IP Intelligence

Home | IP Intelligence

<img class="alignright wp-image-2453 size-medium" src="https://ipintelligencereport.bakerhostetlerblogs.com/wp-content/uploads/sites/11/2016/03/Patent-Defined-4419087-300x196.jpg" alt="The word patent highlighted in a dictionary." width="300" height="196">

Providing a rare glimpse into a Federal Circuit judge’s views on the rules of professional conduct governing conflicts of interest, on February 26, 2016, Federal Circuit Judge William Bryson, sitting as a trial judge, denied a motion to disqualify the law firm of Fish &amp; Richardson, P.C. Erfindergemeinschaft Uropep GbR v. Eli Lilly &amp; Co., No. 2:15-CV-1202 (E.D. Tex. Feb. 26, 2016). Fish represented the co-defendant in the present case, Brookshire Brothers, Inc., in a previous patent infringement suit, GeoTag, Inc. v. The Western Union Co., No. 2:10-CV-574 (E.D. Tex. 2010). Brookshire moved to disqualify Fish because it now represents Uropep against Brookshire.

Judge Bryson decided first whether Brookshire was Fish’s former, not current, client at all relevant times. When Brookshire hired Fish for the GeoTag case, Brookshire and Fish entered into an engagement agreement providing that Brookshire was retaining Fish for only the GeoTag case and that any other matter would require another agreement. The engagement agreement contained also a broad waiver by Brookshire of future conflicts, extending to Fish’s representation of parties against Brookshire in subsequent matters that were not the same as the GeoTag case. The GeoTag case against Brookshire settled on November 20, 2013, and Fish provided no further services to Brookshire except responding to a question about the settlement agreement in June 2014. 

Uropep first contacted Fish in the fall of 2014, and retained the firm in March 2015. In May 2015, Fish initiated and completed a conflict check on Brookshire as a potential defendant in the present suit, filed in July 2015, and on May 19, 2015, Fish sent Brookshire a letter observing that “we . . . have not had an attorney client relationship with you in over a year. . . . [W]e think that it would be best to formalize the end of our attorney/client relationship . . . .”

Judge Bryson found that Brookshire was a former client of Fish at all relevant times. He noted that an attorney-client relationship depends on a contract between lawyer and client and that the relationship generally terminates when the purpose of the employment is completed. He reasoned that the engagement letter stated that Brookshire retained Fish for only the GeoTag case, that Fish performed no work for Brookshire after June 2014, that Uropep did not become a Fish client until March 2015, and that Fish did not begin to explore whether it could be adverse to Brookshire until May 2015. Applying Texas and ABA Rules of Professional Conduct, Judge Bryson therefore proceeded to consider whether Fish violated its duties to its former client by representing an adverse party in a substantially related matter or by receiving confidential information in the prior representation that it reasonably likely would use against Brookshire in the present case.

Judge Bryson found that the GeoTag case and the present case are not substantially related. Brookshire argued that the GeoTag case and the present case both involved “the same delivery of pharmacy services.” Judge Bryson rejected that argument because the GeoTag case concerned a patent relating to locating Brookshire’s pharmacies through a web page while the present case concerned allegations that Brookshire infringed a patent by dispensing the drug Cialis. Although both cases asserted patent infringement, Judge Bryson relied on the commentary in the ABA Model Rules that disqualification requires more than that two cases involve the same type of legal problem.

Judge Bryson considered next whether Fish received confidential information from Brookshire in the GeoTag case that might be used against Brookshire in the present case, and rejected Brookshire’s arguments that it did. Judge Bryson found that in the previous litigation, Brookshire did not provide Fish with any confidential financial or technical documents. Judge Bryson rejected also Brookshire’s allegation that it orally disclosed confidential financial information to Fish for failure of proof. Moreover, Judge Bryson reasoned that any such confidential financial information at the time of the previous litigation would be obsolete by the time of the present litigation and therefore would not require disqualification even if disclosed to Fish. Similarly, Judge Bryson found that Brookshire had not disclosed to Fish its document retention policies and even if it had, “that kind of information would be readily discoverable.”

Judge Bryson next considered Brookshire’s assertion that Fish’s notice of termination of the attorney-client relationship in May 2015 was improper. Because the May 2015 letter stated that it was formalizing the end of the attorney-client relationship, Brookshire argued that there was an attorney-client relationship until that time. Although Judge Bryson acknowledged that the letter could cause confusion, he found that it simply memorialized that the relationship had already terminated at an earlier time.

Finally, in response to Brookshire’s challenging the validity of the prospective conflict waiver in the engagement letter, Judge Bryson acknowledged that “[s]uch sweeping advance conflict waivers are of dubious validity, at least where the precise nature of the prospective conflict is not spelled out with scrupulous care.” But Judge Bryson found that disqualification was not required regardless of the validity of the advance waiver provision in the engagement agreement.

To summarize, the engagement letter played an important role by providing that Brookshire retained Fish for only the GeoTag case and that representation with respect to another matter would require an additional written agreement. The termination letter, however, would better have clearly said that the attorney-client relationship expired when Fish’s services for Brookshire in the GeoTag case ended. Finally, relying on only a broad advance waiver provision might not avoid disqualification.

Federal Circuit Judge Bryson Denies Motion to Disqualify Plaintiff’s Counsel