 12. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S .Ct. 1955, 167 L.Ed.2d 929 (2007). 13. Iqbal, 129 S. Ct. at 1950. 14. Watts v. Fla. Int’l Univ., 495 F.3d 1289, 1295, 1296 (11th Cir. 2007) (quoting Twombly, 550 U.S. at 555, 556). 15. 501 F.3d 1354, 1356 (Fed. Cir. 2007). 16. Id. 17. Id.

Pleading Infringement

defendant notice of its infringement; and (5) a demand for an injunction and damages.”18 Consistent with McZeal, most district courts are continuing to require only minimal pleading from patentees, at least where they allege direct infringement.19 This is true even though they recognize that regional circuit law governs the adequacy of pleadings.20 On the other hand, a few courts have limited McZeal or otherwise required more of patentees. The Northern District of California in late 2009 held that McZeal and Form 18 only applied to claims of direct infringement, not contributory or induced infringement, and so Iqbal could be applied and yet be consistent with McZeal and Form 18.21 In a related vein, several courts addressing design patent infringement have granted Rule 12(b)(6) motions, relying on Iqbal, by filtering out “functional” aspects of the design and determining there is no plausible argument for infringement.22 Thus, absent clarification from the Supreme Court or reversal of McZeal by an en banc court, although lawyers who represent patentees must conduct fairly detailed pre-suit investigations to comply with Rule 11, they need plead only the minimal requirements set forth in Form 18 to the Federal Rules. At this point, mandatory disclosure required by local rules or the federal rules kicks in.23 Where multiple defendants are involved, however, Rule 8 does not permit the plaintiff to “lump all the defendants together and fail to distinguish their conduct because such allegations fail to give adequate notice to the defendants as to what they did wrong.”24 Instead, although minimal detail is required, Rule 8 must be met so as to provide notice to each defendant as to which patent or patents it infringed.

18. Id. 19. E.g., Iguana, LLC v. Lanham, 2009 WL 1620586 (M.D. Ga. June 9, 2009) (contrasting Iqbal and Form 18); S.O.I. TEC Silicon on Insulator Technologies, SA v. MEMC Elec. Materials, Inc., 2009 WL 423989 (D. Del. Feb. 20, 2009). See also Home & Nature Inc. v. Sherman Specialty Co., 322 F. Supp. 2d 260 (E.D.N.Y. 2004) (same result reached in a pre-Twombly case). 20. Schwendimann v. Arkwright, Inc., 2008 WL 2901691 (D. Minn. July 23, 2008); Fotomedia Technologies, LLC v. AOL, LLC, 2008 WL 4135906 (E.D. Tex. Aug. 29, 2008); Taltwell, LLC v. Zonet USA Corp., 2007 WL 4562874, *13–14 (E.D. Va. Dec. 20, 2007). 21. Elan Microelectronics Corp. v. Apple, Inc., 2009 WL 2972374 (N.D. Cal. Sept. 14, 2009). 22. See, e.g., Johnson v. Strauss, 2009 WL 2916913 (S.D. Ohio Sept. 4, 2009); Colida v. Nokia, Inc., 2008 WL 4517188 (S.D.N.Y. May 6, 2008); Select Controls v. Am. Elec. Components, 2008 WL 216612 (S.D.N.Y. Jan 22, 2008). 23. See CBT Flint Partners, LLC v. Goodmail Systems, Inc., 529 F. Supp. 2d 1376, 1380–81 (N.D. Ga. 2007); Teirstein v. AGA Med. Corp., 2009 WL 704138 (E.D. Tex. March 16, 2009); Safeclick, LLC v. Visa Int’l Serv. Ass’n., 208 Fed. Appx. 829 (Fed. Cir. Oct. 23, 2006). 24. Appalachian Enterp., Inc. v. Epayment Solutions, Ltd., 2004 WL 2813121, *6 (S.D.N.Y. 2004). See Classen Immunotherapies, Inc. v. Biogen Idec, 381 F. Supp. 2d 452 (D. Md. 2005).

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D. Defendants’ Pleadings Much like patentees, historically defendants have filed “bare bones” answers. “[D]efendants typically filed answers that consisted of plain statements of affirmative defenses and counterclaims, without any support or detail.25 Whether more is required turns on the nature of the defense and the regional circuit’s approach to pleading. Invalidity defenses are subject to different standards than inequitable conduct. As to invalidity, given the Federal Circuit’s reasoning in McZeal, accused infringers can continue to plead in ways that provide notice but not a lot of detail. One of the few district courts to address this issue post-Twombly held that, at least under Fifth Circuit law, “in some cases, merely pleading the name of the affirmative defense . . . may be sufficient” to give notice to the patentee of the defense to be advanced.26 While it remains to be seen whether other courts will follow suit, the logic behind the holding seems sound.27 Thus, as with patentees, although Rule 11 will require investigation and analysis before an invalidity defense can be pled, invalidity need be pled only in a way that provides notice to the defendant of the nature of the defense. The same is not true with respect to inequitable conduct. The Federal Circuit has stated repeatedly that inequitable conduct must be pled with particularity.28 Although I personally believe this approach is, as a matter of statutory interpretation, incorrect,29 a majority of district courts that have addressed the issue have required inequitable conduct to be pled with particularity and in accordance with Rule 9(b). A panel of the Federal Circuit recently took an extremely strict view of how Rule 9(b) operates in the context of inequitable conduct.30 It held that the pleading must identify the particular individual who knew of material art, which itself is typically required under Rule 9(b), but also that, with respect to materiality, the pleader had the obligation to “identify the particular claim limitations, or combination of claim limitations, that are supposedly absent from the information of record. Such allegations are necessary to explain

25. R. David Donoghue, The Uneven Application of Twombly in Patent Cases: An Argument for Leveling the Playing Field, 8 J. Marshall Rev. Intell. Prop. L. 1, 1(2008). 26. Teirstein v. AGA Med. Corp., 2009 WL 704138 (E.D. Tex. March 16, 2009), quoting Woodfield v. Bowman, 193 F.3d 354, 362 (5th Cir. 1999). 27. But cf. Hynix Semiconductor Inc. v. Rambus Inc., 2007 WL 4062845 (Nov. 15, 2007) (criticizing but not sanctioning defendant for pleading bare bones allegations). 28. See Central Admixture Pharm. Serv., Inc. v. Advanced Cardiac Solutions P.C., 482 F.3d 1347, 1356–57 (Fed. Cir. 2007); Ferguson Beauregard/Logic Controls, Division of Dover Res., Inc. v. Mega Sys., LLC, 350 F.3d 1327, 1344 (Fed. Cir. 2003). 29. See David Hricik, The Application by the District Courts of Rule 9(b) to Inequitable Conduct, 86 Marq. L. Rev. 895 (2003). 30. Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009).

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both ‘why’ the withheld information is material and not cumulative, and ‘how’ an examiner would have used this information in assessing the patentability of the claims.”31 Similarly, the court stated that “a pleading of inequitable conduct under Rule 9(b) must include sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld material information or of the falsity of the material misrepresentation, and (2) withheld or misrepresented this information with a specific intent to deceive the PTO.”32 In an earlier case, the court took a somewhat similar view of how the rule operated in the context of inequitable conduct, stating: ACS pleaded inequitable conduct by alleging only that “during prosecution of the ’515 patent, the patentee failed to disclose all of the relevant prior art known to it” and that “by manipulation of various measurements and units, the patentee sought to mislead the Patent and Trademark Office regarding the relationship between the claimed invention and the prior art.” Defendants’ Third Amended Answer (N.D. Ala. March 16, 2005). This pleading lacks the requisite particularity. It does not identify what relevant and undisclosed prior art was known to the patentee, what “measurements and units” were manipulated, or how that manipulation was meant to mislead the PTO. The pleading thus fails to provide the required particularity to give notice to the other party of the facts on which the defense is premised, and it was properly dismissed by the district court.33

The district courts have provided some additional detail concerning the degree of particularity required.34 Thus, in pleading inequitable conduct, lawyers should first investigate to form a good faith basis under Rule 11 to support the allegation—an investigation that because of the nature of the defense of unenforceability may necessarily have to await formal discovery and not take place pre-suit—and then plead the defense with particularity. In patent litigation, the Federal Circuit’s high standards may mean that lawyers ensure that scheduling orders permit late amendment of pleadings to assert inequitable conduct or that they take discovery early into areas that could lead to the allegation, or both.

31. Id. 32. Id. 33. Central Admixture Pharm. Serv., Inc. v. Advanced Cardiac Solutions P.C., 482 F.3d 1347, 1356–57 (Fed. Cir. 2007). 34. See David Hricik, Wrong About Everything: Application by the District Courts of Rule 9(b) to Inequitable Conduct, 86 Marq. L. Rev. 895, 936–44 (2003).


CHAP T ER

8 Expert Witnesses

A. What Is “Expert” Opinion in Patent Litigation?

147

B. Selection

149

C. Preparation of the Report

151

D. Contents of the Report

152

E. Conflicts of Interest of Experts

154

1. What Law Applies to Disqualification of Experts, Including Lawyer-Experts?

154

2. Conflicts of Interests of Experts

157

a. Introduction

157

b. Side-Switching Cases: The Duty of Loyalty for Experts Is Minimal

158

3. The First Party Must Have Objectively Believed a Confidential Relationship Existed Between It and the Expert

160

4. The First Party Must Prove It Disclosed Confidential Information to the Expert

162

a. Experts Whose Firms Represent Both Sides to a Dispute

162

b. Experts Retained by an Opponent Who Represents the Movant in Unrelated Matters

164

c. Consulting Experts

165

d. Expert Is Lawyer’s Former Client

165

e. Former Employees as Opposing Experts

165

F. Confidentiality and Experts

166

1. Basic Distinctions: Consulting and Testifying Experts

166

2. Disclosure of Testifying Experts’ Files in Related Cases

168

3. Waiving Privilege and Work Product by Disclosure to Experts

169

145

146

Chapter 8 Expert Witnesses 4. Access to Facts Known to and Opinions Held by Consulting Experts

170

5. Testifying Experts’ Review of Consulting Experts’ Materials

171

6. Inadvertent Waiver of Expert’s Facts and Opinions

171

7. Special Note on Consulting Experts

172

8. Testifying Experts

173

G. Means to Reduce the Problems

174

1. Ensure that Employee Confidentiality Agreements Are Broad and Enforceable

174

2. To Help Identify Conflicts, Ask the Expert About Prior Work for the Opposing Party or Opposing Counsel

174

3. Require the Expert to Sign a Confidentiality Agreement

174

4. Formalize Retention of the Expert

175

5. Disclose Information and Get the Expert Working Early

175

6. Identify Confidential Disclosures as Such

175

7. Advise the Expert Not to Talk About or Listen to Confidential Information

176

8. If a Conflict Does Arise, Raise It Promptly with Opposing Counsel

176

a. If the Conflict Cannot Be Resolved, Raise It Promptly with the Court

176

b. Move In Limine to Exclude the Reference to the Conflicting Representation

176

What Is “Expert” Opinion in Patent Litigation?

In patent litigation, experts regularly provide crucial testimony to support elements of both the plaintiff’s and defendant’s case. Ensuring that counsel selects a qualified expert, and one who will not be subject to legitimate Daubert1 challenge, consequently may be critical, since often expert testimony will be required to establish one or more elements of a claim or defense or to rebut the opposing party’s claim or defense. In addition, of course, experts can provide a way to tell the story of the technology to the jury or judge in a coherent and accessible way. Experts are important.

A. What Is “Expert” Opinion in Patent Litigation? Though important, there is ambiguity in the term “expert” that haunts patent litigation in particular. In a case involving computer technology, a district court confronted the basic point that the line between “lay” and “expert” testimony is not precise, and yet it can be critical for patent litigation since, for example, expert testimony may be excluded for failing to meet the requirements of Federal Rule of Evidence 702, while factual testimony is not so limited. That court reasoned: The Federal Rules of Evidence do not explicitly define “expert testimony.” Rule 702 encompasses any helpful “scientific, technical, or other specialized knowledge,” whether presented in the form of an opinion “or otherwise.” Fed.R.Evid. 702. This suggests that expert testimony extends to all fact and opinion testimony touching on “scientific, technical, or other specialized knowledge.” For example, in this case even simple questions like “What is a DRAM?” or “What is a bit?” could be construed as calling for testimony that draws on “technical” or “specialized knowledge.” Read literally, this rule is astonishingly broad, especially in the context of patent litigation. Indeed, the Federal Circuit recently remarked that “a witness not qualified in the pertinent art” may not testify to “anticipation, or any of the underlying questions, such as the nature of the claimed invention, what a prior art references discloses, or whether the asserted claims read on the prior art reference” or “obviousness, or any of the underlying technical questions, such as the nature of the claimed invention, the scope and content of prior art, the differences between the claimed invention and the prior art, or the motivation of one of ordinary skill in the art to combine these references to achieve the claimed invention.” Sundance, Inc. v. DeMonte Fabricating Ltd., 550 F.3d 1356, 2008 WL 5351734, *6 (Fed. Cir.2008). The Federal Circuit has also held that evidence of infringement via

1. Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). See Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999).

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Chapter 8 Expert Witnesses the doctrine of equivalents must typically come from a qualified expert. AquaTex Industries, Inc. v. Techniche Solutions, 479 F.3d 1320, 1329 (Fed.Cir.2007). It further suggested that “expert infringement testimony is generally required in cases involving complex technology.” Id. at 1329, fn. 7. However, there are limits to what constitutes “expert” testimony subject to advance disclosure, written reports, Daubert gatekeeping, and so on. If there were not, patent litigation would be more astronomically expensive than it already is. The historical practice has been to treat a witness’ factual testimony, i.e., testimony about what a witness did or did not do or observed or did not observe, as not being “expert” testimony. Compare with Gomez v. Rivera Rodriguez, 344 F.3d 103, 113 (1st Cir.2003) (holding that expert testimony “does not encompass a percipient witness who happens to be an expert”). As discussed in Gomez, this interpretation follows from the Federal Rules’ example of how the rules apply to a treating physician’s testimony; while a treating physician’s observations all derive from specialized knowledge, his testimony is not “expert testimony.” Id. In the same vein, the court does not believe it is “expert” testimony for an inventor to explain the process by which he made his discoveries, for an engineer to describe the products he has built, or for a scientist to explain what he knew at a certain point in time. These examples clearly draw on “technical” knowledge, yet they are not expert testimony. As a general rule of thumb, the court understands “expert testimony” to be testimony that a witness prepares, as opposed to testimony of what a witness observes. For example, it includes opinion testimony based upon a witness’ analysis of facts using methods based on specialized knowledge. To be sure, this interpretation of Rule 702 does not literally fit with the portion of the rule’s text that reads “in the form of an opinion or otherwise.” But it harmonizes well with the three-prong inquiry that is the heart of Rule 702, namely, that expert testimony (1) be “based upon sufficient facts or data,” (2) result from “reliable principles and methods,” and (3) reflect the reliable application of the principles and methods to the facts. It borders on the absurd to apply this three-pronged inquiry to factual questions like “How did you come up with the invention?” or “What parts did you include in your prototype?” or “How did you solve this problem before the existence of the claimed invention?” Instead, this interrogation about foundation and methodology applies sensibly only to a witness’ prepared conclusions or research.2

Thus, it is important for lawyers to recognize what is, and is not, expert testimony and to ensure that expert testimony complies with the various rules concerning disclosure and timing that apply in all federal litigation. Assuming expert testimony is required on a point, typically lawyers have a choice as to who to call. The following sections analyze that issue and the obligations of an expert.

2. Hynix Semiconductor Inc. v. Rambus Inc., 2009 WL 230039 (N.D. Cal. Jan. 27, 2009).

Selection

B. Selection Obviously, many subjective factors go into the selection of an otherwise qualified expert: Does he present well? Is she able to communicate complex ideas to a lay jury? Is she easy to work with? Is her billing rate reasonable? Is she focused on the case or distracted by her principal job? Will she be viewed as a “hired gun?” Does that matter? Has he expressed views in prior publications that conflict with the case? Has he been disciplined?3 Many issues matter to selecting the “right” expert for a case.4 While a lawyer may be able to get by with an expert who is hard to deal with or who is not the best communicator, the lawyer cannot use an expert who is not qualified under the Federal Rules of Evidence to give expert testimony. Specifically, to be admissible, expert testimony must comport with Rule 702, which in full provides: If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.5

Where expert testimony is required on an issue, a practitioner must ensure that his expert is qualified to provide the necessary testimony, or the case can be dismissed on summary judgment, or by preverdict or postjudgment motions under Rule 50.6 Obviously, whether a particular expert is qualified to

3. See Sure-Safe Indus., Inc. v. C&R Pier Mfg., 851 F. Supp. 1469 (S.D. Cal. 1993) (plaintiffs sought to strike their own expert after finding he had been found to have engaged in dishonesty by an ALJ; motion denied). 4. More precisely, many factors go into picking an expert for particular issues in a case. See Frederick G. Michaud & David Schlitz, The Use of Experts to Prove Obviousness, PLI Order No. 14977 (Sept.–Nov. 2008); Gerald J. Flattmann, Jr., The Effective Use of Experts in Patent Cases: Practice Tips and Tactics, Glasser Legal Works (May 2002); Neutrino Dev. Corp. v. Sonosite, Inc., 410 F. Supp. 2d 529 (S.D. Tex. 2006) (analyzing admissibility of experts’ opinions on issue-by-issue basis); Computer Assocs. Int’l, Inc. v. Simple.com, Inc., 2005 WL 6042725 (E.D. N.Y. Jan. 19, 2005) (noting that even testimony from someone not skilled in the art was admissible); Oxford Gene Tech. Ltd. v. Mergen Ltd., 345 F. Supp. 2d 431 (D. Del. 2004) (same). 5. Fed. R. Evid. 702. See also Byrne v. Wood, Herron & Evans, LLP, 2009 WL 2382415 (E.D. Ky. July 30, 2009) (analyzing whether expert was qualified to testify in legal malpractice claim arising out of patent prosecution and concluding he did not even though he was an experienced patent practitioner). 6. See Hargabus v. Cedar Fair, LP, 2005 WL 2233248, *6 (N.D.Ohio Sept.14, 2005) . See Se-Kure Controls, Inc. v. Vanguard Prods. Group, Inc., 2008 WL 169054 (N.D. Ill. Jan. 17, 2004)

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Chapter 8 Expert Witnesses

testify on a particular issue in a certain case turns on the circumstances of the case and the expert’s background, as well as the subject of his opinion.7 Which jurisdiction’s law governs admissibility of expert testimony? One would think that because the admissibility of expert testimony is not particular to patent law, regional circuit law would control8; however, in its most recent decisions on this issue, the Federal Circuit, without discussing choice of law, relied on its own decisions.9 Thus, even if not controlling as a practical matter, attention should be paid to Federal Circuit law, not regional circuit law. As a general matter, an expert intending to testify about technical issues should have some background in the particular technology at issue,10 and one who has at least ordinary skill “will often be qualified to present expert testimony both in patent trials and more generally.”11 The Federal Circuit has held that a district court abused its discretion in permitting an experienced patent attorney, but one not skilled in the pertinent art, to opine about infringement and validity issues.12 Likewise, it has stated

7.

8.

9. 10.

11. 12.

(limiting ability of expert to testify due to lack of qualifications); Memry Corp. v. Kentucky Oil Tech., N.V., 2007 WL 2746737 (N.D. Cal. Sept. 20, 2007) (holding expert qualified to testify). One critical exception is damage experts: due to the wording of the statute, expert testimony on damages is not required, and a court can award damages even in the absence of expert testimony. Dow Chem. Co. v. Mee Indus., Inc., 341 F.3d 1370, 1381 (Fed. Cir. 2003). Nonetheless, a jury’s award based upon incompetent damages testimony presumably cannot be sustained, at least without additional analysis and adoption by the district court postverdict. See Crystal Semiconductor Corp. v. Tritech Microelectronics Int’l, Inc., 246 F.3d 1336 (Fed. Cir. 2001); Avocent Huntsville Corp. v. Clearcube Tech., Inc., 2006 WL 2109503 (N.D. Ala. July 28, 2006) (excluding damages expert’s analysis). See TransAmerica Life Ins. Co. v. Lincoln Nat’l Life Ins. Co., 2009 WL 24784 (N.D. Iowa Jan. 5, 2009); Avante Int’l Tech. Corp. v. Premier Election Sys., Inc., 2008 WL 5191242 (E.D. Mo. Dec. 10, 2008) (admitting expert testimony in part); Pioneer Corp. v. Samsung SDI Co. Ltd., 2008 WL 5572566 (E.D. Tex. Oct. 2, 2008) (admitting expert testimony). See Weddingchannel.com, Inc. v. The Knot, Inc., 2005 WL 165286 (S.D.N.Y. Jan. 26, 2005) (reasoning that regional circuit law applied in a patent case, not Federal Circuit law, to the question of admissibility of expert testimony). Sundance, Inc. v. Demonte Fabricating Ltd., 550 F.3d 1356, 1360 (Fed. Cir. 2009). See Hypertherm, Inc. v. Am. Torch Tip Co., 2009 WL 530064 (D. N.H. Feb. 27, 2009) (excluding mechanical engineer from testifying about plasma arc torches because he had no experience in their design or manufacture); Elder v. Tanner, 205 F.R.D. 190 (E.D. Tex. 2001) (finding experts had proper backgrounds). Sundance, Inc. v. Demonte Fabricating Ltd., 550 F.3d 1356, 1363 (Fed. Cir. 2009). Sundance, Inc. v. Demonte Fabricating Ltd., 550 F.3d 1356, 1360 (Fed. Cir. 2009); Medtronic Inc. v. Intermedics, Inc., 799 F.2d 734, 741 (Fed. Cir. 1986) (trial court did not abuse its discretion in excluding patent law expert’s testimony on infringement); Union Carbide Corp. v. Am. Can Co., 724 F.2d 1567, 1572 (Fed. Cir. 1982) (agreeing district court properly gave little weight to former patent attorney with no experience in pertinent or analogous arts); Endress + Hauser, Inc. v. Hawk Measurement Sys. Pty. Ltd., 122 F.3d 1040, 1042 (Fed. Cir. 1997) (“this court has on numerous occasions noted the impropriety of patent lawyers testifying as expert

Preparation of the Report 151

that district courts should exclude “markedly incorrect” statements of patent law.13 On the other hand, the fact that a technical expert does not understand patent law or terminology is likely not sufficient to disqualify an expert with sufficient technical background to discuss technical issues,14 though it may prevent him from testifying about patent-specific issues such as anticipation.15 Similarly, a patent lawyer generally will be competent to testify about patent office and procedures.16

C. Preparation of the Report In my experience, some lawyers believe that they should exert control over their experts’ report. I believe this is not only misguided but can lead to abuse of the purpose of expert witnesses, even though some courts will admit opinions that are, essentially, drafted by counsel.17 Having said that the expert and not the lawyer should prepare the report, counsel must provide some direction, since the expert should not be left to sift through millions of irrelevant documents and left to spot issues that others have already seen. The question is obviously one of degree. With respect to actual preparation of the report, it is crucial to know at the outset whether drafts are discoverable and to communicate that fact to the expert. Often lawyers will agree that drafts are not discoverable, and, sometimes, that even communications between experts and counsel are not discoverable. On the other hand, sometimes these agreements are in the best interest of only one party, and so an agreement is not possible. In my own experience, having the ability to circulate draft opinions is a cost-saving and efficient method of using experts. Obviously, it is subject to abuse; the lawyer, not the witness, will write the report. Used properly and ethically, however, protection of drafts is important.

13. 14. 15. 16. 17.

witnesses and giving their opinion regarding the proper interpretation of a claim as a matter of law, the ultimate issue for the court to decide”). Hebert v. Lisle Corp., 99 F.3d 1109, 1117 (Fed. Cir. 1996). Buckley v. Airshield Corp., 116 F.Supp. 2d 658 (D. Md. 2000) (excluding the opinion on other grounds). White Water Investments, Inc. v. Ethicon Endo-Surgery, Inc., 2005 WL 5955023 (S.D. Fla. Sept. 15, 2005). Sundance, Inc. v. Demonte Fabricating Ltd., 550 F.3d 1356, 1360 (Fed. Cir. 2009), citing Bausch & Lomb, Inc. v. Alcon Labs., Inc., 79 F. Supp. 2d 252, 254–55 (W.D.N.Y. 2000). Buckley v. Airshield Corp., 116 F. Supp. 2d 658 (D. Md. 2000) (excluding the opinion on other grounds).

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What is critical is for the expert to be told whether notes, billing records, and drafts are discoverable. Skilled litigators are able to spin drafts and notes to meanings that likely were not intended and in ways which can be awkward for the expert to address. A litigator risks embarrassment or worse if he does not inform the expert about discoverability of notes, drafts, and other preliminary information.

D. Contents of the Report Obviously, the report must comply with Federal Rule of Civil Procedure 26,18 which provides in pertinent part: (B) Written Report. Unless otherwise stipulated or ordered by the court, this disclosure must be accompanied by a written report—prepared and signed by the witness—if the witness is one retained or specially employed to provide expert testimony in the case or one whose duties as the party’s employee regularly involve giving expert testimony. The report must contain: (i) a complete statement of all opinions the witness will express and the basis and reasons for them; (ii) the data or other information considered by the witness in forming them; (iii) any exhibits that will be used to summarize or support them; (iv) the witness’s qualifications, including a list of all publications authored in the previous 10 years; (v) a list of all other cases in which, during the previous 4 years, the witness testified as an expert at trial or by deposition; and (vi) a statement of the compensation to be paid for the study and testimony in the case.

Most of this is obviously fairly straightforward, but at least two common less intuitive issues arise.19 One critical issue is the amount of factual support for the conclusions reached to constitute a “complete statement” of the opinions and “the reasons for them.” For both, the rule requires a “complete statement.”

18. See Probatter Sports LLC v. Joyner Tech., Inc., 2007 WL 2713239 (N.D. Iowa Sept. 14, 2007) (holding report of expert in patent case did not comply with Rule 26, a second time, and so excluded expert from testifying at trial); Zip Dee, Inc. v. Dometic Corp., 949 F. Supp. 653 (N.D. Ill. 1996) (similar facts). 19. A less common problem is timing: often in patent litigation, the order of proof, particularly in declaratory judgment actions, is not settled or intuitive to the judge. As a result, at times, parties have failed to timely designate experts, or improperly designated a “rebuttal” witness as a “case in chief ” witness. See Probatter Sports, LLC v. Joyner Tech., Inc., 2007 WL 2752080 (N.D. Iowa Sept. 18, 2007) (collecting cases).

Contents of the Report

Exactly how much is enough obviously turns on the particulars of the case.20 A recent case provides a stark comparison. In that case, the court found that the plaintiff’s experts’ reports were conclusory and failed to provide a “complete statement” of infringement allegations where they simply stated that infringement occurred based on the patent and the “process practiced” by the defendants but found the defendant’s reports, which had 180 pages of claim charts, sufficient.21 Another common issue relates to so-called “patent law experts.” A court has discretion to exclude testimony that essentially describes legal issues in the case or patent law generally.22 For similar reasons, expert testimony as to claim meaning is often given no deference by the courts, even if admitted.23 Finally, on a related note, even if the expert is qualified, and if he relies upon experiments or other analyses, their results, too, must meet the requirements of Federal Rule of Evidence 702, which provides in full: If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.24

Competent counsel must reasonably monitor or at least instruct expert witnesses of the need to comply with this rule or else face exclusion of the evidence that can result in loss in litigation.25 Damage experts and their methodologies must also be carefully monitored.26

20. See Sparton Corp. v. U.S., 77 Fed. Cl. 1, 4 (2007) (holding report sufficient even though it did “not provide much depth to his analysis” because it “gave enough information” to permit the opposing party to “effectively cross-examine” the witness). 21. Elder v. Tanner, 205 F.R.D. 190 (E.D. Tex. 2001). 22. Ely v. Manbeck, 17 U.S.P.Q.2d 1252, 1254 (D. D.C. 1990). 23. Brunswick Corp. v. U.S., 34 Fed. Cl. 532 (1995) (“since claim construction is a question of law, testimony of a patent expert as to claims’ interpretation is merely a legal opinion entitled to no deference by the court.”); Proctor & Gamble Co. v. McNeil-PPC, Inc., 615 F. Supp. 2d 832 (W.D. Wis. 2009) (stating that opinions on claim meaning “are given less weight than the intrinsic evidence”). 24. Fed. R. Evid. 702. 25. See, e.g., Rosco, Inc. v. Mirror Lite Co., 626 F. Supp. 2d 329 (E.D.N.Y 2009) (admitting various tests which purportedly showed infringement). 26. See Uniloc USA, Inc.v. Microsoft Corp., 632 F. Supp. 2d 147 (D. R.I. 2009) (finding each side’s experts methodology reliable).

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E. Conflicts of Interest of Experts A variety of ethical issues arise whenever an attorney hires an expert, whether in a personal injury case or a complex patent trial. It is important for lawyers to appreciate the ethical issues because the potential impact on attorneys and clients of an ethical violation can be substantial. Not only may a client spend substantial sums educating an expert on a case only to have the expert disqualified, courts have even disqualified entire law firms where the firm has had an improper contact with an expert retained by the opposing party. Sanctions, striking of evidence, and other remedies may also be deemed appropriate. Unfortunately, there is very little guidance with respect to several of the key issues. For example, only a handful of federal district courts across the country have addressed how a conflict of interest facing an expert should be decided: are experts subject to the same rules as attorneys; if not, what standards apply? There is, after all, no generic “Experts’ Code of Ethics,” and courts generally do not apply lawyer ethical rules to nonlawyers. Even where the issue implications lawyer ethics, the choice of law rules that apply with respect to ethical issues in many federal courts makes it difficult to know what rule will apply—even to attorneys, and even if the attorney is licensed only in the state in which a matter is pending. This ethical thicket is dense and poorly illuminated. This chapter surveys the principal ethical issues that arise from using experts and seeks to at least partially clear a path or partially illuminate the dark ethical corners.

1. What Law Applies to Disqualification of Experts, Including Lawyer-Experts? If the issue is the ethics of a person serving as an expert, with few exceptions the disciplinary rules governing lawyers do not apply, even if the expert is a lawyer. The courts almost uniformly conclude that “the standard for conflicts disqualification for attorneys is more stringent than that of experts.”27 In other words, the same facts that will disqualify an attorney might not disqualify an expert.28 Thus, while an entire law firm would readily be disqualified where two lawyers had been actually retained to represent opposite sides in the same lawsuit,29 the same is not true for experts. The courts have

27. Hanson v. Umtech Industrieservice Und Spedition, GBmbH, 1996 WL 622557 (D. Del. 1996). 28. See Chamberlain Group, Inc. v. Interlogix, Inc., 2002 WL 653893 (Ill. App. Apr. 19, 2002) (collecting cases). 29. To be clear, one court has applied “attorney rules” to experts: Marvin Lumber & Cedar Co. v. Norton Co. 113 F.R.D. 588 (D. Minn. 1986). This case has been questioned U.S. v. NHC

Conflicts of Interest of Experts 155

generally applied different, less stringent standards to experts than is typical with lawyer conflict issues.30 For example, where a lawyer has agreed to represent a party in a matter, it is generally irrebuttably presumed that the lawyer had access to confidential information.31 However, when it comes to expert disqualification, the usual presumptions—that a client who hires a lawyer shares information with him, and that a lawyer shares all information with everyone in his firm—do not apply. Indeed, courts appear willing to permit experts to use “screens” (aka “Chinese walls”) to show that even if they had received information, they have not shared it with other experts in the firm. Courts do not generally permit use of screens in the context of attorney-client disqualification.32 There are obvious reasons why courts do not apply the attorney disciplinary rules to issues governing expert witness ethics: if the expert is not a lawyer, then he is not subject to those rules. In addition, courts are concerned about the practical impact of applying those rules, particularly if the area of expertise is particularly narrow. As one court explained: [E]ven if counsel reasonably assumed the existence of a confidential relationship, disqualification does not seem warranted where no privileged or confidential information passed. Were this not so, lawyers could then disable potentially troublesome experts merely by retaining them, without intending to sue them as consultants. Lawyers using this ploy are not seeking expert help with their case; instead, they are attempting only to prevent opposing lawyers from obtaining an expert. This is not a legitimate use of experts, and courts should not countenance it by employing the disqualification sanction in aid of it.33

As one commentator further explained: It is tempting to assume that the answers to these questions are provided by the Rules of Professional Conduct, which provide fairly specific guidance.

30.

31. 32.

33.

Health Care Corp., 150 F. Supp. 2d 1013 (W.D. Mo. 2001) and is clearly an aberration. See also Butler-Tulio v. Scroggins, 774 A.2d 1209 (Md. App. 2001) (preliminary consultations with expert can, if there is an exchange of confidences, lead to a conflict of interest if expert later shows up adverse to party that sought to hire expert). Hansen at *3 (citing EEOC v. Locals 14 and 15, Int’l Union of Operating Engineers, 24 Fair Empl. Prac. Cas (BNA) 1821, 25 Empl. Prac. Dec. (CCH) 31,783 at 6 (S.D.N.Y. Feb. 11, 1981)); Paul v. Raulings Sporting Goods Co., 123 F.R.D. 271, 281 (S.D. Ohio 1988); English Feedlot, Inc. v. Norden Labs., Inc., 833 F. Supp. 1498, 1501 (D. Colo. 1993); Cordy v. SherwinWilliams Co., 156 F.R.D. 575, 580 (D.N.J. 1994). E.g., In re American Airlines, Inc., 972 F.2d 605 (5th Cir. 1992) (entire law firm disqualified where one lawyer had previously received relevant confidential information). See Chamberlain Group, Inc. v. Interlogix, Inc., 2002 WL 653893 (Ill. App. Apr. 19, 2002) (collecting cases); Stencel v. Fairchild Corp., 174 F. Supp. 2d 1080 (C.D. Cal. 2001) (same; rejecting strict imputation). Wang, 762 F. Supp. at 1248 (citations omitted).

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Chapter 8 Expert Witnesses The problem is that those Rules apply only to lawyers who are members of the Arizona State Bar. The Arizona Supreme Court has the power and jurisdiction to license and regulate attorneys practicing in Arizona. It is not at all clear that the Court has that ability to regulate the conduct of nonattorneys. Equally important, attorneys and experts perform different functions at trial. Attorneys are advocates. An expert may promote a party’s case, but the expert’s primary role is as a source of information. An expert is expected to use “scientific, technical, or other specialized knowledge [to] assist the trier of fact to understand the evidence or to determine a fact in issue.”34

A final reason why experts are treated differently no doubt arises from the distinction between facts known and opinions held by experts and those known and held by attorneys. Generally, opinions and information known to testifying, but not consulting, experts are readily discoverable. Indeed, parties are required to disclose information given to testifying experts. This distinction probably lies at the core of the different treatment given to disqualification of experts and attorneys. Ameliorating against disqualification for hiring an expert who had previously had a relationship with the other side is the fact that, at least with respect to testifying experts, facts and opinions held by experts are discoverable. An excellent summary that appeared recently in an article on expert witness conflicts succinctly summarizes the operation of the Federal Rules of Civil Procedure: Under FRCP 26(a)(2), a testifying expert must disclose the data, conclusions and opinions that are to be the subject of his testimony, as well as the factual basis for that testimony. Thus, any preparatory materials furnished to him by an attorney are subject to discovery by opposing counsel, and may include attorney reports and memoranda that would ordinarily be subject to the work product protections afforded by Rule 26(b)(3). Similarly, Rule 26(b)(4)(A) allows opposing counsel to depose and request interrogatories from a testifying expert, in order to become aware of the subject matter of the expert’s proposed testimony and the background for such testimony. On the other hand, Rule 26(b)(4) (B) protects opinions and the background materials of nontestifying experts from discovery by opposing counsel, a discovery protection that can be overcome only by a showing of “exceptional circumstances.” Finally, to discourage expert cannibalization by opposing counsel during discovery, Rule 26(b)(4)(C) provides in certain circumstances for fee sharing of the costs of the expert by opposing counsel requesting the discovery. The rather favorable discovery climate for opposing counsel set up by the Rules comes into conflict with other rules that would normally protect trial preparation materials. For example, Rule 26(b)(3)—while not addressing experts—protects factual and opinion attorney work product from discovery

34. Jeffrey Messing, Expert Witnesses & Conflicts of Interest, 38 Nov. Ariz. Att’y 28, 28 (2001) (footnotes omitted). See McCarter, 296 B.R. at 755.

Conflicts of Interest of Experts 157 except upon a showing of “substantial need” and “undue hardship” to obtain the substantial equivalent of the materials by other means. Rules 26(a)(2) and (b)(4), which govern the disclosure and discoverability of expert materials, are largely silent with respect to work product protection. Shifting attention to the adversary’s expert witness, Rule 32(a)(3) presents another danger, as it allows for the introduction of witness depositions for “any purpose” at trial if the (potential expert) witness is “unavailable” to testify. Thus, when you elect to depose an adversary’s expert witness, you run the risk of having the expert’s deposition admitted at trial (if he should become unavailable) without a proper cross-examination of the expert (because you do not normally want to expose your full cross-examination at the deposition, but merely want to “pin down” the expert’s positions).35

2. Conflicts of Interests of Experts The use of experts in patent lawsuits is an area that is creating an increase in ethical disputes. The number of cases cited in this chapter and decided just within the last few years demonstrates this point. A lawyer who hires an expert with a conflict of interest places her client at a disadvantage. Either actual harm could occur, if the expert were to reveal confidential information to the opponent, or at minimum, delay, expense, or uncertainty could increase. This section addresses the conflicts of interest principles that courts have applied to experts. a. Introduction Courts have generally held that they have power to disqualify experts under some circumstances36 even though no specific rule governs the conduct of experts in federal court. Only a small body of case law analyzes conflicts of interest of expert witnesses, and virtually all of the cases are from federal district courts or isolated decisions from state appellate courts,37 and so are of only persuasive authority outside of the specific jurisdiction in which they control. Despite the lack of a broad body of appellate case law, a fairly uniform approach to the disqualification of expert witnesses has been adopted by the judiciary. Different rules apply depending on what type of conflict has arisen. The authorities principally distinguish between “side-switching” experts—an

35. David H. Marion & Christopher Pushaw, Expert Witnesses: Pitfalls Posed by the Discovery Process, 3 Sedona Conf. J. 199, 202 (Fall 2002). 36. Messing, Expert Witnesses & Conflicts of Interest, 38 Nov–Ariz. Att’y 28, 28 (Nov. 2001). 37. See generally Kendall Coffey, Inherent Judicial Authority and the Expert Disqualification Doctrine, 56 Fla. L. Rev. 195 (2004).

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expert retained by one party, who then does work for its opponent—and conflicts where two experts in the same firm inadvertently end up on opposite sides of the same case. The courts separately analyze the question of former employees as opposing experts—plainly a subcategory of “side-switching” experts. That fact pattern, therefore, is discretely analyzed below. This chapter now examines the rules governing disqualification of experts. b. Side-Switching Cases: The Duty of Loyalty for Experts Is Minimal Even though they do not apply to expert disqualification, an understanding of the rules that apply to attorney disqualification is helpful to understand better the principles applicable to expert disqualification. It is a mistake to assume that the same conduct that would disqualify a lawyer will disqualify an expert. Absent unusual circumstances, an attorney who switches sides—who actually agrees to represent one party but then shows up on the other side—is going to be disqualified. In the typical case, a lawyer who has represented a client in a matter will be irrebuttably presumed to have gained confidential information relevant to the matter.38 Thus, even if the lawyer could “drop” the client like a hot potato and represent its adversary in that matter, it would do no good: lawyers are presumed, by the fact of engaging in a representation, to have acquired confidential information. Thus, they cannot switch sides in the same matter in which they represented a client.39 In contrast, experts sometimes can switch sides. Whether the expert is disqualified from being adverse to a former customer depends—not on irrebuttable presumptions—but on very different kinds of actual proof.40 Probably the most often cited side-switching case is Paul v. Rawlings Sporting Goods Co.41 There, defendant’s counsel consulted with a University of California Berkeley professor about the design of a baseball helmet and did so without any written agreement. It was unclear whether the professor knew that he was being consulted on a particular case. Later, plaintiff’s counsel hired the same professor. The defendant sought to exclude the professor’s testimony, claiming a conflict of interest existed since he had previously been on the defendant’s team. The court recognized that it would have greatly clarified the issues had a written agreement been used. Absent an agreement specifying the professor’s duties, the court concluded that whether it would disqualify an expert who had previously agreed to represent one party in a

38. See, e.g., In re American Airlines, Inc., 972 F.2d 605 (5th Cir. 1992). 39. There are some extremely narrow exceptions. 40. See Howmedica Osteonics Corp. v. Zimmer, Inc., 2007 WL 4440173 (N.D. Cal. Dec. 17, 2007) (disqualifying expert who switched sides). 41. 123 F.R.D. 271 (S.D. Ohio 1988).


matter but who then shows up on the other side, depended on a two-part inquiry: First, was it objectively reasonable for the first party who claims to have retained the consultant to conclude that a confidential relationship existed? Second, was any confidential or privileged information disclosed by the first party to the consultant?42

Some courts have considered a third element: “the public interest in allowing or not allowing an expert to testify.”43 Applying these standards, courts readily disqualify experts who, in fact, actually agree to represent one party, consult with that party and obtain confidential information, but then show up on the other side.44 In those circumstances, experts are treated no differently than lawyers. But where the answer to either question is in dispute, courts undertake an analysis that is distinct from that which applies to attorney-client conflicts because they require actual proof of each issue. There must be proof that the expert actually received information, as an irrebuttable presumption will not apply.45 A variety of competing interests are involved and which are balanced by the two-part test: Several competing interests are involved in changing side cases, including (1) the expert’s interest in pursuing the expert’s profession, (2) the moving party’s interest in not having its confidential communications revealed, and (3) the opposing party’s interest in obtaining the expert’s assistance and testimony. The manner in which these competing interests balance out ultimately depends on whether there was a confidential relationship and the extent of the communications involved.46

42. Larson v. Rourick, 284 F. Supp. 2d 1155, 1156 (N.D. Iowa 2003). 43. Id. Paul, 123 F. R. D. at 278. See Brooks Shoe Mfg. Co. v. Suave Shoe Corp., 716 F.2d 854 (11th Cir. 1983) (expert not disqualified where expert had not ever been actually retained and had not received confidential information); Formosa Plastics Corp., USA v. Kajima Int’l., Inc., 2004 WL 2534207 (Tex. Ct. App. 2004) (adopting Koch Ref. Co. v. Jennifer L. Boudreaux, 85 F. 3d 1178, 1181 (5th Cir. 1996) as matter of first impression); In re McCarter, 296 B.R. 750, 755 (Bankr. E.D. Tenn. 2003); Lee v. Kaiser Found. Health Plan, 65 Va. Cir. 389 (Cir. Ct. Va. 2004); In re Malden Mills Indus., Inc., 275 BR 670 (Bankr. D. Mass. 2002) (collecting cases); Stencel v. Fairchild Corp., 174 F. Supp. 2d 1080 (C.D. Cal. 2001) (applying two-part test, and rejecting strict imputation of expert confidences); Wang Labs., Inc. v. Toshiba Corp., 762 F. Supp. 1246, 1248 (E. D. Va. 1991) (disqualification inappropriate if no confidential relationship existed or no confidential information was disclosed), aff ’d in part, rev’d in part on other grounds, 993 F.2d 858 (Fed. Cir. 1993). 44. E.g., Turner v. Thiel, 553 S.E.2d 765 (Va. 2001); Marvin Lumber & Cedar Co. v. Norton Co., 113 F.R.D. 588 (D. Minn. 1986); Miles v. Farrell, 549 F. Supp. 82 (N. D. Ill. 1982). 45. 3D Sys., Inc. v. Envisiontec, Inc., 2008 WL 4449595 (E.D. Mich. Oct. 1, 2008). 46. Brian Burke, Disqualifying an Opponent’s Expert When the Expert is Your Client’s Former Employee, 66 Def. Counsel J. 69, 69 (Jan. 1999); see Nike, Inc. v. Adidas Am., Inc., 2006 WL

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At least one court has taken side-switching a step further by disqualifying an expert who did not switch sides in the same matter but in related ones. In Conforte & Eisele, Inc. v. Division of Building & Construction,47 the court entered an injunction precluding a party from relying upon an expert who had worked for the other side in a different phase of the same construction project. Thus, side-switching experts cannot be disqualified for the same reason as may lawyers. Although “side-switching” may not be limited to samematter-based conflicts,48 there must be proof that the expert had an obligation of confidentiality and, in fact, received confidential information during the relationship.49 This chapter now addresses the two prongs relied upon by the court to determine whether a side-switching expert must be disqualified. “Where the two-part test is applied, the party moving for disqualification of the adversary’s expert witness has the burden of establishing both the existence of confidentiality and its nonwaiver.”50

3. The First Party Must Have Objectively Believed a Confidential Relationship Existed Between It and the Expert In analyzing whether the lawyer reasonably believed that a confidential relationship had been formed with the expert, courts tend to look at the formalities of retaining the expert. Where the lawyer has, for example, sent a letter confirming retention of the expert, courts conclude that it was objectively reasonable for the lawyer to believe such a relationship had been formed.51

47. 48. 49.

50. 51.

51111106 (E.D. Tex. Sept. 29, 2006) (analyzing motion to disqualify alleged side-switching expert in patent case); Green, Tweed of Del., Inc. v. DuPont Dow Elastomers, LLC, 202 F.R.D. 426 (E.D. Pa. 2001) (denying motion to disqualify former employee from serving as expert against employer). 405 A.2d 487 (N.J. Super. 1979). Id. 1210 Colvin Ave., Inc. v. Tops Markets, L.L.C., 2006 WL 3827429 (W.D.N.Y. Dec. 28, 2006); Lacroix, PPA v. BIC Corp., 339 F. Supp. 2d 196, 200 (D. Mass. 2004); Syngenta Seeds, Inc. v. Monsanto Co., 2004 WL 2223252 (D. Del. Sept. 27, 2004); Friedrich v. Blasz, 11 Misc. 3d 1068 (Sup. Ct. N.Y. 2006); Conte v. Lawless, 2005 WL 2436211 (Del. Super. 2005); Endrody v. M/Y Anomaly, 2005 WL 2207007 (W.D. Wa. Sept. 9, 2005); State v. Clawges, 620 S.E.2d 162 (W. Va. 2005). Walter R. Lancaster, Expert Witnesses in Civil Trials, 2:3 (Aug. 2003) (citing Cordy v. Sherwin Williams Co., 156 F.R.D. 575 (D. N.J. 1995)). See Hansen v. Umtech Industrieservice Und Spedition, GMBH, 1996 WL 622557, * 5–6 (D. Del. July 3, 1996) (court found relationship objectively existed where lawyer sent letter confirming retention and reminding expert of need for confidentiality).


In general, where the meetings are brief or informal, it is less likely that the first element will be satisfied.52 Some cases reach what could be surprising results and seem to demand more than what some might consider an “objectively reasonable” basis. In Mayer v. Dell,53 the court found no confidential relationship had been established even though the attorney had met with the expert once and had given him the complaint. The court found it important that the expert had not been asked to sign a confidentiality agreement and had not yet shared any information with the attorney. Courts have relied on and cited a variety of factors to determine whether an objectively reasonable confidential relationship existed, including: • Whether the relationship was longstanding and involved frequent contacts; • Whether the expert is to be called as a witness in the underlying case; • Whether the alleged communications were from expert to party or the other way around; • Whether the moving party funded or directed formation of the opinion; • Whether the expert was retained to assist in the litigation; • The number of meetings between attorney and expert; • Whether work product was discussed with or provided to the expert; • Whether the expert was asked to agree not to discuss the case with the opponents; and • Whether the expert derived any of his specific ideas form work done at the direction of an attorney.54 The presence, or absence, of a confidentiality agreement is not dispositive.55 Similarly, the fact that some information was shared is not necessarily sufficient: “To get to a point where an attorney expert is comfortable proceeding to the step of reviewing factual information, . . . counsel must necessarily review certain basic facts and theories concerning the litigation.”56 If the first element is satisfied, the expert can be disqualified if the other element is present. The second element is proof of disclosure of confidential information.57

52. See, e.g., Mayer v. Dell, 139 F.R.D. 1 (D. D.C. 1991) (no disqualification where only evidence was of a single consultation to permit the parties to determine whether they would later hire the expert); Palmer v. Ozbek, 144 F.R.D. 66 (D. Md. 1992) (no disqualification where there was only a two-hour meeting between experts and expert, not involving the lawyer). 53. 139 F.R.D. 1 (D.D.C. 1991). 54. See Hewlett-Packard Co. v. EMC Corp., 330 F. Supp. 2d 1087, 1093 (N.D. Cal. 2004). 55. Id. 56. Larson v. Rourick, 284 F. Supp. 2d 1155, 1158 (N.D. Iowa 2003). 57. There is, apparently, some minority authority holding that the tests are disjunctive. State v. Clawges, 620 S.E.2d 162 (W. Va. 2005).

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4. The First Party Must Prove It Disclosed Confidential Information to the Expert When deciding motions to disqualify attorneys who had agreed to represent a client but then appeared for the other side, courts presume (usually irrebuttably) that the client imparted confidences to the lawyer, even if only the briefest conversation occurred.58 Precisely the opposite rule applies in motions to disqualify experts, or so most courts have reasoned. A party seeking to disqualify an opponent’s expert must be prepared to demonstrate that confidential or privileged information was disclosed to the expert. Thus, the party seeking to disqualify a side-switching expert must do more than prove the expert switched sides: the party must show the expert actually acquired confidential information. Failure to do so often means failure of the movant to carry its burden of proof.59 “Unlike attorney-client communications, discussions between parties or counsel and experts do not carry the presumption that confidential information was exchanged.”60 The meaning of “confidential information” in this context is not settled. Courts have characterized it as information “of either particular significance or [that] which can be readily identified as either attorney work product or within the scope of the attorney-client privilege.”61 The term can include discussion of a party’s “strategy in the litigation, the kinds of experts [the party] expected to retain, [the party’s] view of the strengths and weaknesses of each side, the role of each of the [party’s] experts to be hired and anticipated” claims or defenses.62 This obviously needs to be done with care, in probably sealed or in camera proceedings. The firm is, after all, being put to the task of disclosing to the court information which it contends the other side should not be privy. Therefore, caution is required. a. Experts Whose Firms Represent Both Sides to a Dispute The rarest form of conflict of interest involving expert witnesses arises when two experts associated with the same firm agree to represent opposite sides of

58. See generally Flo-Con Sys., Inc. v. Servsteel Inc., 759 F. Supp. 456, 460 (N.D. Ind. 1990) (“In fact, ‘even the briefest conversation between a lawyer and a client can result in the disclosure of confidences. It is the relationship between the prior representation and the present litigation that must be evaluated rather than simply the duration and extent of the past representation.’”) (quoting Novo Terapeutisk v. Baxter Travenol Lab., 607 F.2d 186, 195 (7th Cir. 1979 (en banc)). 59. See English Feedlot, 833 F. Supp. at 1498 (no disclosure of information occurred, and so expert was not disqualified for “side-switching”). 60. Nikkal Indus., Ltd. v. Salton, Inc., 689 F. Supp. 187, 191–92 (S.D.N.Y. 1988). 61. Paul, 123 F.R.D. at 279. 62. Mayer v. Dell, 139 F.R.D. 1, 3 (D. D.C. 1991).


a dispute. Obviously, this arises only when for some reason the conflicts system did not alert the experts to the conflict.63 Very few courts have analyzed this fact pattern. In general, they mention the two-part test applicable to side-switching experts but focus very particularly on the second aspect of the test—whether information was disclosed. They seemingly require an even greater showing: not only must the party show that it disclosed information to one of the firm’s experts, it must show that there is a real risk that that information has been, or will be, shared with the opponent’s expert. It is not clear why the courts have taken this approach since confidentiality is not the sole concern: the idea of having one firm work for both sides in a dispute could create additional substantive conflicts. The experts may not challenge each other’s work as vigorously, for example.64 Thus, and without analyzing the issue in detail, the courts effectively refuse to apply the presumption applied in law firm disqualification—that everyone in a firm shares all confidential information with each other—and have even examined whether “screens” or other practical barriers were in place in the experts’ firm to prevent one expert from sharing information with the other. Accordingly, where the facts show “the absence of any evidence that substantive evidence was exchanged among the affiliated experts, and . . . no prospect of future inadvertent disclosure,” courts conclude disqualification is improper.65 For example, if the expert had been consulted long ago and had likely forgotten any information that had been disclosed, disqualification has been denied.66 Likewise, if the expert had a brief consultation, then a year later joined another firm where another expert was representing the opponent, a court denied disqualification because it found nothing substantive had been exchanged among the experts, they had limited contact, separate offices, and separate computer databases.67 A recent case emphasized the requirement that it be shown that the expert whose disqualification is sought actually possesses confidential material.68 There, a physician employed in the same medical practice as the plaintiff’s medical expert was retained by the defendants. The court adopted the

63. E.g., Hansen v. Umtech Industrieservice Und Spedition, GMBH, 1996 WL 622557 (D. Del. July 3, 1996). While the courts have abjured relying upon attorney disqualification standards, they have struggled in identifying the proper standards and appropriate remedy to apply “where an expert is retained by a party to litigation, and then the adversary retains an expert who is in some way affiliated with the expert retained by the first party.” Hansen at *3 (noting that there is “relatively sparse case law” on the issue and relying on “the inherent power of federal courts” to disqualify an expert). 64. See Sells v. Wamser, 158 F.R.D. 390 (S.D. Ohio 1994). 65. Hansen, 1996 WL 622557 at *8. 66. Id. 67. EEOC, 25 Empl. Prac. Dec (CCH) 31,783 at 7. 68. Wright v. Kaye, 593 S.E. 2d 307, 316 (Va. 2004).

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majority approach and held that absent proof the defendant’s expert had received confidences from his colleague, disqualification was improper. In addition, and unlike law firm disqualification, “screening” the experts upon discovery of the conflict can assist in reducing the likelihood of disqualification. In Western Digital Corp. v. Superior Court,69 the court found that the following affidavit was sufficient to show that a screen warranting denial of a motion to disqualify a firm where one expert had met three times with the movant, but another expert was now representing the opposing party: I have never spoken to anyone about or been told about, directly or indirectly, anything at all having to do with what was discussed at a meeting or meetings between [the movant’s attorney and the expert]. I have been informed about the importance of not discussing our efforts for [the opponent] with [the expert] or anyone else that I know or believe spoke to [the movant’s attorney] about the dispute . . . I have not had any such conversations or communications with any such persons and I will not do so in the future.70

Thus, where two experts in the same firm agree to be retained by lawyers representing clients on the opposite side of the same dispute, disqualification is not automatic. Courts apply a lower standard than they do with attorneys.71 b. Experts Retained by an Opponent Who Represents the Movant in Unrelated Matters Suppose the expert for one party currently is on retention in another matter by another party. Suppose the plaintiff’s expert is on current retention for the defendant in some unrelated matter. The defendant’s lawyer may be fee constrained in cross-examining an expert who will presumably be testifying in that other case on his client’s behalf. Nonetheless, in Atlantic City Associates, LLC v. Carter & Burgess Consultants, Inc.,72 the court applied the two-part test (was there a confidential relationship; were confidences disclosed) and refused to disqualify the experts. It did not view the fact that the experts were currently retained by the client in another matter as a “decisive factor” but instead denied the motion to disqualify because there was no proof of a confidential relationship.

69. 71 Cal. Rptr.2d 179 (Cal. App. 1998). 70. Id. 71. See Formosa Plastics Corp. U.S.A. v. Kajima Int’l Inc., 216 S.W.3d 436 (Tex. App.—Corpus Christi 2006, pet. denied). 72. 2007 WL 63992 (D. N.J. Jan. 5, 2007),


c. Consulting Experts “Although most expert disqualification cases involve a testifying expert, courts employ the same test in determining whether to disqualify a consulting expert.”73 Thus, the rules relating to disqualification of experts, and not lawyers, apply to consulting experts. d. Expert Is Lawyer’s Former Client A law firm may be unable to cross-examine an expert who was formerly its client.74 e. Former Employees as Opposing Experts The courts apply the same standards in determining whether a former employee who is serving as an expert for an opponent is disqualified. “Parties have sought to enjoin their former employees from consulting with their adversaries in litigation by alleging obligations of confidentiality, basing their claims on common law trade secret protection, employment confidentiality agreements, and attorney-client privilege and work product doctrine.”75 Courts are concerned with balancing the various competing interests present when the recipient of some training attempts to use that training against its former master.76

73. Lacroix, PPA v. BIC Corp., 339 F. Supp. 2d 196, 199 (D. Mass. 2004) (citing Great Lakes Dredge & Dock Co. v. Harnischfeger Corp., 734 F. Supp. 334 (N.D. Ill. 1990); Conforti & Eisele, Inc. v. N.J., 405 A.2d 487 (N.J. Supr. 1979)). 74. Sykes v. Matter, 316 F. Supp. 2d 630 (M.D. Tenn. 2004). 75. Brian Burke, Disqualifying an Opponent’s Expert When the Expert is Your Client’s Former Employee, 66 Def. Counsel J. 69, 69 (Jan. 1999). 76. See Wang Labs. Inc. v. CFR Assocs., Inc., 125 F.R.D. 10 (D. Mass 1989) (issuing protective order to prevent plaintiff ’s former employee from serving as defendant’s expert in patent infringement suit with respect to any issues covered by former employee’s confidentiality agreement and precluding defendant from showing expert any of plaintiff ’s documents containing plaintiff ’s trade secrets); Uniroyal Goodrich Tire Co. v. Hudson, 873 F. Supp. 1037 (E.D. Mich. 1994) (permanently enjoining Uniroyal former employee Hudson from consulting with plaintiffs against Uniroyal based upon broad prior confidentiality agreement, since Hudson was not the “only tire expert available to testify as a plaintiff ’s expert”), aff ’d, 97 F.3d 1452 (6th Cir. 1996); American Motors Corp. v. Huffstutler, 575 N.E.2d 116 (Ohio 1991) (reinstating permanent injunction prohibiting former employee from consulting against AMC in Jeep “rollover” cases, in part because expert had improperly removed confidential materials from AMC prior to quitting); Fruehauf Trailer Corp. v. Hagelthorn, 528 N.W.2d 778 (Mich. App.) (affirming denial of preliminary injunction and dismissal of permanent injunction where court reasoned that it was very unlikely former employee had obtained privileged information while employed), appeal denied, 543 N.W.2d 314 (1995); Hayworth v. Schilli Leasing, Inc., 669 N.E.2d 165 (Ind. 1996) (reversing entry of injunction against same former employee).

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Other courts consider these same concerns in slightly different terms. In 2002, in In re Bell Helicopter Textron, Inc.,77 the appellate court reversed a district court’s decision denying a motion brought to disqualify lawyers who had hired a former employee of the opposing party, Bell Helicopters. While employed with Bell, the expert had met with Bell’s attorneys and had discussed lawsuits concerning crashes of Bell’s helicopters. The suit in which the motion to disqualify was raised involved a helicopter crash. The appellate court concluded that there was a substantial relationship between the present suit and information that had been disclosed to the expert and disqualified the firm, concluding that it could not effectively screen the expert and held that Bell did not need to prove that the expert had actually disclosed information to the firm. Similarly, in Green, Tweed of Delaware, Inc. v. DuPont Dow Elastomers, L.L.C.,78 the court refused to disqualify a former employee who was serving as an expert for an adversary since the former employer failed to prove that while the expert had been employed, he had been privy to confidential information relevant to the suit. It applied the same standard that is applied outside this context, in the context of side-switching experts, requiring that the moving party establish that that it had entered into a confidential relationship with the expert and that it had, during that relationship, disclosed confidential or privileged information to the expert that is relevant to the current litigation.79

F. Confidentiality and Experts 1. Basic Distinctions: Consulting and Testifying Experts This section focuses on the Federal Rules of Civil Procedure. State rules governing the discoverability of facts known by and opinions held by experts no doubt vary from the federal rules. But the federal rules are useful because many states have patterned their rules of civil procedure after the federal rules.

77. 87 S.W.3d 139 (Tex. App.—Fort Worth 2002, orig. proc.). 78. 202 F.R.D. 426 (E.D. Pa. 2001). 79. The same test was applied in Space Sys./Loral v. Martin Marietta Corp., 1995 WL 686369 (N.D. Cal. 1995) (disqualifying former employee-expert); Eastman Kodak Co. v. AgfaGevaert N.V., 2003 WL 23101783 (W.D. N.Y. 2003) (disqualifying former employee-expert); and Vikase Corp. v. W.R. Grace & Co.-Conn., 1992 WL 13679 (N.D. Ill. Jan. 24, 1992) (disqualifying former employee-expert). For an interesting twist, see Grioli v. Delta Int’l Mach. Corp., 395 F. Supp. 2d 11 (E.D.N.Y. 2005) (expert had previously represented a party as an attorney).

Confidentiality and Experts

Under the federal rules, materials provided to and considered by an expert in formulating his opinion are generally discoverable.80 Facts known to or held by testifying experts are, as a result, discoverable as of right if they are relevant to a claim or defense in the suit. In contrast, facts known to and opinions held by a non-testifying (or “consulting”) expert are generally immune from discovery.81 At the outset, the rules create an ambiguity: what about facts known to or opinions held by an expert who was not specially retained but who developed his opinions for litigation? Suppose the lawyer talks to an expert, discloses confidences, but never retains him? At least one court has held that such information may be discovered.82 Significantly, once a person has been designated as a testifying expert, courts often do not permit “de-designation” merely because the expert’s opinions or testimony proves unfavorable.83 The Northern District of Iowa examined this problem, stating: This court is persuaded that whether the witness has been designated as an expert expected to testify at trial pursuant to Fed.R.Civ.P. 26(b)(4)(A) is a very significant difference from the situation in which an expert has merely been consulted by a party, but never designated as likely to testify at trial. Such a consulted-but-never-designed expert might properly be considered to fall under the work product doctrine that protects matters prepared in anticipation of litigation. For this reason also, the ability of an opposing party to call a neverdesignated expert at trial should depend upon a showing of “extraordinary circumstances.” However, once an expert is designated, the expert is recognized as presenting part of the common body of discoverable, and generally admissible, information and testimony available to all parties. The practical effect of a Rule 26 designation of an expert is to make an expert available for deposition by the opposing party, as contrasted with subsection (B), authorizes discovery only from designated experts and that discovery may not occur until designation of an expert as expected to be called at trial), and such a deposition preserves the testimony of the expert, should the expert later become unavailable, or provides a basis for impeachment, should the expert’s opinion offered at trial differ.

80. FRCP 26(a)(4)(A) (“A party may depose any person who has been identified as an expert whose opinions may be presented at trial.”). 81. Id. FRCP 26(a)(4)(B) (“A party may, through interrogatories or by deposition, discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or preparation for trial and who is not expected to be called as a witness at trial only . . . upon a showing of exceptional circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means.”). 82. See Harasimowicz v. McAllister, 78 F.R.D. 319, 320 (E. D. Pa. 1978). 83. See Furniture World, Inc. v. D.A.V. Thrift Stores, 168 F.R.D. 61 (D. N.M. 1996); In re Vestavia Assocs., Ltd., Partnership, 105 B.R. 680, 683 (Bankr. M.D. Fla. 1989).

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Chapter 8 Expert Witnesses Thus, Rule 26 designation waives the “free consultation” privilege a party enjoys as to its non-testifying experts. The court therefore concludes that designation of an expert as expected to be called at trial, pursuant to Fed.R.Civ.P. 26(b)(4)(A), even if that designation is subsequently withdrawn, takes the opposing party’s demand to depose and use the expert at trial out of the “exceptional circumstances” category of Rule 26(b)(4)(B).84

Other courts take different approaches. Texas courts, for example, permit de-designation but not if it is either (1) part of a “bargain between adversaries to suppress testimony,” or (2) “for some other improper purpose.”85 Other courts take similar but still distinct approaches.86 Thus, lawyers must ensure that any disclosure to an expert takes place only after retention has occurred. Because of the absolute discoverability of information considered by testifying experts, witnesses should be retained initially as consulting experts and then designated as testifying experts only if their opinions so warrant and the need for the testimony comes to fruition.

2. Disclosure of Testifying Experts’ Files in Related Cases Nowadays, experts are becoming so specialized that one expert is likely to have given opinions, or have been asked to give opinions, in several cases. Does designating an expert as a witness require the attorney to produce the experts’ files in related cases? If so, should an attorney seek such files? It is generally clear that a party must turn over (presuming an obligation to do so has arisen, of course, such as by way of a request for production or court rule, such as the Automatic Disclosure provisions of the Federal Rules of Civil Procedure) all documents given to an expert. Suppose, however, that the expert was previously retained in a different but clearly related matter. Can the expert preclude discovery into those other files? At least one court has said that the expert could not.87 Thus, discovery into testimony on related

84. House v. Combined Ins. Co. of Am., 168 F.R.D 236, 245 (N.D. Iowa 1996) (citations omitted). 85. Castellanos v. Little John, 945 S.W.2d 236, 240 (Tex. App.—San Antonio 1997, orig. proceeding); Estate of Manship v. U.S., 2006 WL 4041784 (M.D. La. 2006); Green v. Nygaard, 143 P.3d 393 (Ariz. App. 2006); Callaway Golf Co. v. Dunlop Slazenger Group Americas, Inc., 2002 WL 1906628 (D. Del. 2002). 86. See, e.g., Callaway Golf Co. v. Dunlop Slazenger Group Americas, Inc., 2002 1906628 (D. Del. 2002). 87. Herrick Co. v. Vetta Sports, 1998 U.S. Dist. LEXIS 14544 (S.D. N.Y. Sept. 14, 1998) (ethics expert had to turn over reports that had not been provided to third parties in prior matters, reasoning that, although that information “would normally be shielded by the work product doctrine or attorney-client privilege,” those protections were waived once the expert was designated to testify).


opinions seems appropriate under this view, although efforts to read that obligation expansively have failed.88 The duty of disclosure recognized by the Herrick court also implicates a lawyer’s responsibilities when retaining an expert. What can a lawyer do to preclude the expert from later agreeing to testify in a case that will, as a result, waive privilege and work product protection over information disclosed to the expert?

3. Waiving Privilege and Work Product by Disclosure to Experts Generally, information considered by an expert is discoverable. The Federal Rules do not make exception for privileged or work product information disclosed to an expert.89 If you hand your testifying expert a bundle of privileged or work product memoranda, therefore, have you waived protection over it? The courts split, but most hold that disclosure of privileged or work product information to a testifying expert can waive privilege and ordinary work product protection.90 “It is never prudent for counsel to assume that the work product doctrine will shield materials given to expert, especially a testifying expert, from discovery by opposing counsel.”91 Courts have repeatedly examined waiver of privilege or work product and generally follow prevailing law: privilege is often waived if disclosed for an expert, but courts are more reluctant to find waive of ordinary work product and avoid finding waiver or opinion work product.92 An interesting example of this arose in In re Omeprazole Patent Litigation.93 There, after an expert submitted a 284 paragraph expert report, counsel sponsoring the expert notified the other side that it was “deleting” 216 of the paragraphs. At the expert’s deposition, opposing counsel asked the expert why this had been done. Counsel objected and instructed not to answer. The court

88. See also In re Wharton, 226 S.W.3d 452 (Tex. App. Waco 2005, orig. proceeding) (other files may show bias); In re Makris, 217 S.W.3d 521 (Tex. App.—San Antonio 2006, orig. proceeding). 89. See generally Christa L. Klopfenstein, Discoverability of Work Product Materials Provided to Testifying Experts, 32 Ind. L. Rev. 481 (1999). 90. See, e.g., Boring v. Keller, 97 F.R.D. 405, 408 (D. Colo. 1983). The split was succinctly summarized recently. David H. Marion & Christopher Pushaw, Expert Witnesses: Pitfalls Posed by the Discovery Process, 3 Sedona Conf. J. 199, 202 (Fall 2002). 91. Id. 92. See Squealer Feeds v. Pickering, 530 N.W.2d 678, 685–86 (Iowa 1995) (privilege waived but not work product); Moore v. R.J. Reynolds Tobacco Co., 194 F.R.D. 659, 664 (S.D. Iowa 2000) (“Opinion work product has nearly absolute immunity from discovery”); Rail Intermodal Specialists, Inc. v. Gen’l Elec. Capital Corp., 154 F.R.D. 218 (N.D. Iowa 1994). 93. 227 F. R. D. 227 (S.D.N.Y 2005).

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held that, not only that the instructions not to answer were improper, but that the work product as to why the defenses described in the 216 paragraphs had been deleted. Another interesting case is United States. Fidelity & Guaranty Co. v. Braspeto Oil Services Co.94 There, the court addressed “how much” an expert had to “consider” work product before it was deemed waived. The court required the party that had given the work product to the expert to clearly show that it had not been considered.

4. Access to Facts Known to and Opinions Held by Consulting Experts The Federal Rules provide broad protection to consulting experts, even those who know opinions or facts adverse to the party designating the expert as nontestifying. Generally, discovery of “facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or preparation for trial and who is not expected to be called as a witness at trial only . . . upon a showing of exceptional circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means.”95 This is ordinarily a difficult hurdle to clear. But where, for example, the expert has knowledge of facts that can no longer be examined, suppose, for example, he made a psychological examination of a plaintiff in a sexual harassment case immediately after a harrowing episode, and the psychological impact has waned because the supervisor was reassigned, pending resolution of the lawsuit. Under such circumstances, the showing of exceptional circumstances required by Rule 26 may be established.96 As one final note, several courts have held that information possessed by even a consulting expert acquired before he is retained is discoverable. The court in Adams v. Shell Oil Co.,97 allowed discovery into facts and opinions known by consulting experts prior to their retention but not into those

94. 2002 WL 15652 (S.D.N.Y 2002). 95. FRCP 26(a)(4)(B) (emphasis added). 96. Compare Thompason v. The Haskell Co., 65 F. Empl. Prac. Case (BNA) 1088 (M.D Fla. 1994) (allowing access to psychological report prepared closer to time of events even though psychologist was designated as a nontestifying expert) with Chiquita Int’l Ltd. v. M/V Bolero Reefer, 1994 U.S. Dist. LEXIS 5820 (S.D. N.Y. 1994) (no discovery allowed of report of consulting expert, even though his report was of a condition of a ship right after an accident had occurred, in part because other party could have, but did not, make same inspection at the time of the events in issue). 97. 134 F.R.D. 148 (E. D. La. 1990).


learned or developed afterward.98 A close reading of the rules creates room for disagreement on this issue, but generally the courts hold that information learned before or facts developed prior to retention cannot be protected from discovery even when known to or held by a person designated as a nontestifying expert.

5. Testifying Experts’ Review of Consulting Experts’ Materials Suppose the report or work done by a nontestifying expert is given to a testifying expert? If the testifying expert considers the materials, then the report is discoverable (and presumably, so would be information held by the consulting expert).99 This rule and the rule holding that generally speaking privilege is waived by review by a testifying expert mandates that experts not reveal the reports of consulting experts, or attorney-client privileged or work product information, either in preparation for testifying by deposition or at trial. Doing so and using such reports to, for example, refresh recollection, could result in waiver under Federal Rule of Evidence 611.100

6. Inadvertent Waiver of Expert’s Facts and Opinions Inadvertent disclosure of information or opinions held by experts can occur in myriad ways. Lawyers often forget that, particularly among experts in a very narrow field, the experts likely know one another, attend conferences together, and may even be friends. Especially where the expert has not testified very often, she may not understand the need for confidentiality and the problems that disclosure can create. A Texas decision addresses this issue. There, the attorney improperly engaged in an ex parte contact with a testifying expert, but the court stated that it would consider the “culpability” of the witness who talked to the opposing party in determining whether it was appropriate to disqualify or otherwise sanction the attorney.101

98. See Grinnell Corp. v. Hackett, 70 F.R.D. 326 (D. R.I. 1976) (evidence not developed in anticipation of trial was discoverable). 99. See Heitmann v. Concrete Pipe Machinery Co., 98 F.R.D. 740, 743 (E. D. Mo. 1983); Dominguez v. Syntex Labs., Inc., 149 F.R.D. 158, 162 (S.D. Ind. 1993) (consulting expert’s materials remained undiscoverable because testifying expert testified he did not review them, even though such materials were provided to him). 100. See United States v. 22.80 Acres, 107 F.R.D. 20, 26 (N D. Cal. 1985). 101. Cramer v. Sabine Transp. Co., 141 F. Supp. 2d 727 (S.D. Tex. 2001) (footnotes omitted).

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Other courts have addressed the question of whether a consulting expert’s report becomes discoverable when it was handed over to third parties.102 This would seem to be the correct result: the rule exists not to promote confidentiality, as such, but instead to facilitate development of a lawyer’s case. Thus, the same conduct that might result in waiver of privilege would not necessarily result in waiver of protection over a consulting expert’s report. Put the other way, disclosure of a privileged document to a third party is inconsistent with a claim that the information is maintained in confidence; but the disclosure to third parties of a consulting expert’s report, whatever the impact on its confidentiality, does not implicate the reason for the protection of such reports, which is not confidentiality, but trial preparation. However, there is a split on this issue.103 Implicit in many cases is the notion that an expert should know not to discuss matters with opposing parties and their lawyers and agents. As a consequence, lawyers likely have an ethical obligation to instruct their experts both not to disclose information and not to solicit breach of confidentiality by another. Experts may not understand the seriousness of these issues. Written reminders in the engagement letter with the expert, for example, may be in necessary in some cases. Related to this, even if you believe that you need not identify consulting experts as persons with knowledge of facts, doing so—and informing the other side that they are off limits—may assist in protecting information known to and opinions held by experts.

7. Special Note on Consulting Experts The Federal Rules provide broad protection to consulting experts, even those who know opinions or facts adverse to the party designating the expert as nontestifying. Generally, discovery of facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or preparation for trial and who is not expected to be called as a witness at trial only . . . upon a showing of exceptional circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means.104 This is ordinarily a difficult hurdle to clear. But where, for example, the expert has knowledge of facts that can no longer be examined? Suppose

102. See Vanguard Sav. & Loan Ass’n v. Banks, 1995 U.S. Dist. LEXIS 2016 at * 7 (E.D. Pa. Feb. 17, 1995) (no waiver). 103. See Bank Russels Lambert v. Chase Manhattan Bank, 175 F.R.D. 34, 45 (S.D.N.Y. 1997) (discussing split). 104. Fed. R. Civ. P. 26(a)(4)(B) (emphasis added).


he made a psychological examination of a plaintiff in a sexual harassment case immediately after a harrowing episode, and the psychological impact has waned because the supervisor was reassigned pending resolution of the lawsuit. Under such circumstances, the showing of exceptional circumstances required by Rule 26 may be established.105 As one final note, courts have held that information possessed by a consulting expert acquired before he is retained is discoverable. The court in Adams v. Shell Oil Co.106 allowed discovery into facts and opinions known by consulting experts prior to their retention but not into those learned or developed afterward.107 A close reading of the rules creates room for disagreement on this issue, but generally the courts hold that information learned before or facts developed prior to retention cannot be protected from discovery even when known to or held by a person designated as a nontestifying expert.

8. Testifying Experts Under the Federal Rules of Civil Procedure, facts known by and opinions held by experts no doubt vary from the federal rules. Under the federal rules, materials provided to and considered by an expert in formulating his opinion are generally discoverable.108 Facts known to or held by testifying experts are, as a result, discoverable as of right if they are relevant to a claim or defense in the suit. In contrast, facts known to and opinions held by a no-testifying (or “consulting”) expert are generally immune from discovery.109

105. Compare Thompason v. The Haskell Co., 65 F. Empl. Prac. Case (BNA) 1088 (M.D Fla. 1994) (allowing access to psychological report prepared closer to time of events even though psychologist was designated as a nontestifying expert) with Chiquita Int’l Ltd. v. M/V Bolero Reefer, 1994 U.S. Dist. LEXIS 5820 (S.D.N.Y. 1994) (no discovery allowed of report of consulting expert, even though his report was of a condition of a ship right after an accident had occurred, in part because other party could have, but did not, make same inspection at the time of the events in issue). 106. 134 F.R.D. 148 (E.D. La. 1990). 107. See Grinnell Corp. v. Hackett, 70 F.R.D. 326 (D. R.I. 1976) (evidence not developed in anticipation of trial was discoverable). 108. FRCP 26(a)(4)(A) (A party may depose any person who has been identified as an expert whose opinions may be presented at trial.). 109. Id. FRCP 26(a)(4)(B) (A party may, through interrogatories or by deposition, discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or preparation for trial and who is not expected to be called as a witness at trial only . . . upon a showing of exceptional circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means.).

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G. Means to Reduce the Problems Courts emphasize that the “most important consideration in expert disqualification cases . . . is the preservation of confidentiality.”110 Given that approach, a lawyer should take reasonable steps to ensure that her client is protected. The following may be important steps to consider.

1. Ensure that Employee Confidentiality Agreements Are Broad and Enforceable Confidentiality agreements should be drafted as broadly as permissible to protect against “turn-coat” former employees.

2. To Help Identify Conflicts, Ask the Expert About Prior Work for the Opposing Party or Opposing Counsel As this section has shown, conflicts can arise under circumstances where an expert is retained by a party adverse to a party for whom the expert previously had been retained. The expert, therefore, is a key and perhaps sole source of such information. Inquiry into conflicts should, as a result, be made early and preferably in writing.111

3. Require the Expert to Sign a Confidentiality Agreement Lawyers have an obligation to maintain the confidentiality of any information relating to the representation of a client. Therefore, any disclosure to a person should be accompanied by a requirement that the person maintain the information as the lawyer is required to do.112 Obviously, the designation of the expert as a testifying expert results in a waiver of that protection, but if the expert is not designated to testify, then confidentiality of information can be maintained.

110. Hansen, 1996 WL 622557 at 8. 111. See generally, Wang, 762 F. Supp. at 1248 (“Counsel seeking to retain a consultant should inquire specifically whether consultant’s past employment presents any problem.”). 112. Wang, 762 F. Supp. at 1248 (“Lawyers bear a burden to make clear to consultants that retention and a confidential relationship are desired and intended.”).

Means to Reduce the Problems

4. Formalize Retention of the Expert In order to avoid uncertainty over whether and when an expert was retained, steps should be taken to formalize the retention of the expert.113 Typically, this may require something written either from or to the expert to indicate the retention.

5. Disclose Information and Get the Expert Working Early Leaving an expert open to cross-examination for failing to give her critical information is clearly a bad idea. The expert should be given all pertinent information.114 Further, she should be given it early: particularly where the expert expresses doubt that his opinion will be what the client’s needs indicate, the lawyer should get the expert working early to avoid last-minute scrambling to identify an expert whose opinion comports with the client’s needs.

6. Identify Confidential Disclosures as Such This is important. Consulting experts who receive work product information should be aware of that fact, and lawyers should, before providing that information to a consulting expert, be aware that dissemination to the expert will likely result in waiver of at least ordinary, but not opinion, work product protection.115

113. See generally, Hansen, 1996 WL 622557 at *5–6 (court found relationship objectively existed where lawyer sent letter confirming retention and reminding expert of need for confidentiality); Wang, 762 F. Supp. at 1248 (“a lawyer seeking to retain an expert and establish a confidential relationship should make this intention unmistakably clear and should confirm it in writing”). 114. See generally Wang, 762 F. Supp. at 1248 (courts will not disqualify experts retained by lawyers but who were not actually used as experts); Palmer v. Ozbeck, 144 F.R.D. 66 (D. Md. 1992) (cautioning against disqualifying experts, particularly in highly specialized areas, where information has not been disclosed in order to discourage lawyers from “retaining” all premier experts in an area with no intention of actually soliciting their expertise). 115. See generally Wang, 762 F. Supp. at 1248 (“Work-Product communications to the consultant should be prominently labeled as such.”).

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7. Advise the Expert Not to Talk About or Listen to Confidential Information Lawyers and their agents need to be wary of the need for confidentiality as well as the need to prevent soliciting disclosure of an opponent’s confidences.

8. If a Conflict Does Arise, Raise It Promptly with Opposing Counsel In practice of law, it is likely that a conflict can go undetected. Companies change names; memories fade; and in the rush of practice, details can be overlooked. Thus, if a conflict is not detected prior to retention but arises later, counsel should promptly raise the issue with opposing counsel.116 The party that has the objection to the expert can, if the objection is not raised promptly, be deemed to have waived the objection. Conversely, if the party who has retained the expert becomes aware of a conflict and the other side is not aware of it, a last-minute motion to disqualify the expert could be filed, derailing trial. a. If the Conflict Cannot Be Resolved, Raise It Promptly with the Court Many jurisdictions hold that conflicts of interest involving attorneys may be waived. Although no waiver cases involving experts has apparently yet arisen, litigants should presume that waiver will be extended into the context of expert conflict of interests and act accordingly. The movant should give attention to how to best present the motion in light of its burden to prove the actual disclosure to the expert of client confidences. Offering the evidence for in camera and ex parte inspection may be the only means to prove the fact of disclosure without, as a consequence, disclosing the very confidences which the movant wants to protect. b. Move In Limine to Exclude the Reference to the Conflicting Representation Confidentiality is the principle concern governing whether to disqualify an expert, and so experts who act under a conflict of interest may not be disqualified under all circumstances. Where a motion to disqualify has failed, the moving litigant should move in limine to exclude any reference to the fact

116. See generally Wang, 762 F. Supp. at 1248 (counsel should discuss issue “thoroughly in an effort to resolve the dispute before it is raised in court”).

Means to Reduce the Problems

that the expert had once agreed to work for the movant. On the other hand, a lawyer who first contacted one expert at a firm, and who successfully disqualified the expert at that firm who agreed to represent the second party, should move in limine to preclude the nonmoving party from referring to the disqualification motion or the fact that an expert in the same firm had actually agreed to advise the other side.

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CHAP T ER

9 Ethical Issues in the Information Exchange Process

A. Litigation Holds and Spoliation

180

B. Local Rule Requirements

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C. Initial Disclosures

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1. Protection of Pre-Pleading Investigatory Materials

181

2. Complete Disclosures and Proper Supplementation

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D. Discovery

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1. General Discovery Abuse

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2. Improper Ex Parte Contacts During Pendency of a Matter

183

a. Employees and Former Employees

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b. Ethical and Procedural Limitations on Ex Parte Contacts with Expert Witnesses

183

E. Litigation Mistakes and Misconduct

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F. Trial Conduct

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1. In-Courtroom Conduct

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2. Advocate-as-Witness Disqualification

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3. Improper Argument

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4. Ex Parte Communications with Jurors

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180 Chapter 9 Ethical Issues in the Information Exchange Process

A. Litigation Holds and Spoliation The consequences of spoliation range from adverse inferences1 to unenforceability. Judge Sue Robinson of the United States District Court for the District of Delaware recently held that spoliation justified holding certain Rambus patents to unenforceable against a particular defendant in Micron Technology Inc. v. Rambus, Inc.2 After Rambus had known that it was going to enforce its patents against specific targets but, nonetheless, moved forward with implementing a “document retention” policy that allowed for destruction of pertinent files while it was in “stealth mode.” The practices that accompany protection of information subject to litigation holds that apply in general civil litigation should, as a result, be followed in patent litigation. Because these cases tend to be document intensive, adherence to procedures and policies is all the more important.

B. Local Rule Requirements Many local rules apply to all cases, and some districts have special “patent case local rules.” Some district courts by local rule require that the patentee without request provide detailed “infringement contentions” after filing suit.3 These so-called preliminary infringement contentions streamline the discovery process by “taking the place of a series of interrogatories that defendants likely would have propounded.”4 Typically, the plaintiff must disclose all facts known to it based on its pre-suit inquiry in sufficient detail to give the defendant notice of infringement beyond the claim language itself.5 Thus, violating Rule 11 can also result in violation of a local rule requiring early disclosure of preliminary contention interrogatories.6

1. E.g., PandoraJewelry, LLC v. Chamilia, LLC, 2008 WL 4533902 (D. Md. Sept. 30, 2008) (discussing court’s inherent power to impose adverse inference due to spoliation in patent case). 2. 255 F.R.D. 135 (D. Del. 2009). 3. Safeclick, LLC v. Visa Int’l Serv. Ass’n., 208 Fed. Appx. 829 (Fed. Cir. Oct. 23, 2006) (affirming dismissal of suit for failure to comply with infringement contention disclosure requirements in local rules). 4. Renesas Tech. Corp. v. Nanya Tech. Corp., 2004 Wl 2600466 (N.D. Cal. Nov. 10, 2004). 5. Intertrust Tech Corp. v. Microsoft Corp., 2003 WL 23120174 (N.D. Cal. Dec. 1, 2003). See MEMC Elec. Materials v. Mitsubishi Materials Silicon Corp., 2004 WL 5363616 (N.D. Cal. March 2, 2004) (discussing purposes of patent local rules and untimely efforts to amend disclosures). 6. Samsung SDI Co. v. Matsushita Elec. Industrial Co., 2006 WL 5097360 (C.D. Cal. June 5, 2006) (collecting cases).

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In some instances, these disclosures can be required as few as ten days after the initial case management conference.7 Compliance with these local rules is important because the Federal Circuit is “very deferential” to application of local rules.8 Obviously, district courts are also concerned with reaching the merits of the dispute and so commonly provide opportunity to amend disclosures required by the local rules as long as the opportunity is sought timely and without great prejudice to the other party.9 Thus, diligence is required during litigation to ensure that any disclosures required by the local rules to be supplemented or updated are properly maintained.10

C. Initial Disclosures 1. Protection of Pre-Pleading Investigatory Materials As described in Chapter 5, litigants are required to investigate the facts and law prior to filing suit. Necessarily, this will result in creation of attorney work product and, likely, attorney-client privileged information. As a result, absent agreement of counsel that such documents do not need to be listed on privilege logs, it is important that litigants properly claim protection over these documents.11

7. Safeclick, LLC v. Visa Int’l Serv. Ass’n., 208 Fed. Appx. 829 (Fed. Cir. Oct. 23, 2006) (quoting the local rules of the Northern District of California). 8. Genentech, Inc. v. Amgen, Inc., 289 F.3d 761, 774 (Fed. Cir. 2002). See Baldwin Hardware Corp. v. Franksu Enter. Corp., 78 F.3d 550 (Fed. Cir. 1996) (affirming monetary sanctions for violation of local rule concerning extension of time). See also U.S. Philips Corp. v. KXD Tech., Inc., 2007 WL 4984153 (C.D. Cal. July 27, 2007) (entering default against defendants for, among other things, violating local rules). 9. Computer Acceleration Corp. v. Microsoft Corp., 481 F. Supp. 2d 620 (E.D. Tex. 2007) (listing factors that courts consider in permitting untimely supplementation of disclosures required by local patent rules and granting leave to amend invalidity contention interrogatories required by local rules). 10. See Finisar Corp. v. DirecTV Group, Inc., 424 F. Supp. 2d 896 (E.D. Tex. 2006) (permitting amendment of invalidity contentions in light of patentee’s amendment of its infringement contentions but refusing defendant to assert new prior art after district court had issued claim construction ruling). 11. For a brief discussion of how to avoid waiver of privilege over these documents when their production or disclosure becomes necessary, see Allen F. Gardner, Pitfalls in Disclosing Prefiling Investigations and Ways to Lessen Them, 20 ABA Intell. Prop. Litig. 3 (Fall 2008).

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2. Complete Disclosures and Proper Supplementation Whether the origin of the obligation is the initial disclosures required by Rule 26 or a district court’s local rules, parties to patent infringement suits must be sure to properly disclose required information. Failure to do so unaccompanied by substantial justification can result, not only in monetary sanctions, but in exclusion of evidence necessary to avoid entry of an adverse judgment. In a recent patent decision from the Maryland district court,12 the defendants failed to timely disclose prior art that they would rely upon to support their invalidity defenses, instead raising it only in opposition to the patentee’s motion for summary judgment. The district court held that “failed timely to disclose prior art or the underlying basis for their invalidity claims . . . [the patentee] is entitled to summary judgment.”13

D. Discovery 1. General Discovery Abuse Discovery abuse is of course not particular to patent litigation,14 but the consequences have been severe. In one recent patent case, the defendants essentially completely failed to participate in discovery and otherwise violated the discovery provisions of the Federal Rules of Civil Procedure as well as the district court’s local rules; the district court found entry of default judgment proper.15 Likewise, deliberate violations of protective orders prohibiting dissemination of particular confidential information has resulted in severe sanctions.16

12. Contech Stormwater Solutions, Inc. v. Baysaver Tech., Inc., 534 F. Supp. 2d 616 (D. Md. 2008). 13. Id. See also Baden Sports, Inc. v. Kabushiki Kaisha Molten, 2007 WL 2285857 (W.D. Wash. Aug. 2, 2007) (excluding certain evidence based upon improper initial disclosure and untimely supplementation); Baden Sports, Inc. v. Kabushiki Kaisha Molten, 2007 WL 2056502 (W.D. Wash. July 16, 2007) (party had disclosed no corporate witnesses in its initial disclosure; every corporate witness excluded from trial); Tuna Processors, Inc. v. Hawaii Int’l Seafood, Inc., 2007 WL 433547 (D. Haw. Feb. 5, 2007). 14. Meaning that the Federal Circuit applies regional circuit law to issues concerning sanctions and discovery abuse. Refac Int’l. Ltd. v. Hitachi, Ltd., 921 F.2d 1247 (Fed. Cir. 1990). 15. U.S. Philips Corp. v. KXD Tech., Inc., 2007 WL 4984153 (C.D. Cal. July 27, 2007). 16. See Wallis v. PHL Assocs., Inc., 86 Cal. Rptr.2d 297 (Cal. App. 2008) (trade secrets case).

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2. Improper Ex Parte Contacts During Pendency of a Matter a. Employees and Former Employees As examined in Chapter 6, the prohibitions against ex parte contacts can arise before litigation is filed. Once litigation is filed, those rules clearly apply and need to be followed. In addition, certain other obligations arise. b. Ethical and Procedural Limitations on Ex Parte Contacts with Expert Witnesses This section addresses, first, the rules governing ex parte contacts with the opposing party’s experts. Second, it addresses the question of whether an expert can make an ex parte contact that the lawyer is prohibited from herself making. Lawyers are prohibited generally from contacting agents and employees currently employed or retained by an opposing party with respect to a matter.17 Many bar associations, however, reason that an expert should be treated as a fact witness for purposes of Model Rule 4.2, and so, unless they are actually employed by the opposing party, are not within the protection of Model Rule 4.2. Hence, Model Rule 4.2 does not prohibit an ex parte contact with an opposing party’s expert witness.18 However, even if the contact is ethically proper, the lawyer must ensure that he does not solicit from the expert proprietary or privileged information from the expert.19 Many jurisdictions’ rules are silent on this point.20 A few specifically cover experts. A comment to Texas’ rules provides that “Paragraph (b) of this Rule provides that unless authorized by law, experts employed or retained by a lawyer for a particular matter should not be contacted by opposing counsel regarding that matter without consent of the lawyer who retained them.”21 Other states through judicial or administrative interpretation conclude that their versions of Rule 4.2 apply to experts.22 Even if Rule 4.2 is not implicated, Rule 4.3 is implicated since the expert would as a result not be “represented by counsel.” The lawyer may not

17. E.g., Model Rule 4.2. 18. See N.Y. St. B. Ass’n. Eth. Op. 577 (1986) (collecting opinions); Or. B. Ass’n. Eth. Op. 1999-154 (1998) (same). 19. See id. 20. See Iowa Rule 32-4.2 (worded as is the Model Rule). 21. Texas Disciplinary Rule of Professional Conduct 4.02, cmt. 3. 22. See, e.g., Alaska B. Ass’n Eth. Op. 85-2 (1985) (recounting the difficulties and gamesmanship that occurred after the bar association had originally concluded that ex parte contacts were not prohibited by state ethics rules).


act disinterested. Also, putting Rule 4.3 to the side, the ABA in an opinion reasoned that such contacts implicate Model Rule 3.4(c), since an ex parte contact may violate the applicable rules of civil procedure.23 If the ethical rules do not apply, there may be prohibitions arising from other rules. Although the courts split on the issue, most courts hold that ex parte contacts with a party’s experts are prohibited, either by unclear standards or by the implicit operation of Federal Rule of Civil Procedure 26 or its state counterparts, which limit discovery of experts to depositions and interrogatories.24 In federal court, this is viewed as a function of Rule 26(b)(4)(A), which states that a party may depose any person who has been identified as an expert whose opinions may be presented at trial. Likewise, as to consulting experts, the rules state that discovery may be had by interrogatory or deposition only if the party seeking the discovery establishes “exceptional circumstances” under which it is impracticable for the party seeking discovery to obtain facts or opinion on the same subject by other means.25 The argument goes that these rules establish the exclusive means by which facts or opinions may be gleaned from experts. As Moore explains: “Any discovery from an expert must proceed under Rule 26(b)(4), and a litigant should not make ex parte contacts with an adverse party’s expert.”26 But, as with all things, there are disagreements and complexities. Putting to the side the question of whether, by authorizing certain avenues of

23. See Am. B. Ass’n formal Eth. Op. 93-378 (1993). The rules of civil procedure are next discussed. 24. E.g., Campbell Indus. v. M/V Gemini, 619 F.2d 24, 26 (9th Cir. 1980) (attorney who engages in an ex parte contact with opposing expert commits “flagrant violation” of Fed R. Civ. P. 26(b)(4)(A)); Erickson v. Newmar Corp., 87 F.3d 298, 302 (9th Cir. 1996) (ex parte contact improper); Am. Prot. Ins. Co. v. MGM Grand Hotel—Las Vegas, Inc., 765 F.2d 925 (9th Cir. 1985) (improper); Durflinger v. Artiles, 727 F.2d 888, 891 (10th Cir. 1984) (contact with consultant-only expert improper); Koch Ref. Co. v. Jennifer L. Boudreaux MV, 85 F.3d 1178, 1183 (5th Cir. 1996) (court troubled by ex parte contact); Sanderson v. Boddie-Noell Enterp., Inc., 227 F.R.D. 448 (E.D. Va. 2005) (finding violation); Sewell v. Md. Dept. of Transp., 206 F.R.D 545 (D. Md. 2002) (violation); Brown v. Contemporary OB/BYN Assocs., 794 A.2d 669 (Md. 2002) (finding no improper ex parte contact under unusual facts); DCH Health Serv. Corp. v. Waite, 115 Cal. Rptr.2d 847 (Cal. App. 2002) (“a lawyer may be disqualified after improper contacts with an opposing party’s expert witness”); In re Firestorm, 916 P.2d 411, 419 (Wash. 1996) (improper; disqualification denied); Shadow Traffick Network v. Superior Court, 29 Cal. Rptr.2d 693, 699 (Cal. App. 1994) (improper); Heyde v. Xtraman, Inc., 404 S.E.2d 607, 611 (Ga. App. 1991) (improper); ABA Comm. on Ethics and Prof. Responsibility, Formal Op. 93-378 (1993). 25. Fed. R. Civ. P. 26(b)(4)(B). 26. Moore’s Federal Rules Pamphlet (2002) at p. 326 (citing cases). See Geoffrey C. Hazard & W. William Hodes, The Law of Lawyering 3–4, at 402 (2d ed. Supp. 1994) (“Since existing rules . . . carefully provide for limited and controlled discovery of an opposing party’s expert witnesses, all other forms of contact are impliedly prohibited.”).

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formal discovery, Rule 26 prohibits informal methods, several bar associations have reasoned that in the absence of a rule similar to Federal Rule of Civil Procedure 26, ex parte contacts are not improper, since by its terms Model Rule 4.2 only applies to employees, of which an expert is not.27 On the other hand, numerous federal courts base their order disqualifying the expert not on state bar rules but on the court’s inherent power. These federal courts appear to enforce their own notions of fairness based on a common-law approach and not based upon any sort of violation of a clear, bright-line rule. As noted, this duty may also require the lawyer under some circumstances to admonish his experts not to discuss the matter with the opposing party’s experts. It may not be a bad idea to inform each expert of the identity of the other experts and to provide reminders as to the confidentiality of information no matter how mundane the information may appear. Olson v. Snap Products, Inc.28 is an interesting fact pattern in the ex parte contact arena. There, the plaintiff’s attorney in a product liability action approached two people, one of whom had agreed to serve as an expert in the case. (The other was “just” a former employee, not an expert.) The alleged improper contact of an expert related to the plaintiff’s contacts with Mr. Johnsen, who had been previously identified by the defendants in an earlier lawsuit as a fact witness, since he helped design the product at issue but also was identified in that prior suit as someone who would “offer opinions regarding the cause of the accident.”29 That case had settled without Johnsen ever being identified as an expert. The plaintiff’s attorney contacted him. The plaintiff contended that he had made the contact to find out Johnsen’s factual knowledge, not his expert opinions. Johnsen told the plaintiff’s attorney during the call that he had in fact never even heard of the case plaintiff was calling about and that he had not been retained in the case. The plaintiff’s attorney and Johnsen then discussed the factual development of the product as well as Johnsen’s opinions about the scientific aspects of the product in suit.30 A few weeks later, the defendant’s attorney called and asked him to serve as an expert in the case at bar. Just after that, one of the plaintiff’s investigators showed up at Johnsen’s house to discuss the product and after that, defendants told plaintiffs that Johnsen was their expert. A motion to disqualify was soon filed.

27. 28. 29. 30.

E.g., Oregon Eth. Op. 1998-154 (Or. St. B. Ass’n Sept. 1998). 183 F.R.D. 539 (D. Minn. 1998). 183 F.R.D. at 540. Id.


The district court denied it, though noting that ex parte contacts with opposing experts was a sanctionable violation of Fed. R. Civ. P. 26(b)(4).31 The court, though denying the motion to disqualify, rejected the plaintiff’s argument that Rule 26(b) did not cover Johnsen since he acquired his “expertise” as an employee. The passage where the court rejected this argument states: There is a conceptual attractiveness to this argument. It is imaginable that a witness could possess two subsets of information—one involving matters of historic fact, and the other accumulated in preparation for trial—but it is not so easily imaginable that experts should be approached, on an ex parte basis, so that the former could be explored, reserving any inquiry on the latter to an occasion when opposing counsel would be present. Such a practice would only invite controversy, overreaching, and professional misconduct. In practical terms, human perception and recall are not so neatly categorized. An expert’s recollection of the factual development of product technology will inevitably be influenced by an overlay of subjectivity, inclusive of those factors which evolve into an expert opinion. We reject, as unsound, any attempt to artificially balkanize an expert’s anticipated testimony into facts, and opinion, such as to allow informal discovery of the facts, while prohibiting an ex parte inquiry into the expert’s opinions. Quite simply, the dichotomy is unworkable.32

The court then rejected the defendants’ argument that once an expert always an expert, since it would “inevitably chill a cord function of judicial proceedings—the search for the truth—by permitting corporations to insulate factual witnesses from future discovery by indelibly branding the witness as an ‘expert.’”33 The court then held that, since the plaintiff’s attorney did not know that Johnsen had been retained in the case at bar (indeed, he hadn’t), disqualification was unwarranted.34 An interesting case is Sanderson v. Boddie-Noel Enterprise, Inc.,35 There, a TV meteorologist was designated by plaintiff as an expert in a slip-and-fall case. The defendant called the TV station manager and asked if this was against the station’s policies. It was, and as a result, the TV weatherman backed out of his retention with the plaintiff. The court relied on authority interpreting FRCP 26(b)(4) but focused on the fact that the communication had not been with the expert but with the expert’s employer. It reasoned that the lawyer indirectly violated the rule through the acts of the employer. As a result, it sanctioned the lawyer for the

31. Citing Erickson v. Newmar Corp., 87 F.3d 298, 301–02 (9th Cir. 1996) (remanding for sanctions against attorney who contacted opposing expert). 32. Id. at 543. 33. Id. 34. Id. 35. 227 F.R.D. 448 (E.D. Va. 2005).

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fees the TV weatherman had been paid, the costs of educating the replacement expert, and associated counsel costs. The second question this section addresses is whether the expert may make contacts with opposing parties. The question often arises of whether a lawyer can have someone else do what he is precluded from doing. An Eighth Circuit opinion, arising out of Minnesota, is worth mentioning. In Greiner v. City of Champlin,36 the trial court dismissed a lawsuit in part because of improper ex parte contacts orchestrated by the plaintiff’s expert with a defendant who was represented by counsel and also awarded sanctions. In affirming the district court’s imposition of sanctions, the court emphasized that the lawyer was responsible for the conduct of the nonlawyer assistance because he knew of it before it occurred and failed to take action. Similarly, the Philadelphia Bar Association issued an opinion of note on that point.37 In that opinion, the attorney’s client in a workers’ compensation matter hired a private investigator, who then made an ex parte contact with the claimant and obtained damaging evidence from him. The bar association reasoned there was no violation of the anticontact rule since the lawyer did not hire and did not even know about, the investigator at the time the contact occurred. More complexities were recognized by the Philadelphia Bar Association in a 1995 opinion: You have inquired of the Committee whether you may contact and, thereafter, retain and/or depose an expert witness retained by counsel for an opposing party. More specifically, the expert in question (“the expert”) has been retained by plaintiff ’s counsel but cannot give an opinion favorable to plaintiff and will not, therefore, be “used.” The Rules of Professional Conduct do not directly address the issues raised in your inquiry. Accordingly, the Committee does not, based upon the limited facts in your inquiry, see any express prohibition against contacting plaintiff ’s expert. Nevertheless, it is the view of the Committee that several Rules of Professional Conduct would be implicated by such a contact and that these Rules need to be carefully weighed in deciding how and even whether to proceed. Your dealings with the expert will be “transactions with persons other than clients” within the scope of Rules 4.1 through 4.4. This sequence of the Rules of Professional Conduct addresses a lawyer’s obligation of candor to third persons with whom he comes into contact on his client’s behalf. Rule 4.2 governs “Communication With Person Represented By Counsel.” This Rule prohibits a lawyer from communicating “about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter” unless the other lawyer consents or the communication is

36. 152 F.3d 787 (8th Cir. 1998). 37. Phila. B. Ass’n Prof. Guidance Comm. Op. 2001-10 (Nov. 2001).

188 Chapter 9 Ethical Issues in the Information Exchange Process “ . . . authorized by law . . .” Clearly, therefore, you must satisfy yourself that the expert is not represented by plaintiff ’s attorney or any other lawyer, including the expert’s personal counsel, who may have become involved “in the matter.” In the event the expert is not represented, you must still avoid making any false statements of material fact or law (Rule 4.1), implying you are disinterested or taking advantage of any misunderstanding’s on the expert’s part as to your role in the matter (Rule 4.3), and using methods of obtaining evidence that violate the legal rights of a third person (Rule 4.4). While you acknowledge that an expert cannot be compelled to give testimony absent consent and reasonable compensation, the Committee notes that the expert’s relationship with plaintiff or plaintiff ’s counsel may have given rise to responsibilities on the expert’s part which might be jeopardized by your overtures. Such responsibilities could include testimonial privileges such as those between a patient and psychotherapist. Your contact with the expert may also threaten the expert’s obligations to plaintiff or plaintiff ’s counsel under the standards of professional conduct which obtain in the expert’s own discipline. Other legal rights of the witness could include those arising out of any potential contractual relationship between the expert and plaintiff ’s counsel; in this regard, we note your suggestion that the expert continues to “be retained” by plaintiff ’s counsel. A key consideration underlying these Rules generally, and Rule 4.4 particularly, is the extent to which an opposing party’s expert may be in possession of confidential information or work product of the opposing party and/or his/her counsel, about which it would be improper to inquire. In this connection, there was also some concern within the Committee that there may be situations where an expert’s relationship with a party, either directly or through counsel, may have become that of agent and principal, in which case your responsibilities under Rule 4.1 through 4.4 may be heightened. You should also remain mindful of explicit statutory provisions or specific rules of civil procedure, such as Pa. R.C.P. 4003.6 governing discovery of treating physicians, which may apply. The Committee also wishes you to be aware of the position of the American Bar Association in Formal Opinion 93-378. In that opinion, the ABA concurred in the view that there was no outright prohibition against ex parte communications with an expert retained by opposing counsel. After expressing concerns similar to ours about the applicability of Rules 4.1 through 4.4, the ABA also commented on the relevance of subsections (b), (c), (d) and (f) of Rule 3.4 of the Model Rules of Professional Conduct. This Rule, entitled “Fairness to Opposing Party and Counsel,” has been adopted, with significant modification, in Pennsylvania. Both versions of the Rule forbid a lawyer from falsifying evidence or counseling a witness to testify falsely [Model Rule 3.4(b) and Pennsylvania Rule 3.4(b)], and requesting a person other than a client to refrain from voluntarily giving relevant information to another party [Model Rule 3.4(f) and Pennsylvania Rule 3.4(d)]. Although the two versions of the Rule track conceptually, there are significant differences. Notably, Rule 3.4(d) as adopted in Pennsylvania forbids a lawyer from requesting “a person to

Litigation Mistakes and Misconduct voluntarily refrain from giving relevant information to another party unless: (1) the person is a relative or an employee or other agent of a client; and (2) the lawyer believes that the person’s interests will not be adversely affected and such conduct is not prohibited by Rule 4.2” (emphasis supplied). The emphasized language is not seen in the equivalent Model Rule, thus underscoring the Committee’s concern that the Rules give considerable weight and protection to the existence of a prior relationship between a witness and a party or the party’s counsel. The Committee concludes, therefore, that notwithstanding the lack of an outright prohibition in the Rules of Professional Conduct against contact with plaintiff ’s expert witness, such a contact may be impermissible or, at the very least, tightly circumscribed depending upon the circumstances. Your remaining inquiries as to retaining and deposing the expert follow from whether your initial contacts with the expert can properly be undertaken.38

Finally, court-appointed experts may be subject to even greater protection against ex parte contacts than those retained by counsel.39

E. Litigation Mistakes and Misconduct Although they have been awarded in the past40 recent years, awards of sanctions for misconduct during patent litigation appear to have increased in both severity and frequency. Sanctions have been based upon violations of local rules,41 Section 285, Rule 11, and Section 1927, as well as the inherent power of the court. In addition, the cases reveal examples where, at least on the facts reported, lawyers have failed to abide by local rules and harmed their clients, when sanctions were not awarded. Some district courts have local rules that require early, mandatory disclosure of contentions concerning infringement, among other things. A party who fails to comply with those local rules is subject to sanction, as explained in that chapter. In addition, a party who initially timely complies with those disclosure requirements is often under a duty to seasonably supplement or amend the contentions. Failure to do so can result in denial of amendment of the

38. Phila. Eth. Op. 94-22 (May 1995) (footnotes omitted). 39. Kenneth C. v. Delonda R., 10 Misc. 3d (1070 (N.Y. Fam. Ct. Jan. 04 2006). 40. Baldwin Hardware Corp. v. Franksu Enterp. Corp., 78 F.3d 550 (Fed. Cir. 1996) (affirming award under 28 U.S.C. § 1927 based on litigation misconduct). 41. See also Constant v. Advanced Micro-Devices, Inc., 10 U.S.P.Q.2d 1797 (Fed. Cir. Apr. 11, 1989) (finding no abuse of discretion in denial of attorney fee award).

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contentions, resulting in the client being unable to present additional infringement or other contentions at trial.42 Lawyers thus should ensure familiarity with local rules and the timing of any required supplementation or amendment. Although no hard-and-fast rule has yet emerged as to what should guide a district court in deciding whether to permit a tardy amendment, courts have generally analogized the failure to amend contentions pursuant to patent local rules to the failure to abide by other time limits imposed by the Federal Rules of Civil Procedure, and so analyze the prejudice to the nonmovant, the length of the delay and its impact on the litigation, the importance of the matter and whether a lesser sanction (besides refusing to allow amendment) would deter and suffice, and whether the party acted diligently in seeking amendment despite the delay.43 “Litigation misconduct and unprofessional behavior are relevant to the award of attorneys fees, and may suffice to make a case exceptional under § 285.”44 “In making this assessment, the district court should take into account offensive litigation tactics, including vexatious or unjustified litigation or frivolous filings, and any indicia that the losing party litigated in bad faith.”45 Obviously, these are broad categories, and various types of conduct have been found to fall within the parameters. In Takeda Chemical Industries, Ltd. v. Mylan Laboratories, Inc.,46 the Federal Circuit affirmed a finding of exceptional case where two generic drug companies had engaged in litigation misconduct, affirming an award of nearly $17 million in fees. There, the generic companies had raised inequitable conduct defenses during litigation but at trial had presented no evidence on the issue. Likewise, they had made “extremely misleading” obviousness arguments but had presented no evidence on them. The district courts have also awarded fees. In Medtronic Navigation, Inc. v. Brainlab Medizinische Computersystems GMBH,47 the court awarded the accused infringer attorneys’ fees and costs, even though the court had denied its motion for summary judgment ,and the jury had found for the plaintiff—a verdict which the court set aside on a postjudgment motion for judgment as a matter of law. The court held the case warranted fee shifting because it should have been obvious to the patentee that the court’s claim construction ruling “eviscerated” any argument for infringement. Prior to the claim construction ruling, the patentee’s conduct had not been improper; however, once the court construed the claims, the patentee and its counsel

42. See Cummins-Allison Corp. v. SBM Co., Ltd., 2009 WL 763926 (E.D. Tex. March 19, 2009) (limiting invalidity contentions due to tardy amendment). 43. Id. (collecting cases). 44. Sensonics, inc. v. Aerosonic Corp., 81 F.3d 1566, 1574 (Fed. Cir. 1996). 45. Advanced Magnetic Closures, Inc. v. Rome Fasteners, Inc., 2008 U.S. Dist. LEXIS 54615 (S.D.N.Y. July 17, 2008). 46. 2008 WL 410413 (D. Colo. Feb. 12, 2008). 47. Id.

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“had a duty to reexamine this litigation and make an objective assessment of the validity of [the patentee’s] claims that . . . the products infringed the patent claims as construed.”48 The court reasoned that they should have accepted the interpretation and so proceeded to appeal the rulings “by requesting certification of an interlocutory appeal or conceding the summary judgment motions,” but instead they pursued “a strategy of distorting those rulings, misdirecting the jury to a different reading of the claim language, and blatantly presenting the jury with a product to product comparison . . .”49 A similar case is Depuy Spine, Inc. v. Medtronic Sofamor Danek, Inc.,50 in which the court found a case exceptional because the defendant had sought to “obscure, evade, or minimize the Federal Circuit’s construction of the patent-in-suit” on the issue of equivalency.51 Finally, significant and pervasive litigation misconduct was cataloged by the district court in Advanced Medical Closures, Inc. v. Rome Fastener Corp., where the court cataloged various actions which, it concluded, justified sanctioning the patentee, including (a) failing to disclose testing that undermined a litigation position despite repeated requests, and (b) pursing infringement through trial but not presenting any evidence that any claim read on an accused product.52

F. Trial Conduct 1. In-Courtroom Conduct Much of what occurs at the trial of patent cases is governed by the same rules as any federal civil suit. Thus, like all lawyers, patent litigators must perform competently in presenting their case, introducing evidence,53 making objections, and preserving error.54

48. 49. 50. 51.

Id. Id. 534 F. Supp. 2d 224 (D. Mass. 2008). Id. See Phonometrics, Inc v. Economy Inns of Am., 349 F.3d 1356 (Fed. Cir. 2003) (affirming sanctions based in part upon actions patentee took after claim construction had gutted its arguments); ICU Med., Inc. v. Alaris Med. Sys., Inc., 2007 U.S. Dist. LEXIS 34467 (C.D. Cal. Apr. 17, 2007) (awarding sanctions for litigation misconduct and criticizing party for “repeatedly contradicting this Court’s claim construction). 52. 2008 U.S. Dist. LEXIS 54615 at *47–49. 53. See Biomet, Inc. v. Barnes & Thornburg, 791 N.E.2d 760 (Ct. App. Ind. 2003) (reversing grant of summary judgment on limitations ground against law firm for failing to properly introduce evidence at trial in patent suit). 54. See Conmed Corp. v. Larson & Taylor, 2002 WL 31427518 (4th Cir. Oct. 31, 2002) (dismissing malpractice claim, for lack of causation, against firm that had failed to properly move

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Chapter 9 Ethical Issues in the Information Exchange Process

2. Advocate-as-Witness Disqualification As a general rule, a lawyer may not appear as an advocate in a jury trial in which he is testifying.55 As explored fully in Chapter 11, combining roles (opinion counsel and trial counsel, for example) can create various ethical issues, including disqualification under the “advocate as witness” rule. Any time, however, that a trial lawyer was a fact witness to events pertinent at trial, counsel should examine whether his role as advocate is permissible. In addition to the obvious lawyer-as-witness issues that arise when trial counsel prosecuted the patent-in-suit, involvement in prior litigation or licensing agreements may also serve as potential grounds for disqualification.56

3. Improper Argument District courts obviously have wide discretion in controlling their courtrooms. However, the Federal Circuit has admonished lower courts to “police attorney trial tactics” carefully.57 In one case, the court found counsel’s remarks to be “improper” where counsel stated that the accused infringer/ counterclaim plaintiff had copied the plaintiff’s patents and “simply copies instead of invents.”58

4. Ex Parte Communications with Jurors Judges typically admonish witnesses and lawyers not to communicate with jurors and for jurors to do the same, apart from the necessary communication for civil society. Where this principle is violated, however, mistrial may be required59; thus, counsel should ensure that all witnesses and parties understand the need not to communicate with the juror.

55. 56.

57. 58. 59.

under Rule 50 on invalidity in prior patent infringement case); Harsco Corp. v. Kerka, Stowell, Kondracki & Clarke, PC, 965 F. Supp. 580 (M.D. Pa. 1997) (same). See Model Rule 3.7. See, e.g., ODS Optical Disc Serv. GMBH v. Toshiba Corp., 41 A.D.3d 166 (N.Y Sup. Ct. App. Div. 2007) (reversing disqualification largely because testimony would be cumulative); Emory Univ. v. Nova Biogenetics, Inc., 2006 WL 2708635 (N.D. Ga. Sept. 20, 2006) (denying motion to disqualify where firm had represented assignee, not inventor, in earlier prosecution); Mitts & Merrill, Inc. v. Srhed Pax Corp., 112 F.R.D. 349 (N.D. Ill. 1986) (magistrate denied disqualification even though trial lawyer was involved in prior licensing efforts), approved, 1986 WL 466 (N.D. Ill. Nov. 19, 1986). See generally Times Fiber Comm., Inc. v. Trilogy Comm., Inc., 1996 WL 698016 (Conn. Sup. Ct. Nov. 29, 1996) (firm disqualified because its lawyers’ conduct was central to case). Union Carbide Chem. & Plastics Tech. Corp. v. Shell Oil Co., 308 F. 3d 1167, 1183–84 (Fed. Cir. 2002). Id. Manildra Milling Corp. v. Ogilvie Mills, Inc., 782 F. Supp. 102 (D. Kan. 1991) (declaring mistrial after 18 trial days due to expert’s ex parte communication with jurors but denying motion to disqualify expert and counsel from participating in retrial of patent case).

CHAP T ER

10 Combining Prosecution with Other Forms of Representation

A. Identifying the Applicable Standards

194

B. Combining Prosecution and Litigation

195

1. The Possibility of Misuse of Discovery Materials While Prosecuting Applications

195

C. Is Prosecution of Patents by Itself Sufficient to Bar Access to Highly Confidential Information?

196

1. In re Sibia

198

2. The Majority View

202

3. A Suggested Analysis

206

D. A Proposed Prosecution Bar Raises Potential Conflicts and Liability E. Issues to Consider in Crafting Protective Orders 1. Liability and Disqualification of Prosecuting Litigators

208 212 216

F. Inequitable Conduct as a Conflict

216

G. Depositions of Prosecuting Litigators

218

1. Advocate-as-Witness Disqualification H. Combining Opinion and Trial Representations 1. Advocate-as-Witness Disqualification I. The Courts Split on Advocate-as-Witness Disqualification J. What to Do

219 223 224 224 227

1. Enhanced Risk of Waiver of Work Product

227

2. What to Do

235

K. Conclusion

235

193

194 Chapter 10 Combining Prosecution with Other Forms of Representation

This chapter addresses ethical issues that face attorneys and firms that combine the prosecution of patents with other forms of representation, including opinion work and litigation. It begins by briefly discussing choice of law.

A. Identifying the Applicable Standards The propriety of particular conduct can often hinge upon the determination of which rules apply. In addition, courts often rely upon applicable ethical rules in determining the standard of care.1 For this reason, lawyers must consider whether and to what extent each of the following bears on their conduct: (a) state ethics rules; (b) the PTO Code, and whether it is the OED’s interpretation or that of some other PTO entity which controls; (c) state substantive law (fiduciary duty, agency, and so on); (d) whether the Federal Circuit or regional circuits have jurisdiction over the issue; (e) “federal” ethical standards, however formulated by the regional circuit; and (f ) the appropriate circuit’s law interpreting the Federal Rules of Civil Procedure. When the conduct is in connection with prosecution, then a preemption analysis may be needed as the final step. With the choice of law issues in mind, this chapter now addresses the problems that can arise by combining other forms of representation with patent prosecution.

1. Some courts hold that applicable ethical rules are admissible as evidence of the standard of care under some circumstances; see, e.g., Two Thirty Nine Joint Venture v. Joe, 60 S.W.3d 896 (Tex. Ct. App. 2001), rev’d on other grounds, 145 S.W.3d 150 (Tex. 2004), while others hold they are inadmissible; see, e.g., Hizey v. Carpenter, 830 P.2d 646 (Wash. 1992). See generally Stephen E. Kalish, How to Encourage Lawyers to Be Ethical: Do Not Use the Ethics Codes as a Basis for Regular Law Decisions, 13 Geo. J. Legal Ethics 649 (2000); Douglas L. Christian & Michael Christian, Twice Bitten: Violations of Ethical Rules As Evidence of Legal Malpractice, 28 The Brief 62 (1999); Gary A. Munneke & Anthony E. Davis, The Standard of Care in Legal Malpractice: Do the Model Rules of Professional Conduct Define It?, 22 J. Legal Prof. 33, 33 (1997/1998); David J. Fish, The Use of the Illinois Rules of Professional Conduct to Establish the Standard of Care in Attorney Malpractice Litigation: An Illogical Practice, 23 S. Ill. U.L.J. 65 (1998); Note, The Evidentiary Use of the Ethics Codes in Legal Malpractice: Erasing a Double Standard, 109 Harv. L. Rev. 1102, 1118 (1996); James I. Sullivan, Impact of Ethical Rules and Other Quasi-Standards on Standard of Care, 61 Def. Couns. J. 100, 101 (1994) (“Analysis of the legal malpractice standard of care frequently requires consideration of the potential impact of ethical rules.”); Teresa Schafer Sullivan & Thomas H. Blaske, Legal Ethics and Legal Malpractice: A Beauty and a Beast in Search of Each Other, 74 Mich. B.J. 150 (1995); Laura Callaway Hart, et al., From Offense to Defense: Defending Legal Malpractice Claims, 45 S.C. L. Rev. 771, 776 (1994).

Combining Prosecution and Litigation

B. Combining Prosecution and Litigation A practitioner whose firm both litigates patent infringement suits and prosecutes applications faces at least two broad categories of potential liability or allegations of unethical conduct: those which arise from having access to a third party’s proprietary information while prosecuting patents for a client, and those which arise from acting as a litigator in a matter concerning a patent or patents which the lawyer previously obtained for the client. The former category of issues arise when the same lawyer is concurrently retained by the same client in multiple roles; the latter when the lawyer is successively retained by the same client in multiple roles.

1. The Possibility of Misuse of Discovery Materials While Prosecuting Applications An attorney who litigates can gain access to an opposing party’s proprietary information through the exchange of discovery. Where the litigator also prosecutes patents for a client, she faces the risk that the opposing party may contend that she should not be allowed to obtain information through discovery which would permit her to misuse that information during prosecution by, for example, using that information to obtain a patent on behalf of her client. If a lawyer prosecutes applications in a highly specialized area of technology on behalf of a client and obtains proprietary information from an opposing party as a result of discovery exchanges in infringement litigation, the opposing party will seek to prevent misuse of the information by seeking a protective order that prevents the lawyer from access to that information.2 Entry of a protective order denying access to critical information will effectively disqualify a lawyer from representing the client in infringement litigation; however, this generally leaves other lawyers in the disqualified lawyer’s firm able to continue the representation. But avoiding “disqualification” by avoiding entry of such a protective order creates potential liability for the prosecuting litigator. He can be accused of using the opposing party’s information during prosecution and be sued for money damages. In addition, the client of a prosecuting litigator may be sued by the opposing party who can argue that it has equitable ownership of patents obtained through misused information.

2. See, e.g., Nazomi Commc’ns, Inc. v. Arm Holdings PLC, No. C 02-02521-JF, 2002 U.S. Dist. LEXIS 21400, 2002 WL 32831822 (N.D. Cal. Oct. 11, 2002) (also seeking to prevent lawyers from negotiating licenses in the field), vacated on other grounds, 403 F.3d 1364, 74 U.S.P.Q.2d 1458 (Fed. Cir. 2005).

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The issue of access to information by a prosecuting litigator creates important issues for both courts and counsel. The courts must be careful whether and to what extent they bar prosecuting litigators from access to discovery materials: imposing a bar too frequently will unnecessarily drive up litigation expenses, while permitting unfettered access by prosecuting litigators to a competitor’s most current and important product development information could result in inadvertent or even intentional misuse of the information during prosecution. Similarly, counsel must be careful in seeking access where inadvertent disclosure could occur, since a prosecuting litigator’s exposure to such information could result in liability by the lawyer and his client for misappropriation of trade secrets. This section analyzes the cases addressing this issue and provides guidance for the courts and for practitioners when confronting the competing interests raised when a prosecuting attorney is also a litigator.3

C. Is Prosecution of Patents by Itself Sufficient to Bar Access to Highly Confidential Information? Federal Rule of Civil Procedure 26(c)(1) states that a “court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including . . . (G) requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way. . . .”4 Courts “routinely” recognize the fact that such information is going to be exchanged in most patent cases, and that often such information is of critical commercial importance.5 Sensitive information is almost always

3. The need to protect confidential information from disclosure to prosecuting attorneys has been addressed even where the prosecuting attorneys are in separate firms from those litigating the case. See, e.g., BASF Corp. v. United States, 321 F. Supp. 2d 1373 (Ct. Int’l Trade 2004) (granting protective order requiring that an ethical screen be established between firm representing party in litigation and another firm which prosecuted patents for that party). Normally, the usual prohibition in a protective order limiting use of information disclosed during litigation to “the litigation” would seem to obviate the need for such steps, but in extreme cases practitioners should consider whether to include provisions which more firmly restrict use and disclosure of information. 4. Fed. R. Civ. P. 26(c)(1), (c)(1)(G) (2007). 5. Commissariat a L’Energie Atomique v. Dell Computer Corp., No. 03-484-KAJ, 2004 U.S. Dist. LEXIS 12782, at *6 (D. Del. May 25, 2004) (“This court has routinely recognized the importance of protecting technical information, particularly in patent cases.”); see, e.g., Safe Flight Instrument Corp. v. Sundstrand Data Control Inc., 682 F. Supp. 20, 21–22, 7 U.S.P.Q.2d 1823, 1824 (D. Del. 1988).

Is Prosecution of Patents by Itself Sufficient to Bar Access?

relevant in a patent case.6 And even in a patent case where the litigators do not prosecute patents and no in-house counsel is involved, district courts will almost, without question, enter a protective order which limits the use and disclosure of information exchanged during discovery. Generally, such protective orders prohibit use or disclosure of information beyond that necessary to prosecute the lawsuit.7 Under some circumstances, courts have recognized that it is insufficient to merely restrict use of information to the litigation itself. Foremost, courts often hold that in-house counsel who, in addition to representing his employer in the litigation, has responsibilities to his employer for product design, pricing, and similar competitive business activities should be precluded from having access to materials exchanged during discovery to the extent that the materials could be deliberately or inadvertently used in business-related activities.8 It is settled that in-house counsel who are engaged in such “competitive decision making” can be denied access to certain sensitive discovery.9 But though that proposition is settled, the scope of what constitutes competitive decision making by in-house counsel remains unclear, at least at the margins. For example, in one recent case, the head of the IP department was found not to be engaged in competitive decision making.10 Does disclosure of information to outside counsel who prosecutes patents for the opposing party create similar concerns that would justify denial of

6. See John M. Benassi & Colbern C. Stuart III, Discovery and Privilege, in Laurence H. Pretty, Patent Litigation § 4:12.3 (2003) (“In virtually every patent case, the parties will have trade secret, confidential or proprietary technical, business and marketing information and documents that they do not want to show to the other side, especially if the other side is a direct competitor.”). 7. See generally Wayne F. Reinke, Comment, Limiting the Scope of Discovery: The Use of Protective Orders and Document Retention Programs in Patent Litigation, 2 Alb. L.J. Sci. & Tech. 175 (1992). 8. See U.S. Steel Corp. v. United States, 730 F.2d 1465, 1467–68 (Fed. Cir. 1984); Infosint S.A. v. H. Lundbeck A.S., 2007 U.S. Dist. LEXIS 36678, 2007 WL 1467784 (S.D.N.Y. May 16, 2007) (analyzing whether in-house counsel engaged in competitive decision making); Affymetrix, Inc. v. Illumina, Inc., 2005 U.S. Dist. Lexis 15482 (D. Del. 2005) (barring certain in-house lawyers from access); Intel Corp. v. VIA Techs., Inc., 198 F.R.D. 525, 531–32 (N.D. Cal. 2000) (barring access); News Am. v. Marquis, No. CV 000177440S, 27 Conn. L. Rptr. 195, 2000 Conn. Super. LEXIS 1273, 2000 WL 726821, at * 1 (Conn. Super. Ct. May 3, 2000) (granting access); Volvo Penta of the Americas, Inc. v. Brunswick Corp., 187 F.R.D. 240, 242–44 (E.D. Va. 1999) (granting access); In re Indep. Serv. Orgs. Antitrust Litig., No. CIV. A. MDL1021, 1995 U.S. Dist. LEXIS 4698, 1995 WL 151739 (D. Kan. March 9, 1995) (granting access). See also Telular Corp. v. Vox2, Inc., 2001 WL 641188 (N.D. Ill. June 4, 2001) (analyzing whether sales director could have access to information in patent infringement case). 9. See generally Louis S. Sorrell, In-House Counsel Access to Confidential Information Produced During Discovery in Intellectual Property Litigation, 27 J. Marshall L. Rev. 657 (1994). 10. Intervet, Inc. v. Merial Ltd., 241 F.R.D. 55 (D.D.C. 2007). See also R.R. Donnelly & Sons Co. v. Quark, Inc., 2007 U.S. Dist. LEXIS 424, 2007 WL 61885 (D. Del. Jan. 4, 2007) (analyzing which house counsel were competitive decision makers).

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access to sensitive information? The question of whether attorneys who prosecute patents may be similarly barred has split the courts.11 As the following cases show, though the Federal Circuit has specifically held that a denial of access “cannot rest on a general assumption that one group of lawyers are more likely or less likely to breach their duty under a protective order,”12 one dominating line of cases holds that proof that a lawyer is engaged in patent prosecution is sufficient to bar access. This divide grows from whether courts should treat outside counsel as if he is involved in competitive decision making solely by reason of his prosecution activities.13 Those courts which conclude that the activities of patent prosecutors create sufficient risk have left the prosecuting litigator with a choice: he may either have access to the information, or he may prosecute patents, but he may not do both.14

1. In re Sibia Several courts—including the Federal Circuit (in an unpublished decision)— hold that patent prosecution by itself is not enough to justify denial of access. This section discusses this line of cases, which represents the minority view. The origins are a district court case that resulted in an unpublished decision by the Federal Circuit. In Sibia Neurosciences, Inc. v. Cadus Pharmaceutical Corp.,15 the prosecuting litigator, DeConti, had been prosecuting patents in the field of cell surface receptors and related proteins and assay methods for his client, Cadus, for two years before Sibia filed an infringement suit against Cadus. The suit involved the same technology that DeConti had described as being “kind of the everyday stuff of biotechnology assays.”16 Sibia sought a protective order to preclude DeConti from prosecuting patents in that field if he was allowed access to certain information during the suit. The lawyer stated at the hearing on entry of the protective order that he did not provide advice on inventions, since they “are made . . . by inventors. We basically receive information from inventors and we make sure that that information

11. See generally James Pooley, Update on Trade Secret Law, 764 PLI/Pat 173 (2003) (discussing cases generally). 12. U.S. Steel, 730 F.2d at 1468. 13. See generally Julia S. Ferguson, et al., Conflicts in Intellectual Property Law: A Brief Survey, 616 PLI/Pat 539, 580–83 (2000). 14. See, e.g., Cummins-Allison Corp. v. Glory Ltd., No. 02 C 7008, 2003 U.S. Dist. LEXIS 23653, at *26–27 (N.D. Ill. Jan. 2, 2004) (“[T]he party could choose not to disclose confidential information to patent prosecution counsel, in which case that counsel could continue to prosecute patent applications; or, the party could choose to reveal confidential information to patent prosecution counsel, and accept limitations on the attorney’s ability to prosecute certain patent applications for a period of time.”). 15. No. 96-1231-IEG (POR), 1997 U.S. Dist. LEXIS 24130 (S.D. Cal. July 15, 1997). 16. Id. at *12.


is protected to . . . the [full] scope of the law as best we can, so our work goes into basically making sure that the invention once made is properly protected by patent.”17 He further testified that he was not generally aware of marketing information nor was he involved in product development or pricing information but, instead, simply protected, through patenting, inventions disclosed to him by the client.18 Significantly, he also testified that he had more than 50 biotech clients, “many of which are involved in the field of cell surface proteins and receptors.”19 In this vein, he stated that he had “a lot of confidential trade secret information” from each client, and yet he kept the information compartmentalized and distinct.20 Based on these facts, the magistrate entered a protective order precluding anyone with access to certain information from prosecuting patents “in the area of cell surface receptors and assay methods relating to the same” until one year after any appeals in the case were resolved.21 However, the district court modified the magistrate’s order,22 noting that DeConti had no involvement in pricing or similar business-related activities that had been found to constitute competitive decision making.23 Then the court turned to the argument that a ban was justified due to “the unique role which patent attorneys play in a client’s competitive patenting decisions.”24 The court rejected it because it would create a “per se rule that counsel who prosecute patents in a particular field should always be subject to disqualification by protective order from viewing confidential information produced in . . . enforcement litigation. . . . Under this rule, a patent holder . . . would be precluded as a practical matter from retaining its outside patent counsel to defend it . . . or to prosecute an enforcement action on its behalf.”25 Instead, the district court credited the testimony of DeConti that he could “segregate this information” and held that the magistrate had “erred in finding that DeConti’s involvement in the prosecution of patents for Cadus, by itself, demonstrated the existence of a risk of inadvertent disclosure.”26

17. 18. 19. 20. 21. 22. 23.

Id. at *10. Id. at *10–11. Id. at *11. Id. at *11–12. Id. at *3. Id at *21 (holding the entry of the bar was “clearly erroneous and contrary to law”). Id. at *21–22 (noting that he did not serve on the board of his client; did not share employees with it; had no involvement in pricing, design, or similar activities; and generally had “a typical outside counsel relationship”). 24. Id. at *23. 25. Id. at *23–24. 26. Id. at *24–25. The court went on to note that the case that Sibia relied on, Motorola, Inc. v. Interdigital Tech. Corp., No. 93-488-LON, 1994 U.S. Dist. LEXIS 20714 (D. Del. 1994 ), had itself distinguished the same situation as in Sibia where an attorney would have “prosecut[ed] patent applications for a long period of time.” Motorola, Inc., 1994 U.S. Dist. LEXIS 20714,

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Sibia then sought mandamus from the Federal Circuit, which denied the petition in an unpublished decision.27 In refusing to grant the writ, the court expressly rejected the argument that involvement in patent prosecution was, by itself, sufficient to justify a bar, stating: “denying access to Cadus’ outside counsel on the ground that they also prosecute patents for Cadus is the type of generalization counseled against in U.S. Steel [v. United States, 730 F.2d 1465 (Fed. Cir. 1984)]. The facts, not the category, must inform the result.”28 Thus, the Federal Circuit in Sibia clearly held that patent prosecution does not mean the prosecuting attorney is a competitive decision maker nor does not by itself require denial of access to information. The court denied the petition for mandamus because, while the “magistrate judge found that Mr. DeConti was very involved in the prosecution of patents,” it “did not make any findings regarding outside counsel’s involvement in ‘competitive decision-making,’ such as involvement in pricing or product design.”29 It affirmed the district court’s denial of entry of a protective order with the bar because “none of the indicia of ‘competitive decision-making’ was present here.”30 Several courts have agreed with the Federal Circuit that someone who prosecutes patents will not automatically be considered a competitive decision maker.31 Courts following In re Sibia generally hold that the fact that

27. 28. 29. 30.

31.

at *16. The Sibia court concluded that “Cadus will suffer a serious and unnecessary hardship from the disqualification of . . . its patent counsel for more than a year before Sibia commenced this litigation.” Sibia Neurosciences, 1997 U.S. Dist. LEXIS 24130, at *26. In re Sibia Neurosciences, Inc., 1997 U.S. App. LEXIS 31828 (Fed. Cir. Oct. 22, 1997). Id. at *7. Id. at *8. Id. The court emphasized that “the standard is not ‘regular contact’ with other corporate officials who make policy, or even competitive decisions, but ‘advice and participation’ in ‘competitive decisionmaking.’” Id. at *8–9 (quoting Matsushita Elec. Indus. Co. v. United States, 929 F.2d 1577, 1580 (Fed. Cir. 1991)). E.g., Avocent Redmond Corp. v. Rose Elec., Inc., 2007 WL 1549477 (W.D. Wash. May 24, 2007) (denying entry of motion for protective order); Infosint S.A. v. H. Lundbeck A.S., 2007 U.S. Dist. LEXIS 36678, 2007 WL 1467784 (S.D.N.Y. May 16, 2007) (barring certain prosecuting attorney from access); MGP Ingredients, Inc. v. Mars, Inc., 245 F.R.D. 497 (D. Kan. 2007) (analyzing two-tiered approach to protective orders); Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, 2004 U.S. Dist. LEXIS 19429, at *2, 2004 WL 2534389, at *1 (N.D. Ill. Sept. 24, 2004) (refusing to enter protective order that would deny outside litigation counsel access to certain materials because he was not involved in “pricing, marketing, product design or the like”); MedImmune, Inc. v. Centocor, Inc., 271 F. Supp. 2d 762, 775 (D. Md. 2003) (refusing to enter protective order which would deny outside counsel access to confidential information even though he prosecuted patents for his client because there was no indicia he was a competitive decision maker); Nazomi Commc’ns, Inc. v. Arm Holdings PLC, No. C 02-02521-JF, 2002 U.S. Dist. LEXIS 21400, 2002 WL 32831822 (N.D. Cal. Oct. 11, 2002), vacated on other grounds, 403 F.3d 1364, 74 U.S.P.Q.2d 1458 (Fed. Cir. 2005); Interactive Coupon Mktg. Group, Inc. v. H.O.T.! Coupons, LLC, No. 98 C 7408, 1999 U.S. Dist. LEXIS 9004, 1999 WL 409990 (N.D. Ill. June 7, 1999), modified, 1999 U.S. Dist. LEXIS 12437,


prosecution without more is insufficient to deny access.32 Instead, these courts look at the facts of the case—including the relationship of the practitioner with the client and her actual practice—to determine whether the practitioner is involved in product design, marketing, pricing, or other business-related decision making in the pertinent field and not just the prosecution of patents.33 These courts interpret the Federal Circuit’s decision In re Sibia to mean that prosecution by itself does not constitute competitive decision making but that the specific facts may show that the practitioner’s actual activities are sufficient to compel a finding that she is engaged in competitive decision making. In Interactive Coupon Marketing Group, Inc. v. H.O.T! Coupons, LLC,34 the evidence showed that the prosecuting litigator had “become intimately familiar with Coolsavings’ [the plaintiff’s] technology and business operations”; had “become involved with various licensing and litigation matters”; and knew “our personnel . . . reviewed our documents, and participated in several high level management meetings regarding intellectual property.”35 Furthermore, the court found that the firm was “deeply involved in representing the client . . . in the context of a fluid, developing technology.”36 Accordingly, the court held that the firm should be precluded from having access to certain discovery information or be barred from prosecuting applications until one year after all appeals of the case were resolved.37

32. 33. 34. 35.

36. 37.

at *8, 1999 WL 618969 (N.D. Ill. Aug. 9, 1999) (“The court is not persuaded that it is appropriate to disqualify patent prosecution counsel from an active role in its client’s litigation as a matter of course.”); In re Certain Magnetic Switches for Coaxial Transmission Lines & Products Containing Same, No. 337-TA-346, 1993 ITC LEXIS 143, at *4 (Int’l Trade Comm’n Mar. 2, 1993) (“[I]t is not required that counsel cease involvement in patent prosecutions, even in areas of related subject matter, in order to gain access to confidential business information.”); Certain Amorphous Metal Alloys & Amorphous Particles, Inv. No. 337-TA-143 (July 22, 1983) (refusing to preclude counsel from having access to information unless he agreed not to prosecute patents in related areas). See, e.g., MedImmune, 271 F. Supp. 2d at 774 n.13 (recognizing that any other rule would be tantamount to a per se prohibition on access by prosecuting litigators). Id. at 775. No. 98 C 7408, 1999 U.S. Dist. LEXIS 9004, 1999 WL 409990 (N.D. Ill. June 7, 1999) modified, 1999 U.S. Dist. LEXIS 12437, 1999 WL 618969 (N.D. Ill. Aug. 9, 1999). U.S. Dist. LEXIS 12437, at *4. Ironically, the party had submitted an affidavit touting the firm’s close connections with the party in order to avoid disqualification on another basis— the advocate-as-witness rule. The affidavit was intended to, and did, show that the firm’s relationship with the party was such that it would have worked a substantial hardship on the party to have it disqualified. See id. Id. at *8–9. Id. at *11. Although the facts probably warrant the holding, along the way the court stated that “competitive decisionmaking is not limited to decisionmaking about pricing and design but can extend to the extent to the manner in which patent applications are shaped and prosecuted.” Id. at *10. The statement, viewed in the context of the facts of the case, is correct

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Thus, several courts hold that absent involvement by the prosecuting litigator in pricing, product design, or similar activities, access to sensitive discovery by prosecuting litigators should be allowed and prosecution bars denied.38 One court appears to reject the need to bar access to any prosecuting litigator. The court in Nazomi Communications reasoned that it was sufficient to enter a protective order prohibiting misuse of information disclosed during litigation; otherwise, it would “presume that attorneys are unable to abide by both the terms of the protective order and the Rules of Professional Conduct.”39 But other district courts have either entered protective orders restricting access to information or enjoined (in so many words) the person from prosecuting applications in “related” areas for a period of time.40 The following section examines the majority view from cases at the opposite side of the divide.

2. The Majority View While often purporting to reject the position, several courts have held that patent prosecution by itself, without inquiry into the actual facts and circumstances of the practitioner’s approach to prosecution or the scope of his representation, is sufficient to bar access. This section discusses these cases. At the outset is the question: How can courts ignore In re Sibia?41 They feel they can do so for three reasons. First, some of the courts reject reliance on

38.

39.

40.

41.

since the court did not hold that patent prosecution per se constitutes competitive decision making. For example, the MedImmune court distinguished Interactive Coupon Marketing Corp. v. H.O.T.! Coupons LLC on the basis that “[i]f ‘shaping’ patent applications amounts to competitive decision-making, the Court has trouble imagining a patent prosecutor who would not meet that standard.” MedImmune, Inc. v. Centocor, Inc., 271 F. Supp. 2d 762, 774 n.13 (D. Md. 2003). See also Presidio Components, Inc. v. Am. Technical Ceramics Corp., 2008 WL 608407 (S.D. Cal. March 4, 2008) (applying a fact-intensive analysis). Nazomi Commc’ns, Inc. v. Arm Holdings PLC, No. C 02-02521-JF, 2002 U.S. Dist. LEXIS 21400, at *8, 2002 WL 32831822 (N.D. Cal. Oct. 11, 2002), vacated on other grounds, 403 F.3d 1364, 74 U.S.P.Q.2d 1458 (Fed. Cir. 2005). See, e.g., Markey v. Verimatrix, Inc., 2009 U.S. Dist. LEXIS 57944 (S.D. Cal. July 8, 2009); Mikohn Gaming Corp. v. Acres Gaming, Inc., 1998 U.S. Dist. LEXIS 22251, 50 U.S.P.Q.2d 1783 (D. Nev. 1998). Sibia is not the only decision by the Federal Circuit relevant to this discussion. The Federal Circuit in 1997 also addressed a similar question, and as in Sibia, issued an unpublished decision. In re Voith Sulzer Paper Tech. of Heidenheim Germany, No. 506, 1997 U.S. App. LEXIS 12854, 1997 WL 264842 (Fed. Cir. May 6, 1997) (refusing to grant petition for mandamus to have trial court enter an order requiring that lawyers who obtained certain documents refrain from prosecuting patents).


In re Sibia because it was an unpublished decision.42 Technically, a court is not required to give any weight to an unpublished decision of the Federal Circuit (though that does not mean that the logic and reasoning of the opinion are wrong and should be ignored). Second, some recognize that because In re Sibia was a mandamus case in which the court merely refused to grant a writ of mandamus that would require the district court to enter a protective order prohibiting disclosure of information to prosecuting counsel, its impact was somewhat limited.43 But rejecting In re Sibia due to its procedural posture is not appropriate. The court refused to grant mandamus relief where it was undisputed that the litigator was involved in patent prosecution. If involvement in prosecution were enough to warrant a bar, then the petition for writ of mandamus would have been granted since allowing a lawyer who was engaged in prosecution to remain in the case would have been a clear abuse of discretion and one that resulted in harm to the petitioner. The fact that the court denied the petition also clearly indicates that something more than prosecution is required. Third, some courts decide the issue by applying only regional circuit law. If the issue is “unique to patent law,”44 then the Federal Circuit’s decisional law controls, and district courts are not free to apply regional circuit law to the issue. But the courts split, often without addressing whether the Federal Circuit’s view is controlling.45 However, if this is a matter of Federal Circuit law, then the Federal Circuit’s views control, even if In re Sibia does not.

42. E.g., Mikohn Gaming Corp., 1998 U.S. Dist. LEXIS 22251, 50 U.S.P.Q.2d at 1786 n.3 (agreeing with the plaintiff that the Federal Circuit “deemed its opinion unsuitable for publication [and that] [f]or this reason alone Sibia should not be considered”). 43. E.g., id. The case was before the circuit court on a petition for a writ of mandamus, in support of which Sibia had the difficult burden of making a “clear and indisputable” showing that the district court had engaged in “a clear abuse of discretion or usurpation of judicial power.” Mikohn’s burden here is not so onerous; it need only demonstrate “‘good cause’” for its proposed protective order. See generally Kevin Casey, et al., Standards of Appellate Review in the Federal Circuit: Substance and Semantics, 11 Fed. Cir. B.J. 279 (2001) (analyzing the standards of review as applied by the Federal Circuit). 44. See generally Julia S. Ferguson, et al., Conflicts in Intellectual Property Law: A Brief Survey, 616 PLI/Pat 539, 582–83 (2000) (“[I]t is an open question whether the Federal Circuit shares the restrictive views many district courts have taken with regard to these kinds of protective orders.”). 45. Some courts look to Sibia and focus on Federal Circuit precedent. E.g., MedImmune, Inc. v. Centocor, Inc., 271 F. Supp. 2d 762, 773 (D. Md. 2003) (“As pronounced by the Federal Circuit, the policy underlying a restriction on counsel’s access to confidential materials. . . .”). Others specifically abjure reliance on In re Sibia. See supra note 54 and accompanying text.

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Once freed of adherence to In re Sibia, the district courts disagree on the approach.46 A few find involvement by a litigator in patent prosecution to be enough to warrant a prosecution bar in a protective order.47 For example, one district court stated that “advice on the scope of patent claims must also be defined as competitive decision-making.”48 What is significant here is the assumption underlying that conclusion. These courts tacitly assume that practitioners have tremendous freedom in crafting the scope of coverage of a patent during patent prosecution, attributing to practitioners’ abilities and capacities of inventors, not patent attorneys. In a case decided by the influential Delaware district court, the court concluded that prosecuting litigators should be barred from prosecution because once they viewed the opponent’s confidential information, they “would have to constantly challenge the origin of every idea, every spark of genius.”49 As noted, these assumptions are not correct in every instance.

46. See Avocent Redmond Corp. v. Rose Elec., Inc., 2007 WL 1549477 (W.D. Wash. May 24, 2007) (discussing split). 47. E.g., SRU Biosystems, Inc. v. Hobbs, 2005 Mass. Super Lexis 361 (Mass. Super. Ct. Aug 2, 2005) (requiring bar); Chan v. Intuit, Inc., 218 F.R.D. 659, 662 (N.D. Cal. 2003) (entering protective order which precluded access to certain discoverable information by those engaged in patent prosecution, and holding that “advice on the scope of patent claims must also be defined as competitive decision-making”); In re Papst Licensing, GmbH, Patent Litig., 2000 U.S. Dist. LEXIS 6374 (E.D. La. May 4, 2000) (enjoining prosecution of patents related to patent-in-suit); Medtronic, Inc. v. Guidant Corp., 2001 U.S. Dist. LEXIS 22805, at *13 (D. Minn. Dec. 19, 2001) (“prosecuting patents is distinct from other legal duties and presents unique opportunities for inadvertent disclosure”); Motorola, Inc. v. Interdigital Tech. Corp., No. 93-488-LON, 1994 U.S. Dist. LEXIS 20714, at *13 (D. Del. Dec. 19, 1994) (in entering injunction against prosecuting related applications until one year after suit ended, court rejected attorneys’ arguments that, though “theoretically possible for them to abuse the confidential information received, . . . they understand their ethical duty and will act in conformance with it”); Ideal Toy Corp. v. Tyco Indus., Inc., 478 F. Supp. 1191, 1195 (D. Del. 1979) (“Weighing heavily against disclosure [of abandoned patent applications] is the fact that Tyco’s counsel in this litigation is also actively engaged in the prosecution of other Tyco applications embracing the same subject matter . . . in the Patent and Trademark Office.”); see also Promega Corp. v. Applera Corp., No. 01-C-244-C, 2002 WL 32359938 (W.D. Wis. June 7, 2002) (discussing prosecution bars applicable to both house counsel and expert witnesses contained in protective order); Semiconductor Energy Lab. Co. v. Sanyo N. Am. Corp., No. C.A. 00-018-GMS, 2001 WL 194303, at *1 n.5 (D. Del. Feb. 22, 2001) (noting disagreement among parties as to scope of prosecution bar in protective order); Davis v. AT&T Corp., No. 98-CV-0189S(H), 1998 U.S. Dist. LEXIS 20471, 1998 WL 912012 (W.D.N.Y. Dec. 23, 1998) (discussing disclosure to plaintiff management-level employees); Avery Dennison Corp. v. UCB SA, No. 95 C 6351, 1996 U.S. Dist. LEXIS 16070, at *5, 1996 WL 633986, at *2 (N.D. Ill. Oct. 29, 1996) (In allowing discovery of abandoned applications, the court noted that “there has been no showing that counsel of record for UCB [the party seeking access to the abandoned applications] routinely advises UCB regarding patent matters or otherwise serves as UCB’s chief patent counsel. In other words, there has been no adequate demonstration that disclosure to counsel is effectively disclosure to UCB.”). 48. Chan v. Intuit, Inc., 218 F.R.D. 659, 662 (N.D. Cal. 2003). 49. Motorola, Inc. v. Interdigital Tech. Corp., No. 93-488-LON, 1994 U.S. Dist. LEXIS 20714, at *15 (D. Del. Dec. 19, 1994). This approach was also adopted in Commissariat a L’Energie


Other courts also assume facts about patent prosecution which may not be true in a given case. One decision from the Northern District of Illinois concluded that patent prosecution by its nature constituted competitive decision making based on the following assumptions about prosecution: [P]atent applications are not always fully formed and unchanging when they are filed. Patent applications may be revised in order to respond to a number of factors that may arise, such as concerns expressed by a PTO examiner—or information about other products that have entered or are about to enter the market. We would expect patent prosecution counsel to be intimately involved in deciding how to shape the original application, or how later to revise it. It is that intimate involvement in the shaping and revision of patent applications that provides for the risk that patent counsel inadvertently will use information obtained from a party in patent litigation in shaping the application. . . . . . . [T]heir roles—and not the mere label of “patent prosecutor”—brought them within the scope of what U.S. Steel referred to as competitive decisionmaking.50

Although the Northern District of Illinois purported to reject the conclusion that patent prosecution creates a per se bar,51 the court assumed facts about patent prosecution that in effect make prosecution a per se bar: it assumed that attorneys will be “intimately involved” in shaping applications to cover specific products.52 Indeed, the court held that if the lawyer had any “role in shaping [the client’s] patent applications and how they are prosecuted,” then the bar applied.53 Thus, despite rejecting a per se bar, the court in effect adopted one: any involvement in “shaping” how patents are prosecuted is enough to justify a bar. Other courts, in addition to the Northern District of Illinois, have reasoned precisely the same way.54

50. 51. 52.

53. 54.

Atomique v. Dell Computer Corp., No. 03-484-KAJ, 2004 U.S. Dist. LEXIS 12782, at *9 (D. Del. May 25, 2004). Cummins-Allison Corp. v. Glory Ltd., No. 02 C 7008, 2003 U.S. Dist. LEXIS 23653, at *23–24 (N.D. Ill. Jan. 2, 2004). Id. at *26–27. Id. at *23. Other courts have likewise made assumptions about patent prosecution which may, or may not, be true in a given case. E.g., Mikohn Gaming Corp. v. Acres Gaming, Inc., 1998 U.S. Dist. LEXIS 22251, at *12, 50 U.S.P.Q.2d 1783, 1786 (D. Nev. 1998) (“It therefore cannot be doubted that as patent prosecution counsel Mr. McCollum works very closely with and advises Acres on matters related to product design.”). Cummins-Allison Corp., 2003 U.S. Dist. LEXIS 23653, at *28. In re Papst Licensing, GmbH, Patent Litig., 2000 U.S. Dist. LEXIS 6374 (E.D. La. May 4, 2000) (“advice and participation of the Papst parties’ counsel in preparation and prosecution of patent applications related to the patents in suit is an intensely competitive decisionmaking activity”).

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This is, of course, flatly contradicted by In re Sibia, which held that prosecution, alone, was insufficient to justify a bar. The obvious question is: who is right?

3. A Suggested Analysis The observations made by the courts explaining why patent attorneys should be denied access might justify denying access to putative inventors—since they clearly are in position to take information disclosed by an opposing party during litigation, turn around, and then apply for a patent derived from that information. But patent practitioners cannot “invent” subject matter, and cannot—except in unusual circumstances—even be named as inventors along with their clients on patent applications that they are prosecuting. Inventors have a “spark of genius” and file for patents on their inventions. In contrast, patent attorneys prosecute patent applications; they are usually not inventors or product design experts; and, as noted, they do not and generally cannot be inventors along with their clients. Absent facts establishing that a particular patent attorney is in fact involved in inventing or product design, courts should not assume that they are. Patent attorneys do not, solely by prosecuting applications, invent products or make design decisions. That can happen in particular cases, but it is not implicit in the nature of all patent prosecutions. That said, there can be clear risks to the disclosing party raised by disclosure of sensitive information to a prosecuting litigator. Whether these risks are present in a particular case depends on the facts, not on a caricature of patent prosecution that assumes that patent practitioners are engaged in product design and development when they file an application. A reasoned analysis is required. Misappropriation of trade secrets is the principal basis for a prosecution bar. For example, the prosecuting litigator can use information disclosed during discovery to draft claims in pending or new applications to cover products that the opposing party intends to bring to market.55 Another example would be the risk that a litigator who sees draft patent applications of the other party will as a prosecutor “be better able to ‘write around’ [the disclosing party’s] patents when drafting [his client’s] own patent applications.”56

55. Papst Licensing, GmbH, Patent Litig., 2000 U.S. Dist. LEXIS 6374, at *12 (E.D. La. May 4, 2000) (“Counsel’s ability to file new claims in existing and pending patents based on the confidential information discovered during the course of this litigation poses an unacceptable opportunity for inadvertent disclosure and misuse.”). 56. Medtronic, Inc. v. Guidant Corp., 2001 U.S. Dist. LEXIS 22805, at *12 (D. Minn. Dec. 19, 2001). See Andrx Pharm., LLC v. GlaxoSmithKline, PLC, 236 F.R.D. 583 (S.D. Fla. 2006)


Although these are legitimate concerns, the conclusion that every patent prosecutor is in a position to misuse information disclosed during discovery in his role as litigator is not correct. For practitioners only filing foreign applications here in the United States, there may be no direct contact with the ultimate client, with only indirect communications via the foreign associate providing instructions. Consequently, there may be no means of acquiring information that could disqualify the individual. Thus, instead of so presuming, courts should focus, as the Federal Circuit suggested, on the actual realities of the practice and the case.57 Only by so doing may courts avoid disqualifying counsel in too broad a circumstance, thus unnecessarily driving up litigation costs and providing too much leverage to the opposing party or too often—keeping prosecuting attorneys from gaining access to information where they can misuse it.58 Whether a prosecuting litigator should be denied discovery of sensitive information depends upon the facts and circumstances of each case. Among other things, courts should inquire into whether the technology that the lawyer is prosecuting is sufficiently related to the patentin-suit to create a reasonable likelihood that trade secrets could be misused. Courts also should consider the role the prosecuting attorney plays: some companies, for example, do much of the drafting themselves, relying on outside patent counsel less so than others. Finally, if counsel is involved in competitive decision making, courts also look to whether a prosecution bar, or denial of access, would result in hardship to the prosecuting litigator’s client.59 The length of time that counsel has been representing the client in either prosecution or litigation,, or both, as well as the length of time the litigation has been pending are two obviously pertinent factors.60

57.

58.

59. 60.

(relying on similar notions to preclude adding outside counsel who prosecuted applications to protective order). The correct resolution of this issue may depend on whose law controls: if the Federal Circuit’s law controls, then Sibia, though not binding, suggests that unless outside counsel is involved in something more than patent prosecution—such as pricing or product design—counsel is not involved in competitive decision making. If regional law applies, then whether a prosecuting litigator can be disqualified turns, apparently, on state trade secret law concerning the inevitable disclosure doctrine or other statutes or case law. The choice of law issue discussed above is worth noting here. If a petition to disqualify were filed in the PTO, seeking to bar a practitioner from prosecuting applications because of his involvement in litigation, the PTO would look to the PTO Code; in contrast, the federal courts have based their decision not on any ethical rule but on concerns arising from the misuse of trade secrets; in their decisions they have focused almost entirely on jurisprudence developed under Fed. R. Civ. P. 26(c). See, e.g., Motorola, Inc. v. Interdigital Tech. Corp., No. 93-488-LON, 1994 U.S. Dist. LEXIS 20714, at *15 (D. Del. Dec. 19, 1994). Id. at *15–16.

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D. A Proposed Prosecution Bar Raises Potential Conflicts and Liability Where a prosecuting litigator is faced with the choice of whether to access confidential material from an opposing party during litigation, the decision is one that requires consideration of the interests of both the lawyer and the client. Also required is a recognition that liability can arise from the involvement of a prosecuting litigator. The lawyer’s own interests could conflict with, or differ from, the client’s on the question of whether to seek a narrow or broad protective order.61 A lawyer may want to avoid facing liability for exposure to confidences and so will not want to oppose entry of a protective order. Or the lawyer may not want to accept the ban on prosecuting applications because of his obligations to, and fees received from, the representation of other prosecution clients. In addition, the client may not appreciate that by having its prosecuting counsel litigate the case, it is risking having ownership of later-filed applications contested and may not want to face that risk. Where a concurrent conflict of interest exists, then the lawyer must obtain the informed consent of the client after consultation.62 In consultation, the issues already described as well as other issues—including risk to the client of having a constructive trust asserted over any subsequent patents prosecuted by the lawyer-prosecutor—may need to be discussed with the client.63 This section next discusses the risks—to client as well as lawyer— associated with refusing to accept a prosecution bar or of remaining a prosecuting litigator in a case with a narrow bar in place. The short-term benefit of avoiding the bar creates a difficulty for lawyer and client. The client is able to continue to enjoy the benefits of being represented by prosecution counsel, who presumably is knowledgeable in the technology. Yet the short-term benefit may be outweighed by long-term costs—costs which the client may not recognize and appreciate absent consultation with the lawyer. The client may not understand that if the lawyer succeeds in obtaining entry of a protective order which does not preclude prosecution activities, doing so may place the lawyer, and perhaps his client as well, in a worse situation: the lawyer is now in a position of being accused

61. See Model Rules Rule 1.7(a). See generally Lisa Dolak, Risky Business: The Perils of Representing Competitors, 30 AIPLA Q.J. 413 (2002) (analyzing Rule 1.7 and issues related to patent representations). 62. Model Rules Rule 1.7. See generally Lisa Dolak, Risky Business: The Perils of Representing Competitors, 30 AIPLA Q.J. 413, 417–18 (2002) (describing operation of Model Rule 1.7 in patent representations). Model Rule 1.7 will not control in most federal courts due to the choice of law issue discussed above. 63. See Parus Holdings, Inc. v. Banner & Witcoff, Ltd., 585 F. Supp. 2d 995 (N.D. Ill. 2008) (court in part denied firm’s motion to dismiss claims that it had used trade secret of one client to favor another client during patent prosecution).

A Proposed Prosecution Bar Raises Potential Confl icts and Liability 209

of receiving confidential information of an opponent and then turning around and using that information to benefit his client. Furthermore, he must be careful during prosecution to comply with PTO Code Section 1.56—by disclosing information subject to a protective order to the extent required by that section but in compliance with the procedures under MPEP Section 724 (discussed below)—and to ensure that his client gives informed consent to his continued prosecution in light of the risks and the limitations created by access to its competitor’s information. Perhaps the central risk the prosecuting litigator faces is that by gaining access to information, he can be accused of having used the information for the benefit of this client during prosecution. His client, too, has been placed at similar risk since the opposing party can contend that the client received the patent only through the misconduct of the lawyer.64 In the context of pure prosecution practice, misuse of confidential information to obtain patents has already resulted in substantial liability. In two recent cases, lawyers were sued for using one client’s information to obtain patents for another client.65 These cases arose in the context of firms prosecuting applications for multiple clients, and so the lawyers misused information gained through the attorneyclient relationship, not through disclosure during discovery. However, because protective orders limit use to the litigation, use outside of that context will violate the protective order. Thus, the potential for the same sort of liability exists for prosecuting litigators who acquire competitors’ proprietary information while conducting discovery to use for the benefit of their clients during prosecution. Prosecuting litigators have also been sanctioned for disclosing to the PTO information produced by an opposing party during litigation that was material to a client’s application. Specifically, in Eagle Comtronics, Inc. v. Arrow Communication Laboratories, Inc.,66 lawyers for the defendant obtained a patent application from the plaintiff during discovery which, they believed, disclosed an invention which was actually conceived by one of plaintiff’s employees, a former employee of the defendant (Lamb).67 Even though a

64. See Kaempe v. Myers, 367 F.3d 958, 71 U.S.P.Q.2d 1147 (D.C. Cir. 2004) (affirming dismissal of malpractice claim against law firm based on conversion of patent rights); Kaempe v. Myers, 367 F.3d 958, 71 U.S.P.Q.2d 1147 (D.C. Cir. 2004) (affirming dismissal of malpractice claim against law firm based on conversion of patent rights); Am. Stock Exchange, LLC v. Mopex, Inc., 230 F. Supp. 2d 333, 52 U.S.P.Q.2d 1385 (S.D.N.Y. 2002) (analyzing claim for constructive trust over patents based on misuse of trade secrets); Bausch & Lomb Inc. v. Alcon Labs., Inc., 64 F. Supp. 2d 233 (W.D.N.Y. 1999) (analyzing claim on indefiniteness and counterclaims of misappropriation of trade secrets, unfair competition, and constructive trust). 65. Professor Lisa Dolak describes recently filed suits in which one client claimed that its lawyers used its proprietary information to obtain patents for another client. Lisa Dolak, Conflicts of Interest: Guidance for the Intellectual Property Practitioner, 42 IDEA 453, 468–71 (1999). 66. 305 F.3d 1303, 64 U.S.P.Q.2d 1481(Fed. Cir. 2002). 67. Id. at 1311, 64 U.S.P.Q.2d at 1485.


protective order in the case precluded using discovery materials for any purpose other than the litigation, the lawyers photocopied copies of the joint application and submitted them to the PTO: once part of the application listed only Lamb as the inventor, the other part listed both Lamb and the plaintiff’s employees (one of whom—Gould—was also a former employee of the defendant), as coinventors.68 On appeal, the Federal Circuit found that the district court had abused its discretion in finding the lawyer’s conduct “not egregious enough to warrant an order to show cause” and so reversed the district court’s denial of sanctions.69 In doing so, the court stated: The conduct in this case was indeed egregious and amounted to much more than Eagle providing the PTO with material that it already possessed. . . . Patent applications are preserved in secrecy by both law and regulation for a reason. The integrity of the patent system is maintained in part by inventors’ understanding that their patent applications will remain secret until either the patents issue or the applications are otherwise published by the PTO. Breaches of this secrecy undermine the integrity of the patent system.70

Thus, a lawyer who obtains information during discovery that may be important to his client’s prosecution activities may not use that information for purposes other than the litigation (if the protective order so provides).71 Ignoring that obligation can—and in light of the Federal Circuit’s finding of an abuse of discretion in Eagle Comtronics, often will—result in sanctions. Another risk of being exposed to information from an opposing party during litigation is the potential for inequitable conduct. It is clear that a lawyer who, as a result of entry of a protective order in a case, does not learn of material information cannot be held to have committed inequitable conduct by failing later to disclose that information to the PTO.72 Suppose, however, that a prosecuting litigator learns information through discovery from an opposing party that is material to patentability of an application he

68. 69. 70. 71.

Id, 64 U.S.P.Q.2d at 1486. Id. at 1312, 1314–15, 64 U.S.P.Q.2d at 1486–88. Id. at 1314, 64 U.S.P.Q.2d at 1487–88 (citations omitted). See Damper Design, Inc. v. Cleveland Elec. Illuminating Co., No. 94-1223, 1995 U.S. App. LEXIS 3520, 1995 WL 71339 (Fed. Cir. Feb. 21, 1995) (reversing the trial court’s decision that the prosecuting litigator had violated protective order by amending certain words in patent application after seeing those words in discovery responses of opponent because lawyer had previously used those same words). 72. Arthrocare Corp. v. Smith & Nephew, Inc., 310 F. Supp. 2d 638, 676–77 (D. Del. 2004) (holding that a protective order entered in a prior case had shielded persons involved in prosecuting an application from learning of certain information, and so there was no inequitable conduct in their failure not to disclose that information), vacated in part on other grounds, 406 F.3d 1365, 74 U.S.P.Q.2d 1749 (Fed. Cir. 2005).

A Proposed Prosecution Bar Raises Potential Confl icts and Liability 211

is prosecuting for a client, even if the client is different from the client in the litigation. Inequitable conduct has been found where parties fail to advise the PTO of information gleaned during discovery.73 Eagle Comtronics shows that protective orders which restrict use to “this action” do not contemplate disclosure to the PTO under the duty of candor.74 That raises a critical issue only recently addressed by the PTO. Given that a practitioner who receives information subject to a protective order may not disclose it to the PTO without violating the protective order, does the presence of the protective order provide justification for nondisclosure to the PTO? If not, then may a lawyer withdraw from prosecution without disclosing the information? The absence of well-developed authority on that issue provides another reason for prosecuting litigators to avoid exposure to discovery materials. In May 2004, the PTO adopted revisions to the MPEP to provide a limited procedural path through this dilemma. Specifically, the MPEP permits practitioners under certain circumstances to disclose information that is subject to a protective order to the PTO under seal.75 The provision was added in light of the recognition that “[s]ituations arise in which it becomes necessary, or desirable, for parties to proceedings in the Patent and Trademark Office relating to pending patent applications or reexamination proceedings to submit to the Office trade secret, proprietary, and/or protective order materials.”76 However, the MPEP gives practitioners authority to submit materials under seal only in limited circumstances and specifically exclude doing so with respect to information “submitted in amendments, arguments in favor of patentability, or affidavits under 37 C.F.R. 1.131 or 1.132.”77 Despite its limitations, this new PTO procedure provides a key, if partial, means to reduce controversies for prosecuting litigators. They should ensure that any protective order applicable to them provide that information may be disclosed to the PTO when it may be done so in accordance with the applicable MPEP sections. Including such a provision is important because protective orders that limit use of information to “this action” may be construed not to permit disclosure to the PTO.78 Thus, if the procedure under MPEP Section 724 is available, a lawyer who is subject to a protective order

73. See, e.g., ICU Med., Inc. v. B. Braun Med. Inc., 2005 WL 588341 (N.D. Cal. Mar. 14, 2005). 74. Eagle Comtronics, Inc. v. Arrow Commc’n Labs., Inc., 305 F.3d 1303, 64 U.S.P.Q.2d 1481 (Fed. Cir. 2002). 75. MPEP § 724.01. 76. Id. § 724. 77. Id. § 724.03. See generally USPTO OG Notice (May 18, 2004) (discussing operation of MPEP Section 724.02). 78. Eagle Comtronics, Inc. v. Arrow Commc’n Labs., Inc., 305 F.3d 1303, 64 U.S.P.Q.2d 1481 (Fed. Cir. 2002).


precluding any use other than for “this action” may not be able to take advantage of the MPEP procedure because doing so will violate the protective order.

E. Issues to Consider in Crafting Protective Orders Including in a protective order a provision that permits disclosure to the PTO when consistent with MPEP Section 724 is merely one aspect of a properly executed protective order where a prosecuting litigator is involved. The scope of any protective order is subject to intense negotiation and, at times, substantial motion practice. The parties, when drafting a protective order, and the courts, when deciding whether and to what extent to include a bar on access, should address the following issues and do so in light of Federal Circuit law.79 A threshold matter is whether the information truly is worth special, heightened protection. If the information relates to products that could be reverse-engineered, this would suggest that a prosecution bar is more likely to be inappropriate.80 Similarly, if the information is stale or quickly will become so, then a bar is less likely to be warranted.81 For example,

79. Federal Circuit law should apply to the question of whether a lawyer should be denied access to discovery because of his representation of a client in patent prosecutions. By definition, that turns on issues “unique to patent law.” Parties also seek to impose “licensing” bars in protective orders, whereby recipients of an opposing party’s information are prohibited from engaging in licensing negotiations. E.g., Nazomi Commc’ns, Inc. v. Arm Holdings PLC, No. C 02-02521-JF, 2002 U.S. Dist. LEXIS 21400, at * 10, 2002 WL 32831822 (N.D. Cal. Oct. 11, 2002) (“As with patent prosecution, attorneys who both litigate and negotiate licenses for a client may be considered decision makers under a U.S. Steel analysis.”), vacated on other grounds, 403 F.3d 1364, 74 U.S.P.Q.2d 1458 (Fed. Cir. 2005); see also Intel Corp. v. VIA Techs., Inc., 198 F.R.D. 525, 530 (N.D. Cal. 2000) (involvement of in-house counsel “in licensing . . . constitutes competitive decisionmaking”); Iams Co. v. Kaln Kan Foods, Inc., No. C-3-97-449, 1998 U.S. Dist. LEXIS 19205, at *8–9 (S.D. Ohio Feb. 27, 1998) (addressing access by expert witness who was involved in product development); Louis S. Sorell, In-House Access to Confidential Information Produced During Discovery in Intellectual Property Litigation, 27 J. Marshall L. Rev. 657 (1994). 80. Davis v. AT&T Corp., No. 98-CV-0189S(H), 1998 U.S. Dist. LEXIS 20417, 1998 WL 912012 (W.D.N.Y. Dec. 23, 1998). 81. The court in Papst Licensing, GmbH, Patent Litig., 2000 U.S. Dist. LEXIS 6374, at *14 (E.D. La. May 4, 2000) held that the only information which could be kept from the prosecuting litigator was “information that embodies product design.” In some circumstances, for example where the litigator is tasked by the client in drafting claims to cover competitor’s products, the scope of protection recognized by the Papst court may be too narrow. The Federal Circuit

Issues to Consider in Craft ing Protective Orders 213

in biotechnology, decade old technology provides little future competitive edge for product design. Thus, a careful examination of the market can provide the court and the parties with information on if the confidential information can be protected. Another key issue is the length of time for which the litigator must refrain from prosecuting applications. Courts generally apply a one- or two-year bar. However, in several cases, the bar ran not from the date of disclosure of the information or from any judgment but from the exhaustion of any appeals.82 Because of the one-year bar in the Patent Act,83 the disclosing party should have to bear a substantial burden for imposition of a bar of longer than one year from the date of disclosure of the information. The third issue is the breadth of the bar. There are several factors to consider in determining how broad a bar parties should negotiate or a court should impose. First, the court and parties must consider whether it can and should cover only inventions in either the exact same subject matter or for any prosecution for the client.84 A request for a bar which is broader than for the same subject matter—for example, one which covers not just continuations but continuation-in-part applications or even unrelated applications— should be viewed carefully.85 Another factor of appropriate breadth is whether

has held that there is nothing per se improper about drafting claims of a pending application to cover a competitor’s product, see Lisa Dolak, The Ethics of Delaying Prosecution, 53 Am. U. L. Rev. 739, 753, & n.82 (2004), but using nonpublic information obtained through discovery to do so presents a different question. 82. Interactive Coupon Mktg. Group, Inc. v. H.O.T.! Coupons, LLC, No. 98 C 7408, 1999 U.S. Dist. LEXIS 9004, 1999 WL 409990 (N.D. Ill. June 7, 1999), modified, 1999 U.S. Dist. LEXIS 12437, at *11, 1999 WL 618969, at *4 (N.D. Ill. Aug. 9, 1999) (“one year after the conclusion of this litigation, including appeals”); Commissariat a L’Energie Atomique v. Dell Computer Corp., No. 03-484-KAJ, 2004 U.S. Dist. LEXIS 12782, at *7 (D. Del. May 25, 2004) (one-year bar, including appeals). 83. See, e.g., 35 U.S.C. § 102(b) (2005) (conditioning issuance of patent on application being filed within one year after claimed invention is first sold or offered for sale in the United States). 84. This issue was central to Commissariat a L’Energie Atomique. There, the court rejected a narrow bar: I will not pick and choose which categories of LCD technology are fair game for CEA’s patent prosecution attorneys and which are not. If CEA’s patent prosecution attorneys have access to the Defendant’s highly confidential information, they will be barred from prosecuting patents “relating to the broad subject matter of the patents in suit, that is, LCD technology. . . . Commissariat a L’Energie Atomique, 2004 U.S. Dist. LEXIS 12782, at *10. 85. In Northbrook Digital LLC v. Vendio Serv., Inc., 2008 WL 239037 (D. Minn. June 9, 2008), the court held that a prohibition that extended to prosecution of continuation applications was proper, for example.


the bar should cover only U.S. filings or should the bar also prohibit prosecution of foreign filings.86 A fourth and related issue is whether the bar applies only to the client that the lawyer is represented in the case or whether it should prohibit a lawyer who is representing any client within the scope of the technological definition from prosecuting applications.87 If the practitioner represents multiple clients in the same narrow field of technology, then a broad bar may seem appropriate. However, the obvious consequence of a broad bar is severe economic impact on the practitioner. Clearly, a court should weigh the parties’ competing concerns in determining whether the bar should prohibit prosecution for any client other than the one which the lawyer is representing in the litigation. Another aspect of the protective order is the definition of “prosecution.” Incorporating into the protective order exactly which activities are prohibited and which are not is crucial. Some courts hold that the bar only applies to lawyers who “actually draft patent applications, claim language for patent applications or arguments made in support of patent applications related to” the disclosed materials.88 Others may find that the reviewing attorney who is litigating the case may be the one to whom the bar must be applied. The definition can be critical. In Chan v. Intuit, Inc.,89 the party seeking to bar the opposing party from access to information defined patent prosecution, or “patenting,” as follows: (a) “Patenting” shall mean and include: (i) preparing and/or prosecuting any patent application (or portion thereof), whether design or utility, and either in the United States or abroad, or participating in a reexamination or reissue proceeding . . . ; (ii) preparing patent claim(s) relating to any of the fields listed above; (iii) providing advice, counsel or suggestion regarding, or in any other way influencing, claim scope and/or language, embodiment(s) for claim

86. Medtronic, Inc. v. Guidant Corp., 2001 U.S. Dist. LEXIS 22805, at *11 (D. Minn. Dec. 19, 2001) (seeking bar as to domestic and foreign filings). 87. See Nazomi Commc’ns, Inc. v. Arm Holdings PLC, No. C 02-02521-JF, 2002 U.S. Dist. LEXIS 21400, at * 6, 2002 WL 32831822 (N.D. Cal. Oct. 11, 2002) (patentee argued that bar should be as to all clients that lawyer is representing in the technology area), vacated on other grounds, 403 F.3d 1364, 74 U.S.P.Q.2d 1458 (Fed. Cir. 2005); Motorola, Inc. v. Interdigital Tech. Corp., No. 93-488-LON, 1994 U.S. Dist. LEXIS 20714, at *18 (D. Del. Dec. 19, 1994) (court prohibited prosecution only for the client involved in the litigation, ITC, not for any other clients). Interestingly, the Motorola court presumed that the ethical duty to its client, ITC would prevent the firm “from prosecuting patent applications for other clients that are of similar subject matter as ITC’s patents in this case.” Id. at *18 n.5. 88. Medtronic, Inc. v. Guidant Corp., 2001 U.S. Dist. LEXIS 22805, at *15 (D. Minn. Dec. 19, 2001). 89. 218 F.R.D. 659 (N.D. Cal. 2003).

Issues to Consider in Craft ing Protective Orders 215 coverage, claim(s) for prosecution, or products or processes for coverage by claim(s) relating to the field(s) listed . . . above; and (iv) assisting, supervising, and/or providing counsel to anyone in connection with doing any of the foregoing.90

The district court rejected plaintiff’s challenge that Paragraph 4(a)(iii) was overbroad but held that Paragraph 4(a)(iv) was “too broad and therefore overly restrictive.”91 Inclusion in a protective order of too broad a definition unnecessarily and perhaps unfairly restricts the prosecution activities of the prosecuting litigator and with little actual, commensurate benefit to the opposing party.92 An important issue to consider is whether the definition should include reexamination proceedings.93 Finally, as noted earlier, the prosecuting litigator should determine whether the protective order should make exception for disclosures appropriate under the new PTO procedure under MPEP Section 724.94 By including such a provision, the prosecuting litigator can ensure that the protective order permits disclosure to the PTO of material information in a manner that preserves the confidentiality of the information yet complies with the duty of disclosure under Rule 1.56. The terms of the protective order on each of these issues can dramatically affect not just the client but the lawyer as well. Many patent practitioners develop expertise in narrow technologies,95 and so a ban as to all clients in a “field” or “subject matter”—if broadly defined—could cost the lawyer significant revenue. Likewise, a client who relies on such a practitioner for prosecution and loses the lawyer’s service because of entry of a protective order will face substantial costs in educating another lawyer on the technology and applications.96

90. Id. at 660–61. 91. Id. at 662. 92. See also Andrx Pharm., LLC v. GlaxoSmithKline, PLC, 236 F.R.D. 583 (S.D. Fla. 2006) (advising with respect to scope of claims constituted competitive decision making). 93. See Microunity Sys., Eng’r., Inc. v. Dell, Inc., 2005 WL 2299440 (E.D. Tex. July 18, 2005) (party moved for clarification that protective order precluded participation in reexamination proceedings but denying that scope of protection). 94. The public policy in ensuring that material information be disclosed to the PTO should, if it can be done in compliance with Section 724, outweigh any need for withholding the information from the PTO. Cf. Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 475 (9th Cir. 1992) (analyzing modification of protective order to permit disclosure of information in other court proceedings). 95. The lawyer in In re Sibia, for example, prosecuted applications for 50 clients in the same general field. In re Sibia Neurosciences, Inc., 1997 U.S. App. LEXIS 31828, at *2 (Fed. Cir. Oct. 22, 1997). 96. For this reason, protective orders should allow barred counsel time to educate replacement prosecution counsel. It may be useful, for example, for a litigator to delay having access to the

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Chapter 10 Combining Prosecution with Other Forms of Representation

The risks described above arise from concurrently prosecuting and litigating patents for a client. Engaging in these representations successively also creates its own risks, as the next section shows.

1. Liability and Disqualification of Prosecuting Litigators There is no general requirement that the practitioner who prosecuted a patent be a witness in an infringement suit involving that patent. However, where an accused infringer makes a charge of inequitable conduct and perhaps in other circumstances,97 it may be necessary for the attorney to testify. An allegation of inequitable conduct by itself creates potential conflicts between the prosecuting litigator and the client and also means that the lawyer will likely be deposed and could be called on to testify at trial. This section analyzes these issues arising from using the same lawyer successively, first as a prosecuting attorney and then as a litigator.

F. Inequitable Conduct as a Conflict Where a lawyer litigates a patent that he or his firm obtained for the client (or its assignee), and the accused infringer makes an allegation of inequitable conduct arising out of the attorney’s conduct, potential conflicts between lawyer and client arise. Inequitable conduct is an affirmative defense to patent infringement that requires proof that a person substantively involved in prosecuting the patent intentionally misrepresented or failed to disclose material information to the PTO and did so with an intent to deceive.98 If inequitable conduct is found, then the patent (and perhaps even related patents) may be held by the court

highly confidential information in order to use that time to educate counsel who will take over responsibility for prosecuting applications. 97. The admissibility of prosecuting counsel’s testimony has become limited in recent years. For example, because the Federal Circuit has limited the use of so-called “extrinsic evidence” to determine claim meaning, it has become less likely that the testimony of a prosecuting attorney will be truly pertinent to many patent cases. See Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1585, 39 U.S.P.Q.2d 1573, 1579 (Fed. Cir. 1996). See generally Ruoyu Roy Wang, Texas Digital Systems v. Telegenix, Inc.: Toward a More Formalistic Patent Claim Construction Model, 19 Berkeley Tech. L.J. 153 (2004) (describing increasing use of “objective” evidence to interpret claims, not subjective testimony). 98. See Lisa Dolak, As If You Didn’t Have Enough to Worry About: Current Ethics Issues for Intellectual Property Practitioners, 82 J. Pat. & Trademark Off. Soc’y 235, 237–38 (2000).

Inequitable Conduct as a Conflict

to be unenforceable, even though valid.99 In addition, the patent owner may be required to pay the attorneys’ fees of the accused infringer.100 An allegation of inequitable conduct based on the prosecuting attorney’s misconduct is likely to create a significant risk that the lawyer’s representation of the client will be materially limited by the lawyer’s personal interests.101 If the patent is unenforceable due to the attorney’s misconduct, the client will have a claim against the lawyer for the harm caused.102 Normally, of course, these allegations arise during litigation in which the trial counsel did not prosecute the patent, and so trial counsel can provide conflict-free advice to the client as to the strengths of the defense, the risks of continuing to assert the patent, and whether a malpractice claim against the prosecution counsel is appropriate. However, a prosecuting litigator faced with an allegation that a patent she prosecuted is unenforceable likely is not in a position to provide the same candid advice in any detached manner. The client may be best served by settling the case at a steep discount or dismissing it altogether, but the lawyer—because her conduct may be the cause of the reduction in value of the case—may be unable to dispassionately give the client that advice, because doing so highlights the fact that her own prior conduct was what harmed the client’s case. The prosecuting litigator’s personal interest in denying or downplaying the allegations may constitute a material limitation on her ability to provide competent legal advice to her client. Again, the presence of a prosecuting litigator in cases with alleged inequitable conduct creates the risk of conflicts between counsel and client. A prosecuting litigator faced with a substantial allegation of inequitable conduct arising out of her own actions should, therefore, determine whether she may nonetheless competently and diligently represent the client in the lawsuit and, if so, obtain the client’s informed consent to do so.103

99. Consol. Aluminum Corp. v. Foseco Int’l Ltd., 910 F.2d 804, 809, 15 U.S.P.Q.2d 1481, 1487 (Fed. Cir. 1990). 100. Brasseler, U.S.A. I, L.P. v. Stryker Sales Corp., 267 F.3d 1370, 1386, 60 U.S.P.Q.2d 1482, 1488 (Fed. Cir. 2001). 101. See Model Rules Rule 1.7(a)(2). 102. Clients whose patents have been held unenforceable have sued their lawyers for breach of fiduciary duty and malpractice. For example, in Lex Tex Ltd. v. Skillman, 579 F.2d 244, 16 U.S.P.Q.2d 1137 (D.C. 1990), the patents were held unenforceable by the Federal Circuit resulting in the reversal of a $9 million judgment in favor of the patentee. Lex Tex, the patentee, then sued the lawyers for having failed to disclose the pertinent prior art to the PTO nearly 20 years before. 103. See Model Rules Rule 1.7(b)(1), (4).

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G. Depositions of Prosecuting Litigators Depositions of opposing trial counsel are “disfavored”104 because “‘even a deposition of counsel limited to relevant and non-privileged information risks disrupting the attorney-client relationship and the impending litigation.’”105 For this reason, the party seeking to depose opposing counsel usually must meet a substantial burden, though that burden varies among the courts.106 However, litigating a patent that the lawyer prosecuted will risk disruption of trial preparation. Normally, attorneys who prosecute patentsin-suit are subject to deposition.107 Although at times courts have denied the depositions of prosecuting attorneys who have been later named as trial counsel, normally they are subject to deposition even if they are trial counsel.108 In addition, where trial counsel prosecuted the patent-in-suit and inequitable conduct is pled,109 courts have almost without exception held that the prosecuting attorney must be made available for deposition—though he is also trial counsel.110

104. United States v. Bd. of Educ., 946 F.2d 180, 185 (2d. Cir. 1991). 105. Alcon Labs., Inc. v. Pharmacia Corp., 225 F. Supp. 2d 340, 344 (S.D.N.Y. 2002) (quoting Madanes v. Madanes, 199 F.R.D. 135, 151 (S.D.N.Y. 2001)). 106. Compare Shelton v. Am. Motors Corp., 805 F.2d 1323, 1327 (8th Cir. 1986) (requiring among other things that “[N]o other means exist to obtain the information than to depose opposing counsel.”), with In re Subpoena Issued to Dennis Friedman, 350 F.3d 65, 67 (2d Cir. 2003) (rejecting the Shelton standard but requiring special showing). The issue was discussed at some length in Simmons Foods, Inc. v. Willis, 191 F.R.D. 625, 630–31 (D. Kan. 2000), where the court noted that the courts have generally agreed that some greater showing is necessary to depose opposing counsel, but have disagreed on how much. 107. “It is quite common for the attorney who prosecuted the patent application to be deposed. . . .” Jack L. Slobodin, Overview of the Patent Infringement Lawsuit—From Appearance of the Case in the Official Unit Trial, 423 PLI/Pat 197, 262 (1995) see, e.g., Amicus Commc’ns, L.P. v. Hewlett-Packard Co., No. 99-0284 HHK/DAR, 1999 U.S. Dist. LEXIS 20901, at *5–8, 1999 WL 33117227, at *2 (D.D.C. Dec. 3, 1999) (collecting cases). 108. Alcon Labs., Inc. v. Pharmacia Corp., 225 F. Supp. 2d 340, 344 (S.D.N.Y. 2002) (“[A] patent prosecution attorney cannot avoid being deposed simply because he is later selected to act as trial counsel in an infringement action concerning the very patent he helped to prosecute.”). 109. As noted above, the Federal Circuit has required that inequitable conduct be pled in accordance with Federal Rule of Civil Procedure 9(b). I disagree, as a matter of statutory interpretation. See David Hricik, Wrong About Everything: Application by the District Courts of Rule 9(b) to Inequitable Conduct, 86 Marq. L. Rev.  (2003). 110. Dri Mark Prods., Inc. v. Wilpak Indus., Inc., 2006 WL 2882565 (E.D. N.Y. Oct. 6, 2006) (defendant entitled to depose plaintiff ’s counsel, who had prosecuted patent-in-suit, on inequitable conduct defense); Environ Prods. Inc. v. Total Containment Inc., 1996 U.S. Dist. LEXIS 12336, at *12, 41 U.S.P.Q.2d 1302, 1306 (E.D. Pa. 1995) (denying motion for protective order to preclude deposition of prosecuting litigator because the “affirmative defense of inequitable conduct makes [the prosecuting litigator’s] mental impressions during the reexamination proceedings an issue in this litigation”); Hay & Forage Indus. v. Ford New Holland, Inc., 132 F.R.D. 687, 690 (D. Kan. 1990) (in denying motion to quash

Depositions of Prosecuting Litigators 219

While the courts recognize that this makes litigation more difficult, they have for the most part not been forgiving of a client who chooses to have the prosecuting attorney represent him in litigation. “The retention of the same counsel to serve as both a prosecuting attorney for its patent and trial counsel in an action involving the validity of that patent presents a Hobson’s choice to any litigant.”111 Courts that permit the deposition of the prosecuting litigator give litigants a choice between the risk arising from deposition of trial counsel and the benefit of retaining a lawyer who understands the underlying technology and who has already been paid by the client to gain that understanding. Clearly, an attorney who is asked by a client to litigate a patent he prosecuted should advise the client of the risks of deposition versus the benefits of proceeding with her and should act accordingly. The client may be unaware of the fact that trial counsel could be deposed. If lawyer and client decide to proceed, it may be wise for the prosecuting litigator to seek a court’s order that her deposition be taken early in the case to avoid disclosure of trial strategy and to prevent interruption of trial preparation on the eve of trial.

1. Advocate-as-Witness Disqualification States that have adopted Model Rule 3.7 provide: (a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness unless: (1) the testimony relates to an uncontested issue; (2) the testimony relates to the nature and value of legal services rendered in the case; or (3) disqualification of the lawyer would work substantial hardship on the client.

subpoena of prosecuting litigator, court stated that attorney’s “meetings with the patent examiner are relevant to the defense of inequitable conduct”); see also Interactive Coupon Mktg. Group, Inc. v. H.O.T.! Coupons, LLC, No. 98 C 7408, 1999 U.S. Dist. LEXIS 9004, 1999 WL 409990, at *4 (N.D. Ill. June 7, 1999) (denying motion to disqualifying trial counsel who had prosecuted patent-in-suit where counsel had not yet been deposed), modified, 1999 U.S. Dist. LEXIS 12437, 1999 WL 618969 (N.D. Ill. Aug. 9, 1999); ResQNet.com, Inc. v. Lansa, Inc., No. 01 Civ. 3578(RWS), 2004 U.S. Dist. LEXIS 13579, 2004 WL 1627170 (S.D.N.Y. July 21, 2004) (quashing subpoena directed to trial counsel who had prosecuted patent-in-suit where no allegation of inequitable conduct had been pled and the other grounds for obtaining deposition were found to be insufficient); aaiPharma, Inc. v. Kremers Urban Dev. Co., 361 F. Supp. 2d 770, 774 (N.D. Ill. 2005) (refusing to quash subpoenas served on trial counsel). 111. Alcon Labs., Inc. v. Pharmacia Corp., 225 F. Supp. 2d 340, 344–45 (S.D.N.Y. 2002).

220 Chapter 10 Combining Prosecution with Other Forms of Representation (b) A lawyer may act as advocate in a trial in which another lawyer in the lawyer’s firm is likely to be called as a witness unless precluded from doing so by Rule 1.7 or Rule 1.9.

Where a law firm represents a client in patent litigation where the firm had obtained the patent-in-suit, thorny issues concerning the advocate-aswitness rule can arise. District courts have reasoned that assertions of inequitable conduct can be used to disqualify counsel who prosecuted the patent-in-suit: “if the attorneys representing the party accused of inequitable conduct are the same attorneys who represented the client in the patent prosecution, then the party asserting inequitable conduct will often move to disqualify those attorneys.”112 In fact, motions to disqualify trial counsel who prosecuted the application that led to the patent-in-suit are common, particularly when inequitable conduct is raised as a defense.113 While state court interpretations of the scope of the advocate-as-witness rule vary,114 to the extent that federal courts addressing the ethical issue of the trial counsel testifying at trial about their role as having prosecuted the patent-in-suit follow the majority interpretation of the Model Rules, disqualification of the lawyer himself should occur in few cases.115 This is true for at least three reasons.116

112. Chiron Corp. v. Abbott Labs., 156 F.R.D. 219, 221, 31 U.S.P.Q.2d 1848 (N.D. Cal. 1994). 113. See Coolsavings.com Inc. v. E-Centives, Inc., No. 98 C 4924, 2000 U.S. Dist. LEXIS 12985, 2000 WL 1262929 (N.D. Ill. Sept. 1, 2000) (denying motion to disqualify); Sun Microsystems, Inc. v. Dataram Corp., No. CIV. 96-20708 SW, 1997 U.S. Dist. LEXIS 4557, at *12–13, 1997 WL 50272, at *4 (N.D. Cal. Feb. 4, 1997) (citing “inherent dangers” of inequitable conduct defense as including “attorney disqualification”); Personalized Mass Media Corp. v. Weather Channel, Inc., 899 F. Supp. 239, 244–45 (E.D. Va. 1995) (disqualifying lawyer); Summagraphics Corp. v. Sanders Assocs., Inc., 1991 U.S. Dist. LEXIS 16387, 19 U.S.P.Q.2d 1859, 1861–62 (D. Conn. 1991) (disqualifying lawyers whose testimony concerning validity would conflict with client’s position at trial); see also Sim Kar Lighting Fixture Co. v. Genlyte, Inc., 906 F. Supp. 967 (D. N.J. 1995) (lawyer’s testimony as to inventorship would not be in issue). 114. As shown above, in an infringement suit a federal court would apply its approach to determining ethics. 115. Under other sets of rules, disqualification may be more likely. Personalized Mass Media Corp. v. Weather Channel, Inc., 899 F. Supp. 239, 244–45 (E.D. Va. 1995) (disqualifying lawyer). Personalized Mass Media was properly criticized, however, for applying the wrong definition of “prejudice” since the court reasoned that any charge of inequitable conduct meant that the attorney’s testimony would be prejudicial—even if the attorney testified that he had not engaged in any misconduct. See Coolsavings.com Inc. v. E-Centives, Inc., No. 98 C 4924, 2000 U.S. Dist. LEXIS 12985, at *10, 2000 WL 1262929 (N.D. Ill. Sept. 1, 2000) (“The Court finds the Personalized Mass Media case unpersuasive because the district court applied an incorrect prejudice standard.”). 116. There are other more fact-specific exceptions that will arise. See Tuna Processors, Inc. v. Hawaii Int’l Seafood, Inc., 2006 WL 2990446 (D. Ha. Oct. 19, 2006) (because statements

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First, if the prosecuting attorneys were witnesses at trial, only the attorneys who personally prosecuted the patent should be disqualified—not other members of their firm.117 Only if there is a conflict under Model Rules 1.7 or 1.9 should members of the testifying attorney’s firm be disqualified.118 Second, those attorneys who were personally involved in prosecution and are disqualified under the advocate-as-witness rule are generally disqualified only from actually appearing before the jury at trial. When Model Rule 3.7(a) disqualifies a lawyer-witness, it does so only from “act[ing] as an advocate at trial.”119 The only disqualification that most courts now impose on lawyers who are disqualified under the lawyer-witness rule is that such lawyers may not serve as counsel at trial, and then, the proscription exists only where trial is to the jury—not before the bench. Accordingly, a litigator disqualified from trying the case would be free to conduct discovery, argue dispositive motions, control and direct the lawsuit, and handle any appeal.120 Further, assuming participation at trial by a lawyer who had prosecuted the patent was critical, inequitable conduct presents no jury issues.121 Under this circumstance, a separate trial to the judge alone122 may be used to obviate

117. 118.

119.

120. 121.

122.

that allegedly constituted inequitable conduct could not as a matter of law constitute inequitable conduct, lawyer was not necessary witness); Mike v. Dymon, Inc., 1996 WL 427761 (D. Kan. July 25, 1996) (various reasons supported denial of motion to disqualify); Gaull v. Wyeth Labs., Inc., 687 F. Supp. 77 (S.D.N.Y. 1988) (testimony was cumulative); Connell v. Clairol, Inc., 440 F. Supp. 17 (N.D. Ga. 1972) (disqualifying lawyers and finding substantial hardship exception inapplicable). See also Lemelson v. Synergistics Research Corp., 504 F. Supp. 2d 1164 (S.D.N.Y. 1981) (denying motion to disqualify because former client, not client, might be prejudiced by testimony). Model Rules Rule 3.7(b). Id. See generally Kubin v. Miller, 801 F. Supp. 1101, 1114 (S.D.N.Y. 1992) (firm-wide disqualification is “extremely harsh” and should be limited); Restatement (Third) of the Law Governing Lawyers § 108, cmt. i (a lawyer affiliated with the disqualified lawyer “may serve as advocate . . . so long as the representation would not involve a conflict of interest”). See ABA Comm. on Ethics and Prof ’l Responsibility, Informal Op. 89-1529 (1989) (lawyer may conduct pretrial proceedings); see also ABA Comm. on Ethics and Prof ’l Responsibility, Informal Op. 83-1503 (1983) (lawyer may handle appeal); Silberline Mfg Co., Inc. v. Int’l Nickel Co., 569 F.2d 1217 (3rd Cir. 1977) (merely because lawyers were precluded from serving as advocates at trial did not mean they could not have access to information subject to protective order). Microsoft Corp. v. Immersion Corp., 2008 WL 682246 (W.D. Wash. March 7, 2008). Gardco Mfg., Inc. v. Herst Lighting Co., 820 F.2d 1209, 1212, 2 U.S.P.Q.2d 2015, 2018 (Fed. Cir. 1987) (holding there is no right to jury trial on any aspect of inequitable conduct). See generally Michael A. O’Shea, A Changing Role for the Markman Hearing: In Light of Festo IX, Markman Hearings Could Become M-F-G Hearings Which Are Longer, More Complex, and Ripe for Appeal, 37 Creighton L. Rev. 843, 849 (2004) (describing availability of bifurcation under Fed. R. Civ. P. 42(b)). See generally Gardco Mfg., Inc., 820 F.2d at 1212, 2 U.S.P.Q2d at 2018 (Fed. Cir. 1987) (noting availability of separate trials); see also Michael A. O’Shea, A Changing Role for the Markman Hearing: In Light of Festo IX, Markman Hearings Could Become M-F-G Hearings

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any ethical issues since generally disqualification is not necessary when the fact finder is a judge, not a jury.123 Finally, in those few cases where the prosecuting attorney is also trial counsel and separate trials are not practicable, the fact is that it is extremely unlikely that the lawyer will ever testify in court. As in all civil cases, the vast majority of patent cases settle prior to trial.124 Resolution of a motion to disqualify can, as a result, be delayed pending resolution of settlement negotiations or rulings on summary judgment. 125 For all these reasons, it is unlikely that the advocate-as-witness rule will often lead to disqualification at trial, at least in those jurisdictions following the ABA interpretation of Model Rule 3.7. However, there are also more subtle ethical issues that practitioners might face. For example, a lawyer who will be a witness and therefore recommends to the client a request for bifurcation could prejudice to the client. Bifurcation would allow the lawyer to remain in the case—but at additional expense to the client. Or, bifurcation might weaken the client’s liability case due to admissibility issues or other reasons.126 Thus, a lawyer who wants to seek bifurcation in order to avoid

123.

124.

125. 126.

Which Are Longer, More Complex, and Ripe for Appeal, 37 Creighton L. Rev. 843, 843 (2004) (describing increasing role of pretrial, nonjury hearings to resolve many critical issues in patent cases). See Plymouth Indus., LLC v. Sioux Steel Co., 2006 WL 3392193 (D. Neb. Oct. 23, 2006); Interactive Coupon Mktg. Group, Inc. v. H.O.T.! Coupons, LLC, No. 98 C 7408, 1999 U.S. Dist. LEXIS 9004, 1999 WL 409990, at *4 (N.D. Ill. June 7, 1999), modified, 1999 U.S. Dist. LEXIS 12437, 1999 WL 618969 (N.D. Ill. Aug. 9, 1999). However, some courts have stated that the fact that trial will be to the bench does not eliminate the possibility of disqualification, but instead the reasons for disqualification merely “‘may be less persuasive.’” See Coolsavings.com Inc. v. E-Centives, Inc., No. 98 C 4924, 2000 U.S. Dist. LEXIS 12985, at *15, 2000 WL 1262929 (N.D. Ill. Sept. 1, 2000) (quoting United States v. Johnston, 664 F.2d 152, 157 (7th Cir. 1981)); see also Environ Prods., Inc. v. Total Containment, Inc., 41 U.S.PQ.2d 1302, 1306 (E.D. Pa. 1996) (stating that prosecuting litigator “could rest assured that he will not be disqualified from this litigation if ‘disqualification of the lawyer would work a substantial hardship on the client’”) (quoting Pa. Rules of Professional Conduct 3.7). See Edward G. Poplawski, Selection and Use of Experts in Patent Cases, 27 AIPLA Q.J. 1, 3 (1999) (noting that more than 90 percent of patent cases settle prior to trial). This fact suggests that judges should in many cases delay deciding motions to disqualify based on the advocate-as-witness rule since any such ruling may be unnecessary. On the other hand, a party that believes opposing counsel is disqualified under the advocate-as-witness rule cannot unduly delay raising the motion, for doing so risks waiver or accusation that the motion was raised on the “eve of trial” only as a litigation tactic. Clearly, providing timely notice, at least to the opposing party, of an objection to trial counsel’s participation is needed. See also Haynes v. R.H. Dyck, Inc. 2008 WL 80749 (E.D. Cal. Jan. 7, 2008) (denying as premature motion to disqualify counsel filed more than a year before trial). See Model Rules Rule 1.7.

Combining Opinion and Trial Representations 223

disqualification under the advocate-as-witness rule should discuss these issues with the client where they would affect the particular case and to the extent necessary obtain informed consent.127

H. Combining Opinion and Trial Representations Companies marketing products or services in the United States will commonly obtain an “opinion of counsel” beforehand if the company is concerned that its product or service will be accused of infringing a patent owned by another party. Securing such an opinion both provides comfort to the client in knowing that it is not violating the law and also in reducing the likelihood of it being forced to pay “enhanced” damages if the opinion turns out to be incorrect.128 If an infringement suit is filed, then from the perspective of both lawyer and client, it would appear more efficient that the accused client rely on the same firm that provided it an opinion of counsel as its trial counsel—why, after all, educate two firms about what could be complex technology. Likewise, it may appear more efficient that a client sued for infringement that had not previously obtained an opinion of counsel obtain one during litigation from trial counsel. This section shows that combining the attorney roles of opining and litigating creates risks for the client that may not arise as acutely when those roles are kept separate. In particular, it first shows that combining the roles of opinion and trial counsel increases the risk of disqualification under the advocate-as-witness rule, and then the risk of waiver of privilege or work product in communications with trial counsel as determined in the various approaches district courts have taken to the issue and of whether and to what degree combining the roles increases that risk. This section concludes by addressing whether obtaining an opinion from the same firm that serves as trial counsel may result in substantial harm to the client.

127. See Model Rules Rule 1.7(b). 128. Title 35 authorizes a trial court in its discretion to increase the damages awarded for patent infringement to a maximum of three times. 35 U.S.C. § 284 (2005); see Mathis v. Spears, 857 F.2d 749, 754, 8 U.S.P.Q.2d 1029, 8 U.S.P.Q.2d 1551, 1554 (Fed. Cir. 1988). One basis for awarding so-called “enhanced” damages is if the infringer “acted in wanton disregard of the patentee’s patent rights, that is, where the infringement is willful.” Read Corp. v. Portec, Inc., 970 F.2d 816, 826, 23 U.S.P.Q.2d 1426, 1435 (Fed. Cir. 1992).

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1. Advocate-as-Witness Disqualification Model Rule 3.7 generally prohibits a lawyer from personally acting as an advocate at trial while also testifying as a necessary witness.129 The rule also “imputes” this conflict by sometimes preventing one lawyer at a firm from trying a case if another lawyer at the firm is disqualified.130 Furthermore, as will be illustrated, federal courts in many circuits are not bound by the strict limitations in the rule and can impute disqualification where that is unnecessary under the Model Rules.

I. The Courts Split on Advocate-as-Witness Disqualification A lawyer who provides an opinion of counsel about a patent is likely to be subject to deposition,131 and one who combines the opining role with a role in litigation may face a motion to disqualify based upon the advocate-aswitness rule. The question of whether disqualification under the advocateas-witness rule as trial counsel of a lawyer who provided an opinion is required has split the courts. Some courts deny the motion because the attorney’s role in preparing the opinion and the client’s receipt of it are likely to be uncontested. These courts view the issue as one of the client’s reliance on the opinion, which is not affected by the fact that trial and opinion counsel are from the same firm.132

129. Model Rule 3.7 provides in full: (a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness unless: (1) the testimony relates to an uncontested issue; (2) the testimony relates to the nature and value of legal services rendered in the case; or (3) disqualification of the lawyer would work substantial hardship on the client. (b) A lawyer may act as advocate in trial in which another lawyer in the lawyer’s firm is likely to be called as a witness unless precluded from doing so by Rule 1.7 or Rule 1.9. 130. Model Rules 3.7(b). 131. E.g., Clinitec Nutrition Co. v. Baya Corp., No. 94 C 7050, 1996 WL 153881 (N.D. Ill. Mar. 28, 1996) (granting motion to compel deposition of opining-litigator). 132. The few courts that have analyzed whether an opining litigator must be disqualified under the advocate-as-witness rule have split. Compare Bristol-Myers Squibb Co. v. RhonePoulenc Rorer, Inc., No. 95 Civ. 8833(RPP), 2000 U.S. Dist. LEXIS 16015, 2000 WL 1655054, at *2 (S.D.N.Y. Nov. 3, 2000) (denying motion to disqualify opining litigator on grounds that it was uncontested that he had provided the opinion and so disqualification was improper), and Amsted Ind. Inc v. Nat’l Castings, Inc., 16 U.S.P.Q.2d 1737 (N.D. Ill. June 22, 1990) (holding that opining litigator was not required to testify as to foundation of opinion),

The Courts Split on Advocate-as-Witness Disqualification 225

Other courts disagree. Foremost, a Western District of Texas court disqualified an entire firm from litigating a case where lawyers had given an opinion of counsel. In Crossroads Systems (Texas), Inc. v. Dot Hill Systems Corp.,133 lawyers from Morgan & Finnegan had given a noninfringement opinion to a client. Later, other Morgan & Finnegan lawyers represented the client when an infringement suit was filed against it over the same patent. The patentee, Crossroads, filed a motion to disqualify Morgan & Finnegan from acting as trial counsel for the accused infringer, Dot Hill. The trial court granted the motion even though it recognized that the ethics rules generally did not require firm-wide disqualification under these circumstances. Explaining why firm-wide disqualification was required under the circumstances of this case, the court stated: The Court believes that . . . a strict prohibition on all members of the testifying lawyer’s firm serving as trial counsel is appropriate. Crossroads will be seeking to attack the reasonableness of Dot Hill’s reliance on the opinions given by Morgan & Finnegan attorneys, in part, by attacking the accuracy and validity of the opinions themselves as well as the work underlying the formulation of the opinions. Moreover, the reasonableness of Dot Hill’s reliance on the opinions will necessarily raise other factual questions, such as what relevant, non-privileged facts (besides those contained in the opinion letters) were communicated between Dot Hill and its opinion counsel. Since both the credibility and legal acumen of Morgan & Finnegan attorneys will be in issue at the trial, if other Morgan & Finnegan attorneys were permitted to serve as trial counsel, they would be placed in the awkward and unseemly position of having to advocate for the credibility and reliability of the testimony of their law partners. Even worse, if the testifying Morgan & Finnegan attorneys were to give testimony that was adverse to Dot Hill’s interests, the attorneys serving as trial counsel would be squarely confronted with a conflict of interest in grappling with competing duties to the client and to the firm. Other potential problems would be sure to arise in the course of a trial in which members of Morgan & Finnegan would be serving as trial counsel while others would be testifying as witnesses. The trial counsel would be put in the position of having to comment on and actively praise the work product of their own firm in the course of arguing the reasonable reliance on the opinion letters by Dot Hill. Another difficulty would be that numerous extraneous issues would

with Rohm & Haas Co. v. Lonza, Inc., No. Civ. A. 96-5732, 1999 U.S. Dist. LEXIS 13919, at *1 1999 WL 718114, at *1 (E.D. Pa. Sept. 7, 1999) (granting motion to disqualify opining litigator). Whether disqualification of an opining litigator is appropriate would most typically turn on whether his testimony in the particular case would be necessary. Most often, for example, where the issue is the reliance of the client on the opinion and not the preparation of the opinion, disqualification would not be appropriate since the fact that the lawyer prepared the opinion would be an uncontested issue. Model Rule 3.7(a)(1) does not require disqualification where the lawyer’s testimony “relates to an uncontested issue.” 133. 2006 U.S. Dist. LEXIS 36181, 2006 WL 1544621, 82 U.S.P.Q.2d 1517 (W.D. Tex. 2006).

226 Chapter 10 Combining Prosecution with Other Forms of Representation likely be injected into the case if a Morgan & Finnegan witness is permitted to testify. Efforts at impeaching the Morgan & Finnegan witnesses may inquire into potential sources of bias, including the amount of fees that were generated in the production of the opinion letters and the amounts Morgan & Finnegan earned before the production of the letters and continues to earn to this day based on its work for Dot Hill. If Morgan & Finnegan were to continue to serve as trial counsel, these questions could potentially serve to impeach the credibility of Dot Hill’s trial counsel at the same time as they affect the credibility of the witnesses. The credibility of a party’s trial counsel, however, clearly should not be an issue in the case.134

The court also rejected allowing the accused infringer to decide whether to call opinion counsel to the stand, explaining that it believed that such decision was tainted by the conflict faced by Morgan & Finnegan: Furthermore, so long as Morgan & Finnegan serves as trial counsel, the motivations behind the potential for a decision not to call the Morgan & Finnegan opinion attorneys as witnesses on behalf of Dot Hill becomes immediately suspect. So long as the Morgan & Finnegan trial attorneys are grappling with divided loyalties to their firm and to their client, there can be no assurance that their representation of Dot Hill would not be different if the credibility and competence of their partners were not in issue.135

Although this is an unusual case with somewhat distinct facts, some federal courts could continue to disqualify a firm from appearing at trial where another lawyer in the firm had given an opinion. Significantly, the Crossroads Systems court recognized that under Fifth Circuit precedent it was not bound to follow the more relaxed standards of the Model Rules and could impute the conflict where it would not be imputed under those rules.136 That was the result in a more recent case, Landmark Graphics Corp. v. Seismic Micro Technology, Inc.,137 where the court held that the lawyer who had prosecuted the patent was not disqualified from pre- or posttrial activities even though he could not appear before the jury as trial counsel or serve as counsel during a bench trial on inequitable conduct.

134. 2006 U.S. Dist. LEXIS 36181, at *30–34 (citations and footnote omitted). 135. Id. at *34. The court also noted: “Other issues that Morgan & Finnegan’s service as trial counsel would tend to implicate include knowledge on the part of the Morgan & Finnegan attorneys concerning (1) the reasons for the Chaparral [also an alleged infringer] purchase, (2) the development of products designed to defeat infringement, and (3) the economic benefit to Dot Hill with respect to the sale of potentially infringing products. In sum, there are simply too many potential rabbit trails and invitations to jury confusion if Morgan & Finnegan attorneys were permitted to serve as trial counsel when their partners will be taking the stand as witnesses.” Id. 136. Id. at *27–28. 137. 2007 U.S. Dist. LEXIS 6897, at *19–20, 2007 WL 735007 (S.D. Tex. Jan. 31, 2007).

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J. What to Do A firm that has already given an opinion of counsel to a client should investigate the district court’s approach to advocate-as-witness disqualification before agreeing to represent the client in litigation. Likewise, trial counsel should refrain from providing such opinions after suit has been filed without investigating first. Rules such as Model Rule 1.7(a)(2) or other applicable standards may require the lawyer to discuss potential disqualification with the client and seek the client’s informed consent on how to proceed. Lawyer and client should discuss whether to seek bifurcation—to keep the lawyer in the case—or to have the case tried in one phase with new trial counsel, along with the advantages and disadvantages of either course. Where roles are combined, there may be means to avoid disqualification. In some courts bifurcation or stay of the issue of willfulness may delay the need for disqualification.138 However, on the question of whether or not to bifurcate, a lawyer’s interests may conflict with those of the client. A lawyer may want to obtain bifurcation so that he can litigate at least part of the case. Bifurcation, though, may not be in the best interest of the client who may be better served by presentation of all issues in suit in a single proceeding before one fact finder. Anticipation and discussion of the concurrent conflict of interest that could develop requires the informed consent of the client. This possible conflict and need for efficiency led the Crossroads court to deny bifurcation.139

1. Enhanced Risk of Waiver of Work Product Willful infringement, when proven, permits a court to award up to treble damages, costs, and attorneys’ fees to the patentee.140 Willful infringement occurs when the infringer acted with, at the least, “objective recklessness.”141 One factor in determining whether an accused infringer acted objectively recklessly is whether it relied on an opinion of counsel.142 An alleged infringer can choose to waive privilege over an invalidity, noninfringement,

138. See generally Edward Poplawski, Effective Preparation of Patent Related Exculpatory Legal Opinions, 29 AIPLA Q.J. 269, 288–91 (2001) (discussing means to reduce need for lawyer’s testimony or otherwise stave off disqualification of opining-litigator); George M. Sirilla, et al., Advice of Counsel: Defense or Dilemma? Friend or Foe?, 81 J. Pat. & Trademark Off. Soc’y 376 (1999) (discussing lawyer-witness rule and ability to bifurcate to avoid it). 139. 2006 U.S. Dist. LEXIS 36181, at *34–35. 140. See Cohesive Techs., Inc. v. Waters Corp., 526 F. Supp. 2d 84 (D. Mass. 2007) (no enhanced damages or attorneys’ fees where infringement not willful). 141. See id. 142. See id.


or unenforceability opinion of counsel on which it relied in undertaking its activities.143 When an accused infringer produces the opinion, it waives privilege over that opinion and also, in many courts, on all communications on the “subject matter” of that opinion144 The scope of waiver of privilege or work product that accompanies production of an opinion of counsel has changed dramatically in recent years. Two recent Federal Circuit cases have become critical. Changes began in a seminal May 2006 Federal Circuit case that addressed a petition for writ of mandamus challenging a district court’s ruling on the scope of both the waiver of attorney-client privilege and work product immunity where the waivers resulted from the defendant’s election to rely on the advice of counsel to rebut a charge of willful infringement.145 For reasons that will become clear, the context of the observations made by the judges in deciding EchoStar is critically important, since the court used broad language but was actually deciding a narrow issue. In EchoStar, TiVo filed an infringement suit against EchoStar. EchoStar asserted the defense of reliance on the advice of two opinions of counsel, one from its in-house counsel and obtained before the suit had been filed, the other from its outside counsel, Merchant & Gould, obtained after the suit had been filed.146 Both opinions addressed only noninfringement, not invalidity or unenforceability.147 TiVo argued that the assertion of this defense triggered a broad subject matter waiver, and ultimately the district court largely agreed, ordering the production of privileged material and work product created by Merchant & Gould that had not been communicated to EchoStar, excepting only “trial preparation or information unrelated to infringement.”148 EchoStar sought review in the Federal Circuit with respect to the Merchant & Gould documents not provided to EchoStar by way of a petition for mandamus, and Merchant & Gould intervened.149 Questions concerning the scope of waiver caused by reliance on both opinions were raised on appeal.

143. See, e.g., Carl Zeiss Jena GmgH v. Bio-Rad Labs. Inc., No. 98 CIV. 8012 RCC DFE, 2000 WL 1006371, at *1 (S.D.N.Y. July 19, 2000); Saint-Gobain/Norton Indus. Ceramics Corp. v. Gen. Elec. Co., 884 F. Supp. 31, 33–34 (D. Mass. 1995). 144. See, e.g., Oxyn Telecomm., Inc. v. Onse Telecom, No. 01 Civ. 1012(JSM), 2003 U.S. Dist. LEXIS 2671, at *21, 2003 WL 660848, at *6 (S.D.N.Y. Feb. 27, 2003) (if privileged communications are placed “in issue” by defenses in litigation, then a “broad” subject matter waiver [of privilege] is effected.”). 145. In re EchoStar Commc’ns Corp., 448 F.3d 1294, 78 U.S.P.Q.2d 1676 (Fed. Cir. 2006). 146. 448 F.3d at 1297, 78 U.S.P.Q.2d at 1677–78. 147. Id., 78 U.S.P.Q.2d at 1678. 148. Id. 149. Id. In granting the petition, the court first held that Federal Circuit and not regional circuit law governs the extent to which a party waives attorney-client privilege and work product

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Concerning in-house counsel, the court quickly rejected EchoStar’s attempt to characterize its reliance on its in-house counsel as not constituting reliance on advice of counsel. The court instead held that “[w]hether counsel is employed by the client or hired by outside contract, the offered advice or opinion is advice of counsel or an opinion of counsel.”150 The court stated that as a result, Echostar waived “the attorney-client privilege with regard to any attorney-client communications relating to the same subject matter, including communications with counsel other than in-house counsel, which would include communications with Merchant & Gould.”151 The preceding sentence bears examination. On appeal, there was no dispute concerning any in-house counsel documents.152 Thus, the court’s statement as to the scope of waiver was dicta as to in-house counsel, since there was nothing to decide. In addition, the fact that nothing was in dispute also meant that there was nothing at issue in the case with respect to what “subject matter” was. In other words, the court did not decide whether by Echostar’s reliance on a noninfringement opinion, the “subject matter” waived includes invalidity or unenforceability opinions. The sentence also bears examination as to the comment concerning Merchant & Gould. With respect to waiver of privileged communications with Merchant & Gould, the statement is also, seemingly, dicta since the issues on appeal related to work product of Merchant & Gould, not privilege. Further, the court did not decide whether communications made after suit was filed were waived since that issue was not presented either in the case. The context of the EchoStar quickly created a battleground for district courts and litigants.153 The court nonetheless turned to the scope of waiver concerning advice from Merchant & Gould that was, as noted above, received after the suit had been filed, and held that the district court had abused its discretion in ordering production of work product documents, whether they had been communicated to EchoStar or not.154 Noting that work product applied only to written or tangible communications, the court emphasized that the purpose of work product differed from attorney-client privilege and was designed to afford a “zone of privacy” around litigation to permit lawyers to commit

150. 151. 152. 153.

154.

by relying on advice of counsel to defend against willful infringement. Id. at 1298, 78 U.S.P.Q2.d at 1679. Id., 448 F.3d at 1299, 78 U.S.P.Q.2d 1679. Id. Id. at 1297 n.2, 78 U.S.P.Q.2d at 1678 n. 2. The Federal Circuit did not clarify matters by citing Akeva LLC v. Mizuno Corp., 243 F. Supp. 2d 418, 423 (M.D.N.C. 2003). In that case, the district court held that privilege and work product were waived over an opinion obtained from trial counsel. That fact pattern was simply not present in EchoStar, and the policy issues implicated in Akeva LLC were not considered by the Federal Circuit. Why the court cited the decision is unclear, but the fact that it did so is causing confusion, as shown below. EchoStar, 448 F.3d at 1300, 78 U.S.P.Q2d at 1680.


thought to paper in order to prepare for trial.155 As a result, there was no subject-matter waiver of work product by reliance upon work product; instead, protection only over factual, not opinion, work product was waived by reliance upon work product.156 In applying these principles to the context of reliance on an opinion of counsel defense against a charge of willful infringement, the Federal Circuit explained that the purpose of requiring subject-matter waiver was to “prevent a party from using the advice he received as both a sword, by waiving privilege to favorable advice, and a shield, by asserting privilege to unfavorable advice.”157 To further that policy, the court reasoned that work product protection was waived to the extent it “could have such an effect.”158 To guide courts in applying these principles, the court identified three categories of work product that generally would be implicated by reliance on advice of counsel: (1) documents that embody a communication between the attorney and client concerning the subject matter of the case, such as a traditional opinion letter; (2) documents analyzing the law, facts, trial strategy, and so forth that reflect the attorney’s mental impressions but were not given to the client; and (3) documents that discuss a communication between attorney and client concerning the subject matter of the case but are not themselves communications to or from the client.159

With respect to the first category, the court reasoned that because privilege is waived when reliance on counsel is asserted, waiver extends to “any documentary communications such as opinion letters and memoranda.”160 Thus, in the court’s view, work product was no different than privileged information: if either one is communicated to the client, protection is waived. That view is at odds with general principles governing work product. A lawyer does not waive work product protection by providing work product to a client, and a client cannot unilaterally choose to waive the lawyer’s interest in the protection of work product.161 Nonetheless, the EchoStar court reasoned

155. 156. 157. 158. 159. 160. 161.

Id. at 1301, 78 U.S.P.Q.2d at 1681. Id. at 1302, 78 U.S.P.Q.2d at 1681. Id. at 1303, 78 U.S.P.Q.2d at 1682–83. Id, 78 U.S.P.Q.2d at 1683. Id. at 1302, 78 U.S.P.Q.2d at 1682. Id. Among other things, the work product privilege belongs also to the attorney, and the client cannot waive the attorney’s interest in work product protection. Hobley v. Burge, 433 F.3d 946, 949 (7th Cir. 2006) (“An attorney has an independent interest in privacy, even when the client has waived its own claim, as long as invoking the privilege would not harm the client’s interests.”) citing Restatement (Third) of the Law Governing Lawyers § 90 cmt. c (2000). The Federal Circuit reasoned that its holding was consistent with that principle: EchoStar had the right to waive attorney-client communications, and that carried with it the

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that when the privilege is waived by reliance on advice of counsel, disclosure “become[s] evidence of a non-privileged, relevant fact, namely what was communicated to the client. . . .”162 If that were true, then any disclosure of work product to a client becomes evidence of a nonprivileged fact if privilege is otherwise waived. That proposition is startling! With respect to the third category (the court placed it last but recognized that it “falls admittedly somewhere interstitially between the first and second,” and so logically ought to be examined second),163 the court stated that work product documents that in effect memorialize or reflect a communication with the client are not protected.164 “Though it is not a communication to the client directly nor does it contain a substantive reference to what was communicated, it will aid the parties in determining what communications were made to the client and protect against intentional or unintentional withholding of attorney-client communications from the court.”165 The court’s holding makes sense since privilege over communications on the subject of the opinion has been waived, and the fact that a lawyer writes down a privileged communication does not convert the substance of the communication into a work product document. However, the court emphasized that information in such documents that had not been communicated could be redacted.166 With respect to the final category of documents (placed second in the court’s analysis)—those that are work product but never communicated to the client—the court found work product protection still existed despite waiver of privilege.167 “[I]f a legal opinion or mental impression was never communicated to the client, then it provides little if any assistance to the court in determining whether the accused knew it was infringing, and any relative value is outweighed by the policies supporting the work product doctrine.”168

162. 163. 164. 165. 166. 167. 168.

right to “waive privilege to evidence of those communications contained in Merchant & Gould’s files.” EchoStar, 448 F.3d at 1304 n.6, 78 U.S.PQ.2d at 1683 n.6 (allowing, however, redaction of mental impressions). Thus, despite the language in EchoStar, the court clearly did not hold that a client has a right to waive work product protection; instead, a client has a right to waive protection over privileged communications even if they are memorialized in work product documents. The court’s result was correct, but its language is difficult to reconcile with settled principles of work product. EchoStar, 448 F.3d at 1303, 78 U.S.P.Q.2d at 1683. Id. at 1304, 78 U.S.P.Q.2d at 1683. Id. Id. Id. Id. at 1303–04, 78 U.S.P.Q2d at 1683. Id. at 1304, 78 U.S.P.Q.2d at 1683.

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The three categories provide some framework for analysis, but, as noted, the EchoStar case has created multiple uncertainties, in part because the court used broad language in the context of a fairly narrow set of facts. First, the question of what is the “subject matter” waived is obscured by the EchoStar decision. Although the case involved only noninfringement opinions received by the client, the court ultimately wrote that an accused infringer who asserts advice of counsel waived protection over communications “concerning whether that patent is valid, enforceable, and infringed by the accused.”169 This language suggests that reliance on an opinion of counsel for one defense waives protection for all. This was not an issue in the case, however, and the court’s language is, at best, dicta. After EchoStar, the district courts began to openly disagree on whether “subject matter” in such a context includes all opinions about any defense— whether or not mentioned in the opinion relied upon by the defendant—or only opinions that relate to the same precise defense as in the opinion waived. Some courts hold that if an opinion concerning one defense is relied upon, other opinions may be withheld. Thus, a defendant who relies upon a noninfringement opinion waives protection over the subject matter of infringement but not regarding opinions on invalidity or unenforceability.170 Other courts, however, after closely parsing the precise context and language of the decision, hold that waiver does not extend beyond the precise subject matter; if an invalidity opinion is relied upon, waiver of noninfringement advice does not occur.171 Second, the EchoStar court addressed temporal limitations in a footnote. It wrote: EchoStar contends that waiver of opinions does not extend to advice and work product given after litigation began. While this may be true when the work product is never communicated to the client, it is not the case when the advice is relevant to ongoing willful infringement, so long as that ongoing infringement is at issue in the litigation. See Akeva LLC, 243 F.Supp.2d at 423 (“[O]nce a party asserts the defense of advice of counsel, this opens to inspection the advice received during the entire course of the alleged infringement.”); see also Crystal Semiconductor Corp. v. TriTech Microelectronics Int’l, Inc., 246 F.3d 1336, 1351–1353 (Fed. Cir. 2001) (noting that an infringer may continue its

169. Id. 170. Akeva LLC v. Mizuno Corp., 243 F. Supp. 2d 418, 422 (M.D.N.C. 2003). 171. Intex Recreation Corp. v. Team Worldwide Corp., 439 F. Supp. 2d 46 (D.D.C. 2006); Autobytel, Inc. v. Dealix Corp., 455 F. Supp. 2d 569 (E.D. Tex. 2006) (discussing split in the cases). See also Genentech, Inc. v. Insmed Inc., 442 F. Supp. 2d 838, 847 (N.D. Cal. 2006) (waiver only applied to “documents and communications that contain opinions (formal or informal) and advice central and highly material to the ultimate questions of infringement and invalidity (the subject matter of the advice given by . . . opinion counsel”).

What to Do 233 infringement after notification of the patent by filing suit and that the infringer has a duty of due care to avoid infringement after such notification).172

This note, and in particular the citation to Akeva, was quickly followed by several district court opinions which took different views of the scope of waiver of work product with respect to post-suit communications with trial counsel. That issue was not involved in EchoStar. Instead, the question of whether the subject matter waiver that accompanies reliance upon an opinion of counsel extends to an accused infringer’s communications with trial counsel was raised in and was decided by the Federal Circuit in the second critical case, the en banc decision in In re Seagate Technology, LLC.173 The In re Seagate court overruled its long-standing interpretation of what constituted “willful infringement.” The court adopted a new interpretation of Section 284 that authorizes imposition of up-to-treble damages only if the accused infringer acted at least in a manner of “objective recklessness.”174 In addition, the court held that a party aware of a patent that it might be infringing was not under an affirmative duty of care to obtain an opinion and that its state of mind was irrelevant.175 Objective recklessness is what matters. Finally, but most pertinent here, the court held that waiver of an opinion of counsel did not by itself warrant the conclusion that protection over communications with trial counsel were also waived.176 Instead, the Federal Circuit held that, absent “unique circumstances” such as party “chicanery,” “as a general proposition” privilege was not waived over communications with trial counsel.177 Likewise, the court held that “as a general proposition, relying on opinion counsel’s work product does not waive work product immunity with respect to trial counsel.”178 The Federal Circuit’s conclusions, however, rested on the fact that it was undisputed that opinion counsel had “operated separately and independently of trial counsel at all times.”179 Thus, so long as trial and opinion counsel operate “separately and independently . . . at all times,” waiver of protection concerning the opinion from opinion counsel does not waive protection over communications relating to trial counsel. It remains to be seen whether combining the roles of opinion and trial counsel will affect the likelihood of waiver of communications with trial

172. 173. 174. 175. 176. 177. 178. 179.

EchoStar, 448 F.3d at 1302 n.4, 78 U.S.P.Q.2d at 1682 n.4. 497 F.3d 1360, 83 U.S.P.Q.2d 1865 (Fed. Cir. 2007) (en banc). Id. at 1371, 83 U.S.P.Q.2d 1870. Id. Id. at 1373, 83 U.S.P.Q2d 1871–72. Id. at 1374–75, 83 U.S.P.Q.2d 1873. Id. at 1376, 83 U.S.P.Q.2d 1874. Id. at 1366, 83 U.S.P.Q.2d 1866–67.

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counsel. Although there is a definite split, most courts hold that an accused infringer may rely on at least a pre-suit180 opinion of counsel without waiving trial counsel’s work product, at least where the opinion comes from a different firm than trial counsel.181 The most certain lesson for now is that courts may continue to view the combination of roles as problematic. In a district court decision decided before In re Seagate, Novartis Pharmaceuticals Corp. v. Eon Labs Manufacturing, Inc.,182 the Cohen, Pontani firm defended accused infringer, Eon, at trial. In response to a charge of willful infringement, Eon had earlier procured an opinion from another member of Cohen, Pontani, Mr. Pontani. Judge Farnan held that Novartis was entitled to discover work product information that Mr. Pontani never provided to Eon. Judge Farnan held that “Eon should be compelled to produce all legal advice it received from any member of the Cohen, Pontani law firm with regard to the subject matter of Mr. Pontani’s opinion.”183 Judge Farnan seemed to view the decision to combine roles as risky: Eon has not only elected to engage in the unconventional and risky arrangement of having opinion and trial counsel from the same law firm, but Eon’s opinion counsel, Mr. Pontani, has actually entered an appearance in this matter. Because the Court cannot differentiate between opinion and trial counsel, the Court will grant Novartis’ Motion to Compel to the extent it seeks the production of all legal advice Eon received from the Cohen, Pontani law firm relating to the subject matter of Mr. Pontani’s opinion.184

180. Where trial counsel provides a post-suit opinion—an unusual circumstance—there is an even greater risk of broader waiver. Explaining why, one court explained: Here, the opinions were rendered by trial counsel’s firm after the litigation began. Although it is difficult to understand how there could be a defense to willful infringement based on an opinion rendered after the litigation began, defendants have raised such a defense. They cannot use their status as trial counsel to erect a barrier to discovery of documents to which plaintiff would otherwise be entitled. Neither can counsel play cute by carefully circumscribing information given to the lawyer in the firm who wrote the opinion, and funneling the information given him through other lawyers in the firm to avoid the concept of “communications between client and attorney.” If a draft opinion is prepared and given to [the opining litigator] who reviews in light of trial strategy before it is given to the client and then sends it back for redrafting if it is a little weak or inconsistent with the trial strategy, plaintiffs have a right to know this. It bears on the independence, competence, analysis, credibility, and value of the opinion. Michlin v. Canon, Inc., 208 F.R.D. 172, 174 (E.D. Mich. 2002). 181. See Motorola, Inc. v. Vosi Techs., Inc., No. 01 C 4182, 2002 U.S. Dist. LEXIS 15655, at *6, 2002 WL 1917256 (N.D. Ill. Aug. 19, 2002) (holding that privilege over trial counsel’s views of infringement or validity were not waived even though on same subject as pre-suit opinions by other lawyers). 182. 206 F.R.D. 396 (D. Del. 2002). 183. Id. at 399 (emphasis in original). 184. Id.

Conclusion

Other courts have made similar observations.185 For example, one court reasoned that: “the broad waiver rule requiring full disclosure of documents, even if they were not given to the client, is best suited to the situation where the opinion counsel is trial counsel. In that situation, the opinion counsel has a dual role in [advising] the client and, thus, there is a greater need to make sure the opinion is not tainted by bias or other influences. . . .”186

The court reasoned that where the opinion came from counsel separate and independent from trial counsel, then the reasons supporting broad waiver of work product are not implicated.187 For the time being, and absent further clarification from the Federal Circuit, combining the roles of opinion and trial counsel, though perhaps efficient, will be viewed as “unconventional” and “risky,” though there seems to be little reason for the distinction—after all, nothing prevents trial counsel, in one firm, from discussing its opinions with an accused infringer who received an opinion from another firm. The risk for now is obvious: a client who relies on the same firm may end up losing trial counsel or facing such a broad waiver of privilege or work product as to end up with either the inability to rely on the opinion or doing so but facing severe legal and practical restrictions on communications with trial counsel. In either event, the opinion of counsel may turn out to be a handful of sand.

2. What to Do Litigating cases involving opinions of counsel create numerous ethical issues for lawyers, and both the lawyer-as-witness issue and the question of waiver under EchoStar and In re Seagate have only begun to be litigated, and only by district courts. Many questions remain the best interest of the client, and practicable for the lawyer, must be determined on a case-by-case basis.

K. Conclusion Combining the role of prosecution of a patent with other forms of representation related to the subject matter of that patent, or concerning the patent itself, can create problems for both attorney and client.

185. Convolve, Inc. v. Compaq Computer Corp., 224 F.R.D. 98 (S.D.N.Y. 2004). 186. Id. at 106 (quoting Akeva L.L.C. v. Mizuno Corp., 243 F. Supp. 2d 418, 424 (M.D.N.C. 2003)). 187. Id.

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Table of Cases

aaiPharma, Inc. v. Kremers Urban Dev. Co., 361 F. Supp. 2d 770 (N.D. Ill. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219n110 Abbott Labs. v. Brennan, 952 F.2d 1356 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . . . . 88n17 Abyst Tech., Inc. v. Empak, Inc., 962 F. Supp. 1241 (N.D. Cal. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35n74, 50n130, 50n132, 56n145 Actel Corp. v. Quicklogic Corp., 1996 WL 297045 (N.D. Cal. May 29, 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58n152, 62n167 Adams v. Shell Oil Co. 134 F.R.D. 148 (E. D. La. 1990) . . . . . . . . . . . . . . . . . . . 170, 173 Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc., 96 F.3d 1390 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104n99 Advanced Display Sys., Inc. v. Kent State Univ., 2001 WL 1524433 (N.D. Tex. Nov. 29, 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9n38 Advanced Magnetic Closures, Inc. v. Rome Fasteners, Inc., 2008 U.S. Dist. LEXIS 54615 (S.D.N.Y. July 17, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190n45 Advanced Medical Closures, Inc. v. Rome Fastener Corp 2008 U.S. Dist. LEXIS 54615. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .191 Affymetrix, Inc. v. Illumina, Inc., 2005 U.S. Dist. Lexis 15482 (D. Del. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197n8 Agilent Tech., Inc. v. Micromuse, Inc., 2004 WL 2346152 (S.D.N.Y. Oct. 19, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51, 31n61 Agouron Pharma., Inc., In re, 1999 WL 187637 (Fed. Cir. March 1, 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64n184 Ah Ju Steel Co. v. Armco, Inc., 680 F.2d 751 (CCPA 1982). . . . . . . . . . . . . . . . . 61n165 Air Crash Disaster Near Roselawn, Indiana, In re, 909 F. Supp. 1116 (D.N.D. Ill. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118, 127 Air Measurement Techs., Inc., v. Akin Gump Straus Hauer & Feld, LLP, 504 F.3d 1262 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11n45 Akeva L.L.C. v. Mizuno Corp., 243 F. Supp. 2d 418 (M.D.N.C. 2003). . . . . .229n1153, 232n170, 235n186 Alcon Labs., Inc. v. Pharmacia Corp., 225 F. Supp. 2d 340 (S.D.N.Y. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218n105, 218n108, 219n111 Am. Airlines, Inc., In re, 972 F.2d 605 (5th Cir. 1992) . . . . . . . . . . . . 7n29, 8n34, 8n36, 49n127, 50n132, 155n31, 158n380 American Can Co. v. Citrus Feed Co., 436 F.2d 1125 (5th Cir. 1971) . . . . . . . . 57n149 American Motors Corp. v. Huffstutler, 575 N.E. 2d 116 (Ohio 1991) . . . . . . . . 165n76 American Sterilizer v Surgikos, 1992 U.S. Dist. LEXIS 21542 (N.D. Tex. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57n149

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Table of Cases Amgen, Inc. v. Elanex Pharma., Inc., 160 F.R.D. 134, 32 U.S.P.Q. 2d 1688 (W.D. Wash. May 11, 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52, 50n130, 50n132, 56n143 Amicus Commc’ns, L.P. v. Hewlett-Packard Co., No. 99-0284 HHK/DAR, 1999 U.S. Dist. LEXIS 20901, 1999 WL 33117227 (D.D.C. Dec. 3, 1999) . . . . . . . . . . . 218n107 Am. Prot. Ins. Co. v. MGM Grand Hotel—Las Vegas, Inc., 765 F.2d 925 (9th Cir. 1985) Durflinger v. Artiles, 727 F.2d 888, 891 (10th Cir. 1984) . . . 184n24 Am. Roller Co. v. Budinger, 513 F.2d 982 (3rd Cir. 1975) . . . . . . . . . . . . . . . . 36n75, 51 Amsted Ind. Inc v. Nat’l Castings, Inc., 16 U.S.P.Q. 2d 1737 (N.D. Ill. June 22, 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224n132 Am. Stock Exchange, LLC v. Mopex, Inc., 230 F. Supp. 2d 333, 52 U.S.P.Q. 2d 1385 (S.D.N.Y. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19n18, 209n64 Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263 (7th Cir. 1983) . . . . . . . . 49n128 Andrew Corp. v. Beverly Mfg. Co., 415 F. Supp. 2d 919 (N.D. Ill. 2006) . . . . . . 41n91 Andrews v. Goodyear Tire & Rubber Co., Inc., 2000 WL 175098 (D. N.J. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117n30 Andrx Pharm., LLC v. GlaxoSmithKline, PLC, 236 F.R.D. 583 (S.D. Fla. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206n56, 215n92 Anticancer, Inc., In re, 2006 U.S. App. LEXIS 31177 (Fed. Cir. Nov. 30, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62n166 Antonious v. Spalding & Evenflo Companies, Inc., 275 F.3d 1066 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97n65, 98n66, 98n70, 99n74, 99n78, 100n86, 103n100 Appalachian Enterp., Inc. v. Epayment Solutions, Ltd., 2004 WL 2813121 (S.D.N.Y. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141n24 Apple Corps. Ltd. v. Int’l Collectors Soc’y, 15 F. Supp. 2d 456 (D.N.J. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122, 126, 127, 131n74 Applied Tech. Ltd. v. Watermaster of Am., Inc., 2009 U.S. Dist. LEXIS 25183 (March 26, 2009) . . . . . . . . . . . . . . . . 46n114, 46n115, 49n124, 49n125 AquaTex Industries, Inc. v. Techniche Solutions, 479 F.3d 1320 (Fed.Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148 Armsey v. Medshares Management Services, Inc., 184 F.R.D. 569 (W.D. Va. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119 Arthrocare Corp. v. Smith & Nephew, Inc., 310 F. Supp. 2d 638 (D. Del. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210n72 Artromick Int’l, Inc. v. Drustar, Inc., 134 F.R.D. 226 (S. D. Ohio 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46n109, 46n112 Asset Conservation, Inc. v. Chapman Indus. Corp., 147 F.R.D. 12 . . . . . . . . . . 74n218 Asyst Tech., Inc. v. Empak, Inc., 962 F. Supp. 2d 1241 (N.D. Cal. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51, 54n137 Atasi Corp. v. Seagate Tech., 847 F.2d 826 (Fed. Cir. 1988) . . . . . . . . . . . . .50n132, 51, 56n144, 56n145 Atlantic City Associates, LLC v. Carter & Burgess Consultants, Inc. . . . . . . . . . . . . .164 Autobytel, Inc. v. Dealix Corp., 455 F. Supp. 2d 569 (E.D. Tex. 2006) . . . . . . 232n171 Avante Int’l Tech. Corp. v. Premier Election Sys., Inc., 2008 WL 5191242 (E.D. Mo. Dec. 10, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150n7 Avery Dennison Corp. v. UCB SA, No. 95 C 6351, 1996 U.S. Dist. LEXIS 16070 1996 WL 633986 (N.D. Ill. Oct. 29, 1996). . . . . . . . . . . . . . . . . . 204n47 Avia Group Int’l, Inc. v. L.A. Gear Cal., Inc., 853 F.2d 1557 (Fed. Cir. 1988)

Table of Cases 239 Avocent Huntsville Corp. v. Clearcube Tech., Inc., 2006 WL 2109503 (N.D. Ala. July 28, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150n6 Avocent Redmond Corp. v. Rose Elec., Inc., 491 F. Supp. 2d 1000, 2007 WL 1549477 (W.D. Wash. May 24, 2007). . . . . . . . . . . 27n47, 48n122, 50n131, 200n31, 204n46 Axcan Scandipharm, Inc. v. Reed Smith, LLP, 2007 Phila. Ct. Com. Pl. LEXIS 78 (March 26, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1n1, 40n87 Baden Sports, Inc. v. Kabushiki Kaisha Molten, 2007 WL 2056502 (W.D. Wash. July 16, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182n13 Baldwin Hardware Corp. v. Franksu Enter. Corp., 78 F.3d 550 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90n28, 181n8, 189n40 Balivi Chem. Corp. v. JMC Ventilation Refrigeration, LLC, 2008 WL 131028 (D. Idaho Jan. 10, 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46n108 Bank Russels Lambert v. Chase Manhattan Bank, 175 F.R.D. 34 (S.D.N.Y. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172n103 BASF Corp. v. United States, 321 F. Supp. 2d 1373 (Ct. Int’l Trade 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196n3 Bausch & Lomb Inc. v. Alcon Labs., Inc., 64 F. Supp. 2d 233 (W.D.N.Y. 1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19n18, 209n64 Bausch & Lomb, Inc. v. Alcon Labs., Inc., 79 F. Supp. 2d 252 (W.D.N.Y. 2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151n16 Baxter Diagnostics, Inc. v. AVL Scientific Corp., 798 F. Supp. 612 (C.D. Cal. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33, 31n60 Bays v. Theran, 418 Mass. 685, 639 N.E. 2d 720 (Mass. 1994) . . . . . . . . . . . . . . . . . 16n5 Bd. of Educ.; United States v., 946 F.2d 180 (2d. Cir. 1991) . . . . . . . . . . . . . . . 218n104 Bd. of Regents of the Univ. of Neb. v. BASF Corp., 2006 WL 2385363 (D. Neb. Aug. 17, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10n43 Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470 (9th Cir. 1992) . . . . . . . . . . 215n94 Beech Aircraft Corp. v. EDO Corp., 990 F.2d 1237 (Fed. Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22n27 Beghin-Say v. Rasmussen, 212 U.S.P.Q. 614 (Comm’r. Pat. 1980) . . . . . . . . . . . . 36n75 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed. 2d 929 (2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140, 140n12 Bell Helicopter Textron, Inc., In re, 87 S.W. 3d 139 (Tex. App.—Fort Worth 2002, orig. proc.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .166 Berkeley Ltd. Partnership v. Arnold, White & Durkee, 118 F. Supp. 2d 668 (D. Md. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45n106 Berndt v. Greenwich Ins. Co., 2008 WL 5114269, U.S. Dist. LEXIS 98079 (W.D. Wis. Dec. 2, 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11n46 B.F. Goodrich Co. v. Formosa Plastics Corp., 638 F. Supp. 1050 (S.D. Tex. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18n11 Biax Corp. v. Fujitsu Computer Sys. Corp., 2007 WL 1466638, U.S Dist. LEXIS 35770 (E.D. Tex. May 16, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51, 53n136 Biomet, Inc. v. Barnes & Thornburg, 791 N.E. 2d 760 (Ct. App. Ind. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191n53 Biomet, Inc. v. Finnegan Henderson LLP, 967 A. 2d 662 (D.C. App. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78n2

240

Table of Cases Board of Regents of the University of Nebraska v. BASF Corp. 2006 WL 2385363 (D. Neb. Aug. 17, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40, 64, 72 Bose Corp. v. JBL, Inc., 274 F.3d 1354, 61 U.S.P.Q. 2d 1216 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7n27 Boston Scientific Corp. v. Johnson & Johnson Inc., __ F. Supp. 2d __, 2009 WL 2600902 (D. Del. Aug. 25, 2009). . . . . . . . . . . . . . . . . . . . . . . . . . . . 36n76, 56n143 Brasseler, U.S.A. I, L.P. v. Stryker Sales Corp., 267 F.3d 1370, 60 U.S.P.Q. 2d 1482 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217n100 Bristol-Myers Squibb Co. v. Ben Venue Labs., 90 F. Supp. 2d 522 n. 7 (D.N.J. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5n18 Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., No. 95 Civ. 8833(RPP), 2000 U.S. Dist. LEXIS 16015, 2000 WL 1655054 (S.D.N.Y. Nov. 3, 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224n132 Brooks Furn. Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88n10, 88n14 Brooks Shoe Mfg. Co. v. Suave Shoe Corp., 716 F.2d 854 (11thCir. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159n43 Brosnan v. Gillin, Jacobson, 2003 WL 1558257 (Cal. App. March 26, 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70n207 Brown v. Contemporary OB/BYN Assocs., 794 A. 2d 669 (Md. 2002) . . . . . . . 184n24 Brown v. St. Joseph County, 148 F.R.D. 246 (N.D. Ind. 1993) . . . . . . . . . . . . . . 113n17 Brunswick Corp. v. U.S., 34 Fed. Cl. 532 (1995) . . . . . . . . . . . . . . . . . . . . . . . . . . 153n23 Buckley v. Airshield Corp., 908 F. Supp. 299 (D. Md. 1995) . . . . . . . . . . . . . . . 15n2, 52, 58n152, 151n14, 151n17 Burton v. Burton, 139 A.D. 2d 554 N.Y.S. 2d 53 (N.Y. App. 1988) . . . . . . . . . . . . 16n5 Butler-Tulio v. Scroggins, 774 A. 2d 1209 (Md. App. 2001) . . . . . . . . . . . . . . . . 155n29 Byrne v. Wood, Herron & Evans, LLP, 2009 WL 2382415 (E.D. Ky. July 30, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11n46, 149n5 Caelter Indus., Inc., 586 F. Supp. 808 (N.D.N.Y. 1984) . . . . . . . . . . . . . . . . . . . . 54n139 Cagguila v. WyethLab, Inc., 127 F. R. D. 653 (E.D. Pa. 1989) . . . . . . . . . . . 113, 113n16 Callahan v. Schoppe, 864 F.2d 44 (5th Cir. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . 96n59 Callaway Golf Co. v. Dunlop Slazenger Group Americas, Inc., 2002 WL 1906628 (D. Del. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168n85, 168n86 Cambridge Prods., Ltd. v. Penn Nutrients, Inc., 962 F.2d 1048 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100n81, 100n83 Camden v. Maryland, 910 F. Supp. 1115 (D Md. 1996) . . . . . . . . . . . . . . . . . . . . 114n20 Campbell Indus. v. M/V Gemini, 619 F.2d 24 (9th Cir. 1980) . . . . . . . . . . . . . . 184n24 Campcore, Inc. v. Matthews, 689 N.Y.S. 2d 814 (N.Y. Sup. Ct. App. Div. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80n6 Carbo Ceramics, Inc. v. Norton-Alcoa Proppants, 155 F.R.D. 158, 31 U.S.P.Q. 2d 1631 (N.D. Tex. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59n154 CardioGrip Corp. v. Mueller & Smith, LP, 2008 U.S. Dist. LEXIS 2627 (S.D. Ohio Jan. 14, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47n116 Carlson v. Fredrikson & Byron, P.A., 475 N.W. 2d 882 (Minn. Ct. App. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27n46 Carl Zeiss Jena GmgH v. Bio-Rad Labs. Inc., No. 98 CIV. 8012 RCC DFE, 2000 WL 1006371(S.D.N.Y. July 19, 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228n143

Table of Cases 241 Carter v. Ozoeneh, 2009 WL 3003836 (W.D. N.C. Sept. 16, 2009). . . . . . . . . . . . 90n25 Castellanos v. Little John, 945 S.W. 2d 236 (Tex. App.—San Antonio 1997, orig. proceeding) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168n85 CBT Flint Partners, LLC v. Goodmail Systems, Inc., 529 F. Supp. 2d 1376 (N.D.Ga. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141n23 Celgene Corp. v. KV Pharm. Co., 2008 WL 2937415 (D. N.J. July 29, 2008) . . . . . . . . . . . . . . . . . . . . . . . 63n176, 64n179, 66n188, 66n189, 67n191, 67n192, 67n195 Cendant Corp. Sec. Litig., In re, 124 F. Supp. 2d 235 (D. N.J. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43n96 Centillion Data Sys., LLC v. Convergys Corp., 2006 WL 20777 (S.D. Ind. Jan. 04, 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98n69, 95n53 Central Admixture Pharm. Serv., Inc. v. Advanced Cardiac Solutions P.C., 482 F.3d 1347 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . 142n28, 143n33 Central Milk Producers Co-op. v. Sentry Food Stores, Inc., 573 F.2d 988 (8th Cir. 1978). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70n208 Certain Magnetic Switches for Coaxial Transmission Lines & Products Containing Same, In re, No. 337-TA-346, 1993 ITC LEXIS 143 (Int’l Trade Comm’n Mar. 2, 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201n31 Chamberlain Group, Inc. v. Interlogix, Inc., 2002 WL 653893 (Ill. App. Apr. 19, 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154n28, 155n32 Chan v. Intuit, Inc., 218 F.R.D. 659 (N.D. Cal. 2003) . . . . . . . . . . .204n47, 204n48, 214 Chiquita Int’l Ltd. v. M/V Bolero Reefer, 1994 U.S. Dist. LEXIS 5820 (S.D. N.Y. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170n96, 173n105 Chiron Corp. v. Abbott Labs., 156 F.R.D. 219, 31 U.S.P.Q. 2d 1848 (N.D. Cal. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220n112 Christian v. Mattel, Inc., 286 F.3d 1118 (9th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . 87n6 Ciba-Geigy Corp. v. Alza Corp., 795 F. Supp. 711 (D. N.J. 1992) . . . . . . . . . 52, 53n136 Ciocca v. Neff, 2005 WL 1473819 (S.D.N.Y. June 22, 2005) . . . . . . . . . . . . . . . . . . 80n8 CITC Indus., Inc. v. Manow Int’l Corp., 1978-1 Trade Cases P 61, 947 (S.D.N.Y. 1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53n134 City of Columbia v. Omni Outdoor Advertising, Inc., 499 U.S. 365, 111 S. Ct. 1344 (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90n24 Civco Med. Instruments Co. v. Proteck Med. Products, Inc., 2004 WL 1326474 (S.D. Iowa June 4, 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . 25n38, 36n75 Civco Med. Instruments Co. v. Protek Med. Prods., Inc., 2004 WL 1326474 (S.D. Iowa June 4, 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 Classen Immunotherapies, Inc. v. Biogen Idec, 381 F. Supp. 2d 452 (D. Md. 2005) . . . . . . . . . . . . . . . . . . . . . 91n30, 94n47, 96n57, 97n62, 138n1, 141n24 Clemens v. McNamee, 2008 WL 1969315 (S.D. Tex. May 6, 2008) . . . . . . . . . . . 19n17 Cleverly Minded Ltd. v. Anthony Sicari Apparel Group Indus., 2003 U.S. Dist. LEXIS 855 (S.D. N.Y. Jan 23, 2003) . . . . . . . . . . . . . . . . . . . . . 47n119 Clinitec Nutrition Co. v. Baya Corp., No. 94 C 7050, 1996 WL 153881 (N.D. Ill. Mar. 28, 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224n131 Coffin v. Bowater Inc., 2005 WL 5885367 (D. Me. May 13, 2005) Cohesive Techs., Inc. v. Waters Corp., 526 F. Supp. 2d 84 (D. Mass. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227n140 Cole v. Avidoso Municipal Schools, 43 F.3d 1373 (10th Cir. 1994) . . . . . . . . . . . . 8n36

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Table of Cases Colida v. Nokia, Inc., 2008 WL 4517188 (S.D.N.Y. May 6, 2008). . . . . . . . . . . . 141n22 Colorpix Systems of America v. Broan Mfg. Co., 131 F. Supp. 2d 1499 (D. Conn. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31n60 Colvin Ave., Inc. v. Tops Markets, L.L.C., 2006 WL 3827429 (W.D.N.Y. Dec. 28, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160n49 Commissariat a L’Energie Atomique v. Dell Computer Corp., No. 03-484-KAJ, 2004 U.S. Dist. LEXIS 12782 (D. Del. May 25, 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196n5, 213n82, 205n49, Committee on Legal Ethics v. Frame, 433 S.E. 2d 579 (W.Va. 1993) . . . . . . . . . . 43n96 Commonwealth Scientific & Industrial Research Organisation v. Toshiba Am. Info. Sys., Inc., 2008 U.S. App. LEXIS 22114 (Fed. Cir. Oct. 23, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40n88, 74 Computer Acceleration Corp. v. Microsoft Corp., 481 F. Supp. 2d 620 (E.D. Tex. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181n9 Computer Assocs. Int’l, Inc. v. Simple.com, Inc., 2005 WL 6042725 (E.D. N.Y. Jan. 19, 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149n4 Comtech, Inc. v. Reuter, 1986 WL 6829 (E.D.N.Y. March 18, 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22n26, 24n36 Concat LP v. Unilever, PLC, 350 F. Supp. 2d 796 (N.D. Cal. 2004) . . . . . . . . . . . . . . . . . . . . . . . .19n16, 36n76, 64n183, 64n184, 67n194 Conditioned Ocular Enhancement, Inc. v. Bonaventura, 458 F. Supp. 2d 704 (N.D. Ill. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . .91n30, 93n41, 94n46 Conforte & Eisele, Inc. v. Division of Building & Construction . . . . . . . . . . . . . . . . .160 Conley v. Gibson 355 U.S. 41 (1957) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139–40 Conmed Corp. v. Larson & Taylor, 2002 WL 31427518 (4th Cir. Oct. 31, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191n54 Connell v. Clairol, Inc., 440 F. Supp. 17 (N.D. Ga. 1972). . . . . . . . . . . . . . . . . . 221n116 Consol. Aluminum Corp. v. Foseco Int’l Ltd., 910 F.2d 804, 15 U.S.P.Q. 2d 1481 (Fed. Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217n99 Constant v. Advanced Micro-Devices, Inc., 10 U.S.P.Q. 2d 1797 (Fed. Cir. Apr. 11, 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189n41 Contech Stormwater Solutions, Inc. v. Baysaver Tech., Inc., 534 F. Supp. 2d 616 (D. Md. 2008) . . . . . . . . . . . . . . . . . . . . . . .92n32, 93n41, 182n12 Conte v. Lawless, 2005 WL 2436211 (Del. Super. 2005) . . . . . . . . . . . . . . . . . . . 160n49 Convolve, Inc. v. Compaq Computer Corp., 224 F.R.D. 98 (S.D.N.Y. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235n185 Convservation, Inc. v. Chapman Indus. Corp., 147 F.R.D. 12 . . . . . . . . . . . . . . . . . . .52 Coolsavings.com Inc. v. E-Centives, Inc., No. 98 C 4924, 2000 U.S. Dist. LEXIS 12985, 2000 WL 1262929 (N.D. Ill. Sept. 1, 2000) . . . . . . . . . . . 220n113, 220n115, 222n123 Cooter & Gell v. Harmarx Corp., 496 U.S. 384, 110 S.Ct. 2447, 110 L.Ed. 2d 359 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .98 Cordy v. Sherwin-Williams Co., 156 F.R.D. 575 (D.N.J. 1994) . . . . . . . 155n30, 160n50 County of Los Angeles v. Forsyth, 223 F.3d 990 (9th Cir. 2000). . . . . . . . . . . . . . . 9n40 Coupon Mktg. Group, Inc. v. H.O.T.! Coupons, LLC, No. 98 C 7408, 1999 U.S. Dist. LEXIS 9004, 1999 WL 409990 (N.D. Ill. June 7, 1999), modified, 1999 U.S. Dist. LEXIS 12437 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200n31 Cramer v. Sabine Transp. Co., 141 F. Supp. 2d 727 (S.D. Tex. 2001). . . . . . . . 171n101

Table of Cases 243 Crossroads Systems (Texas), Inc. v. Dot Hill Systems Corp., 2006 U.S. Dist. LEXIS 36181, 2006 WL 1544621, 82 U.S.P.Q.2d 1517 (W.D. Tex. 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225, 226, 227 Crystal Semiconductor Corp. v. Tritech Microelectronics Int’l, Inc., 246 F.3d 1336 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150n6 Cummins-Allison Corp. v. Glory Ltd., No. 02 C 7008, 2003 U.S. Dist. LEXIS 23653 (N.D. Ill. Jan. 2, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . 205n50, 198n14 Cummins-Allison Corp. v. SBM Co., Ltd., 2009 WL 763926 (E.D. Tex. March 19, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190n42 Damper Design, Inc. v. Cleveland Elec. Illuminating Co., No. 94-1223, 1995 U.S. App. LEXIS 3520, 1995 WL 71339 (Fed. Cir. Feb. 21, 1995) . . . . . 210n71 Darby & Darby, PC v. VSI Int’l, Inc., 701 N.Y.S. 2d 50 (Sup. Ct. App. Div. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79n5 Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147, 147n1, 148 Davidson Supply Co., Inc. v. P.P.E., Inc., 986 F.Supp. 956 (D. Md. 1997) . . . . . . . .119 Davis v. AT&T Corp., No. 98-CV-0189S(H), 1998 U.S. Dist. LEXIS 20471, 1998 WL 912012 (W.D.N.Y. Dec. 23, 1998) . . . . . . . . . . . . . . . . . . . . . 204n47, 212n80 DCA Food Indus., Inc. v. Tasty Foods Inc., 626 F. Supp. 54 (W.D. Wis. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16n5, 22n24 DCH Health Serv. Corp. v. Waite, 115 Cal. Rptr. 2d 847 (Cal. App. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184n24 Decora Inc. v. DW Wallcovering, Inc., 899 F. Supp. 132 (S.D.N.Y. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52, 15n2, 33n67 Federal Deposit Insurance Corp. v. United States Fire Ins. Co., 50 F.3d 1304 (5th Cir. 1995) 8 Dept. of Corps v. SpeeDee Oil Change Sys., Inc., 980 P. 2d 371 (Cal. 1999) . . . . . 17n7 Depuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 534 F. Supp.2d 224 (D. Mass. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .191 De Technologies, Inc., v. Dell Inc., 2006 WL 4677984 (W.D. Va. Feb. 28, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97n65, 100n85 Dieter v. Regents of the Univ. of Cal., 963 F. Supp. 908 (E.D. Cal. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56n143, 58n152 Digeo, Inc. v. Audible, Inc., 505 F.3d 1362 (Fed. Cir. 2007) . . . . . . . . . . . 88n10, 96n56 Discotrade Ltd. v. Wyeth-Ayerst Int’l. Inc., 200 F. Supp. 2d 355 (S.D.N.Y. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31n60 Dolan, In re, 384 A. 2d 1076 (N.J. 1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66n188 Dome Patent LP v. Permeable Technologies, Inc., 190 F.R.D. 88 (W.D.N.Y. 1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94n50, 99n73, 100n83, 100n81 Domestic Air Transp. Antitrust Litig., In re, 141 F.R.D. 556 (N.D. Ga. 1992). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124n 55 Dominant Semiconductors SDN, BHD v. Osram GmBH, 524 F.3d 1254 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90n25, 92n32 Dominguez v. Syntex Labs., Inc., 149 F.R.D. 158 (S.D. Ind. 1993) . . . . . . . . . . . 171n99 Dorsey & Whitney LP v. Grossman, 749 N.W. 2d 409 (Minn. App. 2008) . . . . . . . 1n1 Dow Chem. Co. v. Mee Indus., Inc., 341 F.3d 1370 (Fed. Cir. 2003) . . . . . . . . . . 150n6 Dresser Indus., In re, 972 F.2d 540 (5th Cir. 1992) . . . . . . . . . . . . .7n29, 36n76, 112n11

244

Table of Cases Dri Mark Prods., Inc. v. Wilpak Indus., Inc., 2006 WL 2882565 (E.D. N.Y. Oct. 6, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218n110 DuBois v. Gradco Systems, Inc., 136 F.R.D. 341 (D. Conn. 1991) . . . . . . . 119, 117n33 Ducane Gas Grills, Inc., In re, 320 B.R. 312 (Bankr. D. S.C. 2004) . . . . . . . . . . . . 24n36 Dunbar v. Baylor College of Med., 984 S.W. 2d 338 (Tex. Ct. App. 1998) Duncan v. Merill, Lynch Pierce Fenner & Smith, Inc., 646 F.2d 1020 (5th Cir. 1981). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49n126, 133n50 DW Wallcovering, Inc., In re, 1996 WL 17457 (Fed. Cir. 1996) . . . . . . . . . . . . . 56n145 DX/DY Voice Processing, Inc. v. Teligence Corp., 2007 WL 2463305 (E.D. Wash. Aug. 28, 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140n8 E.F. Hutton & Co. v. Brown, 305 F. Supp. 371 (S.D. Tex. 1969) . . . . . . . . . . . . . . 37n79 E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S. Ct. 523, 5 L.Ed. 2d 464 (1961) . . . . . . . . . . . . . . . . . . 89n22, 90n23 Eagle Comtronics, Inc. v. Arrow Commc’n Labs., Inc., 305 F.3d 1303, 64 U.S.P.Q. 2d 1481 (Fed. Cir. 2002) . . . . . . . . . . . . . . 209, 210, 211, 211n74, 211n78 Eastman Kodak Co. v. Agfa-Gevaert N.V., 2003 WL 23101783 (W.D. N.Y. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166n79 Eastman Kodak Co. v. Sony Corp., 2004 WL 2984297 (W.D. N.Y. Dec. 27, 2004) . . . . . . . . . . . . . . . . . . . 29n52, 31n61, 32, 71n212, 74n218 Eberle Design, Inc. v. Reno A&E, 354 F. Supp. 2d 1093 (D. Ariz. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58n152 EchoStar Commc’ns Corp., In re, 448 F.3d 1294, 78 U.S.P.Q. 2d 1676 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228n145 Ehrich v. Binghampton City School Dist., 210 F.R.D. 17 (N.D.N.Y. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46n111 Elan Microelectronics Corp. v. Apple, Inc., 2009 WL 2972374 (N.D. Cal. Sept. 14, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141n21 Elantec Semiconductor Inc v. Cooper, 1999 WL 33921316 (N.D. Cal. March 10, 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53n134, 62n169 Elan Transdermal Ltd. v. Cygnus Therapeutic Sys., 809 F. Supp. 1383 (N.D. Cal. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . 49n123, 50n132, 52, 58n153, 61n162 Elder v. Tanner, 205 F.R.D. 190 (E.D. Tex. 2001) . . . . . . . . . . . . . . . . . . 150n10, 153n21 Elonex I.P. Holdings, Ltd. v. Apple Computer, Inc., 142 F. Supp. 2d 579 (D. Del. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36n76, 69n204 El Paso Co.; United States v., 682 F.2d 530 (5th Cir. 1982) . . . . . . . . . . . . . . . . 105n104 Eltech Sys. Corp. v. PPG Indus., Inc., 903 F.2d 805, 809–10 (Fed. Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88n11 Ely v. Manbeck, 17 U.S.P.Q. 2d 1252 (D. D.C. 1990) . . . . . . . . . . . . . . . . . . . . . . 153n22 Emle Indus., Inc. v. Patentex, Inc., 478 F.2d 562 (2d Cir. 1973) 51 Emory Univ. v. Nova Biogenetics, Inc., 2006 WL 2708635 (N.D. Ga. Sept. 20, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24n37, 192n56 Endress + Hauser, Inc. v. Hawk Measurement Sys. Pty. Ltd., 122 F.3d 1040 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150n12 Endrody v. M/Y Anomaly, 2005 WL 2207007 (W.D. Wa. Sept. 9, 2005) . . . . . 160n49 Engineered Prods. Co. v. Donaldson Co., Inc., 290 F. Supp. 2d 974 (N.D. Iowa 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57n148, 59n155

Table of Cases 245 English Feedlot, Inc. v. Norden Labs., Inc., 833 F. Supp. 1498 (D. Colo. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155n30 Environmental Ins. Declaratory Judgment Actions, In re, 600 A. 2d 165 (N.J. Super. Ct. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .129 Environ Prods., Inc. v. Total Containment, Inc., 43 U.S.P.Q. 2d (BNA) 1288 (E.D. Pa. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83n23, 222n123 Environ Prods. Inc. v. Total Containment Inc., 1996 U.S. Dist. LEXIS 12336, 41 U.S.P.Q. 2d 1302 (E.D. Pa. 1995) . . . . . . . . . . . . . . . . . . . . . 218n110 Enzo Biochem, Inc. v. Applera Corp., 468 F. Supp. 2d 359 (D. Conn. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38, 39, 44n105 Eon-Net, L.P. v. Flagstar Bancorp, Inc., 239 F.R.D. 609 (W.D. Wash. 2006). . . . . . . . . . . . . . . . . . . 87n3, 87n7, 98n71, 99n72, 99n80, 100n82 Erickson v. Newmar Corp., 87 F.3d 298 (9th Cir. 1996) . . . . . . . . . . . . 184n24, 186n31 Essex Chem. Corp. v. Hartford Accident & Indem., 993 F. Supp. 241 (D.N.J. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22n24 Estate of Manship v. U.S., 2006 WL 4041784 (M.D. La. 2006) . . . . . . . . . . . . . . 168n85 Etna Prods. Co., Inc. v. Tactica Int’l, Inc., 234 F. Supp. 442 (S.D.N.Y. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009). . . . . . 142n30 EZ Paintr Corp. v. Padco, Inc., 222 U.S.P.Q. 310 (D. Minn. Nov. 9, 1983) . . . . 57n146 Faughn v. Perez, 145 Cal. App. 4th 592 (Cal. App. 2006) . . . . . . . . . . . . . . . . . . . 31n60 Fawer, Brian, Hardy & Zatkis v. Howes, 639 So. 2d 329 (Ct. App. La. 1994) . . . . . 1n1 Ferguson Beauregard/Logic Controls, Division of Dover Res., Inc. v. Mega Sys., LLC, 350 F.3d 1327 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . 142n28 FieldTurf, Inc. v. Southwest Recreational Labs, Inc., 235 F. Supp. 2d 708 (E.D. Ky. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95n54, 96n56 FieldTurf, Inc. v. Southwest Research Recreational Indus., Inc., 357 F.3d 1266 (Fed. Cir. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95n54, 96n56 Filmtec Corp. v. Hydranautics, 67 F.3d 931 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . 89n18 Finisar Corp. v. DirecTV Group, Inc., 424 F. Supp. 2d 896 (E.D. Tex. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181n10 Firestorm, In re, 916 P. 2d 411 (Wash. 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184n24 Flint Hills Scientific, LLC v. Davidchack, 2001 WL 1718276 (D. Kan. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15n2 Flint Hills Scientific, LLC v. Nikitin, 2002 WL 975881 (D. Kan. March 21, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15n2 Flo-Con Sys., Inc. v. Servsteel Inc., 759 F. Supp. 456 (N.D. Ind. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52, 162n58, 38n81 Florida Ins. Guar. Ass’n., Inc. v. Carey Canada, Inc., 749 F. Supp. 255, 260 (S.D. Fla. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72n212 Flying J Inc. v. TA Operating Corp., 2008 WL 648545 (D. Utah March 10, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42n95 FMC Corp. v. Guthery, 2009 U.S. Dist. LEXIS 14609 (D. N.J. Feb. 25, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19n19 Foboha GmbH v. Gram Tech., Inc., 2008 WL 4619795 (N.D. Ill. Oct. 15, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92n34

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Table of Cases Formosa Plastics Corp., USA v. Kajima Int’l., Inc., 2004 WL 2534207 (Tex. Ct. App. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159n43 Formosa Plastics Corp. U.S.A. v. Kajima Int’l Inc., 216 S.W. 3d 436 (Tex. App.—Corpus Christi 2006, pet. denied) . . . . . . . . . . . . . . . . . . . . . . . . . 164n71 Fortner v. Int’l Diving & Consulting Serv., Inc., 1996 WL 50807 (E.D. La. Feb. 8, 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28n50 Fortson v. Winstead, McGuire, Secrest & Minick, 961 F.2d 469 (4th Cir. 1992). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27n46 Fotomedia Technologies, LLC v. AOL, LLC, 2008 WL 4135906 (E.D. Tex. Aug. 29, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141n20 Fraser v. High Liner Foods (U.S.A.), Inc., 2009 WL 1951894 (Fed. Cir. July 8, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96n60 Freeman v. Chicago Musical Instrument Co., 689 F.2d 715 (7th Cir. 1982). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15n3, 60n159 Fresenius USA, Inc. v. Baxter Int’l, Inc., In re, 107 Fed. Appx. 910 (Fed. Cir. July 29, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 Friedrich v. Blasz, 11 Misc. 3d 1068 (Sup. Ct. N.Y. 2006) . . . . . . . . . . . . . . . . . . 160n49 Fruehauf Trailer Corp. v. Hagelthorn, 528 N.W. 2d 778 (Mich. App. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165n76 Fund of Funds, Ltd. v. Arthur Andersen & Co., 567 F.2d 225 (2d Cir. 1977) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42, 42n93 Furniture World, Inc. v. D.A.V. Thrift Stores, 168 F.R.D. 61 (D. N.M. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167n83 Gabapentin Patent Litig., In re, 407 F. Supp. 2d 607 (D. N.J. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22n24, 64n178 Galarowicz v. Comm’r of Patents & Trademarks, 848 F.2d 1245 (Fed. Cir. 1988) (unpublished) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5n17 Gardco Mfg., Inc. v. Herst Lighting Co., 820 F.2d 1209, 2 U.S.P.Q. 2d 2015, 2018 (Fed. Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221n121 Gatti, In re, 8 P. 3d 966 (Or. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .133 Gaull v. Wyeth Labs., Inc., 687 F. Supp. 77 (S.D.N.Y. 1988) . . . . . . . . . . . . . . . 221n116 G.D. Searle & Co. v. Nutrapharm, Inc., 1999 WL 249725 (S.D.N.Y. Apr. 28, 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46n114 Gen’l Elec. Co. v. Industra Prods., Inc., 683 F. Supp. 1254 (N.D. Ind. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62n169 Gen’l Elec. Co. v. U.S., 215 Ct. Cl. 928 (Ct. Cl. 1977) . . . . . . . . . . . . . . . . . . . . . . 61n165 Gen’l Elec. Co. v. Valeron Corp., 608 F.2d 265 (6th Cir. 1979) . . . . . . . . . . . . . . . . . . .51 Gen-Cor, LLC v. Buckeye Corrugated, Inc., 111 F. Supp. 2d 1049 (S.D. Ind. 2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31n60, 46n111 Genentech, Inc. v. Amgen, Inc., 289 F.3d 761 (Fed. Cir. 2002) . . . . . . . . . . . . . . . 181n8 Genentech, Inc. v. Insmed Inc., 442 F. Supp. 2d 838 (N.D. Cal. 2006) . . . . . . 232n171 Gibson, In re, 991 P. 2d 277 (Colo. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82n21 Gidatex, S.rL. v. Campaniello Imports, Ltd. 82 F. Supp. 2d 119 (S.D.N.Y. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122, 132, 133 Globetrotter Software, Inc. v. Elan Computer Group, Inc., 362 F.3d 1367 (Fed.Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92n35 Gomez v. Rivera Rodriguez, 344 F.3d 103 (1st Cir. 2003) . . . . . . . . . . . . . . . . . . . . . .148

Table of Cases 247 Gould, Inc. v. Mitsui Mining & Smelting Co., 738 F. Supp. 1121 (N.D. Ohio 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71n212 GP Indus., Inc. v. Eran Indus., Inc., 500 F.3d 1369 (Fed. Cir. 2007) . . . . . . . . . . 92n36 Great Am. Ins. Co. v. Godwin Pappas Ronquillo, LLP, 2008 WL 1881320 (N.D. Tex. March 6, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91n28 Great Lakes Dredge & Dock Co. v. Harnischfeger Corp., 734 F. Supp. 334 (N.D. Ill. 1990); Conforti & Eisele, Inc. v. N.J., 405 A. 2d 487 (N.J. Supr. 1979) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165n73 Green, Tweed of Del., Inc. v. DuPont Dow Elastomers, LLC, 202 F.R.D. 426 (E.D. Pa. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160n46, 166 Greene’s Pressure Treating & Rentals, Inc. v. Fulbright & Jaworski, L.L.P . . . . . . . . .35 Green v. Nygaard, 143 P. 3d 393 (Ariz. App. 2006) . . . . . . . . . . . . . . . . . . . . . . . 168n85 Greiner v. City of Champlin, 152 F.3d 787 (8th Cir. 1998) . . . . . . . . . . . . . . . . . . . . .187 Grievance Proceeding, In re, 2002 WL 31106389 (D. Conn. July 19, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117n33 Griffin-El v. Beard, 2009 WL 292802 (E.D. Pa. Sept. 8, 2009) . . . . . . . . . . . . . . . . 43n98 Grinnell Corp. v. Hackett, 70 F.R.D. 326 (D. R.I. 1976) . . . . . . . . . . . . 171n98, 173n107 Grioli v. Delta Int’l Mach. Corp., 395 F. Supp. 2d 11 (E.D.N.Y. 2005) . . . . . . . 166n79 Grosser-Samuels v. Jaquelin Designs Enterp., Inc., 448 F. Supp. 2d 772 (N.D. Tex. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9n38, 25n38, 55n140 Hackett v. Village Court Assocs., 602 F. Supp. 856, 858 (E.D. Wis. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19n18 Hanntz v. Shiley, 766 F. Supp. 258 (D.N.J. 1991) . . . . . . . . . . . . . . . . . . 116n26, 117n33 Hansen v. Umtech Industrieservice Und Spedition, GMBH, 1996 WL 622557 (D. Del. July 3, 1996) . . . . . . . . . . . . . . . . . 154n27, 160n51, 163n63 Harasimowicz v. McAllister, 78 F.R.D. 319 (E. D. Pa. 1978) . . . . . . . . . . . . . . . . 167n82 Hargabus v. Cedar Fair, LP, 2005 WL 2233248 (N.D.Ohio Sept. 14, 2005) . . . . 149n6 Harness, Dickey & Pierce, PLC v. Powerhouse Marks, LLC, 2008 WL 4457782 (E. D. Mich. Sept. 29, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11n46 Harsco Corp. v. Kerka, Stowell, Kondracki & Clarke, PC, 965 F. Supp. 580 (M.D. Pa. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78n2, 192n54 Hartford Accident & Indem. Co. v. Foster, 528 So. 2d 255 (Miss. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82n18 Hay & Forage Indus. v. Ford New Holland, Inc., 132 F.R.D. 687 (D. Kan. 1990). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218n110 Hayes Microcomputer Prods., Inc. Patent Litig., In re, 982 F.2d 1527 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103n97 Haynes v. R.H. Dyck, Inc. 2008 WL 80749 (E.D. Cal. Jan. 7, 2008) . . . . . . . . . 222n125 Hayworth v. Schilli Leasing, Inc., 669 N.E. 2d 165 (Ind. 1996) . . . . . . . . . . . . . . 165n76 Hebert v. Lisle Corp., 99 F.3d 1109 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . 151n13 Heitmann v. Concrete Pipe Machinery Co., 98 F.R.D. 740 (E. D. Mo. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171n99 Henry Filters, Inc. v. Peabody Barnes, Inc., 611 N.E. 2d 873 (Ct. App. Ohio 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25n38, 26n40 Hernandez v. Paicius, 134 Cal. Rptr. 2d 756 (Cal. App. 2003) . . . . . . . . . . . . . . . 43n99 Herrick Co. v. Vetta Sports, 1998 U.S. Dist. LEXIS 14544 (S.D. N.Y. Sept. 14, 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168n87

248

Table of Cases Hewlett-Packard Co. v. Cooper, 1999 WL 33921317 (N.D. Cal. March 12, 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 Hewlett-Packard Co. v. EMC Corp., 330 F. Supp. 2d 1087 (N.D. Cal. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161n54 Heyde v. Xtraman, Inc., 404 S.E. 2d 607 (Ga. App. 1991) . . . . . . . . . . . . . . . . . . 184n24 Hilleby v. FMC Corp., 1992 WL 455436 (N.D. Cal. 1992) . . . . . . . . . . . . . . . . . . 50n130 Hinchman v. Gillette, 618 S.E. 2d 387 (W.Va. 2005) . . . . . . . . . . . . . . . . . . . . . . . 90n26 Hitachi, Ltd. v. Tatung Co., 419 F. Supp. 2d 1158 (N.D. Cal. 2006) . . . . . . . . . . 56n145 Hizey v. Carpenter, 830 P. 2d 646 (Wash. 1992) . . . . . . . . . . . . . . . . . . . . . 10n44, 194n1 Hobley v. Burge, 433 F.3d 946 (7th Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . 230n161 Hoffman-La Roche Inc. v. Invamed Inc., 213 F.3d 1359 (Fed. Cir. 2000) . . . . . 100n84 Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 62 USPQ2d 1801 (2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6n23 Honeywell Int’l, Inc. v. Phillips Lumileds, 2009 WL 256831 (E.D. Tex. Jan. 6, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28n51, 31, 31n61 Hooper v. Steelplank Corp., 215 U.S.P.Q. 2d 329 (E.D. Mich. 1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25n38, 28n50 Hopper v. Frank, 16 F.3d 92 (5th Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . 27n46, 33 House v. Combined Ins. Co. of Am., 168 F.R.D 236, 245 (N.D. Iowa 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168n84 Howmedica Osteonics Corp. v. Zimmer, Inc., 2007 WL 4440173 (N.D. Cal. Dec. 17, 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158n40 Humco, Inc. v. Noble, 31 S.W. 3d 916 (Ky. 2000) . . . . . . . . . . . . . . . . . . 117n33, 120n41 Hunter Douglas, Inc. v. Harmonic Design, Inc., 153 F.3d 1318 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92n32 Hunter Douglas, Inc. v. Home Fashions, Inc., 811 F. Supp. 566 (D. Colo. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52, 58n152, 59n154 Hydril Co. v. Multiflex, Inc., 553 F. Supp. 552 (S.D. Tex. 1982) . . . . . . . . . . . . . . . . . .52 Hynix Semiconductor Inc. v. Rambus Inc., 2007 WL 4062845 (Nov. 15, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142n27 Hynix Semiconductor Inc. v. Rambus Inc., 2009 WL 230039 (N.D. Cal. Jan. 27, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148n2 Hypertherm, Inc. v. Am. Torch Tip Co., 2009 WL 530064 (D. N.H. Feb. 27, 2009) Iams Co. v. Kaln Kan Foods, Inc., No. C-3-97-449, 1998 U.S. Dist. LEXIS 19205 (S.D. Ohio Feb. 27, 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212n79 IBM Corp. v. Levin, 579 F.2d 271 (3rd Cir. 1978) . . . . . . . . . . . . . . . . . . . . . . . . . 46n111 ICU Med., Inc. v. Alaris Med. Sys., Inc., 2007 U.S. Dist. LEXIS 34467 (C.D. Cal. Apr. 17, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191n51 ICU Med., Inc. v. B. Braun Med. Inc., 2005 WL 588341 (N.D. Cal. Mar. 14, 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211n73 Ideal Instruments, Inc. v. Rivard Instruments, Inc., 245 F.R.D. 381 (N.D. Iowa 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108n1 Ideal Toy Corp. v. Tyco Indus., Inc., 478 F. Supp. 1191 (D. Del. 1979) . . . . . . . 204n47 Iguana, LLC v. Lanham, 2009 WL 1620586 (M.D. Ga. June 9, 2009) . . . . . . . . 141n19 Immunocept LLC v. Fulbright & Jaworski, LLP, 504 F.3d 1281 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11n45

Table of Cases 249 Indep. Serv. Orgs. Antitrust Litig., In re, 203 F.3d 1322 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89n19 Indep. Serv. Orgs. Antitrust Litig., In re, No. CIV. A. MDL-1021, 1995 U.S. Dist. LEXIS 4698, 1995 WL 151739 (D. Kan. March 9, 1995) . . . . . 197n8 Infosint S.A. v. H. Lundbeck A.S., 2007 U.S. Dist. LEXIS 36678, 2007 WL 1467784 (S.D.N.Y. May 16, 2007) . . . . . . . . . . . . . . . . . . . . . . 197n8, 200n31 Innovation Ventures, Inc. v. N2G Distributing Inc., 2009 U.S. Dist. LEXIS 66295 (E.D. Mich. July 31, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 Inorganic Coatings, Inc. v. Falberg, 926 F. Supp. 517 (E.D. Pa. 1995) . . . . . . . . . 110n6 Installation Software Tech. Inc., v. Wise Solutions, Inc., 2004 WL 524829 (N.D. Ill. March 5, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . 29n52, 71n212 Int’l Bus. Mach. Corp. v. Levin, 579 F.2d 271 (3d Cir. 1978). . . . . . . . . . . . . . . . 64n179 Intamin, Ltd. v. Magnetar Tech., Corp., 483 F.3d 1328 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100n82 Intel Corp. v. VIA Techs., Inc., 198 F.R.D. 525 (N.D. Cal. 2000) . . . . . . 197n8, 212n79 Intelli-Check, Inc. v. Tricom Card Tech., Inc., 2008 WL 4682433 (E.D.N.Y. Oct. 21, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58n152, 59n157, 71n212 Interactive Coupon Mktg. Group, Inc. v. H.O.T.! Coupons, LLC, No. 98 C 7408, 1999 U.S. Dist. LEXIS 9004, 1999 WL 409990 (N.D. Ill. June 7, 1999) . . . . . . . . . . . . . . . . . .201, 202n38, 213n82, 219n110, 222n123 International Tele-Marine v. Malone & Associates, (D. Colo. 1994) 845 F. Supp. 1427 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12n23 Intertrust Tech Corp. v. Microsoft Corp., 2003 WL 23120174 (N.D. Cal. Dec. 1, 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180n5 Intervet, Inc. v. Merial Ltd., 241 F.R.D. 55 (D.D.C. 2007) . . . . . . . . . . . . . . . . . . 197n10 Intex Recreation Corp. v. Team Worldwide Corp., 439 F. Supp. 2d 46 (D.D.C. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232n171 ISI Int’l Inc., v. Borden Ladner Gervais LLP, 316 F.3d 731 (7th Cir. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91n31, 92n37 Iverness Med. Switzerland GMBH v. Acon Labs., Inc., 2005 WL 1491233 (D. Mass. June 23, 2005) . . . . . . . . . . . . . 50n130, 58n152, 59n154 Jack Eckerd Corp. v. Dart Group Corp. (D. Del. 1985) 621 F. Supp. 725 82 Cal. Rptr. 2d at 330 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21n23–22n23 Johnson v. Ohio Dept. Of Youth Serv., 231 F. Supp. 2d 690 (N.D. Ohio 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117n33 Johnson v. Strauss, 2009 WL 2916913 (S.D. Ohio Sept. 4, 2009) . . . . . . . . . . . . 141n22 Johnston; United States v., 664 F.2d 152 (7th Cir. 1981) . . . . . . . . . . . . . . . . . . 222n123 Jorgenson v. Taco Bell Corp., 58 Cal. Rptr. 2d 178 (Cal. App. 1996) . . . . . . . . . . . . .109 Judin v. U.S., 110 F.3d 780 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . 97n65, 99, 99n75 Judkins v. HT Window Fashion Corp., 529 F.3d 1334 (Fed. Cir. 2008) Kabi Pharmacia AB v. Alcon Surgical, Inc., 803 F. Supp. 957 (D. Del. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47n117 Kaempe v. Myers, 367 F.3d 958, 71 U.S.P.Q. 2d 1147 (D.C. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19n18, 209n64 Kasha v. Roth & Goldman, P.C., 2008 WL 690916 (Cal. Super. Ct. Jan. 12, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96n58

250

Table of Cases Kearney & Trecker Corp. v. Giddings & Lewis, Inc., 452 F.2d 579 (7th Cir. 1972). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48n120 Kearns v. Chyrslter Corp., 771 F. Supp. 190 (E.D. Mich. 1991) . . . . . . . . . . . . . 70n208 Kearns v. Fred Lavery/Porsche Audi Co., 573 F. Supp. 91 (E. D. Mich. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Kearns v. Fred Lavery Porsche Audi Co., 745 F.2d 600 (Fed. Cir. 1984) . . . . . . . . 16n5 Kennecott Corp. v. Kyocera Int’l, Inc., 15 U.S.P.Q. 2d 1745 (Fed. Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59n154 Kenneth C. v. Delonda R., 10 Misc. 3d (1070 (N.Y. Fam. Ct. Jan. 04 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189n39 Kersey v. Dennison Mfg. Co., 1992 WL 71390 (D. Mass. 1992) . . . . . . . . . . . . . . 24n36 Kinzenbaw v. Case, LLC, 2004 WL 1146462 (N.D. Iowa May 20, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36n76 Kirkland & Ellis v. CMI Corp., 1999 WL 92257 (N.D. Ill. Feb. 11, 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42n95, 80n6 Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19n21 Koch Ref. Co. v. Jennifer L. Boudreaux MV, 85 F.3d 1178 (5th Cir. 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159n43, 184n24 Koehring Co. v. Manitowoc Co., 418 F. Supp. 1133 (E.D. Wis. 1976) . . . . . . . . . . . . .53 Kubin v. Miller, 801 F. Supp. 1101 (S.D.N.Y. 1992) . . . . . . . . . . . . . . . . . . . . . . 221n118 Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999) . . . . . . . . . . . . . . . . . . . . . . . 147n1 LaBelle v. McGonagle, 2008 WL 3842998 (D. Mass. Aug. 15, 2008) . . . . . . . . . . 11n46 Lacroix, PPA v. BIC Corp., 339 F. Supp. 2d 196 (D. Mass. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160n49, 165n73 La Jolla Cove Motel & Hotel Apts., Inc. v. Superior Court, 121 Cal. App. 4th 773 (Ct. App. Cal. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120n41 Landmark Graphics Corp. v. Seismic Micro Tech., Inc., 2007 WL 735007 (S.D. Tex. Jan. 31, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9n38, 226 Lang v. Reedy Creek Improvement District, 888 F.Supp. 1143 (M.D. Fla. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119 Lanza, In re, 65 N.J. 347, 352–53, 322 A. 2d 445 (N.J. 1974) . . . . . . . . . . . . . . . . 67n191 Larson v. Rourick, 284 F. Supp. 2d 1155 (N.D. Iowa 2003) . . . . . . . . . . 159n42, 161n56 Laryngeal Mask Co. Ltd v. Ambu A/S, 2008 WL 558561 (S.D. Cal. Feb. 25, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17n6 Lee v. Kaiser Found. Health Plan, 65 Va. Cir. 389 (Cir. Ct. Va. 2004) . . . . . . . . 159n43 Lemelson v. Apple Computer Inc., 28 U.S.P.Q. 2d 1412 (D. Nev. June 4, 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36n76, 47n117 Lemelson v. Synergistics Research Corp., 504 F. Supp. 2d 1164 (S.D.N.Y. 1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55n140, 221n116 Lewis, In re, 689 A. 2d 561 (D. D.C. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81n14 Lex Tex Ltd. v. Skillman, 579 F.2d 244, 16 U.S.P.Q. 2d 1137 (D.C. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217n100 Lovell v. Winchester, 941 S.W. 2d 466 (Ky. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . 16n5 Lucent Tech., Inc. v. Gateway, Inc., 2007 U.S. Dist. LEXIS 35502 (S.D. Cal. May 15, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57n150, 59n156, 59n157

Table of Cases 251 Madanes v. Madanes, 199 F.R.D. 135 (S.D.N.Y. 2001) . . . . . . . . . . . . . . . . . . . . 218n105 Makris, In re, 217 S.W. 3d 521 (Tex. App.—San Antonio 2006, orig. proceeding) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169n88 Malden Mills Indus., Inc., In re, 275 BR 670 (Bankr. D. Mass. 2002) . . . . . . . . 159n43 Manildra Milling Corp. v. Ogilvie Mills, Inc., 76 F.3d 1187 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95n53 Manildra Milling Corp. v. Ogilvie Mills, Inc., 782 F. Supp. 102 (D. Kan. 1991). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192n59 Manoir Electroalloys Corp. v. Amalloy Corp., 711 F Supp. 188 (D. N.J. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46n110 Mardi Grass, LLC v. Davis, 192 F.Supp. 2d 635 (E.D. La. 2002) . . . . . . . . . . . . . . 19n18 Markey v. Verimatrix, Inc., 2009 U.S. Dist. LEXIS 57944 (S.D. Cal. July 8, 2009) Marshall v. Quinn-L Equities, Inc., 704 F. Supp. 1384 (N.D. Tex. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27n46 Marvin Lumber & Cedar Co. v. Norton Co. 113 F.R.D. 588 (D. Minn. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154n29, 159n44 Mathis v. Spears, 857 F.2d 749, 8 U.S.P.Q. 2d 1029, 8 U.S.P.Q. 2d 1551 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223n128 Matsushita Elec. Indus. Co. v. United Mayer v. Dell, 139 F.R.D. 1, 3 (D. D.C. 1991) . . . . . . . . . . . . . . . . .161, 161n52, 162n62 Mays, In re, 495 S.E. 2d 30 (Ga. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82n20 McCallum v. CSX Transp. Inc., 149 F.R.D. 104 (M.D.N.C. 1993) . . . . . . . . . . . . . 8n36 McCarter, In re, 296 B.R. 750 (Bankr. E.D. Tenn. 2003) . . . . . . . . . . . . . . . . . . . 159n43 McCarthy v. John T. Henderson Inc., 587 A. 2d 280 (N.J. Super. Ct. App. Div. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27n46 McCook Metals LLC v. Alcoa, 2001 WL 58959 (N.D. Ill. Jan. 18, 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51, 59n154 McCubbrey, Bartels & Ward v. D’Amato & Lynch, 2003 WL 21481027 (Ca. App. June 27, 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2n2 McZeal v. Sprint Nextel Corp. 501 F.3d 1354 (Fed. Cir. 2007) . . . . . . . . . 140, 141, 142 MedImmune, Inc. v. Centocor, Inc., 271 F. Supp. 2d 762 n.13 (D. Md. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200n31, 202n38, 203n45 Medtronic, Inc. v. Guidant Corp., 2001 U.S. Dist. LEXIS 22805 11 (D. Minn. Dec. 19, 2001) . . . . . . . . . . . . . . . . . . . . . . 204n47, 206n56, 214n86, 214n88 Medtronic Inc. v. Intermedics, Inc., 799 F.2d 734 (Fed. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150n12 Medtronic Navigation, Inc. v. Brainlab Medizinische Computersystems GMBH, 2008 WL 410413 (D. Colo. Feb. 12, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . .190 Melea Ltd. v. Steelcase, Inc., 2003 WL 21816814 (E.D. Mich. July 14, 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58n152 MEMC Elec. Materials v. Mitsubishi Materials Silicon Corp., 2004 WL 5363616 (N.D. Cal. March 2, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180n5 Memry Corp. v. Kentucky Oil Tech., N.V., 2007 WL 2746737 (N.D. Cal. Sept. 20, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150n6 Messing, Rudavsky & Weliky, P.C. v. President & Fellows of Harvard Coll., 764 N.E. 2d 825 (Mass. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6n22

252

Table of Cases Metamorfyx, LLC v. Belkin Components, 2002 WL 1308633 (N.D. Ill. June 14, 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19n20 Metoprolol Succinate Patent Litig., In re, 2005 WL 1661509 (E.D. Mo. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15n2, 51 Meyerland Community Improvement Ass’n v. Temple, 700 S.W. 2d 263 (Tex. App.—Houston [1st Dist.] 1985, writ ref’d n.r.e.). . . . . . . . . . . . . . . . . . . 27n46 MGP Ingredients, Inc. v. Mars, Inc., 245 F.R.D. 497 (D. Kan. 2007) . . . . . . . . . 200n31 Miano v. AC & R Advertising, Inc., 148 F.R.D. 68 (S.D.N.Y. 1993) . . . . . . . . . . 120n39 Michels v. U.S., 72 Fed. Cl. 426 (Fed. Cl. Ct. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . 96n57 Michlin v. Canon, Inc., 208 F.R.D. 172 (E.D. Mich. 2002) . . . . . . . . . . . . . . . . 234n180 Micromesh Tech. Corp. v. Am. Recreation Prods., Inc., 2007 WL 2501783 (N.D. Cal. Aug. 30, 2007). . . . . . . . . . . . . . . . . . . .88n12, 99n80, 101n88 Micron Technology Inc. v. Rambus, Inc. 255 F.R.D. 135 (D. Del. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .180 Microsoft Corp. v. Alcatel Business Systems, 2007 WL 4480632 (D. Del. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121n44 Microsoft Corp. v. Commmonwealth Scientific & Industrial Org., 2007 WL 4376104 (E.D. Tex. Dec. 13, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 Microsoft Corp. v. Immersion Corp., 2008 WL 682246 (W.D. Wash. March 7, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221n120 Microunity Sys., Eng’r., Inc. v. Dell, Inc., 2005 WL 2299440 (E.D. Tex. July 18, 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215n93 Midfirst Bank v. Curtis, 2006 WL 2787485 (N.D. Ill. Sept. 22, 2006) . . . . . . . . . 62n171 Midwest Indus., Inc. v. Karavan Trailers, Inc., 175 F.3d 1356, 50 U.S.P.Q. 2d 1672 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66n24, 92n32 Midwest Motor Sports, Inc. v. Arctic Cat Sales, Inc., 144 F. Supp. 2d 1147 (D.S.D. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121 Mike v. Dymon, Inc., 1996 WL 427761 (D. Kan. July 25, 1996) . . . . . . . . . . . . 221n116 Mikohn Gaming Corp. v. Acres Gaming, Inc., 1998 U.S. Dist. LEXIS 22251, 50 U.S.P.Q. 2d 1783 (D. Nev. 1998) . . . . . . . . . . . . . . . 202n40, 205n50 Miles v. Farrell, 549 F. Supp. 82 (N. D. Ill. 1982). . . . . . . . . . . . . . . . . . . 159n43, 159n44 Millburn Marketing Assocs. v. Parker Labs, Inc., 1994 WL 228531 (D. N.J. May 17, 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51, 49n123 Mills v. Polar Molecular Corp., 12 F.3d 1170 (2d Cir. 1993) . . . . . . . . . . . . . . . . . 139n4 Mindscape, Inc. v. Media Depot, Inc., 973 F. Supp. 1130 (N.D. Cal. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45n108 Mitts & Merrill, Inc. v. Srhed Pax Corp., 112 F.R.D. 349 (N.D. Ill. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192n56 M.J Woods, Inc. v. Conopco, Inc., 271 F. Supp. 2d 576 (S.D.N.Y. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19n17, 78n2 Modine Mfg. Co. v. Allen Group, Inc., 917 F.2d 538 (Fed. Cir. 1990) . . . . . . . . . 88n15 Molins PLC v. Textron, Inc., 48 F.3d 1172 (Fed. Cir. 1995) . . . . . . . . . . . . . . . . . . 5n19 Monco v. Janus, 583 N.E. 2d 575 (Ill. App. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5n20 Monon Corp. v. Wabash Nat’l Corp., 764 F. Supp. 1320 (N.D. Ind. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52, 35n72, 55n141, 70n209 Moore v. R.J. Reynolds Tobacco Co., 194 F.R.D. 659 (S.D. Iowa 2000) . . . . . . 169n92 Morin v. Trupin, 711 F. Supp. 97 (S.D.N.Y. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . 19n18 Moss v. Moss Tubes, Inc., 1998 WL 641362 (N.D.N.Y. Sept. 9, 1998) . . . . . . . . . 52–53

Table of Cases 253 Motion to Quash Deposition Subpoena to Lance Wagar, In re, 2006 WL 3699544 (N.D.N.Y. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43n100 Motorola, Inc. v. Interdigital Tech. Corp., No. 93-488-LON, 1994 U.S. Dist. LEXIS 20714 (D. Del. 1994) . . . . . . . . . . . . . . . . . . . . . 199n26, 204n47, 204n49, 207n59, 214n87 Motorola, Inc. v. Vosi Techs., Inc., No. 01 C 4182, 2002 U.S. Dist. LEXIS 15655, 2002 WL 1917256 (N.D. Ill. Aug. 19, 2002). . . . . . . . . . . . . . . 234n181 Moyroud v. Itek Corp., 528 F. Supp. 707 (S.D. Fla. 1981) . . . . . . . . . . . . . . . . . . . . . . .52 Multi-Piece Rim Products Liability Litigation, In re, 612 F.2d 377 (8th Cir. 1980). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10n43 Mustang Enterp, Inc. v. Plug-in Storage Sys., Inc., 874 F. Supp. 881 (N.D. Ill. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62n168 N. Am. Philips Corp. v. Am. Vending Sales Inc., 29 U.S.P.Q. 2d 1817 (N.D. Ill. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59n154 Nat’l Med. Enterp. v. Godbey, 924 S.W. 2d 123 (Tex. 1996) . . . . . . . . . . . . . . . . . 42n92 Nat’l Presto Indus., Inc. v. West Bend Co., 76 F.3d 1185 (Fed. Cir. 1996) National Texture Corp. v. Hymes, 282 N.W. 2d 890 (Minn. 1979) . . . . . . . . . . . 26n41 Nazomi Commc’ns, Inc. v. Arm Holdings PLC, No. C 02-02521-JF, 2002 U.S. Dist. LEXIS 21400, 2002 WL 32831822 (N.D. Cal. Oct. 11, 2002) . . . . . . . . . . . 195n2, 200n31, 202, 202n39, 212n79, 214n87 Nebraska v. Flores, 622 N.W. 2d 632 (Neb. 2001)22n32 Netflix Antitrust Litig., In re, 506 F. Supp. 2d 308 (N.D. Cal. 2007) . . . . . . . . . . 89n21 Netratings, Inc. v. NPD Group, Inc., 2003 WL 23112305 (D. Del. Dec. 11, 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19n17 Neutrino Dev. Corp. v. Sonosite, Inc., 410 F. Supp. 2d 529 (S.D. Tex. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149n4 New Jersey Sports Prods., Inc. v. Bobby Bostick Promotions, LLC, 963 A. 2d 890 (N.J. Super. Ct. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93n43, 94n48 News Am. v. Marquis, No. CV 000177440S, 27 Conn. L. Rptr. 195, 2000 Conn. Super. LEXIS 1273, 2000 WL 726821 (Conn. Super. Ct. May 3, 2000) . . . . . . 197n8 NHC Health Care Corp.; U.S. v., 150 F. Supp. 2d 1013 (W.D. Mo. 2001). . . . . 155n29 Nike, Inc. v. Adidas Am., Inc., 2006 WL 51111106 (E.D. Tex. Sept. 29, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159n46 Nikkal Indus., Ltd. v. Salton, Inc., 689 F. Supp. 187 (S.D.N.Y. 1988) . . . . . . . . . 162n60 Nilssen v. Osram Sylvania, Inc., 504 F.3d 1223 (Fed. Cir. 2007) . . . . . . . . . . . . . . 83n22 Northbrook Digital LLC v. Vendio Serv., Inc., 2008 WL 239037 (D. Minn. June 9, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213n85 NovoTerapeutisk Laboratorium A/S v. Baxter Travenol Labs, Inc., 607 F.2d 186 (7th Cir. 1979) . . . . . . . . . . . . . . . . . . . . . . . . . . . 18n10, 49n129, 162n58 N.V. v. Ciba Seeds, 933 F. Supp. 514 (M.D. N.C. 1996) . . . . . . . . . . . . . . . . . . . . . 36n75 N.Y. Institute of Tech. v. Biosound, Inc., 658 F. Supp. 759 (S.D.N.Y. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58n152 ODS Optical Disc Serv. GMBH v. Toshiba Corp., 41 A.D. 3d 166 (N.Y Sup. Ct. App. Div. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192n56 Olson v. Snap Products, Inc. 183 F.R.D. 539 (D. Minn. 1998) . . . . . . . . . . . . . . . . . .185 Omeprazole Patent Litigation, In re, 227 F. R. D. 227 (S.D.N.Y 2005) . . . . . . . . . . .169

254 Table of Cases Open LCR.Com, Inc. v. Rates Techn., Inc., 112 F. Supp. 2d 1223 (D. Colo. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93n40 Ositis, In re, 40 P. 3d 500 (Or. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .134 Oxford Gene Tech. Ltd. v. Mergen Ltd., 345 F. Supp. 2d 431 (D. Del. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149n4 Oxford Sys., Inc. v. Cellpro, Inc., 45 F. Supp. 2d 1055 (W.D. Wash. 1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47n117, 61n161 Oxyn Telecomm., Inc. v. Onse Telecom, No. 01 Civ. 1012(JSM), 2003 U.S. Dist. LEXIS 2671, 2003 WL 660848 (S.D.N.Y. Feb. 27, 2003) . . . . . . . . 228n144 Pain Prevention Lab., Inc. v. Electronic Waveform Labs, Inc., 657 F. Supp. 1486 (N.D. Ill. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26n42 Paintr Corp. v. Padco, Inc., 222 U.S.P.Q. 310 (D. Minn. Nov. 9, 1983) . . . . . . . 59n154 Palmer v. Ozbek, 144 F.R.D. 66 (D. Md. 1992) . . . . . . . . . . . . . . . . . . . 161n52, 175n114 PandoraJewelry, LLC v. Chamilia, LLC, 2008 WL 4533902 (D. Md. Sept. 30, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180n1 Panduit Corp. v. All States Plastic Mfg. Co., 744 F.2d 1564 (Fed. Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6n25, 58n152, 59n158 Papst Licensing, GmbH, Patent Litig., In re, 2000 U.S. Dist. LEXIS 6374 (E.D. La. May 4, 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204n47, 205n54, 206n55 Papst Motoren GMbH & Co. v. Kanematsu-Goshu (U.S.A.), Inc., 629 F. Supp. 864 (S.D.N.Y. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57n147 Papyrus Tech. Corp. v. N.Y. Stock Exchange, Inc., 325 F. Supp. 270 (S.D.N.Y. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58n152, 59n154 Parker; U.S. v., 165 F. Supp. 2d 431 (W.D.N.Y. 2001) . . . . . . . . . . . . . . . . . . . . . 128n64 Parker v. Carnahan, 772 S.W. 2d 151 (Tex. App.—Texarkana 1989, writ denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26n43 Parkinson v. Phonex Corp., 857 F. Supp. 1474 (D. Utah 1994) . . . . . . . 36n76, 71n210 Parkland Corp. v. Maxximum Co., 920 F. Supp. 1088 (D. Idaho 1996). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49n123, 50n132 Parus Holdings, Inc. v. Banner & Witcoff, Ltd., 585 F. Supp. 2d 99, 2008 WL 4601033 (N.D. Ill. Oct. 9, 2008). . . . . . . . . . . 19n18, 34n68, 34n70, 208n63 Patriarca v. Center for Living & Working, Inc., 778 N.E. 2d 877 (Mass. Sup. Jud. Ct. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118n36, 120n41 Patriot Scientific Corp. v. Moore, 2006 WL 994747 (Fed. Cir. Apr. 12, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38n80 Paul E. Iancono Structural Eng’r, Inc. v. Humphrey, 722 F.2d 435 (9th Cir. 1983). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9n40 Paulson v. Plainfield Trucking, Inc., 210 F.R.D. 654 (D. Minn. 2002) . . . . . . . . 114n21 Paul v. Raulings Sporting Goods Co., 123 F.R.D. 271 (S.D. Ohio 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155n30, 158 Pearson v. First NH Mortgage Corp., 200 F.3d 30 (1st Cir. 1999) . . . . . . . . . . . 63n174 Pellegrini v. Analog Devices, Inc., 2008 WL 2329403 (Fed. Cir. July 2, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95n51, 97n61 Penda Corp. v. STK, LLC, 2004 WL 1628907 (E.D. Pa. July 16, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110n7, 121 Pennwalt Corp. v. Plough, Inc., 85 F.R.D. 264 (D. Del. 1980) (Lanham Act case) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28n51

Table of Cases 255 People v. C de Baca, 948 P. 2d 1 (Colo. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81n15 People v. Miller, 35 P. 3d 689 (Colo. 20010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81n13 Personalized Mass Media Corp. v. Weather Channel, Inc., 899 F. Supp. 239 (E.D. Va. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220n113, 220n115 Phonometrics, Inc v. Economy Inns of Am., 349 F.3d 1356 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191n51 Picker Int’l, Inc. v. Varian Assocs., Inc., 869 F.2d 578 (Fed. Cir. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71n212 Pioneer Corp. v. Samsung SDI Co. Ltd., 2008 WL 5572566 (E.D. Tex. Oct. 2, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150n7 Plant Genetic Sys., N.V. v. Ciba Seeds, 933 F. Supp. 514 (M.D. N.C. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52, 26n44 Plymouth Indus., LLC v. Sioux Steel Co., 2006 WL 3392193 (D. Neb. Oct. 23, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222n123 Potash Antitrust Litig., In re, 1994-1 Trade Cas.. 70, 644 n.20 (D. Minn. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9n41 Power Mosfet Techs., LLC v. Siemens AG, 2002 WL 32785219 (E.D. Tex. Sept. 30, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 Presidio Components, Inc. v. Am. Technical Ceramics Corp., 2008 WL 608407 (S.D. Cal. March 4, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202n38 Pressman-Gutman Co., Inc. v. First Union Nat’l Bank, 2004 U.S. Dist. LEXIS 23991 (E.D. Pa. Nov. 30, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . 40n87 Prism Technologies LLC v. Verisign, Inc., 2008 WL 4426135 (D. Del. Sept. 30, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91n29 Probatter Sports LLC v. Joyner Tech., Inc., 2007 WL 2713239 (N.D. Iowa Sept. 14, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152n18, 152n19 Proctor & Gamble Co. v. McNeil-PPC, Inc., 615 F. Supp. 2d 832 (W.D. Wis. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153n23 Promega Corp. v. Applera Corp., No. 01-C-244-C, 2002 WL 32359938 (W.D. Wis. June 7, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204n47 Pro-Mold and Tool Co. v. Great Lakes Plastics, Inc., 75 F.3d 1568 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90n25 The Prudential Insurance Co. of American Sales Practices Litigation, In re, 911 F. Supp. 148 (D. N.J. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .118 PSN Ill., Inc. v. Ivoclar Vivadent, Inc., 2005 WL 2347209 (N.D. Ill. Sept. 21, 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90n25, 93n39, 93n44 Public Serv. Elec. & Gas Co. v. Associated Elec. & Gas Ins. Serv., Ltd., 745 F. Supp. 1037 (D. N.J. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117, 117n29 Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295 (Fed. Cir. 2004) . . . . . . . . . . . 87n3, 87n5, 88n9, 88n13, 88n16, 97n65, 98n67, 101n89 Quintel Corp. v. Citibank, 589 F. Supp. 1235 (S.D.N.Y. 1984) . . . . . . . . . . . . . . . 27n46 Rail Intermodal Specialists, Inc. v. Gen’l Elec. Capital Corp., 154 F.R.D. 218 (N.D. Iowa 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169n92 Rand v. Monsanto, 926 F.2d 596 (7th Cir. 1991). . . . . . . . . . . . . . . . . . . . . . . . . . . . 8n37 Ransburg Corp. v. Champion Spark Plug Co., 648 F. Supp. 1040 (N.D. Ill. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46n111

256 Table of Cases Rates Technology Inc. v. Mediatrix Telecom, Inc., 2007 WL 1987787 (E.D.N.Y. June 29, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100n81 Read Corp. v. Portec, Inc., 970 F.2d 816, 23 U.S.P.Q. 2d 1426 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223n128 Red Eagle Resources Corp. v. Baker Hughes. No. H-91-0627, 1992 WL 170614 (S.D. Tex. Mar. 4, 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Reedhycalog UK, Ltd. v. Baker Hughes Oilfield Operations, Inc., 2007 WL 1217897 (E.D. Tex. Apr. 24, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103n101 Refac Int’l, Ltd. v. Penn Nutrients, Inc., 962 F.2d 1048 (Fed. Cir. 1992) . . . . . . . 99n79 Refac Int’l. Ltd. v. Hitachi, Ltd., 921 F.2d 1247 (Fed. Cir. 1990) . . . . . . . . . . . . . 182n14 Reliant Pharm., Inc. v. Par Pharm., Inc., 2008 WL 1826036, U.S. Dist. LEXIS 33461 (Apr. 23, 2008) . . . . . . . . . . . . . . . . . . . . . 51, 53n135, 58n151 Rembrandt Tech., L.P. v. Comcast Corp., 2007 WL 470631 (E.D. Tex. Feb. 8, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38, 9n38, 39 Renesas Tech. Corp. v. Nanya Tech. Corp., 2004 WL 2600466 (N.D. Cal. Nov. 10, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180n4 Rent Club Inc. v. TransAmerica Rental Finance Corp., 811 F. Supp. 651 (M.D. Fla. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119, 117n34 Research Corp. Tech. Inc. v. Hewlett-PackardCo., 936 F. Supp. 697 (D. Ariz. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36n76 ResQNet.com, Inc. v. Lansa, Inc., No. 01 Civ. 3578(RWS), 2004 U.S. Dist. LEXIS 13579, 2004 WL 1627170 (S.D.N.Y. July 21, 2004) . . . . . . . . . . . . . . . 219n110 Rice v. Strunk, 670 N.E. 2d 1280 (Ind. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27n46 Richmond Am. Homes of N. Cal., Inc. v. Air Design, Inc., 2002 Cal. App. Unpub. LEXIS 6948 (Cal. App. July 25, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . 40n87 Riles, In re, 2000 WL 1062086 (Fed. Cir. July 20, 2000) . . . . . . 49n126, 50–51, 50n133 Rohm & Haas Co. v. Brotech Corp., 127 F.3d 1089 (Fed. Cir. 1997) . . . . . . . . . 100n81 Rohm & Haas Co. v. Lonza, Inc., No. Civ. A. 96-5732, 1999 U.S. Dist. LEXIS 13919, 1999 WL 718114 (E.D. Pa. Sept. 7, 1999) . . . . . . . . . . . . . . . . . 225n132 Rosco, Inc. v. Mirror Lite Co., 626 F. Supp. 2d 329 (E.D.N.Y 2009) . . . . . . . . . 153n25 Rose v. Summers, Comp-ton, Wells & Hamburg P.C., 887 S.W. 2d 683 (Mo. Ct. App. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19n18 R.R. Donnelly & Sons Co. v. Quark, Inc., 2007 U.S. Dist. LEXIS 424, 2007 WL 61885 (D. Del. Jan. 4, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197n10 Safeclick, LLC v. Visa Int’l Serv. Ass’n., 208 Fed. Appx. 829 (Fed. Cir. Oct. 23, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .141n23, 180n3, 181n7 Safe Flight Instrument Corp. v. Sundstrand Data Control Inc., 682 F. Supp. 20, 7 U.S.P.Q. 2d 1823 (D. Del. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196n5 Saint-Gobain/Norton Indus. Ceramics Corp. v. Gen. Elec. Co., 884 F. Supp. 31 (D. Mass. 1995). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228n143 Samsung SDI Co. v. Matsushita Elec. Industrial Co., 2006 WL 5097360 (C.D. Cal. June 5, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180n6 Sanderson v. Boddie-Noell Enterp., Inc., 227 F.R.D. 448 (E.D. Va. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184n24, 186 Saveca v. Reilly, 488 N.Y.S. 2d 876 (N.Y. Sup. Ct. App. Div. 1985) . . . . . . . . . . . . 80n6 S. Bravo Sys., Inc. v. Containment Techs. Corp., 96 F.3d 1372 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97n65

Table of Cases 257 Scantibodies Clinical Lab., Inc., In re, 2002 WL 1334522 (Fed. Cir. May 8, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18n11 Schloetter v. Railoc of Indiana, Inc., 546 F.2d 706 (7th Cir. 1976) . . . . . . . . . . . 61n164 Schoeneman, In re, 891 A. 2d 729 (D. D.C. 2006). . . . . . . . . . . . . . . . . . . . . . . . . . 82n19 Schwartz v. Hood, 2002 WL 974678 (D. Mass. May 8, 2002) . . . . . . . . . . . . . . . 117n34 Schwendimann v. Arkwright, Inc., 2008 WL 2901691 (D. Minn. July 23, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141n20 Scientific Corp. v. Johnson & Johnson, Inc. __ F. Supp. 2d __, 2009 WL 2600902 (D. Del. Aug. 25, 2009). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32 Seagate, Novartis Pharmaceuticals Corp. v. Eon Labs Manufacturing, Inc., In re, 206 F.R.D. 396 (D. Del. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234, 235 Seagate Technology, LLC, In re, 497 F.3d 1360, 83 U.S.P.Q. 2d 1865 (Fed. Cir. 2007) (en banc) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233, 235 Security Bank v. Klicker, 418 N.W. 2d 27 (Ct. App. Wis. 1987) . . . . . . . . . . . . . . 27n46 Se-Kure Controls, Inc. v. Vanguard Prods. Group, Inc., 2008 WL 169054 (N.D. Ill. Jan. 17, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149n6 Selby v. Revlon Consumer Prods. Corp., 1997 WL 587472 (N.D. Tex. Sept. 17, 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43n97 Select Controls v. Am. Elec. Components, 2008 WL 216612 (S.D.N.Y. Jan 22, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141n22 Sells v. Wamser, 158 F.R.D. 390 (S.D. Ohio 1994) . . . . . . . . . . . . . . . . . . . . . . . . 163n64 Semiconductor Energy Lab. Co. v. Sanyo N. Am. Corp., No. C.A. 00-018-GMS, 2001 WL 194303 (D. Del. Feb. 22, 2001) . . . . . . . . . . 204n47 Sensonics, Inc. v. Aerosonic Corp., 81 F.3d 1566 (Fed. Cir. 1996) . . . . . . . . . . . 190n44 Sequa Corp. v. Lititech, Inc., 807 F. Supp. 653 (D. Colo. 1992) . . . . . . . . . . . . . 134n85 Serious Materials, LLC v. Supress Prods., LLC, 2008 WL 754878 (N.D. Cal. March 21, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103n97 Sewell v. Md. Dept. of Transp., 206 F.R.D 545 (D. Md. 2002) . . . . . . . . . . . . . . 184n24 Shadow Traffick Network v. Superior Court, 29 Cal. Rptr. 2d 693 (Cal. App. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184n24 Shannon v. Gordon, 670 N.Y.S. 2d 887 (N.Y. Sup. Ct. 1998) . . . . . . . . . . 24n36, 25n37 Shatterproof Glass Corp. v. PPG Indus., Inc., 1995 WL 5609 (Fed. Cir. Jan. 6, 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95n55 Shearing v. Allergan, Inc., 1994 WL 382450 (D. Nev. Apr. 5, 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45n108–46n108 Shearson Lehman Bros., Inc. v. Wasatch Bank, 139 F.R.D. 412 (D. Utah 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117n31 Shelton v. Am. Motors Corp., 805 F.2d 1323 (8th Cir. 1986) . . . . . . . . . . . . . . 218n106 Sherman Indus., Inc. v. Goldhammer, 683 F. Supp. 502 (E.D. Pa. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80n6 Shire Labs. Inc. v. Nostrum Pharma., Inc., 2006 WL 2129482 (D. N.J. July 26, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36n77, 41n91 Shoney’s, Inc. v. Lewis, 875 S.W. 2d 514 (Ky. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . .110 Sibia Neurosciences, Inc., In re, 1997 U.S. App. LEXIS 31828 (Fed. Cir. Oct. 22, 1997) . . . . . . . . . . . . . . . . . . . . . . . 198, 200, 200n27, 201, 202, 203, 203n45, 204, 206, 215n95 Sibia Neurosciences, Inc. v. Cadus Pharmaceutical Corp. No. 96-1231-IEG (POR), 1997 U.S. Dist. LEXIS 24130 (S.D. Cal. July 15, 1997) . . . . . . . . . . . . . . . . . . 198, 200

258

Table of Cases Silberline Mfg Co., Inc. v. Int’l Nickel Co., 569 F.2d 1217 (3rd Cir. 1977) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221n118 Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 518 F.2d 751 (2d Cir. 1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58n152 Sim Kar Lighting Fixture Co. v. Genlyte, Inc., 906 F. Supp. 967 (D. N.J. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220n113 Simmons Foods, Inc. v. Willis, 191 F.R.D. 625 (D. Kan. 2000) . . . . . . . . . . . . . 218n106 Singh v. Duane Morris LLP, 538 F.3d 334 (5th Cir. 2008) . . . . . . . . . . . . . . . . . . . 11n45 SMEC, Inc., In re, 160 B.R. 86 (M.D. Tenn. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . 80n6 SMI Indus. Canada Ltd. v. Caelter Indus., Inc., 586 F. Supp. 808 (N.D.N.Y. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35n75 Smith v. Kansas City So. Ry. Co., 87 S.W. 3d 266 (Mo. App. 2002) . . . . . . . . . . 117n33 Snapping Shoals Elec. Membership Corp. v. RLI Ins. Corp., 2006 WL 1877078 (N.D. Ga. July 5, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40n88 Snyder, In re, 472 U.S. 634 n. 6 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .118 S.O.I. TEC Silicon on Insulator Technologies, SA v. MEMC Elec. Materials, Inc., 2009 WL 423989 (D. Del. Feb. 20, 2009) . . . . . . . . . . . . . . . . . 141n19 Soverain Software LLC v. Gap, Inc., 340 F.Supp. 2d 760 (E.D.Tex. 2004) . . . . . . . . . .34 Space Sys./Loral v. Martin Marietta Corp., 1995 WL 686369 (N.D. Cal. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166n79 Sparton Corp. v. U.S., 77 Fed. Cl. 1 (2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153n20 Squealer Feeds v. Pickering, 530 N.W. 2d 678 (Iowa 1995) . . . . . . . . . . . . . . . . . 169n92 SRU Biosystems, Inc. v. Hobbs, 2005 Mass. Super Lexis 361 (Mass. Super. Ct. Aug 2, 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204n47 State of Arkansas v. Dean Foods Products Co., Inc., 605 F.2d 380 (8th Cir. 1979). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10n43 State Street Assocs., L.P., B.R. In re, 2005 WL 887151 (Bankr. N.D.N.Y. March 23, 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24n34 State v. Clawges, 620 S.E. 2d 162 (W. Va. 2005) . . . . . . . . . . . . . . . . . . . 160n49, 161n57 Static Control Components, Inc. v. Dallas Semiconductor Corp., 2003 WL 21666582 (M.D.N.C. July 16, 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . 71n210 Steffes v. Stepan Co., 144 F.3d 1070 (7th Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . 93n45 Stencel v. Fairchild Corp., 174 F. Supp. 2d 1080 (C.D. Cal. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155n32, 159n43 Stepney; U.S. v., 246 F. Supp. 2d 1069 (N.D. Cal., Feb. 11, 2003) . . . . . . . . . . . . . 22n25 St. Paul Fire & Marine Ins. Co. v. Birch, Stewart, Kolasch & Birch, LLP, 379 F. Supp. 2d 183 (D. Mass. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94n48 Stratagene v. Invitrogen Corp., 225 F. Supp. 2d 608 (D. Md. 2002) . . . . . . . . . . . . . . .51 Stratagene v. Parsons Behle & Latimer, 315 F. Supp. 2d 765 (D. Md. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58n152 Strausbourger Pearson Tulcin Wolff, Inc. v. Wiz Tech., Inc., 82 Cal. Rptr. 2d 326 (Cal. App. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20n23 Strojirenstvi v. Seisakusho, 2 USPQ2d 1222 (Comm’r Pat. & Trademarks Aug. 29, 1986). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47n116 Subpoena Issued to Dennis Friedman, In re, 350 F.3d 65 (2d Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218n106 Summagraphics Corp. v. Sanders Assocs., Inc., 1991 U.S. Dist. LEXIS 16387, 19 U.S.P.Q. 2d 1859 (D. Conn. 1991) . . . . . . . . . . . . . . . . . . . . 220n113

Table of Cases 259 Sundance, Inc. v. Demonte Fabricating Ltd., 550 F.3d 1356 (Fed. Cir. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . 147, 150n9, 150n11, 150n12, 151n16 Sun Microsystems, Inc. v. Dataram Corp., No. CIV. 96-20708 SW, 1997 U.S. Dist. LEXIS 4557, 1997 WL 50272 (N.D. Cal. Feb. 4, 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220n113 Sun Studs, Inc. v. Applied Theory Assocs., Inc., 772 F.2d 1557 (Fed. Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7n28, 24n35, 24n36, 51, 49n130 Superguide Corp., In re, 2001 WL 1000700 (Fed. Cir. Aug. 13, 2001) . . . . . . . . . . . . .50 Superior Fireplace Co. v. Majestic Prods. Co., 270 F.3d 1358 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88n13, 88n14, 88n15 Sure-Safe Indus., Inc. v. C&R Pier Mfg., 851 F. Supp. 1469 (S.D. Cal. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149n3 Swanson v. Wabash, Inc., 585 F. Supp. 1094 (N.D. Ill. 1984) . . . . . . . . . . . . 43n97, 100 Sykes v. Matter, 316 F. Supp. 2d 630 (M.D. Tenn. 2004) . . . . . . . . . . . . 43n100, 165n73 Synergy Tech & Design Inc. v. Terry, 2007 U.S. Dist. LEXIS 34463 (N.D. Cal. May 2, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24n36 Syngenta Seeds, Inc. v. Monsanto Co., 2004 WL 2223252 (D. Del. Sept. 27, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160n49 Takeda Chem. Indus., Ltd. v. Mylan Labs., Inc., 549 F.3d 1381 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102, 102n92, 190 Talecris Biotherapeutics, Inc. v. Baxter Int’l Inc., 491 F. Supp. 2d 510 (D. Del. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51, 58n151, 58n152 Taltwell, LLC v. Zonet USA Corp., 2007 WL 4562874 (E.D. Va. Dec. 20, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141n20 Taurus IP, LLC v. DaimlerChrysler Corp., 559 F. Supp. 2d 947 (W.D. Wis. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88n11, 90n25 Taylor v. Sheldon, 172 Ohio St. 118, 173 N.E. 2d 892 (Ohio 1961) . . . . . . . . . . . . 16n5 Teirstein v. AGA Med. Corp., 2009 WL 704138 (E.D. Tex. March 16, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141n23, 142n26 Telectronics Proprietary, Ltd. v. Medtronic, Inc., 836 F.2d 1332 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24n36, 35n75, 54n138 Telular Corp. v. Vox2, Inc., 2001 WL 641188 (N.D. Ill. June 4, 2001) . . . . . . . . . 197n8 Teradyne, Inc. v. Hewlett-Packard Co., 1991 WL 239940 (N.D. Cal. June 6, 1991). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31n60 Terra Int’l, Inc. v. Mississippi Chem. Corp., 913 F. Supp. 1306 (N.D. Iowa 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120n41 Thermocycle Int’l, Inc. v. A.F. Hinrichsen Sales Corp., 1991 WL 120299 (S.D.N.Y. June 26, 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101n90 Thomason v. Norman E. Lehrer, P.C., 182 F.R.D. 121 (D. N.J. 1998) . . . . . . . . 104n98 Thompson v. The Haskell Co., 65 F. Empl. Prac. Case (BNA) 1088 (M.D Fla. 1994). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170n96, 173n105 3D Sys., Inc. v. Envisiontec, Inc., 2008 WL 4449595 (E.D. Mich. Oct. 1, 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159n45 Times Fiber Comm., Inc. v. Trilogy Comm., Inc., 1996 WL 698016 (Conn. Sup. Ct. Nov. 29, 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192n56 Tipton v. Canadian Imperial Bank of Commerce, 872 F.2d 1491 (11th Cir. 1989). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72n212

260

Table of Cases Tomar Electronics, Inc. v. Watkins, 2009 WL 1819994 (D. Ariz. Jan. 28, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1n1, 2n2, 80n6 Touchcom, Inc. v. Bereskin & Parr, 2008 WL 4889148, U.S. App. LEXIS 23271 (Fed. Cir. Oct. 6, 2008) . . . . . . . . . . . . . . . . .20n22, 37n79, 48n121 Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, 2004 U.S. Dist. LEXIS 194292004 WL 2534389 (N.D. Ill. Sept. 24, 2004) . . . . . . . . . . . . . . . . 200n31 Transamerica Ins. Fin. Corp. v. Pennmed Consultants, Inc., 1996 WL 605131 (Oct. 18, 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24n34 TransAmerica Life Ins. Co. v. Lincoln Nat’l Life Ins. Co., 2009 WL 24784 (N.D. Iowa Jan. 5, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150n7 Trone v. Smith, 621 F.2d 994 (9th Cir. 1980) . . . . . . . . . . . . . . . . . . . . . . . . 17n9, 50n132 Trust Corp. v. Bright, 6 F.3d 336 (5th Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7n29 Tuchman v. DSC Communications Corp., 14 F.3d 1061 (5th Cir. 1994) . . . . . . 139n4 Tuna Processors, Inc. v. Hawaii Int’l Seafood, Inc., 2006 WL 2990446 (D. Haw. Oct. 19, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220n116 Tuna Processors, Inc. v. Hawaii Int’l Seafood, Inc., 2007 WL 433547 (D. Haw. Feb. 5, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182n13 Turner v. Thiel, 553 S.E. 2d 765 (Va. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159n44 22.80 Acres; United States v., 107 F.R.D. 20, 26 (N D. Cal. 1985). . . . . . . . . . . 171n100 Two Thirty Nine Joint Venture v. Joe, 60 S.W. 3d 896 (Tex. Ct. App. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10n44, 194n1 Ultimax Cement Mfg. Corp. v. CTS Cement Mfg. Corp., 2007 US Dist. Lexis 44096 (May 7, 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24n36 Ultradent Prods., Inc. v. Dentsply Int’l, Inc., 344 F. Supp. 2d 1306 (D. Utah 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59n155 Uniloc USA, Inc.v. Microsoft Corp., 632 F. Supp. 2d 147 (D. R.I. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153n26 Union Carbide Chem. & Plastics Tech. Corp. v. Shell Oil Co., 308 F. 3d 1167 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192n57 Union Carbide Corp. v. Am. Can Co., 724 F.2d 1567 (Fed. Cir. 1982) . . . . . . . 150n12 Unique Sports Generation, Inc. v. LGH-III, LLC, 2005 US Dist. LEXIS 22133 (S.D. N.Y. Sept. 30, 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47n119 Uniroyal Goodrich Tire Co. v. Hudson, 873 F. Supp. 1037 (E.D. Mich. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165n76 United States Fidelity & Guaranty Co. v. Braspeto Oil Services Co., 2002 WL 15652 (S.D.N.Y 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .170 Universal Mfg Co. v. Gardner, Carlton & Douglas, 207 F. Supp. 2d 830 (N.D. Ill. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37n77 University of Rochester v. G.D. Searle & Co., Inc., 2000 WL 1922271, U.S. Dist. LEXIS 19030 (N.D. N.Y. Dec. 11, 2000) . . . . . . . . . .29n53, 36n76, 45n106 University of W. Va. Bd. of Trustees v. Vanvoorhies, 33 F.Supp. 2d 519 (N.D. W. Va. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24n36, 25n37 University Patents, Inc. v. Kligman, 737 F. Supp. 325 (E.D. Pa. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116n27, 113n16 Uniweld Prods., Inc. v. Union Carbide Corp., 385 F.2d 992 (5th Cir. 1967) 49n126 U.S. Filter Corp. v. Ionics, Inc., 189 F.R.D. 26 (D. Mass. 1999) . . . . . . . . . . . . . 58n152

Table of Cases 261 U.S. Philips Corp. v. KXD Tech., Inc., 2007 WL 4984153 (C.D. Cal. July 27, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181n8, 182n15 U.S. Steel Corp. v. United States, 730 F.2d 1465 (Fed. Cir. 1984) . . . . . . . . . 197n8, 200 Valley Recreation Products, Inc. v. Arachnid, Inc., 1994 WL 530818 (Fed. Cir. Sept. 30, 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100n81 Vanguard Sav. & Loan Ass’n v. Banks, 1995 U.S. Dist. LEXIS 2016 (E.D. Pa. Feb. 17, 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172n102 VData, LLC v. Aetna, Inc., 2006 WL 3392889 (D. Minn. Nov. 21, 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101n87, 103n96, 140n8 Verve, LLC v. Hypercom Corp., 2006 WL 2390505 (D. Ariz. Aug. 16, 2006). . . . . . . . . . . . . . . . . . . . . 90n25, 90n28, 95n52, 95n54, 99n75 Vestavia Assocs., Ltd., Partnership, 105 B.R. 680 (Bankr. M.D. Fla. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167n83 View Eng’g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87n3, 94n49, 97n62, 97n65, 99n75 Vikase Corp. v. W.R. Grace & Co.-Conn., 1992 WL 13679 (N.D. Ill. Jan. 24, 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166n79 Visa U.S.A., Inc. v. First Data Corp., 241 F. Supp. 2d 1100 (N.D. Cal. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69n204 Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 39 U.S.P.Q. 2d 1573 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216n97 Voith Sulzer Paper Tech. of Heidenheim Germany, In re, No. 506, 1997 U.S. App. LEXIS 12854, 1997 WL 264842 (Fed. Cir. May 6, 1997) . . . . 202n41 Volvo Penta of the Americas, Inc. v. Brunswick Corp., 187 F.R.D. 240 (E.D. Va. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197n8 Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 86 S. Ct. 347, 15 L.Ed. 2d 247 (1965) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89n20 Wallace v. Valentino’s of Lincoln, 2002 WL 31323811 (D. Neb. Oct. 17, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117n33 Wallis v. PHL Assocs., Inc., 86 Cal. Rptr. 2d 297 (Cal. App. 2008) . . . . . . . . . . 182n16 Wang Labs., Inc. v. Toshiba Corp., 762 F. Supp. 1246 (E. D. Va. 1991) . . . . . . 159n43 Wang Labs. Inc. v. CFR Assocs., Inc., 125 F.R.D. 10 (D. Mass 1989). . . . . . . . . 165n76 Waterloov Gutter Protection Sys. Co v. Absolute Gutter Protection, LLC, 64 F. Supp. 2d 398 (D. N.J. 1999) . . . . . . . . . . . . . . . . . . . 91n30, 91n31, 93n42, 93n43 Watts v. Fla. Int’l Univ., 495 F.3d 1289 (11th Cir. 2007) . . . . . . . . . . . . . . . . . . . 140n14 Weddingchannel.com, Inc. v. The Knot, Inc., 2005 WL 165286 (S.D.N.Y. Jan. 26, 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150n8 Weider Sports Equip. Co. v. Fitness First, Inc., 912 F. Supp. 2d 502 (D. Utah 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109n2, 124n57 Western Digital Corp. v. Superior Court, 71 Cal. Rptr. 2d 179 (Cal. App. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .164 Westinghouse Elec. Corp. v. Gulf Oil Corp., 588 F.2d 221, 224 (7th Cir. 1978) 49n129 Wharton, In re, 226 S.W. 3d 452 (Tex. App. Waco 2005, orig. proceeding) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169n88 White Mach. Corp. v. Whiting Corp., 567 F.2d 713 (7th Cir. 1977) . . . . . . . . . . 32n62

262 Table of Cases White Water Investments, Inc. v. Ethicon Endo-Surgery, Inc., 2005 WL 5955023 (S.D. Fla. Sept. 15, 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151n15 Wilco Marsh Buggies & Draglines, Inc. v. XYZ Ins. Co., 520 So. 2d 1292 (Ct. App. La. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80n6 Wilson P. Abraham Constr. Co. v. Armco Steel Corp., 559 F.2d 250 (5th Cir. 1977). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22n24 W.L. Gore & Assocs., Inc. v. Int’l Med. Prosthetics Research Assocs., Inc., 745 F.2d 1463 (Fed. Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . . 53n134, 58n152, 59n155 Woodfield v. Bowman, 193 F.3d 354, 362 (5th Cir. 1999) . . . . . . . . . . . . . . . . . . 142n26 Worldspan, L.P. v. Sabre Group Holdings, Inc., 5 F. Supp. 2d 1356 (N.D. Ga. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67 Wright v. Kaye, 593 S.E. 2d 307 (Va. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163n68 Wright v. Rinaldo, 2008 Mich. App. LEXIS 1411 (July 10, 2008) . . . . . . . . . . . . 47n116 Yamaha Corp., In re, 1995 WL 412843 (Fed. Cir. June 30, 1995) . . . . . . . . . 50, 59n154 Yamanouchi Pharma. Co. v. Danbury Pharmacal Inc., 231 F.3d 1339 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102n91 Yarn Processing Patent Validity Litig., In re, 530 F.2d 83 (5th Cir. 1976). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19n16, 36n75 Zachair Ltd. v. Driggs, 965 F.Supp. 741 (D. Md. 1997) . . . . . . . . . . . . . . . . . . . . . . . .119 Zenith Elec. Corp. v. Exzec, Inc., 182 F.3d 1340 (Fed. Cir. 1999) . . . . . . . 90n25, 92n32 Zip Dee, Inc. v. Dometic Corp., 949 F. Supp. 653 (N.D. Ill. 1996) . . . . . . . . . . . 152n18

Index

ABA Model Rules. See Model Rules of Professional Conduct (Model Rules) Abbreviated New Drug Application (ANDA), 102–3 Advance (or prospective) consent, 66–67, 68, 69 Adverse litigation, as conflict of interest, 68 Advocate as witness rule, Advocates as witness rules, disqualification, 192, 201n35, 220, 221, 222, 222n124, 223, 224n132 combining attorney roles, ethical issues of, 192 combining opining and litigating, prosecuting lawyer, 223–24 courts split on, 224–26 prosecuting lawyer, deposition of, 219–23 state court, interpretations of, 220–22 Affiliated entities, attorney-client relationship, 28–33 ABA Model Rules, 29 corporate entities, representation of, 30 engagement letter, 33 legal approaches, 29 undisputed factor, 32 Alleged inequitable conduct, 211 as conflict, client-attorney relationship, 216–17 prosecuting litigator, 216 American Bar Association (ABA), 4, 10, 29, 42, 60, 118, 188 ANDA certification, 103 Antitrust liability bad faith requirement, 92, 93 federal antitrust laws, 88, 89 patent law, 89 regional circuit law, 89 state law, 88 Applicable ethical standards, identification of, 194

Assignees, and current/former client’s patent, 36 Attorney, conflicts of interests of in combining prosecutions, 195 and litigation, 195 inequitable conduct, 211, 216–17 Attorney-client privilege, 165 Attorney-client relationship, 15, 16, 17, 45 inequitable conduct, 216–17 client identity, 18–19 common issues of, 19–22 deposition of person, 20 duration of, 45–47 ethical issues of, 194, 195, 220, 222 joint defense agreement, 21–22 lawyer’s role, clarity of, 19 obligations of confidentiality, 20 Breach of contract action, 40, 65, 72 of duty of diligence, 81, 82 of fiduciary duty, 69 Business entities, attorney-client relationship, 26–27 Civil Procedure 11, Federal Rule of compliance with, 86–87 claim construction, 98–99 Claim construction, 153n23, 190, 191n51 under Civil Procedure 11, 98–99 Claims interpretation, 97–101 accused product inquiry, 99 claim chart, 100–101 Civil Procedure Rule 11, violation of, 98 problems of, 98 Client confidences, possession of, 53–54 Client consent, 57, 60 advance (or prospective) consent, 66–67, 68, 69 concurrent conflict of interest, 208

263

264 Index Client identity, attorney-client relationship, 15–17 affiliated entities, 28–33 assignees of patent, 35 business entities, 26–27 employees and officers, 27–28 former clients’ successor corporations, 33–35 inventors, 22–26 Co-counsel, 15, 62, 80 conflict of, 15 Communication, 78, 82–83 of attorney-client, 229, 231, 234n180 ex parte with jurors, 192 indirect communication, via foreign associates, 207 material information disclosure, 83 prospective clients and conflicts, 15–18 disqualifying information, 17 disqualifying matter, 16–17 e-mails, 18 with trial counsel, 233, 234, 235 Competency, of lawyers, 2, 78–81 Confidential disclosures, identifying, 175 Confidentiality accessing facts of consulting expert, 170–71 experts, 166–73 factors determining, establishment of, 161 facts, opinions, waiver of, 171–72 nontestifying expert, 166–68, 171 privilege or work product, waiver of, 169–70 testifying experts, 166–68, 174 testifying experts’ files, disclosure of, 168–69 Confidentiality agreement enforceability, 174 importance of, 174 signature requirements, 174 Conflicts consent to. See Consent to conflicts from inequitable conduct, 216–17 raised by proposed prosecution bar, 208–12 Conflicts of interest, 15n2, 18–19n16, 42n95, 39, 69 of expert, 154–65 disqualification, laws pertaining, 154–57 ethical issues, 154 inquiry, 174

loyalty, minimal duty of, 158–60 positional conflict of interest, 43–44 Consent to conflicts, 62–64 contemporaneous consent, 64–66 malpractice claims, post-wrong waivers of, 69–70 prospective consent, 66–69 Consulting expert access to facts and opinions held, 170–71 disqualification of, 165 governing rules, 165, 170 materials, testifying experts’ review, 171 note on, 172 Current client conflicts adverse discovery ABA explanation, 43 of current client, 42–43 helping behind the scene, 37–38 implications and recommendations of adversity, 44 disqualification, 44 patentee and client, 44–45 infringement suit, 37 lawyer, client representation of, 36, 36n77 liability, client’s risk, 40–41 making the case against own client, avoiding of, 42 nonpatent cases, 41–42 parallel patent litigation, 38–39 patent litigation, 36–37 positional conflicts of interest, 43–44 Current employees, contacting through opposing party Web sites, 115 Damage experts, 150n6, 153 Defendant, pleadings of, 142–43 Defenses, Admissions and Denials, 138 Diligence, 78 missing deadlines, 81 neglect, 81, 82 Direct infringement, 141 Disclosures complete, proper supplementation, 182 confidential disclosures, 162, 175 of discovery, 180–81 inadvertent disclosure, risks of, 199 information disclosure. See Information disclosure governing rules, 181, 182 infringement, contentions of, 189–91 pre-pleading investigatory materials, initial protection of, 181

Index protective orders, violation of, 182 testifying experts’ files disclosure, 168–69 work product, 181 Discovery abuse of, 182 Federal Rules of Civil Procedure provisions of, 182 violation of, 182 improper ex parte contacts, pendency of a matter, 183, 183–89 process of, 180 Discovery exchanges misuse of, possibilities, 195–96 prosecuting lawyers, 202 Disengagement letters, 47–48 Disqualification confidential material, disclosure of, 163 firm, 17 governing rules, 158–65 of hiring firm, 59 impact of, 61–62 imputed disqualification, doctrine of, 55, 58 of migrating lawyers, 56 screening, 164 testifying expert, involvement of, 165 Disqualification, advocates-as-witness combining opining and litigating, 223–24 risks of, 223 prosecuting litigators, depositions of, 218–23 courts, views of, 224–26 Model Rule 3.7, 219, 221, 224n119, 225n132 testifying attorney’s firm, member of, 221 Model Rule 1.7, 227 Disqualification, denial of disqualification motion due to improper use of, 75 other justifications for, 70–75 prejudice of hardships, 70 seeking disqualification, delay in, 70 thrust upon conflict, 71–74 corporate mergers, 72 waiver doctrine, 70 Document retention policy, 180 Double imputation, 57, 59n158 Employees and officers, 27–28 Ex parte contacts expert witnesses, 183–89 ethical, procedural limitations, 184 FRCP 26(b)(4), 186

FRCP 26(b)(4)(A), deposition, 184 Model Rule 4.2, 183 Model Rule 4.3, 183 Philadelphia Bar Association, 187 protection of, 189 scope of, 187 Model Rules, 108–9, 183, 184 Expert testimony, 147, 148 Rule 702, compliance with, 149 Expert witness ethical issues, 154, 155, 157 ex parte contacts. See Ex parte contacts and confidentiality, 166 consultant experts, 170–73 consulting and testifying experts, basic distinctions of, 166–68 consulting expert’s material, by testifying experts, 171 expert’s facts and opinions, inadvertent waiver of, 171–72 testifying experts files, disclosure of, 168–69 testifying experts, 173 waiving privilege, and work product, by disclosure, 169–70 conflict of interest of experts, 154, 157–58 confidential information disclosure, 162–64 confidential relationships, 160–61 consultant experts, 165 experts disqualification of, 154–57 former client, of lawyers, 165 opposing experts, 165–66 side-switching cases, 158–60 disciplinary rules, 154–57 disqualification, 154 Federal Rules of Civil Procedure, 156 patent litigation, expert opinion, 147–49 problem reduction means, 174 about confidentiality agreement, 174 confidentiality agreement, signing of, 174 conflict identification, 174 conflict projection, 176–77 expert, retention of, 175 identifying disclosures, 175 information disclosure, 175 maintaining confidentiality, 176 public interest, involvement of, 159 report content, 152–53 report preparation, 151–52 selection of, 149–51

265

266 Index Expert’s opinion, 147–49 report contents of, 152–54 preparation of, 151–52 selection of, 149–51 Extrinsic evidence, use of limitations, 218n97 Factual investigation formal discovery, 108 informal investigation, 108 legal investigation, 108 Federal Circuit law, 10, 11 choice on legal issues, 6–7 and patent issues, 6 prosecuting litigator, access to opponents’ proprietary information, 6 Federal pleadings defendant’s pleadings, 142–43 Federal Rule of Civil Procedure 8, 138 Claims for Relief, 138 Defenses, Admissions and Denials, 138 Federal Rule of Civil Procedure, 9(b), 139 pleading infringements, 139–41 Rule 11 basis, 139–40 Federal Rules of Civil Procedure, 5–6, 81 discovery provisions of, 182 violation of, 182 Form 18, 140 Rule 8, 138–39 multiple defendants, 141 Rule 8(a), claims, 138 Rule 8(b), defenses, 138 Rule 9, 139 fraud, allegation of, 138 scope of, inequitable conduct, 142–43 Rule 11 violation of, 104, 139–40 pre-suit investigations, 142 Rule 12(b)(6), compliance, failure, 138, 141 Rule 26, 152, 156, 166, 173n109, 184, 186–87, 196 Federal Rules of Evidence Rule 611, 171 Rule 702, 148, 153, 171 Former client conflicts client representation, duration of, 45–46 former clients’ protections, 48

client confidences, possession of, 53–54 firm’s prior work, interpretation of impropriety, appearance of, 55 substantial relationship test, 48–53 hiring lawyers, impacts on firms, 56–60 lawyers’ departure, impacts on firms, 60–61 former government officials, 61 transferring lawyers, special issues, 55–56 private practice migration, 55–56 Hatch-Waxman Act, 102 Hiring lawyers, impact on firms, 56–60 double imputation, 57 “enough” prior work to count, 57 Screening of incoming lawyers, 58 Hot potato doctrine, 71–74 Impropriety, appearance of, 55, 150–51n12 Imputation, 18, 55, 56n144, 61, 159n43 conflicts, 59, 61 double imputation, 57, 59n158 Imputed disqualification, 57, 58 Indemnity obligations as source of conflicts, 45, 74 Indirect adversity, 40, 64–65n184 Induced infringement, 141 Inequitable conduct, 142–43 Information disclosure, 63, 83, 168, 175, 181–82 access to facts, limitations, 170 adequate disclosure, 67, 69 automatic disclosure provisions, 168 disclosure, degree of, 67 inadvertent waiver, 171–72 third party, 172 waiver,169–70 written disclosure, 64 Information exchange process discovery general abuse of, 182 pendency of a matter, improper ex parte contacts, 183–89 ethical issues litigation holds and spoliation, 180 local rule requirements, 180 initial disclosures, 181, 182 litigation, mistakes and misconduct of, 189–91 trial conduct, 191–92 advocate-as-witness, disqualification, 192

Index ex parte communications with jurors, 192 improper argument, 192 in-courtroom conduct, 191 Infringement, 17, 35, 37, 41, 45, 54, 65, 74, 88 common issues, 153 pre-suit investigation, of patentee, 94–101 allegation, legal investigation of, 97–101 verification of, 95–96 pre-suit letters, 91–94 bad faith, 92 competency issues, 91n30 litigation privilege, 93–94 objectively baseless standard, 92n30 preparation guidelines, 94 risks of, 93–94 types of, 141 Invalidity defenses, 142 pleadings, 142 Inventors, laws of, 22–26 assignee, 24 Combined Declaration & Power of Attorney, 23 employee-inventor, 23, 24 Joint Declaration & Power of Attorney, 23 patent agents, 23 Power of Attorney, 23 PTO regulations, 22, 23 Knowledge, definition, 111 Lanham Act, 92 Lawyer departure of impact on firms, 60–61 nondelegable duties under Rule 11, 79 to represent clients, 80 counterintuitive duty, 82 disqualification of, 82 subject background, 80 technology knowledge, 81 Liability and sanctions, potential sources of, 86 attorney fee shifting under U.S.C. Title 35, 87–88 under federal antitrust laws, 88–90 under Federal Rule of Civil Procedure 11, 86–87

under state law and other federal statutes, 90–91 Local rule requirements, 180–81 Loyalty, test for, 29–30 Malpractice, 15, 20, 23,25, 34, 35, 48, 63, 69 claim of, 1n1, 23 patent malpractice case, 35 post-wrong waivers, 69 Manual of Patent Examining Procedure (MPEP), 5 Section 724, 209, 211, 212 Markman rulings, 45 Model Code of Professional Responsibility (Model Code), 4 and PTO, 4–5 Model Rules of Professional Conduct (Model Rules), 4, 29, 31, 112, 116 Rule 1.7, 31, 72, 74, 208, 227 operation of, patent representation, 208n62 Rule 1.9, disqualification, testifying firm, member of, 221 Rule 1.18, 16, 18 disqualifying information, disclosure of, 17–18 about revealing information, 16 Rule 3.4, 183–84, 188 Rule 3.7, 221, 222, 224n129 advocate-as-witness, disqualifications of, 219–20, 224 Rule 4.1, 128 Rule 4.2, 108–9 undercover investigations, 121–24 in-house committee’s inability to alter, 120 intellectual property (IP) cases, 121, 122, 123 and Rule 11, 127–28 Rule 4.3, 124–27 unrepresented persons, protection by, 124–27 Rule 8.4, 128 National Standards approach choice on legal issues, 6–9 patent litigators, refer to, 8–9 Neglect, 81, 82 Opinion work product, 169, 169n92, 175, 230

267

268

Index Opposing party, on current employees ABA Model Code DR7-104(a) all employees, 114 about lawyers, 113 National Standard approach, 114 represented client, 119 Opposing party, on former employees Model Rule on, 118 National Standard approach on, 119 prohibitions against contracting, 116 represented by counsel, 119 total ban of, 117 Patent law experts, 150–51n12, 153. See also Expert witnesses; Expert’s opinion Patent litigation compliance with, Rules 8, 9, 138 failure of, 138 confidential relationship, 160–61 confidentiality, experts, 166–73 accessing facts, consulting expert, 170–71 facts, opinions, waiver of, 171–72 nontestifying expert, 166–68 testifying expert’s review of, 171 privilege or work product, waiver of, 169–70 testifying experts, 174 testifying experts’ files, disclosure of, 168–69 conflicts of interest, expert, 154–65 disqualification, laws pertaining, 154–57 loyalty, duty of, minimal, 158–60 expert opinion, 147–49 liability for missteps, 1 mistakes and misconduct of, 103–4, 189–91 sanctions, awards of, 189 parallel patent litigation, 38 problem reduction, means to, 174–76 report contents of, 152–54 preparation of, 151–52 selection of, 149–51 side-switching expert, disqualification of, 162–66 consulting experts, 165 expert retention, defendant, 164 former client, 165 former employees, opposing experts, 165–66

same firm representation, opponents, 162–64 spoliation, 180 consequences of, 180 procedures, adherence to, 180 Patent suits claim definition, 98 investigations, purposes, 86 pre-suit investigation of, 94–95 under Federal Rule of Civil Procedure 11 objective, basis of, 97 representations to court, 86 signature requirements in, 86 Patentee verification rights assignment of, 95 transfer of, 95 Pleadings defendant’s pleadings, 142–43 Federal Rule of Civil Procedure 8, 138 Claims for Relief, 138 Defenses, Admissions and Denials, 138 Federal Rule of Civil Procedure, 9(b), 139 inequitable conduct, 142–43 infringement, 139–41 invalidity defenses, 142 pleading infringements, 139–41 Rule 11 basis, 139–40 Power of attorney, 23, 24 Preliminary contention interrogation disclosure, 180–81 Pre-pleading investigations, 139 general issues of law and other papers, 103–4 liability and sanctions, potential sources Federal Rule of Civil Procedure 11, 86–87 attorney fee shifting, U.S.C. Section 285, 87–88 liability, 88–90 patent invalidity, 101–2 ANDA Certifications, 102–3 patentee’s pre-suit investigation, infringement charges, 94–95 to allege infringement, 97–101 defendant as proper defendant, 96–97 patent in force, 96 plaintiff as patentee, 95–96 patentee’s pre-suit letters, charging infringement, 91–94

Index pre-suit materials, issues of privilege and work product, 104–5 unenforceability, 103 Pre-suit enforcement efforts ethical constraints on, 108 under Rule 11, 108–9 matter, 109–11 Pre-suit inquiry, 180 Pre-suit investigation, 87, 87n7, 90, 94, 101 ethical constraints on, 108 purposes of, 86 regional circuit law controls, 95 Pre-suit letters, 91–92 preparation guidelines, 94 risks of, 93–94 Privilege and work product, issues of information, disclosure of, 104 presuit materials, 104–5 record maintenance, 105 Proprietary information access to, 196–98 denial of, 197–98 issues of, 196–98 prosecuting lawyers, limitations of, 210 disclosure of, 197 majority view from cases, 202–6 discovery of, 195 inadvertent disclosure, risks of, 199 misuse of, 195 protection of, 195 PTO procedure, 211 In re Sibia, 198–202 Prosecuting litigators alleged inequitable conduct, allegations of, 216–17 depositions of, 218, 219 advocates as witness rule disqualification, 219–23 disqualification of, 216 foreign applications, 207 hardships of, 207, 209, 210 liabilities of, 195, 216 proprietary information, access to, 208–12 protective order, MPEP Section 724, 209, 211–12, 215 retention of, 219 Prosecution applicable standards, identification of, 194 confidential information, bar access to, 196–98 majority view, 202–6 In re Sibia, 198–202

suggested analysis, 206–7 crafting protective orders, issues of, 212–16 prosecuting litigators, liability and disqualifications of, 216 inequitable conduct, as a conflict, 216–17 and litigation, 195 discovery materials misuse, possibilities of, 195–96 ethical issues of, 195 opinion and trial representations, 223 advocate-as-witness, disqualifications, 224 potential conflicts, 208–12 and liabilities, 208–12 prosecuting litigators, depositions of, 218–19 advocate-as-witness, disqualifications, 219–23 work product, enhanced risk of waiver of, 227–35 definition of, 214 Prosecution bars avoiding, short term benefits of, 208 concurrent conflicts, 209 potential conflicts, and liability, 208–9 reasons for, 207 Prospective client, 16, 17, 18 Protective orders avoiding entry of, 195–96 crafting, issues of, 212–16 disclosure, 182 violation of, 182 discovery exchanges, infringement litigation, 195 Regional circuit law, 75, 89, 95, 141 Retention documentation of, 175 lawyer, responsibilities of, 169 Reverse-engineered accused product, 100 Side-switching experts, disqualification of, 162–66 confidentiality information, 162 precautionary methods, 162 consulting experts, 165 expert retention, defendant, 164 former client, 165 former employees, opposing experts, 165–66 from same firm as opponents, 162–64

269

270

Index Subject-matter waiver, 230 temporal limitations, 232 work product, categories of, 230–35 Substantial relationship test, 48–53 Successor corporation to former clients, 33–34 continuation of, 35 malpractice case, 35 “Thrust upon” conflict, 71–74 exception of, 72 Transferring lawyers, special issues private practice migration, 55–56 Trial Conduct, 191–92 advocate-as-witness, disqualification, 192 ex parte communications, with jurors, 192 improper argument, 192 in-courtroom conduct, 191 Unconsentable conflicts, 62, 66 Undercover investigator, dishonesty evidence gathering, ways of, 130–31 under Rules 4.2 and 4.3, 129–30 under Rules 8.4 and 4.1, 127–28 deception, 128 represented party, 129 Unenforceability, in pre-pleading investigations, 103 Unethical conduct laws applicable, 195 Federal Circuit, 195

Federal Rules of Civil Procedure, 195 OED’s interpretation, 195 PTO code, 195 regional circuits, 195 state ethics rules, 195 state substantive law, 195 U.S.C. Section 285 attorney fee shifting, 87–88 patent suits, 91 Waiver opinion work product, 169 ordinary work product, 175 privilege, 169, 172, 169n92 scope of, 228–30 counsel, opinion of, 229, 232–33 noninfringement, 232 privilege, 228, 235 trail counsel, work product of, 234 work product, 228, 233, 235 Waiver doctrine, 70 Walker Process fraud, 89 Willful infringement, 227, 230, 233 Work product, 181 reliance, context of, 230 categories of, 230–35 waiver, enhanced risk of, 227 Work product doctrine, 165, 167, 168n87, 169 Work product information disclosure of, 169 protection of, 157, 159

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