Serving the

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Wednesday, April 27, 2016

Patent Prosecution Conflicts of

Interest for Clients Having

Competing Technologies

1 © AIPLA 2016

12:30 pm – 2:00 pm Eastern 10:30 am – 12:00 pm Mountain

11:30 am – 1:00 pm Central 9:30 am – 11:00 am Pacific

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Serving the

Creative and Legal Communities

Wednesday, April 27, 2016

Patent Prosecution Conflicts of

Interest for Clients Having

Competing Technologies

7 © AIPLA 2016

12:30 pm – 2:00 pm Eastern 10:30 am – 12:00 pm Mountain

11:30 am – 1:00 pm Central 9:30 am – 11:00 am Pacific

Online Programs Committee

Committee Leadership

8 © AIPLA 2016

Jennifer M. K. Rogers

Chair, Online Programs

Shumaker & Sieffert, PA

Rogers@ssiplaw.com

Jameson Ma

Vice Chair, Online Programs

Bookoff McAndrews

JMa@bookoffmcandrews.com

Presented by…

9 © AIPLA 2016

Frederick Gibb Moderator &

Webinar Coordinator Partner - Gibb & Riley

Mercedes Meyer Partner

DrinkerBiddle

William Griffin Deputy Director, Office of

Enrollment & Discipline

US Patent & Trademark Office

Mercedes K. Meyer, Ph.D., J.D.

Drinker Biddle & Reath LLP

These materials are public information and have been prepared solely for educational and entertainment purposes to contribute to the understanding of U.S. intellectual property law and practice. These materials reflect only the personal views of the speaker and are not individualized legal advice. It is understood that each case is fact-specific, and that the appropriate solution in any case will vary. Therefore, these materials may or may not be relevant to any particular situation. Thus, Drinker Biddle & Reath LLP, and the speaker cannot be bound either philosophically or as representatives of their various present and future clients to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with the firm or the speaker, or any combination thereof. While every attempt was made to insure that these materials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed.

And nothing represents the views of any sentient life form on the earth or universe, or any parallel universe, alive or dead, fictitious or real! This is for entertainment purposes only.

11

Conflict Checks – When?

Current Client – Conflict of Interest

Prospective Waiver

Former Clients Duties

Ethical Walls

Reality Check

Confidential Information, Awkward Situations & Solutions

12

New Client Representation

New Matter

Lateral Hire

Additional Party Named

Merger / Acquisition of Entity

Name Change

13

– CONFLICTS & DUTIES

14

Who is the client? Inventor or corporation?

Make it clear you represent the corporation and

not an inventor if that is the situation

An employee-inventor required to assign rights

does not generally have an attorney-client

relationship with the company’s patent counsel

There is no waiver of privilege under the

common interest doctrine

Shukh v. Seagate Technol., 872 F.Supp.2d 851 (D. Minn.

2012).

15

a) Except as provided in paragraph (b) of this section, a practitioner shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:

1) The representation of one client will be directly adverse to another client; or

2) There is a significant risk that the representation of one or more clients will be materially limited by the practitioner’s responsibilities to another client, a former client or a third person or by a personal interest of the practitioner.

b) Notwithstanding the existence

of a concurrent conflict of

interest under paragraph (a) of

this section, a practitioner may

represent a client if:

1) The practitioner reasonably

believes that the practitioner will

be able to provide competent

and diligent representation to

each affected client;

2) The representation is not

prohibited by the law;

3) The representation does not

involve the assertion of a claim

by one client against another

client represented by the

practitioner in the same

litigation or other proceeding

before a tribunal; and

4) Each affected clients give

informed consent, confirmed in

writing. 16

ABA cmt. 24, Model Rule 1.7

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?

The client's reasonable expectations in retaining

the lawyer?

there is significant risk, then informed consent

is necessary or the attorney must withdraw

17

Or wave the work goodbye

Alzheimer’s Institute of America Inc. v. Avid

Radiopharmaceuticals, 2011 BL 307203 – Bryan Cave’s

conflict that was resolved with court assistance

Advance Waiver, Waiver After the Fact, Thrust

Upon Waiver

ADVANCE WAIVER: Watch out….did the prospective

waiver spell out the conflict NOW in question?

18

Sheppard Mullin Richter & Hampton LLP v. J-

M Mfg. Co., 2016 BL 24241, Cal. Ct. App. 2d

Dist., No. B256314 (1/29/2016)

Firm could not recover contractual fee or even

quantum meruit for representing defendant in

qui tam action while simultaneously representing

one of the plaintiffs in an unrelated matter

When conflict arose, the firm had a duty to tell

and obtain informed consent rather than rely on

a broad advance waiver in its engagement

agreement.

Violated 3-310(C)(3) in California

19

Don’t always work! Even if you have one, when the actual conflict arises, you still should obtain informed consent for the actual REAL conflict depending on jurisdiction

California – informed consent in writing

Texas Rule 1.06 does not regard a law suit against a current client in an unrelated matter as a “conflict of interest” requiring informed consent

See Mylan Inc. v. Kirkland & Ellis LLP (WD Pa Jun. 9, 2015)

TIP: Update and renew waivers as needed and confirmed in writing

20

In the matter of Certain Laser Abraded Denim Garments, Order No. 43, Inv. No. 337-TA-930 (5/7/2015) Gap requested disqualification as it had

more than one dozen open matters with Dentons giving Dentons access to confidential information relevant to the ITC investigation, including tax, customs and trade and IP

Dentons disclosed to RevoLaze in a litigation funding deal with Longford Capital Fund I LP that it did have a conflict with Gap, along with two other respondents. With Dentons in a partial contingency fee deal with RevoLaze, Gap said Dentons had put itself in line to benefit directly “from its own unethical conduct,” according to the order

21

Effectiveness is based upon… Whether the conflict is consentable?

Whether the client has given a truly informed consent? Unlikely that a client can appreciate

consequences of a prospective waiver that does not identify the potential party, class of potentially conflicting clients or nature of likely matter

See ABA Formal Ethics Op. 93-372 (1993) and DC Ethics Op. 309 (2001).

Under 1.7(b), the more comprehensive the explanation of the types of future representations that may arise and the actual reasonably foreseeable adverse consequences of those representations, the greater the likelihood that the client will have the requisite understanding

22

Annual review of prospective waivers?

Comprehensive explanations of the type of waiver

Consent to a particular type of conflict with which the client already may be familiar Consent to IPRs, PGRs and CBMs of specified

subsidiaries?

Consent to a matter the client is already familiar with?

Consent in conformity given client’s experience of use with legal services? Are they a legal service savvy client?

23

You still owe them a duty of confidentiality

A former client must consent to a

materially adverse representation in the

same or a substantially related matter,

and must be given in writing

In re Sawyer, 13 P.3d 112 (Or. 2000)

TIP: When running conflicts, have responding

attorneys explain why the former client matter is

unrelated

TIP: Old model code didn’t require. Model PTO

rules require it

25

A lawyer should preserve the confidences and secrets of a client. Disqualification may be appropriate if:

1. the moving party is a former client of the adverse party's counsel;

2. there is substantial relationship between the subject matter of the counsel's prior representation of the moving party and the issues in the present lawsuit; and

3. the attorney whose disqualification is sought had access to, or was likely to have access to, relevant privileged information in the course of his prior representation of the client.

TIP: How does the subject matter differ? Could the confidential information in any way be relevant to the new matter?

26

(a) A practitioner who has formerly

represented a client in a matter shall not

thereafter represent another person in the

same or a substantially related matter in

which that person’s interests are materially

adverse to the interests of the former

client unless the former client gives

informed consent, confirmed in writing.

27

c) A practitioner who has formerly represented a

client in a matter or whose present or former

firm has formerly represented a client in a

matter shall not thereafter:

1. Use information relating to the representation to

the disadvantage of the former client except as the

USPTO Rules of Professional Conduct would permit

or require with respect to a client, or when the

information has become generally known; or

2. Reveal information relating to the representation

except as the USPTO Rules of Professional Conduct

would permit or require with respect to a client.

28

MegaLitigation comes to you. It would

oppose a current client of the firm

(unrelated matter). Can I fire the client?

Lemelson v. Apple Computer Inc. (D. Nev. 1993)

Can you take an adverse position to a patent

that you wrote a provisional application for

(or were otherwise involved with) and the

resulting patent (which you did not file or

prosecute) was later sold to another entity –

not a client?

Patriot Universal Holding LLC v. McConnell

29

A practitioner must be concerned with the

appearance of proper propriety. An attorney

should always fully and promptly inform his

client of any material developments in the

matters being handled for the client (EC 9-2).

Matters change with time, as do clients / conflicts

An attorney should not accept employment in

connection with any matter in which he had

substantial responsibility prior, since to accept

employment would give the appearance of

impropriety even if non exists (EC 9-3).

30

Under Canon 5, if it is obvious that a lawyer

or one in his firm ought to be called as a

witness on behalf of his client, he and his

firm must withdraw from the conduct of

the trial, and may not continue

representation in the trial (DR 5-102(A)).

Knowledge imputes

31

Claim similarity of what was done before to

what you are currently doing

Same art classification?

Length of time between filing dates of

matters?

Do the matters cite to the same prior art? To

what extent?

32

Petitioner failed to explain how former client

patent prosecution related to the IPR in

question and was substantially related.

Motion to Disqualify counsel was DENIED.

IPR, Paper No. 5, March 29, 2016

33

(a) A practitioner shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation, the disclosure is permitted by paragraph (b) of this section, or the disclosure is required by paragraph (c) of this section.

(c) A practitioner shall disclose to the Office information necessary to comply with applicable duty of disclosure provisions.

11.106(c) is not present in MRPR 1.6. It differs from old § 10.57(c) which recited “may reveal”.

ISSUE: Can you OR must you cite a confidential document of one client that pertains to the patentability of another client’s claims under Rule 11.106? See J. Nies dissent in Molins PLC

v. Textron Inc., 48 F.3d 1172 (Fed. Cir. 1995).

Noisy withdrawal?

35

(i) a practitioner shall not acquire a proprietary interest in the cause of action, subject matter of litigation, or proceeding before the Office which the practitioner is conducting for a client, except that the practitioner may, subject to the other provisions in this section:

(3) in a patent case for a proceeding before the office, take an interest in the patent or patent application as part or all of his or her fee.

See old 37 C.F.R. § 10.64.

Reasonable fee issues may still exist within state jurisdictions.

36

a) While practitioners 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

§§ 11.107 or 11.109, unless:

1) The prohibition is based on a personal interest

of the disqualified practitioner and does not

present a significant risk of materially limiting

the representation of the client by the

remaining practitioners in the firm; or

37

Certain limitations on imputation disqualification appear in the PTO Code. If the attorney who possesses the information has no knowledge or involvement with the prosecution of the patent application to which that information is material, no conflict arises. (The lawyer would not be knowingly engaged in inequitable conduct, in violation of 37 C.F.R. § 10.23(c)(1), and would not be circumventing a Disciplinary Rule in violation of 37 C.F.R. § 10.23(b)(2). (Replaced by § 11.109)

David Hricik, The Risk and Responsibilities of Attorneys and Firms prosecuting Patents for Different Clients in Related Technologies, TEXAS INTELLECTUAL PROPERTY LAW JOURNAL, Vol. 8: 3, 331, 344

38

2) The prohibition is based upon § 11.109(a) or (b), and arises out of the disqualified practitioner’s association with a prior firm, and

i. The disqualified practitioner 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 any affected former client to enable the former client to ascertain compliance with the provisions of this section, which shall include a description of the screening procedures employed; a statement of the firm’s and of the screened practitioner’s compliance with the USPTO Rules of Professional Conduct; 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

39

b) When a practitioner has terminated an association with a firm, the firm is not prohibited from thereafter representing a person with interests materially adverse to those of a client represented by the formerly associated practitioner and not currently represented by the firm, unless:

1) The matter is the same or substantially related to that in which the formerly associated practitioner represented the client; and

2) Any practitioner remaining in the firm has information protected by §§ 11.106 and 11.109(c) that is material to the matter.

c) (c) A disqualification prescribed by this section may be waived by the affected client under the conditions stated in § 11.107.

d) (d) The disqualification of practitioners associated in a firm with former or current Federal Government lawyers is governed by § 11.111.

40

Disqualification of an entire firm for a single

member is too harsh when truly unethical

conduct has not taken place and the matter

is merely one of the superficial appearance

of evil.

Former government lawyers cannot be made

into Typhoid Mary's

Kesselhaut v. United States, 555 F2d 791 (Ct. of

Claims 1977)

41

Ethical Walls - You must have a different

customer number for the ethical walls so not

every practitioner in the firm can have

access to the information tied to the number.

OTHERWISE, imputation!

42

43

Copying & Pasting – The Art of Patent Plagiarism

Multi-party representation

Mergers, acquisitions, collaborations

Corporations & Law firms

Laterals

Lawyer temps / contract lawyers & secondments

to clients

Time Changes Things

CenTra Inc. v. Estrin, 538 F3d 402 (6th Cir. 2008) –

simultaneously helping CenTra procure bridge funding

while assisting Windsor to halt bridge expansion.

44

Copying and Pasting

Tethys Bioscience v.

Mintz Levin, 98

UPSQ2nd 1585 (ND Cal.

2010)

Cold Spring Harbor

Laboratory v. Ropes &

Gray, 101 USPQ2d 1834

(D. Mass 2012)

45

Alzheimer’s Institute of America v. Avid

Radiopharmaceuticals, ED Pa. 2011

Bryan Cave brought sought for AIA. In process

USF sought to intervene due to inventor issue.

USF would not grant waiver to Bryan Cave

Case had been ongoing for 2.5 years

Balancing of interests, loss of loyalty and feeling

of betrayal were insufficient to require firm

withdrawal.

46

Sunbeam Products Inc. v. Hamilton Beach

Brands, 727 F.Supp2d 469 (ED Va. 2010)

Attorney moved from one firm to another

Work performed at one firm was substantially

related to work at the other firm

His work was imputed, and firm was disqualified.

TIP: Have a system for assessing lateral attorney

prior litigation representations.

47

Who are their competitors?

Mergers by competitors?

Do you represent the potential competitor?

What new products are they bringing to market

and who are they worried about?

TIP: Manage your expectations and those of

your client EARLY as to what the firm can and

cannot do. 48

AIC gave a money-back guarantee of “a patent” to inventors.

Only design patents were sought.

Neither Gilden nor Bender spoke to an inventor – AIC discouraged that practice.

AIC paid Gilden and Bender.

Attorney-client relationship is between the attorneys and the inventors with payment coming from a 3rd party.

What is the impact of the payment by the 3rd party to the attorney?

Does it alter the duty of loyalty owed to the client?

ADVICE: Know who your client is. State in writing who is not your client.

Promotion Company

American Inventors

Corporation (AIC)

Leon Gilden

Michael Bender

1000+ Inventors

AIC pays

attorney Inventors

hire AIC

to get them

a patent

Attorney-Client

Relationship

49

WGS “represented” Whitehead Institute in technology involving MIT, Whitehead, UMass, and MPG.

MPG’s complaint only states that the Powers of Attorney confirms the existence of attorney-client relationship among all the parties.

MIT, MPG, and Whitehead are in a joint-invention and joint-marketing agreement, with Whitehead responsible for managing the prosecution, but all could advise on prosecution.

WGS allegedly had included inventions from the Tuschl II patent (MPG only) into Tuschl I (joint).

MPG argues that TII may not issue because of OTDP.

TII arguably is a species and TI a genus.

50

MPG MIT

Whitehead

WGS

UMass

Power Of Atty Attorney-Client

only??

50

Who’s the client? Chap. 4 Does the current corp. client have a belief that its affiliate

has de facto become a current client of the law firm?

Does the corp. client share the same directors, officers, management as affiliate?

Does the corp. client share the same offices with the affiliate?

Does the corp. client share the same legal department with affiliate?

Does the corp. client and affiliate share a substantial number of corporate services?

Is there substantial integration infrastructure between the current corp. client and affiliate (e.g. computer networks, e-mail, intranet, letterhead, etc.)

Will representation of corp. client materially limit adverse representation of affiliate? N.Y.C. Ethics Op. 2007-03 (Sept. 2007)

51

Who is the client?

Not the foreign associate! They are an “agent” under agency law

You need to know WHO the client is

You need an update on whether the client entity has changed

TIP: Annual letters to your foreign associate confirming whether there has been a change in any of the clients you handle for them.

52

Databases

Keyword searches should be robust.

Synonym issues

Conflicts should be run an updated for each existing

and new client.

Mergers / acquisitions / spinoffs / collaborations

“A lawyer’s duty to avoid conflicts is not limited to the

requirement of an adequate conflict checking system” NY

State Bar Ass’n Comm. on Prof’l Ethics, Op. 1085,

2/16/16.

Vaxiion Therapeutics, 593 F.Supp.2d 1153 (SD Cal. 2008) –

conflicts issue?

53

Industry Consolidation & Conflicts Mergers, Asset Swaps, Collaborations:

Novartis-GSK asset swap; Organon / Schering-Plough/Merck; Bayer AG with Schering; AstraZeneca/Medimmune; Pfizer/Wyeth; Sanofi-Aventis; Roche / Genentech; Forest / Watson / Actavis

Keeping your representations straight in Big Law

Industry Collaboration & Conflicts University collaborations for pipelines &

diagnostics: Novartis / U. Penn; GSK / Yale; Sanofi / UCSF

Keeping your power of attorney straight

Generics v. Brands – Keeping your opinions straight?

54

The Laundry List Problem

B-Cell disorders – Subgenus

immune-mediated thrombocytopenias – Sub-subgenus

for idiopathic thrombocytopenic purpura and chronic

idiopathic thrombocytopenic purpura

Species: myasthenia gravis, lupus nephritis, lupus

erythematosus, and rheumatoid arthritis

CONCLUSION: Search the terms for a robust

database, but unlike LEDs, restriction of practice

by disease not practical

55

CD20 (human only)

MS4A1 (membrane-spanning 4-domains, subfamily A, member 1)

B1, B-lymphocyte antigen CD20, B-lymphocyte surface antigen B1,

Bp35

CD20

CVID5,

LEU-16, Leukocyte surface antigen Leu-16

Membrane-spanning 4-domains subfamily A member 1,

MGC3969

MS4A2

S7

CD20L (human only)

MS4A3 (membrane-spanning 4-domains, subfamily A, member 3 (hematopoietic cell-specific)

CD20 antigen-like protein,

CD20L, Hematopoietic-specific transmembrane protein 4, HTm4, HTM4, Membrane-spanning 4-domains subfamily A member 3

QUESTIONS: Do you search by target

or by target and ligand of interest?

What about multiple ligands and

promiscuous binding behaviors –

what do you search then? And what

if all ligands aren’t known?

56

Amgen / Sandoz-

Novartis

Neupogen (filgrastim) /

Zarxio (filgrastim-sndz)

– Neuopogen and Zarxio

are the trade names.

Granulocyte colony-

stimulating factor (G-

CSF) analog

Other brand names are

as follows:

Company Brand

Cadila Pharmaceuticals Filcad

Abbott Laboratories Imumax

Dr. Reddy’s Laboratories Grafeel

Intas

Biopharmaceuticals

Neukine

Emcure

Pharmaceuticals

Emgrast

Reliance Life Sciences Religrast

Biocon Nufil

57

Are the different insulin analogs different

enough that you could prosecute applications

for analogs for two different companies?

Business / Financial / Competitive information?

Comparative data?

Negative statements or disparaging statements?

Prior art issues?

Does the insulin analog illustrate the problem

of biobetters?

58

Company name, address, Dunn & Bradstreet

Drug name, brand name

Target and ligand to target and their synonyms

Claim terms

Law firm acquisitions & laterals

Competitors – discuss with client

Mergers / Acquisitions / Name Changes / Asset Sales/Swaps

59

Inequitable Conduct – hiding the ball

Depositions of prosecuting litigators – What to do with confidential information Substantial burden to require that varies by jurisdiction

Where IC is pled, courts hold that prosecuting attorney must be deposed Eagle Comtronics Inc. v. Arrow Communication Laboratories, Inc.,

305 F3d 1303 (Fed. Cir. 2002)

Extends to IPRs . See Paice LLC v. Hundai Motor Co.

Advocate-as-Witness Only attorneys who actually prosecute should be disqualified

(MR 3.7(a)). If there is further conflict under 1.7 or 1.9, should members of the attorney’s firm be disqualified (who didn’t prosecute)

Also true for legal opinions – although there is confusion in court treatment

TIP – May suggest bifurcation. Discuss with client and perhaps memorialize in writing.

61

Multi-party prosecution or NOT – if you don’t

jointly represent, send an email around

saying who you do and do not represent.

SAVE THE EMAIL.

If you DO represent everyone – tell them

what happens if they start disliking each

other.

62

GP firms – educate management on client

industry / competitors and conflicts

Strategic planning to include industry change

63

.

Partner Drinker, Biddle & Reath LLP

Washington, DC 20005

202.842.8821

Mercedes.Meyer@dbr.com

64

Conflict of Interest

Maling v. Finnegan, 473 Mass. 336 (2015)

– Plaintiff engaged law firm to prosecute patents for screwless

eyeglass hinge.

– After patents were obtained, plaintiff learned that firm had

simultaneously represented another client in the same industry.

– Plaintiff’s work was done in firm’s Boston office; 2nd party’s work was

done in D.C. office.

– Plaintiff alleges that firm belatedly commenced preparation of one

of his applications and that it inexplicably took a long time to do so.

– Plaintiff alleges he would not have made investment in developing

his product if firm had disclosed its conflict and work on 2nd party’s

patents.

Maling (cont.)

– Appellate court stated that subject matter conflicts may present a

number of potential legal, ethical, and practical problems, but they

do not, standing alone, constitute actionable conflict of interest that

violates Mass. Rule of Professional Conduct 1.7 (Conflict of Interest).

– Court did not find that competing for patents in the same space

placed clients directly adverse to one another. • Analogized with two clients attempting to obtain radio broadcast licenses.

– Court discussed likelihood of interference as a barometer for conflict

between two clients in same space.

– No evidence or even allegation that Plaintiff’s claims were altered

because of simultaneous representation.

Maling (cont.)

KEY TAKEAWAY:

“This court has not defined a minimum protocol for carrying out a

conflict check in the area of patent practice, or any other area of

law. However, no matter how complex such a protocol might be,

law firms run significant risks, financial and reputational, if they do

not avail themselves of a robust conflict system adequate to the

nature of their practice.”

Uropep GbR v. Eli Lilly, et al. 2016 WL 76090 (E.D. Texas Feb. 26, 2016) (Federal Circuit Judge Bryson)

– Law firm represents plaintiff in patent litigation commencing in March

of 2015

– Firm previously represented co-defendant in a separate patent

infringement matter.

• Hired as counsel in March 2011; case settled in November 2013.

• Engagement agreement expressly limited representation to the case at

issue, and included waiver of future conflicts.

– In May of 2015, Firm sent previous client a disengagement letter to

formal end of attorney/client relationship.

Uropep (cont.)

– Court ruled that previous client was indeed a former client as

original engagement letter was clear about finite nature of

representation.

– Current action was found not to be adverse to former client

because:

• The current and former actions are not “substantially related.”

• Firm had not received significant confidential information from former

client.

– No determination on validity of advance waiver since court found

there was no need for a waiver.

Office of Enrollment and Discipline

Case Review

In re Radanovic (USPTO D2014-29) – Patent attorney:

• Represented two joint inventors of patent application.

• No written agreement regarding representation.

• Attorney became aware of a dispute wherein one inventor alleged

that the other did not contribute to allowed claims.

• Continued to represent both inventors.

• Expressly abandoned application naming both inventors in favor of

continuation naming one.

– Mitigating factors included clean 50-year disciplinary

history.

– Received public reprimand.

In re Newman (USPTO D2015-14)

In re Blackowicz (USPTO D2015-13)

– Newman asks Blackowicz to represent Client 1 & Client 2, who

co-own TM application.

– Newman and Blackowicz also represent Client 2’s father (Client

3), Client 2’s uncle (Client 4), and the uncle’s company (Client 5).

– No disclosures to Clients 1 & 2 regarding potential effects of co-

representation or in light of representation of Clients 3, 4 & 5.

– Work on Client 1 & 2’s application is billed to Client 5. • No disclosures are made regarding possible issues with this arrangement.

– Clients 3 and 4 were copied on confidential emails with

Clients 1& 2.

– Dispute develops between Client 1 and Client 2.

In re Blackowicz (USPTO D2015-13)

In re Newman (USPTO D2015-14)

– Blackowicz and Newman correspond with Client 2 and Client 3

regarding the TM application and the dispute between Client 1 and

Client 2. • Discussed abandonment of joint application in favor of new applications for

the same mark owned by Client 3’s company (Client 6).

– Blackowicz abandoned co-owned application. Did not consult with

Client 1.

– Filed new applications on behalf of Client 3’s company (Client 6) for

same mark.

– Client 1 complained and Blackowicz filed petition to reinstate the co-

owned application, even though, if granted, the co-owned application

would have been directly adverse to Client 6 applications.

In re Blackowicz (USPTO D2015-13)

– 30-day suspension.

– Required to take MPRE & attain score of 85 or better.

– 13-month probation with practice monitor.

– Mandatory conflicts CLE attendance.

In re Newman (USPTO D2015-14)

– 30-day suspension.

– Required to take MPRE and attain score of 85 or better.

– 18-month probation.

– Mandatory practice management or conflicts CLE attendance.

In re Lane (USPTO D2011-64) – Patent Agent:

• Represented cardiothoracic surgeon in connection with patent

protection for medical device.

• Entered into contract with client to assist in development and

marketing of invention.

• During representation of the client, filed a patent application in

same technology area naming himself as an inventor, but excluding

the client.

• Did not obtain consent after full disclosure of actual or potential

conflicts caused by business relationship or additional patent

application.

– Public reprimand and 2-year probation.

In re Watkins (USPTO D2006-04)

– State Bar of Arizona v. Watkins, (Arizona Supreme Ct.

No. SB-07-00062-D)

• Patent Attorney represented TASER company in patent matters.

• Took stock options as payment for representation.

• Claimed to have invented new power source for use in stun

guns.

• Filed paperwork with USPTO indicating that TASER employee

was sole inventor of new power source.

• After he cashed out stock options, attorney revealed that he was

joint inventor of new power source and demanded payment.

• Filed application naming himself as co-inventor.

– Excluded from practice before USPTO.

In re Klima (USPTO D2014-32)

– Patent Attorney disciplined in Iowa: • Attorney prepared medical and general powers of

attorney for client.

• Client had different attorney in same firm prepare trust.

• During meeting regarding trust, Attorney learned that

client wanted to make $75,000.00 bequest to him.

• Attorney then reviewed and made proofreading

suggestions to draft documents, including trust.

• Attorney did not explain conflict to client.

– Received (reciprocal) public reprimand.

In re Boegemann (USPTO D2011-24)

– Patent Attorney: • In the course of making an estate plan for a 100-year old

client, attorney took a $50,000.00 bonus he characterized as a

gift.

• Attorney did not advise the client of the desirability of

seeking, and did not give the client the opportunity to seek,

independent legal counsel on the transaction.

• Attorney did not obtain informed consent of the terms of the

transaction.

• The Supreme Court of Arizona censured attorney.

– Received public reprimand.

In re Harrington (USPTO D2012-14)

– Patent Attorney: • Between 2005 and 2008, an invention promotion company referred

a significant volume of clients to attorney.

• Funds paid by clients to promotion company for patent legal

services were placed in an escrow account maintained by 3rd party.

• Attorney agreed to prepare, file, and prosecute client applications.

• Attorney did not divulge business relationship with promotion

company to client and did not discuss potential or actual conflicts.

• Attorney did not speak with clients about their inventions or his

services.

• Attorney did not consult with clients regarding prosecution or

inform clients of office correspondence.

– Received 3-year suspension from practice before USPTO.

In re Lewis (USPTO D2012-03)

– Patent Attorney disciplined in California: • Represented 3 clients in a landlord-tenant matter.

• The clients’ interests potentially conflicted, but the attorney did

not obtain informed consent for joint representation.

• Attorney also entered into an aggregate settlement of the

clients’ claims without the informed consent of each client.

• Attorney failed to render accounts to the clients and failed to

resolve a dispute with the clients before disbursing funds to

himself.

• Attorney’s trust account funds fell below the values of settlement

funds he was holding in trust for clients.

– Received 2-year (reciprocal) suspension from practice

before the USPTO.

In re Karasik (USPTO D2011-58)

– Trademark Attorney: • Represented clients in connection with a land-development

transaction.

• A dispute arose between the clients and attorney informed them

that she could no longer represent them due to the conflict.

• Afterwards, attorney reviewed documents relating to the same

matter for one of the clients.

• Attorney also later participated in a modification of the land deal

for the same client.

• Supreme Court of California found that attorney accepted

employment adverse to a former client without informed

consent.

– Public reprimand and 3-years probation.

Decisions Imposing Public Discipline

Available In FOIA Reading Room

http://e-foia.uspto.gov/Foia/OEDReadingRoom.jsp

In the field labeled “Decision Type,” select “Discipline” from the drop down menu. • To retrieve all discipline cases, click “Get Info” (not the

“Retrieve All Decisions” link).

Official Gazette for Patents • http://www.uspto.gov/news/og/patent_og/index.jsp

Select a published issue from the list, and click on the “Notices” link in the menu on the left side of the web page.

OED Discipline:

Warnings vs. Formal Discipline

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Patent

Attorneys

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Trademark

Attorneys

Breakdown of Disciplinary Decisions by Practitioner Type

FY15

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Contacting OED

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WaivingConflictsofInterestforClientsHavingCompetingTechnologies

FrederickW.GibbIII,Esq.Gibb&Riley,LLC844WestStreet

Suite200Annapolis,MD21401

Conflictsofintereststhatattorneysfaceincriminaldefenseordomesticrelationssituationscanbereadilyunderstood;however,intherealmofpatentprosecution,andespeciallyforpatentprofessionalsdealingwithlargemultinationalcorporations,theissuessurroundingtherulesofprofessionalresponsibilityforconflictsofinterestarelessclear.Toaidinthisarea,thispaperfocusesondefininghowtheconflictofinterestrulesapplytopatentprofessionals,andwhatconflictsofinterestcanbewaived.I. ModelRules A. Rule1.6oftheABAModelRulesofProfessionalConduct Initially,itishelpfultolookatpatent-relatedconflictsofinterestbyreviewingsomemodelrules.Forexample,Rule1.6oftheABAModelRulesofProfessionalConductprovidesthat"[a]lawyershallnotrevealinformationrelatingtotherepresentationofaclientunlesstheclientgivesinformedconsent." Thus,whileanattorneymustmaintainclientconfidences,aclientmaywaivethisprotectionandallowtheirattorneytodivulgesomesecretinformation.Forexample,theobligationtoprotectconfidencesandsecretsdoesnotprecludealawyerfromrevealinginformationwhenhisclientconsentsafterfulldisclosure. B. Rule1.7oftheABAModelRulesofProfessionalConduct

Rule1.7oftheABAModelRulesofProfessionalConductprovidesthat"alawyershallnotrepresentaclientiftherepresentationinvolvesaconcurrentconflictofinterest."Morespecifically,ModelRule1.7explainsthataconcurrentconflictofinterestexistsiftherepresentationofoneclientwillbedirectlyadversetoanotherclient,orthereisasignificantriskthattherepresentationofoneormoreclientswillbemateriallylimitedbythelawyer'sresponsibilitiestoanotherclient.

However,Rule1.7doesexplainthatalawyermaystillrepresenttheclientif

certainconditionsaresatisfied.Theseincludethatthelawyerreasonablybelievesthatthelawyerwillbeabletoprovidecompetentanddiligentrepresentation,therepresentationisnotprohibited,therepresentationdoesnotinvolvetheassertionofaclaimbyoneclientagainstanotherclientrepresentedbythelawyerinthesamelitigation,andeachaffectedclientgivesinformedconsent,confirmedinwriting.

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C. Rule1.9oftheABAModelRulesofProfessionalConduct

Rule1.9oftheABAModelRulesofProfessionalConductprovidesthata"lawyerwhohasformerlyrepresentedaclientinamattershallnotthereafterrepresentanotherpersoninthesameorasubstantiallyrelatedmatterinwhichthatperson'sinterestsaremateriallyadversetotheinterestsoftheformerclientunlesstheformerclientgivesinformedconsent,confirmedinwriting."Also,ModelRule1.9explainsthatalawyershallnotknowinglyrepresentapersonifafirmwithwhichthelawyerformerlywasassociatedhadpreviouslyrepresentedaclientandthelawyerhadacquiredinformationthatismaterialtothematter(unlesstheformerclientgivesinformedconsent,confirmedinwriting).

D. Rule1.10oftheABAModelRulesofProfessionalConduct

ModelRule1.10(a)oftheABAModelRulesofProfessionalConductstandsforthepropositionthatnolawyersinafirmshallknowinglyrepresentaclientwhenanyoneofthempracticingalonewouldbeprohibitedfromdoingso.ModelRule1.10providesanexceptiontothisrulewhen:(1)"theprohibitionisbasedonapersonalinterestofthedisqualifiedlawyeranddoesnotpresentasignificantriskofmateriallylimitingtherepresentationoftheclientbytheremaininglawyers"or(2)"theprohibitionarisesoutofthedisqualifiedlawyer’sassociationwithapriorfirm;"and"thedisqualifiedlawyeristimelyscreened";and"writtennoticeispromptlygiventoanyaffectedformerclient."

ModelRule1.10(b)oftheABAModelRulesofProfessionalConductexplains

that"[w]henalawyerhasterminatedanassociationwithafirm,thefirmisnotprohibitedfromthereafterrepresentingapersonwithinterestsmateriallyadversetothoseofaclientrepresentedbytheformerlyassociatedlawyer"unlessthematteristhesameorsubstantiallyrelatedandanylawyerremaininginthefirmhasinformationthatismaterialtothematter.

ModelRule1.10(c)explicitlyprovidesthat"disqualificationprescribedby

thisrulemaybewaivedbytheaffectedclientundertheconditionsstatedinRule1.7." II. USPTORules A. 37C.F.R.§11.107Conflictofinterest;Currentclients. Havingaddressedsomeselectedmodelrules,thisdiscussionnowproceedstothemorespecificconflictofinterestrulestowhichpractitionersbeforetheOfficearebound.Onesuchrule,setforthin37C.F.R.§11.107,regardingconflictofinterest,statesthatapractitionershallnotrepresentaclientiftherepresentationinvolvesaconcurrentconflictofinterest.Aconcurrentconflictofinterestexistsforexampleif,therepresentationofoneclientwillbedirectlyadversetoanotherclientorthereisasignificantriskthattherepresentationofoneormoreclientswillbe

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materiallylimitedbythepractitioner’sresponsibilitiestoanotherclient,aformerclientorathirdpersonorbyapersonalinterestofthepractitioner.

Notwithstandingtheexistenceofaconcurrentconflictofinterest,a

practitionermayrepresentaclientifthepractitionerreasonablybelievesthatthepractitionerwillbeabletoprovidecompetentanddiligentrepresentationtoeachaffectedclient.Furthermoreiftherepresentationdoesnotinvolvetheassertionofaclaimbyoneclientagainstanotherclientrepresentedbythepractitionerinthesamelitigationorotherproceedingbeforeatribunalandeachaffectedclientgivesinformedconsent,confirmedinwriting. B. 37C.F.R.§11.109Dutiestoformerclients. InregardtoUSPTOin37C.F.R.§11.109,providingdutiestoformerclients,itisstatedthatapractitionerwhohasformerlyrepresentedaclientinamattershallnotthereafterrepresentanotherpersoninthesameorasubstantiallyrelatedmatterinwhichthatperson’sinterestsaremateriallyadversetotheinterestsoftheformerclientunlesstheformerclientgivesinformedconsent,confirmedinwriting.Furthermore,apractitionershallnotknowinglyrepresentapersoninthesameorasubstantiallyrelatedmatterinwhichafirmwithwhichthepractitionerformerlywasassociatedhadpreviouslyrepresentedaclientwhoseinterestsaremateriallyadversetothatperson;andaboutwhomthepractitionerhadacquiredinformationprotectedby§§11.106and11.109(c)thatismaterialtothematter,unlesstheformerclientgivesinformedconsent,confirmedinwriting.

Apractitionerwhohasformerlyrepresentedaclientinamatterorwhose

presentorformerfirmhasformerlyrepresentedaclientinamattershallnotthereafterusetheinformationrelatingtotherepresentationtothedisadvantageoftheformerclientexceptastheUSPTORulesofProfessionalConductwouldpermitorrequirewithrespecttoaclient,orwhentheinformationhasbecomegenerallyknownorrevealinformationrelatingtotherepresentationexceptastheUSPTORulesofProfessionalConductwouldpermitorrequirewithrespecttoaclient(37C.F.R.§11.109).III. CaselawExamples

A. Max-Planckv.Whitehead

ThecaseofMax-Planckv.Whitehead1isaninterestingexampleofconflictsofinterestandwaiverthatareevaluatedbydeterminingwhetheranattorney-clientrelationshipeverexisted.1Max-Planck-GesellschaftZurFöerderungDerWissenschaftenE.V.,Max-Planck-InnovationGmbh,AndAlnylamPharmaceuticals,Inc.,Plaintiffs,v.WhiteheadInstituteForBiomedicalResearch,MassachusettsInstituteOfTechnology,AndBoardOf

4

Morespecifically,onequestiontheMax-Planckv.Whiteheadcourtfieldedwaswhetherapartycancontractuallywaiveitsrighttonon-conflictedrepresentation,andthecourtstatedthatitisnotuncommonforparties,especiallysophisticatedones,toprospectivelywaivelegalconflictsofinterestbyagreement(Max-Planckv.Whiteheadat324). Inthiscase,MaxPlanckenteredintoanagreementtoallowWhiteheadtoprosecuteapatent,withMaxPlanckretainingonlythe"reasonableopportunitytocommentandadviseonpatentattorneystobeused,"whichwasarguedtobeanimplicit,prospectivewaiverofanyconflictofinterest(Max-Planckv.Whiteheadat325).Thecourtnotedthatimpliedconsent[toconflictedrepresentation]requiresaninformedclient,andacourtcansaythataclient'sactionscansupportsolelytheconclusionthattheclienthasconsented,butonlyinthelimitedcircumstancethatitisindisputablyclearthattheclientwasawareoftheconflict(citingCenTra,Inc.v.Estrin2(Max-Planckv.Whiteheadat325)). ThecourtconcludedthatMaxPlanckwasawareofthepotentialforconflictwhenitenteredintotheagreementsandthatmoreimportantly,itwasawareofanexistingconflictatthetimethatitexercisedaPowerofAttorney,andthatMaxPlanckdidsoeveninlightoftheexistingdisagreementbetweenitselfandWhiteheadabouttheinclusionofcertaindatainthespecification(Max-Planckv.Whiteheadat325).Inthiscase,thecourtfoundundisputedevidencethatMaxPlanckwasawareoftheconflictwhenitconsentedtorepresentationbytheattorneys,andenteringintotheagreementsmayhavefurtherconstitutedwaiverofcertainconflictofinterestclaims(Max-Planckv.Whiteheadat325). Therefore,Max-Planckv.Whiteheadispresentedinthispaperforthepropositionthatitisnotuncommonforparties,especiallysophisticatedones,toprospectivelywaivelegalconflictsofinterestbyagreement(alsosee,e.g.,AcushnetCo.v.Coaters,Inc.,972F.Supp.41,70(D.Mass.1997)). B. Andrewv.Beverly ThecaseofAndrewv.Beverly3,hereinafterreferredtoasAndrewv.Beverly,isaninterestingexampleofconflictsofinterest,specificallyrelatingtopatentlawrepresentationandmultipleclients.AndrewCorporationinAugust2005,fileditsfirstamendedcomplaintthatBeverlyManufacturingCompanyhadinfringedthreeofAndrew’spatents.Furthermore,AndrewCorp.'scomplaintallegedthatBeverlyTrusteesOfTheUniversityOfMassachusetts,Defendants,CivilActionNo.09-Cv-11116-Pbs,UnitedStatesDistrictCourt,D.Massachusetts,February7,20112CenTra,Inc.v.Estrin,538F.3d402,419(6thCir.2008)3AndrewCorporation,Plaintiff,v.BeverlyManufacturingCompany,Defendant,No.04C6214,UnitedStatesDistrictCourt,N.D.Illinois,EasternDivision,February16,2006

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hadwillfullyinfringedontwoofthesepatentsevenafterreceivingwrittennoticefromAndrewCorp(Andrewv.Beverlyat920).Initsdefense,BeverlywishedtosubmitthreeopinionletterswrittenbyitscounselfromthelawfirmofBarnes&Thornburg(Andrewv.Beverlyat920).However,AndrewCorp.filedamotiontodisqualifythecounselandexcludethethreeopinionletters,andtobarBarnes&Thornburgattorneysfromtestifyinginthiscase(Andrewv.Beverlyat921).Atthetime,bothAndrewCorp.andBeverlyMfg.wereclientsofBarnes&Thornburgandtheyhadnotfiledanappearanceonthiscaseonbehalforeitherparty.(Andrewv.Beverlyat920) ThethreeopinionletterswereissuedtoBeverlyin2003andeachoftheopinionlettersstatepositionsthatareadversetoAndrew(Andrewv.Beverlyat921).ForexamplealetterdatedJuly8th2003,signedbyBarnes&Thornburg,opinedthatBeverly’snewly“modifiedstackablehangerdoesnotfallwithintheclaimsof[Andrew’s]‘543patent,”(Andrewv.Beverlyat921).Anotherofthethreeopinionlettersfurtherexpandeduponthis,forexampletheAugust28th2003letteropinesthatBeverly’s“newembodimentofthegroundingkitdoesnotliterallyinfringethe‘056patent,andtherewouldbenoinfringementundertheDoctrineofEquivalents,”(Andrewv.Beverlyat921). Previoustothesethreeopinionlettersin2003,BeverlywasrepresentedbytwoattorneysfromthelawfirmLeeMannandunderLeeManntookplaceinadisputethatBeverlyhadwithAndrewthatinvolvedAndrewthreateningtosueBeverlyforunfaircompetitionandmisappropriationoftradesecretsoverBeverly’s‘snap-inhangers’(Andrewv.Beverlyat921).However,beforethelawsuitwasfiledbothpartiesreachedanagreementforBeverlytoadjustthedesignofthe‘snap-inhanger’anditberenamedasthe‘modifiedstackablehanger,’(Andrewv.Beverlyat921). ThetwoattorneyswhoworkedatLeeMannthenjoinedBarnes&ThornburginJanuary2003aspartnersandtheconflictsdepartmentatBarnes&ThornburganalyzedLeeMann’sclientinformationtodeterminewhetherBeverlycouldbeaclientoftheirs(Andrewv.Beverlyat922).Furthermore,“Barnes&ThornburgrecognizednoconflictbetweenAndrewandBeverlydespitethefactthattheworkMcWilliamsandEnglingperformedforBeverlyhadanalyzedAndrew'spatentsadverselytoAndrew...failingtoidentifytheconflictduringthemerger,Barnes&ThornburgapprovedBeverlyasoneitsnewclientswithoutinformingAndreworBeverlyofanyconflictorrequestingconsentfromeither,”(Andrewv.Beverlyat922).

FurthermoreBarnes&Thornburgcontinuednottoacknowledgetheconflictin2003andinto2004despitethefactthatinJune2003alltheattorneysinvolvedwerealllocatedinsameBarnes&ThornburgofficeinChicagoandwerepracticingpatentrelatedwork(Andrewv.Beverlyat922).BothAndrewCorpandBeverlycontactedBarnes&Thornburgtoseekrepresentationinthisdispute,andBarnes&Thornburgfinallyrecognizedthatitcurrentlyrepresentedbothclientsand

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thereforetheydeclinedbothcompaniesrequestforrepresentationagainstoneanother(Andrewv.Beverlyat923).

Inregardstotheconflictofinterestinthiscase,theBarnes&Thornburg

GeneralCounselassertedthat,"theBarnes&ThornburglawyerswhorepresentedAndrewhaveneverdiscussedanyBeverlymatterwiththeBarnes&ThornburglawyerswhorepresentedBeverlyandvisaversa,"(Andrewv.Beverlyat923).Thisseemedlikeaninterestingperspectivetotake,seeingasthethreeopinionlettersadversetoAndrewwereproducedbyBarnes&Thornburg(Andrewv.Beverlyat921).

AndrewCorp.contendedthatBarnes&Thornburghadbreacheditsfiduciary

dutiestothembytakingadversepositionin2003withthreeopinionlettersthatwereprovidedtoBeverly.(Andrewv.Beverlyat924).AndrewCorp.wantedBarnes&ThornburgtobebannedfromanyparticipationinthiscaseandthatthreeopinonlettersbewithdrawnandfinallythatBeverlycouldnotuseanyoftheopinionsortestimonyfromthethreeletters(Andrewv.Beverlyat924).TocounterthisBeverlyassertedthatBarnes&Thornburgcouldbedisqualifiedbecauseitneverfiledanappearanceinthiscase,andfurthermoreBeverlyarguedthatinthiscasetheywereblamelessandshouldn’tbepenalizedforanyofthemistakesofBarnes&Thornburg.(Andrewv.Beverlyat924).ToadvancetheirpointBeverlyalsostatedthatAndrewwasjustusingthisaslitigationtacticforAndrewshadbeenawareofconcurrentrepresentationforoverayear(Andrewv.Beverlyat924). ThefacttheBarnes&Thornburgdidnotsignanywaiversregardingtheirobviousconflictofinterestthatthefacethatthe,“concurrentrepresentationofbothAndrewandBeverly,whowereadversetooneanother,preventsBarnes&Thornburgfrombeingabletoprovidethetypeofcompetent,independentadviceandopinionlettersthatthelawrequires.Barnes&Thornburg'sfiduciarydutiestoAndrewprohibiteditfromtakinganypositionadversetoAndrew,”(Andrewv.Beverlyat928).FurthermorethecourtstatedthatBarnes&Thornburg’s,“onlycompetentlegalopinioninJulyandAugust2003toBeverlyconsistentwiththeCodeofProfessionalConductwastorefrainfromexpressinganyopinion(Andrewv.Beverlyat928).Therefore,asamatteroflaw,thiscourtheldthattheJulyandAugust2003opinionletterswerenotissuedbycompetentopinioncounsel.TheonlyremedyavailabletoenforceadherencetotheRulesofProfessionalConductis,totheextentpossible,placethepartiesinthepositiontheywouldhavebeeninhadcounselactedcompetentlyinaccordancewiththeRulesofProfessionalConduct.Consequently,itappearsthattobefairandtoupholdtheintegrityoftheprofession,noopinionletterbyBarnes&Thornburgwhilelaboringundertheunwaivedconflictofinterest,shouldbeusedinanymannerinthiscase,”(Andrewv.Beverlyat929). Toconclude,generally,ifanattorneyorlawfirmisinvolvedinaconcurrentrepresentationconflictandcannotobtainawaiveroftheconflictbybothclients,thereisastringentstandardofreview.ThecourtalsoenforcedAndrewCorp’smotiontodisqualifyBarnes&Thornburgfromparticipatinginthiscaseandto

7

excludeallopinionlettersissuesbyBarnes&ThornburgtoBeverly(Andrewv.Beverlyat929).

C. G.E.v.Industra

ThecaseofG.E.v.Industra4isagoodexampleofconflictsofinterest,specificallypatentprosecutionandmultipleclients,includingformerclients.TheJeffersfirmhaddoneworkfordefendantIndustraformanyyears,andlaterG.E.retainedJeffers(G.E.v.Industraat1256).AtthattimeG.E.agreedandunderstoodthatIndustrahadtoapprovetheworktheJeffersfirmwoulddoforG.E.,andIndustraapproved,aslongastherewerenoconflicts(G.E.v.Industraat1256).

MorepreciselyG.E.claimedthatoneofit’spatents(UnitedStatesPatentNo.

4,276,689)wasinfringedbythreeofIndustra’spatents(Industra'sUnitedStatesPatentNo.4,565,743,Industra'sUnitedStatesPatentNo.4,566,180andIndustra'sapplicationforapatent,UnitedStatesSerialNo.472,718,respectively)(G.E.v.Industraat1256).AttorneysfromtheJeffersfirmhaddonealargeamountofpatentworkforthedefendantIndustraformanyyears,sincethemid-1960s.G.E.firstretainedJeffersastheircounselinthelate1960sorearly1970s(exactdateunknown)(G.E.v.Industraat1257).Asmentionabove,G.E.understoodthatIndustrahadtoapprovetheworkdonebytheJeffersfirmtoensuretherewasnoconflictofinterest.However,in1980,oneoftheIPlawyersatG.E.,Krisher,sufferedaheartattackandhadtomissworkforseveralmonths.DuringthistimeG.E.askedJefferstodraftanamendmenttoapatentapplicationthathadbeenfiledbyKrisherin1979(G.E.v.Industraat1257).Anotherattorney(Hoffman)atJefferstookonthetaskofdraftingtheamendmentandinordertoassisthim,G.E.handedovertheirentirelegalfile(whichwentontobecometheUnitedStatesPatentNo.4,276,689).LaterIndustraaskedJefferstoworkonthreepatents.HoffmanstatedthathedidnotworkonanyofthesethreepatentapplicationsandfurtherstatedthathedidnotdoanyIndustraworkatall.(G.E.v.Industraat1257).

AccordingtoG.E.theyfirstbecameawareoftheinfringementoftheirPatent

No.4,276,689inNov1985andatthistimeKrisherwrotealettertoIndustrathatchargedthemwithpatentinfringement(G.E.v.Industraat1257).Aseriesofmeetingswereheldtoinanattempttosettlethedisputehowever,theywereunsuccessfulandG.E.filedalawsuitagainstIndustrainFeb1987(G.E.v.Industraat1257).IndustraretainedtheJeffersfirmastheirlocalcounselandMcDermottfirmasfurtheroutsidecounsel(G.E.v.Industraat1257).

Followingthis,G.E.trialcounselrequestedthewithdrawaloftheJeffersfirm

fromtheproceedingsandtheJeffersfirmagreedtowithdraw.Yet,theMcDermott4GeneralElectricCompany,aNewYorkcorporation,Plaintiff,v.Industra,Products,Inc.,anIndianacorporation,Statomat-Globe,Inc.,anOhiocorporation,andRansburgCorporation,anIndianacorporation,Defendants,Civ.No.F87-50UnitedStatesDistrictCourt,N.D.Indiana,FortWayneDivision,April20,1988

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firmwhichcontinuedtorepresentIndustracontinuedcontactwithattorneysoftheJeffersfirm(G.E.v.Industraat1257).G.E.thendiscoveredseveralotherinstancesofforbiddencommunicationsbetweenJeffersandMcDermottandaccordinglyfiledamotiontoDisqualifyDefendantscounsel(G.E.v.Industraat1257).AttorneysatbothfirmsdidassertthatnomemberoftheMcDermottfirmhadevercommunicatedwiththeJeffersfirmregardingspecificworkdoneforG.E.

DuetothefactthattheJeffersfirmvoluntarilywithdrew,thecourt

disqualifiedG.E.’spreviousmotiontohavethemremoved(G.E.v.Industraat1258).However,thecourtdidstatethat,“Itcanbeconcludedwithvirtualcertainty,however,thattheJeffersfirmwouldhavebeendisqualifiedhaditdeclinedtowithdraw,forithadrepresentedG.E.previouslyinasubstantiallyrelatedmatter,”(G.E.v.Industraat1258).YettheprimaryissueisveryinterestinginwhethertheMcDermottfirmshouldbedisqualifiedaswellduetoits‘contact’withtheJeffers.TosupportthismotionG.E.lookedthatthecase,“FundofFundsv.ArthurAndersen5.Inthatcase,counselwasdisqualifiedbecauseofitsassociationwithdisqualifiedco-counsel.ThiscourtconcedesthattheFundofFundscasehasaverysimilarfactpatterninsomerespects.However,thecourtinthatcaseacknowledgedthatthegeneralrulewasthataco-counselrelationshipalonewouldnotwarrantdisqualification(G.E.v.Industraat1258).Inthatcase,co-counselwasdisqualifiedduetothe"extraordinary,suigenerisfactsunderlyingthisaction....".Inmanysignificantways,thiscaseisfactuallydifferentfromFundofFundsv.ArthurAndersen.Therefore,thefactthatco-counselwasdisqualifiedinthatcasedoesnotnecessarilycontrolthiscourt'sdecisioninthiscase.Ofevengreatersignificanceisthefactthat,sincetheFundofFundsv.ArthurAndersencasewasdecided,theSeventhCircuithasdevelopeditsownlineofcasesonattorneydisqualificationwhichmustfinallycontrolthiscourt'sdecision,”(G.E.v.Industraat1259).InthiscasethecourtdecidedthattheMcDermottfirmwouldnotbedisqualified.FurthermoretheJeffersfirmhadto,byorderofthecourt,disassociateitselfentirelyfromtheMcDermottfirmtothegreatestextentpossible(G.E.v.Industraat1259).

D.Armstrongv.McAlpinArmstrongv.McAlpin6,isacasethatisrelatedtoscreeningwalls(e.g.,conflict

walls,Chinesewalls)andinparticularhowtheyrelatetoconflictsofinterest.Inthebasicfactsofthiscase,amotionwasfiledtodisqualifyisbasedonthepriorparticipationofTheodoreAltman,wasnowapartneratthelawfirmrepresentingtheplaintiffs(Armstrongv.McAlpinat436).TheodoreAltmanwaspreviouslyanAssistantDirectoroftheDivisionofEnforcementoftheSecuritiesandExchangeCommission(theSEC).Duringthistime,theSECcommencedanactionagainstCapitalGrowthcompanies(agroupofinvestmentcompanies)ofwhomClovis5FundofFundsv.ArthurAndersen&Co.,567F.2d225(2dCir.1977)6MichaelF.Armstrong,etal.,Plaintiffs-Appellees,v.ClovisMcAlpin,etal.,Defendants-AppellantsNo.745,Docket79-7042UnitedStatesCourtofAppeals,SecondCircuit;submittedFebruary22,1980;decidedJune20,1980,625F.2d433(1980)

9

McAlpinwastheCEO(Armstrongv.McAlpinat436).McAlpinhadlootedmillionsofdollarsfromthesecompaniesandfledtoCostaRicain1974.InordertorecovertheassetsstolenbyMcAlpintheSEChiredMichaelF.Armstrongasthereceiver,andoneofthemaintasksasthereceiverwastorecoverallpropertystolenbyMcAplin(Armstrongv.McAlpinat436).ArmstrongrequestedhiscounselthefirmofBarrettSmithSchapiro&Simon,andtheSEChandedoveralltheirfilestoBarrettSmithinordertofacilitatetheirprosecutionofMcAplin.ThecourtstatedthatBarrettSmithspentover2600hoursassistingArmstronginhisinvestigationandthisincludedtheuseoffiveattorneysandeightassociates(Armstrongv.McAlpinat436).

Nevertheless,in1976ArmstrongandBarrettSmithbecameawareofa

potentialconflictofinterestbetweenaclientofBarrettSmithwhowouldbecomeadefendantinlitigationbroughtforwardbyArmstrong(Armstrongv.McAlpinat436).EventhoughBarrettSmithhadalreadyinvestedalotoftimeandenergyintoprosecutingMcAplin,Armstrongdecidedthatmustgainmoreoutsidecounsel(Armstrongv.McAlpinat436).SeeingasMcAlpinhadfledtoCostaRicaandconsiderableresourcesandmoneyhadbeenusedupbyBarrettSmith,Armstrongabilitytohiremorecounselwasquitelimited.ArmstronghadtofindafirmthatonlywasabletopursuelitigationinboththeUSAandCostaRicaandbelargeenoughtohandlethesubstantialworkload,butalsoworkforlittleornocompensation(Armstrongv.McAlpinat436).ArmstrongthereforelookedatfirmswhowereworkingtoprosecuteRobertL.Vesco,wholikeMcAplin,stolemillionsandfledtoCostaRica(Armstrongv.McAlpinat436).ArmstrongfinallyhiredthefirmofGordonHurwitzButowskyBakerWeitzen&Shalov,primarilybecauseofButowskyworkinSpecialCounseltoInternationalControlsCorporation,whichwasinvolvedinlegalworkinCostaRicarelationtoVescocase.InacceptingthepositionofArmstrong’soutsidecounsel,theGordonfirmagreedtoprosecutethelitigationallthewaytoconclusion,eventheycouldnotgetpaid(Armstrongv.McAlpinat436).

DuringthenegotiationsbetweenArmstrongandtheGordonfirm,Altman

joinedtheGordonfirm,havingpreviouslyheldhispositionatSECforthreeyears(Armstrongv.McAlpinat436).AshighrankingattorneyattheSEC,AltmanhadpreviousknowledgeoftheCapitalGrowthinvestigation,andalthoughhewasnotworkingday-to-dayonthiscase,heknowthegeneralfactsofthecaseandit’sstatus(Armstrongv.McAlpinat437).WhenArmstrongbecameawareofAltmannewemploymentattheGordonfirm,boththeBarrettSmithandGordonfirmresearchedwhethertheeffectofAltman’spreviousroleattheSECimpactedthecurrentcase(Armstrongv.McAlpinat437).BothfirmsconcludethatAltmanshouldinnowaybeinvolvedwiththerepresentationofArmstrongintheproceedings(Armstrongv.McAlpinat437).ThismatterbroughtbeforebothajudgewhoagreedwithbothfirmsfindingsandtheSEC,inwhichitwouldbenoproblemifAltmanwasappropriatelyscreenedfromallmattersrelatingtoArmstrong’scaseagainstMcAlpin(Armstrongv.McAlpinat437).

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Twoyearslaterin1978,McAlpinsoughttodisqualifytheGordonfirmbecauseofAltman’spriorworkattheSEC.Thismotionwasdeniedbecausethescreeningwallswerestrongand“thejudgeconcludedthattheGordonfirmhadcarriedouttheletterandspiritoftherelevantbarassociationethicalrulings,thatthefirm'srepresentationofthereceiverwasnotunethicalanddidnotthreatentheintegrityofthetrial,andthatappellantshadsufferednoprejudiceasaresultoftherepresentation,”(Armstrongv.McAlpinat438).

UsingtheABACodeofProfessionalResponsibilityinthecaseofArmstrongv.

McAlpinissimilartotheconflictofinterestissueinBoardofEducationv.Nyquist7,whereitisstatedthat,“[o]urreadingofthecasesinthiscircuitsuggeststhatwehaveutilizedthepoweroftrialjudgestodisqualifycounselwherenecessarytopreservetheintegrityoftheadversaryprocessinactionsbeforethem(Armstrongv.McAlpinat438).Inotherwords,withrareexceptionsdisqualificationhasbeenorderedonlyinessentiallytwokindsofcases:(1)whereanattorney'sconflictofinterestsinviolationofCanons5and9oftheCodeofProfessionalResponsibilityunderminesthecourt'sconfidenceinthevigoroftheattorney'srepresentationofhisclient,...ormorecommonly(2)wheretheattorneyisatleastpotentiallyinapositiontouseprivilegedinformationconcerningtheothersidethroughpriorrepresentation,forexample,inviolationofCanons4and9,thusgivinghispresentclientanunfairadvantage....Butinotherkindsofcases,wehaveshownconsiderablereluctancetodisqualifyattorneysdespitemisgivingsabouttheattorney'sconduct....Thisreluctanceprobablyderivesfromthefactthatdisqualificationhasanimmediateadverseeffectontheclientbyseparatinghimfromcounselofhischoice,andthatdisqualificationmotionsareofteninterposedfortacticalreasons....Andevenwhenmadeinthebestoffaith,suchmotionsinevitablycausedelay,”(Armstrongv.McAlpinat442).

E. Kesselhautv.U.S.AswithArmstrongv.McAlpin,thescreeningpracticeputinplacewas

comparableandsubsequentlyverystringentinKesselhautv.U.S.8.InKesselhautv.U.S.,Mr.ProthrohadformanyyearsbeenalawyerfortheFederalHousingAdministration(FHA)andtheDepartmentofHousingandUrbanDevelopment(HUD),andfinallyrosetobeGeneralCounselfortheFHA(Kesselhautv.U.S.at793).Kesselhaut,aNJpropertylawfirmrepresentedtheFHAinvariouscasesregardinglocalpropertytaxesonhouseacquiredbytheFHAafterforeclosure,however,theydisputedwiththeFHAregardingfees.(Kesselhautv.U.S.at793).Kesselhaut,thenfiledanactionwiththecourtin1974totryandrecoverthefeesfromtheFHA.MeanwhileMr.Prothrohadretiredin1969,butlaterbecameassociatedwiththefirmofKroothandAltmaninWashingtonD.C.atthetime,Mr.Prothrowastheonlyattorneyassociatedwiththisfirm.KesselhautdiscoveredthatMr.Prothrohad7BoardofEducationv.Nyquist,590F.2d1241(2dCir.1979)8GeorgeandMartinKesselhautv.TheUnitedStates,No.166-74.UnitedStatesCourtofClaims,555F.2d791(May18,1977)

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joinedKroothandAltman,andin1972calledthemaskingtoretainthefirmtoprosecutehisFHAclaim(Kesselhautv.U.S.at793).Immediately,Mr.Prothrostatedthathecouldnotparticipateanyofthiscase.Followinghisownresearch,Mr.Prothrostatedthathedidnotthinkthefirmwouldbedisqualified(Kesselhautv.U.S.at793).

ItisimportanttonotethatMr.Prothro,“nevercommunicatedwithplaintiffs

concerningthemeritsoftheirclaim,norprovidedthemwithinformation,advice,orguidancethereon.Similarly,hehasnevergivenadvice,information,orguidancetotheattorneysinKroothandAltman,norhashelookedatdocumentsintheirfilesconcerningthemeritsoftheclaim,”(Kesselhautv.U.S.,at794).FurthermoreinNovemberof1976,amemowasissuedstatingthat,“Mr.Prothroistocontinuetohavenoconnectionwiththecase,allotherattorneysarenottodiscussitwithhimandaretopreventanycasedocumentsfromreachinghim,thefilesaretobekeptinalockedfilecabinet,thekeyscontrolledbyMessrs.AltmanandKrugandissuedtootherattorneys,clerks,andsecretaries,onlyona"needtoknow"basis,”(Kesselhautv.U.S.at794).

Inthiscase,theconflictofinterestwasnotmerelybetweencompetingclients

inasimilarenterprisebutratherbetweenthegovernmentandprivatepractice.Thispresentsthequestions,wouldalawyerwhopreviouslyworkedforgovernmentdepartmentbeunabletopursueacareerinthecivilsectorafterwards?Furthermore,wouldafirmwhichhiredanex-governmentattorneybeautomaticallydisqualifiedfromanycasewherepotentialconflictsofinterestmightarise?ThelanguagepresentedthroughtheKesselhautv.U.S.casesummarizestheseissuesthus,“Therewillbeinstanceswherenoscreeningprocedurewillbeadequate,andtheinfectionmustbeallowedtotakeitscourse.Whenscreeningisuseditmust,ashere,bespecificandinflexible.Eachcasedependsonitsownmerits...TheironruleurgedbythetrialjudgewouldactasastrongdeterrenttotheacceptanceofGovernmentemploymentbythemostpromisingclassofyounglawyers.Indeed,infairnesstothem,itwouldbenecessarytowarnthembeforesigningon,ofthedisabilitieslikelytobeincurredatalaterdate.AttorneyshavingbothprivateandGovernmentexperienceareoftenbetterqualifiedtobeofvaluetocourts,astheirofficers,andtotheirclients,publicandprivate,thanthosehavingoneortheotherexperiencealone.Ifinterchangebetweentheprivateandpublicsectorsofthebaristobehalted,andcareersinsuchsectorsmademattersofseparatetracksthatwillneverconverge,itshouldbeonlyuponfullconsiderationofallthelegalincidentsofGovernmentemploymentoflawyers,anditshouldbedoneovertly,andnotachievedasacollateralconsequenceofadisciplinaryruleostensiblyhavingotherpurposes,”(Kesselhautv.U.S.at794).

F. LaSallev.CountyofLake

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ThecaseofLaSallev.CountyofLake9,isnon-IPcase,butisausefulexampleofconflictsofinterestandwaiverinregardstoattorneysjoiningtheprivatesectorfromlocalgovernment.

Thecourt,usingCanon4and9oftheABACodeofProfessional

Responsibility,presentedthequestionofwhetheritcouldreasonablybesaidthatduringtheformerrepresentationtheattorneymighthaveacquiredinformationrelatedtothesubjectmatterofthesubsequentrepresentation(LaSallev.CountyofLakeat255).Ingeneralathree-levelinquirymustbeundertakeninordertoseeifsuchasubstantialrelationshipexists,asdescribedhere,“First,thetrialjudgemustmakeafactualreconstructionofthescopeofthepriorlegalrepresentation.Second,itmustbedeterminedwhetheritisreasonabletoinferthattheconfidentialinformationallegedlygivenwouldhavebeengiventoalawyerrepresentingaclientinthosematters.Third,itmustbedeterminedwhetherthatinformationisrelevanttotheissuesraisedinthelitigationpendingagainsttheformerclient,”(WestinghouseElectricCorp.v.GulfOilCorp.10;NovoTerapeutiskLaboratoriumv.BaxterTravenolLabs,Inc.11

IncontrasttobothArmstrongv.McAplinandKesselhautv.U.S.,thescreening

procedureinLaSallev.CountyofLakeweresetuptoolate,forMr.SeidlerjoinedthefirmofRudnick&WolfeonFebruary2,1981;yetscreeningarrangementswerenotestablisheduntilthedisqualificationmotionwasfiledinAugust1981,andalthoughMr.SeidlerstatesinhisaffidavitthathedidnotdisclosetoanypersonassociatedwiththefirmanyinformationaboutthevalidityoftheAgreementortheCounty'sstrategyonanymatterrelevanttothislitigation,nospecificinstitutionalmechanismswereinplacetoinsurethatthatinformationwasnotshared,evenifinadvertently,betweenthemonthsofFebruaryandAugust(LaSallev.CountyofLakeat259).

G. Shukhv.SeagateConflictsofinterestandwaiverscanoccurnotonlybetweenattorneysand

clients,butalsobetweenemployee-inventorsandtheirpreviousemployers,asdemonstratedinShukhv.Seagate12.Togivesomebackgroundtothecase,ShukhwasemployedatSeagatefrom1997until2009andwhenhewasgivenhisnoticeoftermination,ShukhmadethousandsofcopiesofSeagate’sdocuments(Shukhv.9LaSalleNationalBankandLakePropertiesVenture,PlaintiffAppellants,v.CountyOfLakeandtheVillageofGrayslake,Defendants-Appellees,703F.2d252(7thCir.1983)10WestinghouseElectricCorp.v.GulfOilCorp.,588F.2d221,225(7thCir.1978)11NovoTerapeutiskLaboratoriumv.BaxterTravenolLabs,Inc.,607F.2d186,195(7thCir.1979)12AlexanderM.Shukh,Plaintiff,v.SeagateTechnology,LLC,SeagateTechnology,Inc.,SeagateTechnology,andUnknownOwnersandAssignees,SeagateTechnology,PLC,Defendants,CivilNo.404(JRT/JJK),UnitedStatesDistrictCourt,D.Minnesota,June29,2012,872F.Supp.2d851

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Seagateat854).Usingthesedocuments,ShukhinsistedthathehadinventorshiprightsoversomeoftheclaimsagainstSeagate.InNovember2011,thecourtorderedthatShukhreturnthedocumentshetookfromSeagate,andinresponsetodiscoveryrequests,SeagateproduceddocumentstoShukhincludingsomethatShukhhadtakenfromSeagate.AmongthedocumentsSeagateproducedwereShukh'sfiveinventiondisclosuresoverwhichSeagatehadpreviouslyassertedprivilege(Shukhv.Seagateat854).

TheMagistrateJudgeinthiscasestatedthatitiswellknownintheIPlaw

world,thatShukhdidnothaveanattorney-clientrelationshipwithSeagate'sattorneys,andthusnojointprivilegeattached(Shukhv.Seagateat854).Thecourtheldthatthisdecisionwasnotclearlyerroneousorcontrarytolaw.Anemployee-inventorrequiredtoassignhispatentrightsdoesnotgenerallyhaveanattorney-clientrelationshipwiththecompany'spatentcounsel(Shukhv.Seagateat854).Furthermore,ingeneraltheemployee’semploymentagreementautomaticallyassignspatentsrightstotheemployer,inthiscaseSeagate(Shukhv.Seagateat854).

H. Mononv.Wabash

InthecaseofMononv.Wabash13,apatentattorneyMr.Bushnell,performedIPworkforMononTrailerInc(whosepresidentwasMr.DonaldJ.Ehrlich),whichin1970swasboughtbyEvansTransportation(Mononv.Wabashat1322).Mr.EhrlichremainedwiththecompanyandMr.Bushnell’sIPlegalserviceswerereplacedbythein-housecounselatEvansTransportation(Mononv.Wabashat1322).EvansTransportationtriedtobuyMononTrailerDivisionandindoingsoretainedMr.Bushell’sservicesinordertoprepareapatentapplicationthatwasinventedunderEvansTransportation(Mononv.Wabashat1322).Mr.BushnellcompletedthepatentapplicationandwasadvisedbyMr.EhrlichtosubmititunderthefuturecompanynameofMononTrailerDivision(Mononv.Wabashat1322).However,thedealtobuyMononTrailerDivisionfellthroughandinsteadMr.EhrlichformedWabashNationalCorporationandMononTrailerDivisionintimebecameMononCorporation(Mononv.Wabashat1322).Uponlearningofthis,Mr.BushnellgavethepatentfiletoMonon’snewattorney,Mr.Price.HealsoinformedMr.PricethatheintendedtorepresentDonaldJ.EhrlichandWabashNationalCorporation.(Mononv.Wabashat1322).InFebruaryof1990U.S.PatentNumber4,904,017wasissuedtotheinventorwhothenassignedittoMononCorporation(Mononv.Wabashat1322).

ThecourtnotedthatCanon4oftheABACodeofProfessionalResponsibility

providesthat"alawyershouldpreservetheconfidencesandsecretsofaclient"andCanon9admonishesthat"alawyershouldavoideventheappearanceofprofessionalimpropriety."Whendecidingaquestionofattorneydisqualification,13MononCorporation,Plaintiff,v.WabashNationalCorporation,Defendant,Civ.A.No.L90-00044,UnitedStatesDistrictCourt,N.D.Indiana,LafayetteDivision,764F.Supp.1320(1991)

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federalcourtsembodythesubstanceofthesecanonsinthesubstantialrelationshiprule(Mononv.Wabashat1323).Additionally,“Canon9admonishesthatalawyermustavoideventheappearanceofimpropriety(Mononv.Wabashat1323).AsimplisticviewofthissituationisthatTrexlerBushnellobtainedapatentforonepartyandnowattemptstodenythesamepatentfortheotherparty(Mononv.Wabashat1323).AmorecarefulexaminationofthefactsandconsiderationofthetechnicalitiesstillmakesitclearthatAttorneyBushnell,attheveryleast,madeinitialdeterminationsthattheinventionwaspatentableandthendraftedclaimsforapatentapplicationdesignedtoconvincethePTOthattheinventionwaspatentable(Mononv.Wabashat1323).Nowthesamelawyergoessofarastoclaimthatthesameinventionlackstheconditionsofpatentability(Mononv.Wabashat1323).Nomatterwhotheclientswereorare;nomatterwhatconfidentialinformationispossessedbywhom,thissimplecircumstancegives"anunsavoryappearanceofconflictofinterestthatisdifficulttodispelintheeyesofthelaypublic—orforthatmatterthebenchandbar,”(Mononv.Wabashat1323).

I. Telectronicsv.Medtronic

InthecaseofTelectronicsv.Medtronic14,themainquestionregarding

conflictsofinterestandwaiverwaswhetherapatentattorneycanworkwithacorporateinventortodraftandprosecuteapatenttocompletionandthenlater,workingforotherinterestsseektoinvalidateornarrowlyconstruetheself-samepatent.Specifically,Medtronic(sometimesreferredtoas"MT")soughtreliefunder19U.S.C.§1337(Supp.III1985)forallegedinfringementbyTelectronicsofMedtronic'sfourpatents—UnitedStatesLettersPatentNos.3,648,707('707),4,059,116('116),4,312,355('355),and3,595,242('242)(Telectronicsv.Medtronicat1334).Togivesomebackgroundonthiscase,Mr.Berkovitsin1969inventedacardiacpacemakerwithdualchambercardiacpacing,whichhethenassignedtheentireinterestintohisemployer,AmericanOpticalCorporation(Telectronicsv.Medtronicat1334).ThispatentwasissuedunderUnitedStatesPatentNumber3,595,242in1971.Mr.BerkovitsendedhisemploymentwithAmericanOpticalCorporationin1975andfoundanewjobatMedtronic(Telectronicsv.Medtronicat1335).

Atthetime,attorneyMr.Rackmanhadbeentheoutsidepatentcounselfor

Telectronicsforabout7years;however,therewasclearlyanundisputedexistingattorney-clientrelationshipbetweenAmericanOpticalCorporation(sometimesreferredtoas"AO")andMr.Rackman(Telectronicsv.Medtronicat1335).Mr.Rackman,whileanassociateofthelawfirmofAmsterandRothstein,hadservedasoutsidepatentcounselforAOinthe1960's(Telectronicsv.Medtronicat1335).HepreparedseveraldraftapplicationsforAO,someinvolvingpacemakertechnology,14TelectronicsProprietary,Ltd.,Plaintiff-Appellee,v.Medtronic,Inc.,Defendant-Appellant,v.Telectronics,Inc.,andTelectronicsUSA,AdditionalDefendantsOnCounterclaim-Appellees,No.87-1364,UnitedStatesCourtofAppeals,FederalCircuit,January6,1988,836F.2d1332

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othersinvolvingnon-pacemakertechnology.RackmanhadoccasiontomeetwithAOinconnectionwiththesedraftapplications,andonthesevisitshemetwithBerkovits(Telectronicsv.Medtronicat1335).

Theotherattorneyinthiscase,Mr.Nealon,alsohadapre-existingattorney-

clientrelationship(Telectronicsv.Medtronicat1335).SimilartoMr.Rackman,Mr.Nealonhad,“beenin-housepatentcounselforTelectronicssince1977.Hisattorney-clientrelationshipwithAOisalsoundisputed,becausehewasAO'sin-housepatentcounselduringtheperiodatissue.OnMarch4,1969,Berkovits,asinventor,appointedNealonandtwootherattorneys,"myAttorneys,withfullpowerofsubstitution,andrevocationtoprosecute[the'242patent]application,andtomakealterationsandamendmentstherein,"(Telectronicsv.Medtronicat1335).AllcorrespondencewiththeUnitedStatesPatentandTrademarkOfficewassenttoNealonasprincipalattorney.AccordingtothefilehistoryinthePTO,NealoncommunicatedwiththePTOatleastfourtimesduringtheprosecutionofthepatentapplication,”(Telectronicsv.Medtronicat1335).

InthiscasethecourtfoundthataccordingtotheCanon7oftheABACodeof

ProfessionalResponsibility,thefactsdidnotindicatethatTelectronics'attorneyswereunreasonableorineffective."Inhisrepresentationofaclient,alawyermay...[w]herepermissible,exercisehisprofessionaljudgmenttowaiveorfailtoassertarightorpositionofhisclient."DR7-101(B).Canon9:Regarding“appearanceofimpropriety”thecourtstated:Here,thedistrictcourtfoundthattheinventor(Mr.Berkovits)wasnotthealter-egoofAmericanOpticalCorporation,andthus,anattorney-clientrelationshipdidnotexist;andWarnerLambertTechnologies,thesuccessorininteresttoAmericanOpticalCorporation,hadprovidedawrittenwaivertotheattorney’srepresentation.Inaddition,anyappearanceofimproprietyislessenedbythefactthattheattorneydidnotundertakesuccessiverepresentationofclientswithadverseinterestsanddidnotobtainactualconfidencesthatwouldgivetheirclientanunfairadvantage(Telectronicsv.Medtronicat1336).

J. Vaxiionv.Foley&Lardner

InthemalpracticecaseVaxiionv.Foley15,onMay24,2001,FoleySanDiego

OfficeofFoley&LardnerLLP(hereinreferredasFoleySanDiego)filedaU.S.provisionalpatentapplicationonbehalfofVaxiion(anemergingbiotechcompany)entitled"MinicellCompositionsandMethods"(Vaxiionv.Foleyat1157).BothFoleySanDiegoandVaxiionworkedtogethertopreparetheFirstProvisionalApplication.OnFebruary25,2002,FoleySanDiegofiledasecondprovisionalapplicationwiththesametitleandVaxiionwasfullysatisfiedwithboththeFirstandSecondProvisionalApplications(Vaxiionv.Foleyat1157).

15VaxiionTherapeutics,Inc.,Plaintiff,v.Foley&LardnerLLPanddoes1through20,Inclusive,Defendants,CaseNo.07cv00280-IEG(RBB),UnitedStatesDistrictCourt,S.D.California,December18,2008,593F.Supp.2d1153

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ToclaimpriorityintheU.S.totheFirstProvisionalApplicationfiledonMay24,2001,Vaxiionhadtofileanon-provisionalU.S.applicationwithinoneyear,orbyMay24,2002(Vaxiionv.Foleyat1157).InordertoclaimprioritytotheFirstProvisionalApplicationoutsidetheU.S.,VaxiionhadtofileaPatentCooperationTreatyapplicationbythesamedate(Vaxiionv.Foleyat1157).InJuly2001,VaxiionhiredMarkSurberasitsChiefScientificOfficer.SurberbecametheprimarycontactwithFoleySanDiegoregardingtheutilityandPCTapplications(Vaxiionv.Foleyat1157).

Overthecourseofmanymonths,FoleySanDiegoandVaxiionpreparedthe

patentapplications.FoleySanDiegoadvisedSabbadini(Vaxiion’sfounder),Surber,andWilliamGerhart,Vaxiion'sChiefExecutiveOfficer,thatitwouldbebesttofileseparateUnitedStatesNon-ProvisionalandPCTapplicationsasopposedtoasinglePCTapplication(althoughintheendthetwoapplicationswerenotsubstantivelydifferent)(Vaxiionv.Foleyat1157).Assuch,theFoleySanDiegolawyersandtheirclientsmadethedecisiontogethertofiletheseparateapplications(Vaxiionv.Foleyat1157).Furthermore,aspartoftheirfilingstrategy,thepartiesagreedtofiletwenty-threeindividualpatentapplicationswithdiscreteproposedsetsofclaims,asopposedtooneapplicationincludingall464ofVaxiion'sclaims(Vaxiionv.Foleyat1158).

VaxiiondecidedtorelyonGranston(anattorneyatFoleySanDiego)rather

thanWarburg(anotherattorneyatFoleySanDiego)fortheactualdraftingoftheminicellpatentapplications(becauseofGranston'slowerbillingrate),andcommunicatedprimarilywithGranstonthroughouttheprocess.VaxiionwasawareoftheamountoftimeGranstonspentpreparingtheU.S.FirstandSecondProvisionalApplications,theU.S.Non-ProvisionalApplicationandPCTApplication,ascomparedtothetimeWarburgspentonthesame(Vaxiionv.Foleyat1158).Inthemonthleadinguptothefilingdeadline,thelimitedtimelefttofilethemultipledivisionalapplicationsconcernedSurberbecausehefeltGranstondidnotincorporatehissuggestionsintotheapplicationsquicklyenough(Vaxiionv.Foleyat1158).FoleySanDiegoclaimsthatduringthesametimeperiodWarburgcontinuallywarnedVaxiionhowimportantitwasforVaxiiontogettheinformationFoleySanDiegoneededtofilethedivisionalapplicationsbythedeadline(Vaxiionv.Foleyat1158).Notwithstandingtheseconcernsonbothsides,SabbadinireviewedthespecificationandclaimsWarburgandGranstonassembledonMay23,2002at6:06p.m.(theeveningbeforethedeadline),proposednochangestotheclaims,andbelievedtheapplicationwas"excellent"andreadytobefiledatthattime(Vaxiionv.Foleyat1158).

ThepartiesdonotdisputeFoleySanDiegoknewthePCTapplicationhada

May24,2002filingdeadlineandthattheUnitedStatespostofficeclosedon11:00p.m.onthenightofMay24,2002,andthatGranstonexplainedtoSurberthathehadtodelivertheapplicationstothepostofficeby11:00p.m.toreceiveaMay24postmarkontheapplication(Vaxiionv.Foleyat1159).

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SurberneverthelesscontinuedtoprovideGranstonwithchanges,comments,andadditionsupuntiltheeveninghoursbeforethefilingdeadlineof11:00p.m.onMay24,2002(Vaxiionv.Foleyat1159).GranstonunilaterallyabandonedthestrategyoffilingthemultipledivisionalapplicationsinfavoroffilingoneUnitedStatesnon-provisionalapplicationonMay24,2002,asthefilingdeadlinegotcloserandSurberstillhadnotgivenhisapprovaltofile(Vaxiionv.Foleyat1159).ThelastofSurber'sseriesofchangescameat9:50p.m.onthenightofthedeadlinewhenSurberinstructedGranstonbytelephonetoaddseveralhundredpagesofDNAsequencestotheapplication(Vaxiionv.Foleyat1159).GranstonexplainedtoSurberthatthechangeswereunnecessary,theycouldbeaddedlaterbyamendment,andthatifGranstontriedtoincludethemhecouldnotguaranteethefilingdeadlinecouldbemet(Vaxiionv.Foleyat1159).

SurberemailedthesequencestoGranstonat10:01p.m.,andduetotheir

size,Granstondidnotreceivethemalluntil10:09p.m.At10:20p.m.,Granstonfinalizedtheapplication,includingtheDNAsequences,emailedtheU.S.Non-ProvisionalApplicationtohisassistantMichelleSympsontofinalize,andemailedthePCTapplicationtoparalegalSandraA'CostatoformattoconformtothePCTformattingrules(Vaxiionv.Foleyat1159).Atapproximately10:40p.m.,GranstonleftforthepostofficewiththecompletedNon-ProvisionalApplication,andaskedWhittentostaybehinduntilthePCTApplicationwascompleted,todriveittothepostoffice(Vaxiionv.Foleyat1159).Atthattime,Whittenstates,A'CostawashavingtroubleformattingthePCTbecausehercomputerkeptfreezing.Oncethecomputerwasworking,A'Costaformattedtheapplication,butbythetimeshefinisheditwaspast11:00p.m.,andthepostofficehadclosed(Vaxiionv.Foleyat1159).

DespitetryingtoreachcontactsinAlaskaandHawaiiwhocouldstill

potentiallyobtainaMay24postmarkonthePCTApplicationbecauseofthetimezonedifference,Granstonwasunabletofiletheapplicationbythedeadline(Vaxiionv.Foleyat1159).Vaxiionthussuccessfullyfiledanon-provisionalU.S.patentapplication("Non-ProvisionalApplication")onMay24,2002,claimingprioritytotheFirstandSecondProvisionalApplications,andfiledthePCTapplicationthenextbusinessday,May28,2002(Vaxiionv.Foleyat1159).AsaresultofthemissedPCTApplicationdeadline,VaxiionisnotabletoclaimpriorityinternationallytotheMay24,2001FirstProvisionalApplication,butonlytotheFebruary25,2002SecondProvisionalApplication(Vaxiionv.Foleyat1159).

AfterFoleySanDiegofiledtheFirstProvisionalApplicationonVaxiion's

behalfonMay24,2001,butbeforeFoleySanDiegofiledtheSecondProvisionalApplicationonVaxiion'sbehalfonFebruary25,2002,anattorneyinFoley'sWashingtonD.C.office(hereinreferredasFoleyD.C.),StephenBent,filedaprovisionalapplicationforanAustraliancompany,EnGeneIC,alsocoveringcertainaspectsofminicelltechnology(Vaxiionv.Foleyat1160).OnOctober15,2001,BentfiledonbehalfofEnGeneICaprovisionalapplication,titled"IntactMinicellsasVectorsforDNATransferandGeneTherapyInVitroandInVivo,"(Vaxiionv.Foley

18

at1159).EnGeneIC'sPCTApplication,whichwasfiledoneyearlateronOctober15,2002,claimsprioritytoEnGeneIC'sprovisionalapplication,andasaresultisconsideredseniortoVaxiion'sPCTApplication(Vaxiionv.Foleyat1160).

FoleyrepresentedbothVaxiionandEn-GeneICfromNovember2001until

June2002(Vaxiionv.Foleyat1160).PriortothepublicationofEnGeneIC'sPCTApplicationonApril24,2003,neitherWarburgnorGranstonknewofEnGeneIC'sprovisionalapplicationorthatFoleyD.C.attorneyBentrepresentedEn-GeneIC(Vaxiionv.Foleyat1160).InJuly2002,VaxiionterminateditsrelationshipwithFoleySanDiegoandinsteadretainedtheservicesofthelawfirmofKnobbeMartensOlson&Bear(Vaxiionv.Foleyat1160).KnobbeMartenscontinueditsprosecutionofVaxiion'spatentapplicationsforminicelltechnology.OnFebruary27,2007,theUSPTOissuedtoVaxiionPatentNo.7,183,105(the"105Patent"),whichclaimedprioritytotheFirstandSecondProvisionalApplications(Vaxiionv.Foleyat1160).

VaxiionlearnedthatFoleyrepresentedEnGeneICnolaterthanNovember

2004.Vaxiionnever,however,raisedanissueregardingFoley'scontinuedrepresentationofEnGeneICuntillateAugust2007,whenPlaintiff'scounselindicatedVaxiionwouldnotproducecertainlaboratorynotebooksindiscoverybecauseofFoley'scontinuedrepresentationofEnGeneIC(Vaxiionv.Foleyat1160).FoleywithdrewfromitsrepresentationofEnGeneICwithrespecttoEnGeneIC'sPCTApplicationandEn-GeneIC'sNon-ProvisionalU.S.Application,inlate2007orearly2008.FoleycontinuestorepresentEnGeneICinsomepatentmatters(Vaxiionv.Foleyat1160).

BeforeFoleywithdrewfromitsrepresentationofEnGeneIC,in2006and

2007,aPTOexaminerrejectedseveralclaimsinEnGeneIC'sNon-ProvisionalU.S.ApplicationpartlyinlightofVaxiion'sNon-ProvisionalU.S.Application(Vaxiionv.Foleyat1160).Inresponsetotheexaminer'srejection,FoleyonbehalfofEnGeneICsubmitteddeclarationsattemptingtoantedatetheVaxiionpriorartreference(i.e.demonstrateEn-GeneICreduceditsinventiontopracticebeforeVaxiion)Vaxiionv.Foleyat1160.OnJuly25,2007,thePTOwithdrewitsrejectionofEnGeneIC'sNon-ProvisionalApplicationbaseduponVaxiion'sNon-ProvisionalU.S.Application,andinsteadrejectedEnGeneIC'sapplicationbaseduponVaxiion'sthen-issued'105Patent(Vaxiionv.Foleyat1160).

So,whatcouldFoleyhavedonedifferently?Ithasbeenopinedbyauthor

SandraP.Thompson,hereinreferredtoastheThompsonarticle16,thattwoactsinadvanceoftheEnGeneICrepresentationcouldhavenegatedordramaticallyminimizedthesubjectmatterconflictissuesinthiscase.16IP:Subjectmatterconflictsofinterestinpatentprosecution–Caselaw,VaxiionTherapeuticsv.Foley&Lardnerprovidesanimportantexampleinavoidingconflictsofinterest,bySandraP.Thompson,January28,2014(http://www.insidecounsel.com/2014/01/28/ip-subject-matter-conflicts-of-interest-in-patent)

19

TheThompsonarticleproposesthatfirstVaxiioncouldhavebeenrequested

toprovidealistofcompetitorstoFoleyandrequestthattheynotrepresentanycompanyorindividualonthatlist.ThatlistcouldbeputintoFoley’sconflictsystemas“adverseparties”or“relatedparties”sothataconflictsearchwillflagthosecompanies.Vaxiionshouldalsobeaskedtoupdatethatlistwithoutsidecounselasneeded.

TheThompsonarticlestatesthatsecondFoleyshouldhaveconducteda

subjectmatterconflictsearchinadvanceofEnGeneIC’sengagementwithinthepatentgrouptoensurethattherewasnosubjectmatterconflictofinterest.TheThompsonarticlenotesthatatsmallandmid-sizefirms,thistypeofsearchmaybeasimpleemailtothepatentgroupthatstates:“Weareconsideringrepresentingacompanywhodevelopsandmanufactures....Pleasereplybackimmediatelyifyourepresentanyclientswhousethistechnology;”andalargefirmmayalsoconsiderutilizingthismethodofconflictchecking,butabettersystemmaybetouseaconflictdatabasethatallowsattorneystoselect“businesscodes”relatedtothetypeandsubtypesofbusinesses,followedbyaddingkeywordstohelpfocusinonwhethersomeoneelseatthefirmishandlingmattersinthattechnologyspace.Inthiscase,akeywordsearchof“minicell”mayhaveeasilyidentifiedsuchaconflict.

IV. Conclusion

Asshownabove,conflictsofintereststhatattorneysfaceintherealmof

patentprosecution,andespeciallyforpatentprofessionalsdealingwithlargemultinationalcorporations,involvespecializedrulesthatmaynotimmediatelybeapparent.Inviewofthis,theforegoingpaperidentifiestheconflictofinterestrulesthatapplytopatentprofessionals,andwhatconflictsofinterestcanbewaived.Morespecifically,throughtheestablishmentofconflictwallssomeclientsmaycontinuetobeserved,afterfulldisclosureandwaiver.However,someconflicts(suchasanattorneyattackingapatentpreviouslyobtainedbythesameattorney)cannotbewaived.Whileeachsituationisveryfactandclientspecific,beingawareoftherulesrelatingtoconflictsandobtainingwaiverafterfulldisclosurecanoftenallowattorneystoavoidrunningafouloftherulesandtheclient'sinterests.

Frederick W. Gibb, III Frederick W. Gibb, III is a partner in the firm and is a registered patent attorney with an electronics background. He earned a Bachelors of Science degree from the University of San Francisco in 1984, and a Juris Doctor degree from Santa Clara University in 1988. Mr. Gibb is a member of the Maryland State Bar, Virginia State Bar, the American Intellectual Property Law Association (AIPLA), the American Bar Association (ABA), and the Executive Licensing Society (LES). He is also a member of the Virginia Bar Association (VBA), the Maryland State Bar Association, and the Anne Arundel Bar Association. Mr. Gibb is registered to practice before the United States Patent and Trademark Office. Mr. Gibb concentrates on patent application preparation and prosecution in the electrical, mechanical, computer, and software related arts. Prior to forming the firm, Mr. Gibb was an Associate Patent Attorney in a mid-sized firm in Northern Virginia for three years and was an Associate Litigation Attorney in a Richmond, Virginia law firm, concentrating in civil litigation before the state, federal, district, and federal appellate courts, and in corporate matters for over five years. Mr. Gibb has served as a claims drafting instructor for the Patent Bar Review Course and as an Instructor for the Advanced Application and Amendment Writing Workshop. Mr. Gibb is a frequently invited speaker, lecturer, and panelist on intellectual property issues.

William J. Griffin Deputy Director Office of Enrollment & Discipline United States Patent and Trademark Office William J. currently serves as the Deputy Director for the Office of Enrollment and Discipline. Prior to joining the USPTO, Mr. Griffin engaged in the private practice of intellectual property law with several Washington, D.C. area law firms. His private practice focused primarily on patent, trademark and copyright litigation, patent counseling, and patent prosecution. He received a Bachelor’s degree in electrical engineering from Johns Hopkins University and a Juris Doctor degree with honors from George Washington University. He is admitted to practice before the USPTO (currently inactive), the Supreme Court of Virginia, the United States District Court for the Eastern District of Virginia, and the United States Court of Appeals for the Federal Circuit.

C:\Documents and Settings\meyermk\Desktop\Marketing Folder\New Web Bio.doc

Mercedes K. Meyer, Ph.D., is co-chairs Life Science section of the Intellectual Property Practice Group of Drinker Biddle & Reath. Mercedes counsels in the pharmaceutical and biotechnology areas. Mercedes focuses on patent prosecution, transactions, contested proceedings, and asset management, which extends to due diligence investigations and the preparation of validity, infringement and freedom to operate opinions regarding biotechnology and pharmaceutical patents.

Mercedes received her bachelor's degree in chemistry from Bryn Mawr College (1988) and her Ph.D. (1994) in virology from the University of Texas Graduate School of Biomedical Sciences at Houston and The University of Texas M.D. Anderson Cancer Center. She earned her J.D. (1996) from the University of Houston Law Center. She is co-author with Professor David Hricik on Patent Ethics: Prosecution (3rd ed. 2014) with the 2016-2017 just released. Mercedes is a Fellow of the American Intellectual Property Law Association (AIPLA), where she is the past chairperson of the Women in IP Law Committee (2005-2007), past vice chair of the Biotechnology Committee (2007-2009), past Board Member and Secretary of the AIPLA Board of Directors (2009-2013). Mercedes is also co-chair of the Diversity Committee of the Federal Circuit Bar Association (FCBA) and vice chair of the Women’s Committee of IPO.