All posts by David

About David

Professor of Law, Mercer University School of Law. 2012-13, judicial clerk to Chief Judge Rader. Expert witness and consultant.

The Breadth of the Duty of Candor in IPR

Ethics,

This column is about shows that because of the wording of regulations imposing the duty of candor in IPR, parties — parties — in an IPR owe an extremely broad duty of candor.  This ain’t your grandpa’s Rule 56.

Here’s the regulation, 37 C.F.R. 42.11:  “Parties and individuals involved in the proceeding have a duty of candor and good faith to the [USPTO] during the course of a proceeding.”

There’s a lot of unpacking to do when that rule is applied, but one key different between 42.11 and 1.56 is who is covered by the obligation.  Under 1.56 it is, of course, those persons substantively involved in prosecution.  Now look at 42.11:  parties.  And persons “involved.”  Obviously, “persons involved” is broader than persons substantively involved, but parties means, one would think, the party and everyone in it.  That is an extraordinarily broad scope.

By the way if you compare 42.11 to the narrower “inconsistent information must be disclosed” obligation in IPR in 42.51, it applies to a different set of people and does not include parties, so one would think these words were deliberately chosen and have different meaning.

Finally, there are proposed amendments in the works which, I heard when I was at the USPTO a couple weeks ago, are coming “soon.”  There’s more about that here, and I don’t know if it will narrow the scope of who is covered, if anything, the proposed amendment to 42.10 adding a certification by the lawyer may make it clear that a lawyer has a duty to investigate everything known to a “party” to an IPR.

A PTO official said to me after my talk that trying to think about IPR with an overlay of prosecution will do nothing but harm. He’s right.

 

Iqbal, Twombly, the Demise of Form 18, and Rule 12 Hell

Ethics

A few months ago, I was at the Eastern District of Texas Bench and Bar Conference, and I started talking to a federal district judge about her views of the then-imminent demise of Form 18, the form that essentially made it sufficient for a complaint alleging direct infringement to include only barebones allegations of the facts.  Her response was, “it’s going to be Rule 12 hell.”

And she was right.

Where the law now is is this, it seems:  to state a claim of direct infringement, a patentee must state factual content — which excludes legal conclusions and conclusory statements — which, if taken as true, plausibly shows infringement.  What she saw happening is what is happening, and a good example of this just happened in an order, Atlas IP LLC v. Pacific Gas & Elec. Co., from Judge LaPorte of the Northern District of California.

Where we are, it seems, is that we’re going to have to apply rules from Iqbal and Twombly about how legal conclusions don’t count to patent claims, where what matters is, of course, the legal conclusion about what the claim means.  Once that clutter is removed and it becomes clear that legal conclusions can sometimes ‘count’ for purposes of stating a claim, we are still going to have to face defendants filing motions asserting that the alleged interpretation is an “implausible” interpretation of the claims.  And we’re going to do that element by element.

So, “Markman Plausibility” hearings to decide Rule 12(b)(6) motions are coming your way?

Rule 12 hell?  Rule 12 hell no!

The Maling Decision from Massachusetts on Subject Matter Conflicts

Ethics, , ,

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.

 

PTAB Allows Filing of Motion for Sanctions for Alleged Protective Order Violation

Ethics,

Lately I’ve had a lot of calls about ethical issues in IPR proceedings. The rules are not clear in a number of instance and the case law is sparse and not always easily harmonized with the plain text of the rules.  This case caught my eye, though, for a different reason.

The order is paper 23 in RPX Corp. v. Applications on the Internet Time, LLC, IPR 2015 (Dec. 4, 2015).  The actual order itself grants the petitioner authority to file a motion for sanctions for alleged violations of the Standing Default Protective Order.  Obviously, parties need to police against such violations.

What the case reminds us is that the Standing Default Protective Order is not… a standing default protective order.  Instead, it is entered only by motion of the parties, and that motion must include the proposed protective order.

Here, the parties had previously agreed to be bound by the protective order, and so the fact that they had not requested entry of any protective order did not matter. However, remember that there really is no default standing protective order… a misnomer that can hurt you.

S.D. Florida shifts fees from date of claim construction onward

Ethics, ,

Advanced Ground Info. Sys., Inc. v. Life360, Inc. (S.D. Fla. Civ. A. No. 14-cv-80651), is an interesting case .  The patent-in-suit covered some sort of smart phone app (it’s not clear what).  The key dispute over infringement centered on whether the end user, alone, performed each step of the patented method.  Of course, a method claim cannot be infringed without preponderant evidence of direct infringement by someone.

Here, the asserted method claims survived the accused infringer’s motion for summary judgment of non-infringement, but were found by the jury to be not infringed.  Even though the case got to a jury, the district court awarded fees to the prevailing accused infringer, rejecting the argument that simply because the case got to trial meant it was not subject to shifting.

Instead, the court emphasized that after Akamai and the district court’s claim construction, it had been clear that there could be no infringement.  To oppose fees, the accused infringer pointed out that the court had denied the defendant’s motion for summary judgment after both Akamai and claim construction.

Why then, did the district judge deny the motion for summary judgment?

In granting fees in its November 30, 2015 order, the judge explained that he had “considered granting” the motion but had not done so because of the patentee’s explanation of how the app worked. Specifically, the judge stated that he denied summary judgment of non-infringement of the method claims based on the patentee’s argument that when the end user used the app was used, the app “automatically,” performed the remaining steps and so directly infringed the method claims.  That turned out to be untrue, and so the denial of summary judgment, alone, was insufficient to avoid an exceptional case finding.

In addition, the judge in granting fees also mentioned that the patentee had never sold any products, sued a start-up that had never made a profit, and yet the patentee argued that it had suffered irreparable harm.  Given the facts, the judge awarded fees from claim construction onward.

The lessons are several, but not unusual or new.  One is obviously to have a viable infringement claim and evidence of it; lawyer argument is not evidence.  The other is to keep in mind that, post-Octane it is important to evaluate infringement and other arguments carefully after claim construction (and any other similar event) and advise the client on, not just whether the case is meritorious, but whether it is marginally so and thus continued litigation puts the client at risk of fee shifting.

Judge Real Enters Default Against Infringement Defendant for Discovery and Other Abuses

Ethics

On December 1 in United Construction Products, Inc. v. Tile Tech, Inc. Judge Real of the Central District entered terminating sanctions — default judgment admitting patent infringement, inducement, and more — and found a case exceptional.  Among other things, the judge found that defendant’s counsel, among other things, missed pretty much every deadline, made misrepresentations to the court about meeting deadlines, and more.

No, this sort of conduct isn’t common in federal litigation (to this degree), but terminating sanctions are rare.

Federal Circuit Asked on Mandamus to Recognize Patent Agent Privilege

Ethics

In In re Queen’s University at Kingston (App. No. 2015-0145), the court yesterday heard oral argument on whether to recognize the patent agent privilege.  The oral argument is here.

Judges Lourie and O’Malley (if I’m recognizing their voices by memory correctly) seemed to believe that the court should recognize the privilege, but judge Reyna was skeptical of using mandamus to reach the issue.

This issue does need resolution by the court.  The amount of money cost fighting over whether this privilege exists is money spent not addressing the merits, and whether this privilege exists comes up fairly frequently (and will more so in future cases, since patenting has become more of an international endeavor since the mid-1990s).  I’ve written about this issue (and other patent agent ethics issues) here.  The petitioner pretty much echoed my argument in the paper!  Hopefully Judge O’Malley will quote me in her decision.

The USPTO also held some roundtables on the privilege (see here).

New Discovery Rules: Act Now?

Ethics,

I’m headed to speak at the Eastern District of Texas Bench & Bar Conference and then at the AIPLA meeting in DC. One result of this (and of teaching civil procedure this year) is becoming very concerned about the new discovery rules, coming into effect in December. If you haven’t read them, do so. If you file a case after December 1, they will control; they also will control, to the extent practicable and just, to cases filed before then.

Apart from doing away with all forms except the one relating to waiver of service of process, the key change is with respect to the scope of discovery.  Here is the old rule:

Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense—including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. All discovery is subject to the limitations imposed by Rule 26(b)(2)(C).

Here is the new:

Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.

There are a lot of changes.

First, discovery has to be — not just relevant to an existing claim or defense — but also proportional to several factors or considerations.  The answer to whether an issue is important is quite subjective, and, no doubt, turns on viewpoint.  Does it bring in a subjective element?  How do we determine whether the cost will exceed the likely benefit without knowing what the discovery would reveal?

But the key concern I have is the elimination of any ability to allow discovery beyond relevancy to a claim or defense.  Given that there must be a rule 11 basis to plead something, how can certain affirmative defenses (especially inventorship and inequitable conduct) ever be pled?  Because of this change, if it can’t be pled, there won’t be discovery.  Local rules, of course, can’t be inconsistent with the FRCP.

The amendments are here.

Georgia Annual Corporate IP Institute October 27-28 in Atlanta

Current Affairs, Ethics, Patent,

By David Hricik

On October 27-28, 2015, the Ninth Annual Corporate IP Institute® is being held in Atlanta.  I’ll be speaking along with a lot of other folks.  As usual, the Intellectual Property Owners Association (IPO) has organized a panel for the event for corporate IP management best practices.  Registration for the Institute (and a bonus charity golf game, the CIP CUP® — these folks obviously have trademark and marketing lawyers around) is available here.

 

California Bar Reportedly Drops Reines Inquiry

Ethics

The only reports I can find about this are behind paywalls, but the reports are that the California bar association dropped its investigation into whether there was any wrong-doing involving Mr. Ed Reines and his interactions with former Chief Judge Rader.  As you’ll recall, the Federal Circuit wrote an opinion (which I thought had an awful lot of holes in it, available here).

What is that expression about where do I go to get my reputation back?

Professionalism in Communications with the USPTO

Ethics,

I gave a talk last night in New York City, and I talked about various prosecution and litigation issues.  In attendance was a primary examiner.  We got to discussing nasty communications from practitioners.

She told me some things that should be obvious, but apparently my sense of what is obvious differs from a lot of practitioners.

First, being snarky doesn’t work.  Telling someone they are stupid is not going to advance prosecution.

Second, when a particularly nasty communication comes in, it becomes the topic of conversation.  “You won’t believe this one…”  It’s a small world so if you’re practicing in one area, being nasty to one examiner may affect your reputation among several examiners in that art group.

Despite those two fairly common-sense things, nasty-grams continue.  The OED occasionally gets involved.

Patent prosecution is, of course, an adversary process, with the practitioner attempting to overcome an examiner’s arguments as to why certain claims are unpatentable (among other things). Examiners are under time pressures, as are practitioners whose clients need efficiently delivered legal services. Sometimes that leads one “side” or the other to lose its cool.

That is understandable, and perhaps forgivable.

What seems to happen too often is that practitioners unload vituperative communications on examiners. This is probably counter-productive – telling someone they are stupid and wrong in my experience is likely not to change that person’s mind. Yet, practitioners persist in this nasty conduct.

Primary examiners have told me that when these sorts of nasty communications come in, they are passed around and ridiculed at the office. I doubt that is testimony to their effectiveness.

Beyond that, these are passed along to the OED. The OED has made it clear that it will not tolerate unprofessional behavior. In one recent disciplinary case, In re Schroeder, D2014-08 (May 5, 2015), the OED entered a default judgment against a practitioner who clearly went beyond the boundaries of decency. The practitioner wrote:

            Are you drunk? No, seriously … are you drinking scotch and whiskey with a side of crack cocaine while you “examine” patent applications? (Heavy emphasis on the quotes). Do you just mail merge rejection letters from your home? Is that what taxpayers are getting in exchange for your services? Have you even read the patent application? I’m curious. Because you either haven’t read the patent application or you are … (I don’t want to say the “R” word) “Special.”

The practitioner also stated:

Since when did the USPTO become a post World War II jobs program? What’s the point in hiring 2,000 additional examiners when 2,000 rubber stamps would suffice just fine? So, tell me something Corky, what would it take for a patent application to be approved? Do we have to write patent applications in crayon? Does a patent application have to come with some sort of pop-up book? Do you have to be a family member or some big law firm who incentivizes you with some other special deal? What does it take Corky? Perhaps you might want to take your job seriously and actually give a sh.t! What’s the point in having to deal with you Special Olympics rejects when we should go straight to Appeals? While you idiots sit around in bathtubs farting and picking your noses, you should know that there are people out here who actually give a sh. t about their careers, their work, and their dreams.

Perhaps indicating that he was having a bad day, on the same day that practitioner filed a response in another application. That examiner had also rejected the claims based on the prior art. Rather than overcoming the substance of the rejection, the practitioner wrote:

Apparently, the current Examiner to which this application has been assigned, does not speak the native language here in the United States of America. Perhaps in Farsi, really ancient Latin, or even the post-Nimoy Vulcan dialect, the word “stud” just so happens to be synonymous with the term “ridge”. But here in this country, the same country to which [sic] Examiner receives his stipend, the word “stud”, and the word “ridge” have two separate and distinct meanings.

He also wrote examiners were like “athletes who participate in the Special Olympics [who] might initially make the same mistake after a wild night of cocaine and strippers in Las Vegas.” Finally, he said he had consulted an online dictionary “called www.USPTOexaminerswhoaremorons.com,” where, sure enough, a picture and name of the current examiner was found. Not surprisingly, enumerated synonyms include the following: ‘Down’s Syndrome, idiot, lazy, incompetent, blind, stupid, worthless.’”

Don’t do this.

In Scotland a Juror who Misuses Technology Can Face Two Years in Prison!

Ethics

I’ve written an article or two on ethics and technology, and am in the middle of writing a chapter for an ABA book.  It is remarkable to me the number of jurors who do not listen to the judge’s admonitions not to do research about the case but, instead, to listen to the evidence.  Also, jurors sometimes text to friends, family, and each other about the case.  I know that a juror in one trial I was involved in a couple years ago was tweeting during a patent trial (mostly about how boring it was and, I have to say, I agreed!).  There’s even a blog about jurors misbehaving called jurorsbehavingbadly.com!

Over in the UK they’ve decided to take this fight one step further and criminalize some aspects of this.  Up to 2 years in prison! The article is here.

Not sure I’d lock someone up for two years for doing this, but I do know that, especially in the criminal arena, misconduct has caused mistrials, motion practice, and more.  Perhaps it would serve as a strong deterrent?

Anyone have any stories to share?

Illinois: In-house counsel who limit practice to that before the USPTO do not need to register

Ethics

Some states permit in-house counsel to practice in the state so long as they only represent their corporate employer and register with the state.  Registration is not free or hassle-free.  However, in Opinion No. 15-01 (May 2015), the Illinois State Bar concluded that in-house counsel who limited his practice to patent practice did not need to register.

This issue comes up in many forms.  For example, what can a patent agent do?  The USPTO has defined what is, and is not, practice before the office and those definitions should be carefully consulted.  But this Illinois opinion is a bit of good news to in-house counsel in my law school’s state.

Dickstein Shapiro Dodges Malpractice Suit by Showing Long-Ago Issued Claims Were to Ineligible Subject Matter

District Court, Ethics, Patent, Statutory Construction,

By David Hricik

This one will make your head spin, especially the statutory construction part.  The case is Encylopaedia Britannica, Inc. v. Dickstein Shapiro LLP (D. D.C. Aug. 26, 2015).

The Dickstein Shapiro firm was retained by Encyclopaedia Britannica, Inc. (EB) in 1993 to file a patent application. The patent issued, and in 2006 EB sued several companies for infringing it. The patent was held invalid due to “an unnoticed defect” in the 1993 application.  The basis for invalidity was not 101, however.

EB then sued the law firm for malpractice in prosecuting the 1993 application.  EB contended that, but for the firm’s negligence, it would have made a lot of money in the infringement suit.

After the malpractice suit was filed, Alice was decided.  The firm then argued that, as a result, the claims were ineligible and so any malpractice by it in 1993 could not have been the but-for cause of harm.  The claims would have been “invalid” under 101 even had it not botched the 1993 application, and so there was no harm caused by any error it made.

To put this in context:  Because of a 2014 Supreme Court decision, the 2006 case would have been lost anyway because, in 1993, the claims were not eligible for patenting.

And the argument worked.  The district court granted a motion to dismiss for failure to state a claim, finding the subject matter ineligible on the face of the patent.

I’ll leave the merits of that to others.

What is interesting is the court’s approach to retroactive application of Alice.  The issue was whether in the 2006 case, even had the firm’s alleged malpractice not caused the invalidity judgment, the claims were “invalid” under 101 then.  The district court held that Alice did not change the law, but merely stated what it had always been.    Specifically, the district court stated:

When the Supreme Court construes a federal statute… that construction is an authoritative statement of what the statute has always meant that applies retroactively.  Alice represents the Supreme Court’s definitive statement on what 101 means — and always meant.  Because the underlying case is governed by 101, it is appropriate for this Court to apply the Supreme Court’s construction of 101 as set forth in Alice.

(Citations omitted).

For this and other reasons, the court reasoned that “the only rule that makes sense in this context is to apply the objectively correct legal standard as enunciated by the Supreme Court in Alice, rather than an incorrect legal standard that the [district court in the 2006 infringement case] may have applied prior to July 2015 [when the court was deciding the motion.]”  The court then applied Alice and found the claims “invalid” under 101.

There’s a lot to unpack here.

First, the retroactivity of Alice bodes ill for lawyers who obtained patents now being held “invalid” under 101.  If the law “always” was this way, why did you advise your clients to spend so much money on a patent so clearly invalid that a judge could decide it by looking at it? But keep reading, because you and I know Alice and the rest changed the law.  (Indeed, the USPTO changed its examination procedures to adjust to it!)

Second, there could be enormous consequences if Alice changed the Court’s prior interpretations of 101.

While as a matter of statutory construction the retroactivity principle relied upon by the district court is correct, retroactivity does not ordinarily apply when an interpretation is changed.  (This perhaps explains why the Supreme Court is careful to avoid saying it is changing an interpretation, because changes to interpretations of a statute are prospective, only, as a general rule.  In that regard, think about Therasense for a moment.) So, if Alice changed the law, then the district court was likely wrong to apply it retroactively.

More broadly, however, if Alice (and the rest) changed the meaning of 101, then it means many patents now being held “invalid” should not be judged under Alice.

I’ve been waiting for someone to make the retroactivity argument (as with Therasense, which clearly changed the CAFC’s interpretation of “unenforceability”).  It would be fun to try to see someone use Alice and apply it to the Supreme Court line of cases and make them all fall in a line.

Kyle Bass’s Response to Motions about Abuse of IPR in IPR2015-01092 

Ethics, , ,

The response in Coalition for Affordable Drugs v. Celgene (IPR2015-01092) is here.

Here’s the introduction:

Celgene’s motion is littered with references to the Petitioner’s and Real Parties-in-Interest’s (collectively, “CFAD”) “admitted profit motive,” and makes the curious argument that filing IPR petitions with a profit motive constitutes an “abuse of process.” Yet at the heart of nearly every patent and nearly every IPR, the motivation is profit. Celgene files for and acquires patents to profit from the higher drug prices that patents enable. Generic pharmaceutical companies challenge patents to profit from generic sales. Celgene’s argument is in conflict with Supreme Court precedent expressly finding it in the public’s interest for economically motivated actors to challenge patents. See Lear v. Adkins, 395 U.S. 653, 670 (1969) (holding public interest requires permitting licensees to challenge validity because they “may often be the only individuals with enough economic incentive to challenge the patentability” and “[i]f they are muzzled, the public may continually be required to pay tribute to would-be monopolists”). Having an economic motive for petitioning the government simply does not turn the petition into an abuse of process.

CFAD anticipates that fees and costs to complete an IPR for a single drug is approximately $1 million dollars. There are a limited number of entities capable of making that financial commitment. And fewer can make such a commitment without the prospect of profiting from their efforts. The fact is CFAD’s motivations do not change the social value of its activities. Poor quality patents enable pharmaceutical companies to maintain artificially high drug prices and reap unjust monopoly profits paid for by consumers and taxpayers.

Celgene accuses CFAD of motives that are not entirely “altruistic.” That is a truthful irrelevancy. The U.S. economy is based largely on the notion that individual self-interest, properly directed, benefits society writ large. Celgene’s motive is to profit from consumers and taxpayers from drug sales. Celgene’s patent-conferred monopoly results in Revlimid prices that exceed $580 per pill—creating costs in excess of $200,000 per patient year. (See Exs. 1021-23, showing prices for three Celgene drugs protected by challenged patents.) Revlimid sales were nearly $5 billion in 2014. Celgene is not giving Revlimid or its profits away.

CFAD’s IPRs are part of its investment strategy, and it will only succeed by invalidating patents, which would serve the socially valuable purpose of reducing drug prices artificially priced above the socially optimum level. And even if, despite its best efforts, it does not profit—each petition that knocks down a barrier to generic entry benefits the public. It should be axiomatic that people do not undertake socially valuable activity for free—not Celgene, not generics, not shareholders, and not investment funds. Low drug prices will not simply materialize. They must be brought about by agents who will invest significant capital and do the hard work of identifying and challenging weak patents. Generics sometimes serve this function. But the law does not render it “abuse” for others, including CFAD, to also play this important societal role.

Another Parallel Litigation Disqualification Case

Ethics, ,

I can’t find it on line, but it’s Milwaukee Electric Tool Corp. v. Hilti, 2015 WL 1898393 (E.D. Wis. Apr. 27, 2015).  DLA Piper was representing Snap-on Tools.  Another client asked it to sue several potential infringers, one of which was Snap-on.  The firm appeared in all of the cases — all of which involved the same patent — against every defendant except Snap-on.

Snap-on moved to disqualify DLA Piper.  It contended that, by representing the patentee against the non-clients, it was adverse to Snap-on.  Basically, the argument that has been made (in this circumstance in several patent cases, and in other contexts) is that a lawyer should not be a part of building a case against his own client.

The court discussed the three other patent cases on this issue, and some of the other cases, but denied the motion to disqualify.  It found that DLA Piper was not adverse to Snap-on, but it noted that it was a very close question.

Here’s my question:  obviously, DLA Piper cannot coordinate with those lawyers who are adverse to Snap-on.  (I can’t do out of court what I couldn’t do in it.)  How can a law firm competently represent a patentee in an infringement suit without coordinating arguments (claim construction, etc.) with other counsel?  For a discussion of those issues, see Arrowpac Inc. v. Sea Star Line, LLC, 2013 Wl 5460027 (M.D. Fl. Apr. 30, 2013).

This case is somewhat like the Akin Gump case, discussed below, which resulted in a $500,000 judgment against that firm.

Public Confidential Information: California Weighs In, Asks for Comments

Ethics, Inequitable Conduct, Law Firm Practice, malpractice

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.