Public Confidential Information: California Weighs In, Asks for Comments

By David Hricik


I’d normally only put this on the ethics page, but Dennis is on vacation and this issue pops up a lot in patent practice.

Suppose you get a call from a third party about a matter you’re handling for a client.  She tells you that she had written a blog post about a prior dispute she had had with your client, which your client had paid to settle.  Per your request, she emails you a link to the blog post.  You forward the link to a friend, saying nothing about it other than “this is interesting.”

Did you do anything wrong?

The information you forwarded was not privileged:  it came from a third party, so that doctrine doesn’t apply.  But, lawyers’ obligation of confidentiality extends far beyond privileged information, to protecting “confidential” information.  Whether information is “confidential” turns on applicable law, and in some states it includes even information that was publicly available when the lawyer was representing the client.  Generally, confidential information must be kept confidential if revealing it would be detrimental to the client, or former client, or the client had asked it not be revealed.

The California bar association has a proposed bar opinion that would make it clear that, while not privileged, even public information must be accorded protection as confidential information. The California bar has asked for comments, and you can do so here, and find the entire opinion.

Now think about patent practice.  You learn about a piece of prior art while representing Client A.  For whatever reason, it wasn’t pertinent to Client A’s application, so you didn’t disclose it.  Patent issues. Matter ends.

Now you’re representing Client B in prosecution. You remember that piece of prior art, and if you disclose it in Client B’s case, it is more likely that Client B will get a patent that, let’s say, will aid it compete with former Client A.  Can you?  Must you?

There are a lot of ways this issue comes up in patent practice, and some states like this proposed California opinion take a counterintuitive view of what is confidential.

Be careful out there and be sure to think about whether the USPTO rules, or your state rules, would control on that question.

Federal Circuit: Firm Cannot Switch Sides in Patent Case

By Dennis Crouch

In re ATopTech (Fed. Cir. 2014)

Professor Hricik already wrote some on this case [link], but I wanted to discuss it in a bit more depth as well.

In 2013, Synopsys sued ATopTech for infringing its U.S. Patent No. 6,507,941. The ‘941 patent covers a sub-grid connectivity method used in chip layout automation software known as electronic design automation (EDA). ATopTech hired the 800-lawyer behemoth firm of O’Melveny & Myers to handle the defense. However, N.D. California Judge Chesney disqualified the O’Melveny firm based upon a conflict of interest.

O’Melveny has some history with the parties. The ‘941 patent was previously owned by Magma Design and O’Melveny represented Magma Design for almost a decade, including in its 2012 merger with Synopsys. O’Melveny had also represented Magma Design in several EDA-patent lawsuits against Synopsys and had apparently considered asserting the ‘941 patent against Synopsys. Further, two of the attorneys on the O’Melveny trial team had been part of the Magma Design team, including Luann Simmons (Managing Partner of OMM San Francisco).

Based upon these facts, the district court found that the relationship between the current and former representation substantial enough to create an irrefutable presumption that confidential material information was transmitted to the attorneys regarding the current dispute. The result of that conclusion is that O’Melvany cannot now switch sides to represent the opposing party. The district court did not, however, go so far as to particularly find that the O’Melveny attorneys had actually breached any ethical duties.

In a Mandamus action, ATopTech asked the Federal Circuit to overrule the lower court decision. However, the appellate panel denied the Mandamus petition – finding instead that the lower court “had a sound basis for disqualifying OMM.”