The Maling Decision from Massachusetts on Subject Matter Conflicts

In late December, the high court of Massachusetts issued a decision in Maling v. Finnegan, Henderson.  The decision is accessible, if you search for “Maling,” here.

Boiled down, the court affirmed the grant of the firm’s Rule 12(b)(6) motion to dismiss a complaint that in broad terms alleged that the Finnegan firm had a conflict because it represented the plaintiff and another client in obtaining patents claiming screwless eyeglass hinge inventions.  There are two broad issues:  when is prosecution of patents for one client adverse to another, and when are two patent applications so close that prosecuting them creates a material limitation on the lawyer’s ability to represent either client.

With respect to adversity, this form of conflict is sometimes viewed as a “finite pie” conflict, where two clients are fighting for a resource that cannot meet both their demands.  In Maling, the court relied on a case that I’ve cited for two decades now that involved a firm representing two companies each pursuing a license to a radio channel.  The court reasoned there that so long as they were not fighting over the same channel, and there was no electrical interference between the two channels, there was no direct adversity and so no conflict.  By analogy, the court’s essential holding was that unless patent claims interfere or are to obvious variations of each other, there is no direct adversity.  (The court also noted that giving an infringement opinion to one client about another client’s patent would be adverse, but that was not alleged, apparently, here.)

With respect to material limitations, this form of conflict arises when a lawyer’s obligations to anyone (including himself) precludes him from competently representing a client.  The basic test is:  imagine what a lawyer without the “obligation” would do; and then ask whether the obligation the allegedly conflicted lawyer had would result in a material limitation.  Simple example:  if a lawyer represents a car wreck plaintiff, the lawyer generally cannot cross-examine that plaintiff even in an unrelated matter if it doing so would involve, say, exposing eyesight problems that could be used against the plaintiff in the car wreck. The court in Maling contrasted the allegations in the complaint to situations where firms have shaved claims for one client to avoid another client’s patent.  There was nothing like that here, and nothing like what the court suggested might otherwise be a material limitation.

The court ended with admonitions to lawyers to be sure to monitor for conflicts carefully.  I’ll end by noting that this is not the first, or last, word on this topic.

“Be careful out there,” as they said in Hill Street Blues.

 

4 thoughts on “The Maling Decision from Massachusetts on Subject Matter Conflicts

  1. The problem with hypos and “black letter rules” applied broadly is, as you know and as the hypo suggests, the dynamic nature of prosecution.

    But the flip side is that: if you take into account downstream possibilities then any two companies are “adverse.” If Google gets a patent, then Domino’s Pizza won’t be able to.

  2. David, you write:

    “The court in Maling contrasted the allegations in the complaint to situations where firms have shaved claims for one client to avoid another client’s patent. There was nothing like that here, ,,,,”

    in which what interests me is “nothing like that here” and also how far one can stretch the notion of “shaving”.

    Suppose my firm has two unrelated clients A and B who both design eyewear. Each comes up, independently, with improved lens mount architecture. My partner in the firm, AA, drafts the patent application for Client A and my partner colleague BB writes claims for Client B.

    Each partner writes (in ignorance of the other’s work) . Each writes a set of claims in which the independent claim is wide enough to read on to both the A and the B prototype. Each awaits approval of the draft, from his respective client, to enable my firm to file at the USPTO. Any conflict yet? You bet! It will be vital to the extent of legal rights of A and B which of A and B files first.

    In prosecution at the USPTO, however, prior art is revealed, that renders such wide claims unpatentable. Both AA and BB have to narrow down, to avoid the art. It just so happens though, that the claims issued to A do not read on to B’s prototype, and that the claims issued to B do not read on to A’s prototype. So, no “shaving” then? And never any “conflict” then? OK?

    Nevertheless, A feels cheated, that he cannot sue B. And B also feels cheated, that he cannot sue A. Does either A or B have any remedy against the firm?

    1. Max,

      No. On page 20: “Maling’s complaint does not contain any allegations as to the services or scope of representation agreed upon by Maling and Finnegan other than that Finnegan “agreed to file and prosecute a patent for Maling’s inventions.” Nor is it adequately alleged that Finnegan should have reasonably anticipated that Maling would need a legal opinion that would create a conflict of interest. There are simply too few facts from which to infer that Finnegan reasonably should have foreseen the potential conflict in the first place.”

      In your hypothetical, Clients A & B can sue each other, but they will need to hire new law firms even thought, probably, they assumed the firm would take care of them and so are irritated. Finnegan got off but the facts could have turned out differently. (Unlike your hypo, different offices were involved and I think this helped them even though it is the same firm.) I think you are suggesting that possible conflicts should be avoided from the very beginning and agree.

      1. Thanks. You read my thoughts. But I did not write that AA and BB are sitting in the same office building. Indeed I had different buildings in mind. If different buildings did indeed help FH, it ought not to have done.

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