Legal Ethics Opinion No. 1456
Conflict of Interest--Former/Multiple Client: Patent Attorney
Representing Current Client Adverse to Former Client in Unrelated
Interference or Litigation Matter
You have indicated that a law firm represents corporation X in
patent related matters including the preparation and filing of
two patent applications which were then assigned to division Y of
corporation X. Subsequently, division Y of corporation X was
sold to corporation Z. At the time of the sale of division Y,
corporation X and corporation Z were, and presently still are,
involved in litigation in matters unrelated to the patent
applications.
You further indicate that, at the time of the sale of division Y
to corporation Z, law firm A received oral authorization from
corporations X and Z to continue prosecution of patent
applications before the U.S. Patent and Trademark Office (USPTO)
despite the ongoing relationship between law firm A and
corporation X. Each of the two patent applications referenced
has since received an action from the USPTO rejecting the claimed
invention, to which law firm A has filed a response in one of the
patent applications. This response was based substantially on an
analysis of the action by an attorney at law firm A after
providing comments on the action to an attorney at corporation Z,
and after having received authorization and completing
instructions to file the response.
In addition, you advise that, in the handling of patent matters
for corporation X, law firm A is presently handling a reissue
patent application (R1) before the USPTO, wherein an issue should
shortly be raised whether claims in the reissue application
interfere with allowed claims in a reissue application (R2) filed
by law firm B for corporation Z. Further, law firm A has been
requested to handle other interference matters for corporation X
against corporation Z.
You have also indicated that, in view of both the above and a
possible conflict raised by handling interference matters (an
inter partes procedure at the USPTO to determine priority of
invention), law firm A has advised attorneys at corporation Z
that it will no longer handle these two patent applications,
including the response to the other action in patent
applications, and is presently forwarding patent applications to
corporation Z.
Finally, you indicate that the subject matter of the two reissue
applications, as well as the pending litigation between
corporations X and Z, is totally unrelated to the subject matter
of the two patent applications. You state that the handling of
the two patent applications would not reveal any secrets or
confidences of corporation Z to law firm A as to the subject
matter contained in the reissue application of corporation Z
and/or the litigation between corporations X and Z. You also
state that the contact by attorneys at law firm A with attorneys
at corporation Z has been minimal and related only to the two
patent applications prepared by attorneys at law firm A for
corporation X prior to the sale of division Y to corporation Z
and prior to any contact with attorneys for corporation Z.
You have asked the committee to opine whether, under the facts of
the inquiry, law firm A may properly represent corporation X in
an interference or in litigation against corporation Z.
The appropriate and controlling Disciplinary Rule related to your
inquiry is DR 5-105(D), which dictates that a lawyer who has
represented a client in a matter shall not thereafter represent
another person in the same or substantially related matter if the
interest of that person is adverse in any material respect to the
interest of the former client unless the former client consents
after disclosure. (emphasis added)
The committee has repeatedly opined that the earlier
representation of a client who is now the adverse party in a suit
brought on behalf of another client is not per se sufficient to
warrant disqualification of the lawyer on ethical grounds. Seee.g., LEOs #1399, #1194, #1139. See also City of Cleveland v.
Cleveland Elec. Illuminating, 440 F. Supp. 193, 208 (N.D. Ohio
1977). Additional critical factors to the determination of
disqualification are the relatedness of the two matters and the
issue of whether the lawyer obtained secrets and confidences of
the first client in the course of the representation.
Assuming the facts as you have provided them, which facts
indicate that law firm A represented corporation Z on patent
applications unrelated to the firm's subsequent representation of
corporation X on interference and litigation matters against
corporation Z in different patent applications, the committee is
of the opinion that those facts demonstrate no substantial
relatedness between the previous and subsequent patent matters.
Furthermore, again assuming the facts provided, there is no
indication that any secrets or confidences of corporation Z
relative to the interference and litigation matters in question
were obtained by law firm A. Therefore, the committee opines
that there is no per se impropriety in law firm A's continued
representation of corporation X under the circumstances as
presented. The committee's opinion is grounded on the
assumption that the two matters are clearly unrelated
technically. However, the committee cautions that should it be
determined by a finder of fact that either the matters were
substantially related, owing to similarities between the
inventions for which patent applications were made, or that law
firm A did in fact receive secrets and confidences of corporation
Z after it acquired division Y, it might then be necessary for
law firm A to withdraw from representation of corporation X in
the interference and litigation matters and from further any
pursuit of the patent applications earlier filed for division
Y/corporation Z. See General Electric Co. v. Valeron Corp., 428
F.Supp. 68 (E.D. Mich., S.D. l977).
Committee Opinion
June 9, 1992
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