Given that patent litigation brought by non-performing entities (née patent trolls) continues in full blossom, it’s no surprise that Big Firm castaways have been leaping in to get a piece of the action on the plaintiffs side. But representing NPEs carries risks for lawyers who earned their patent pedigrees at defense firms, as a pair of decisions highlighted on Thursday.
First the good news for patent defendants: San Francisco federal district court judge William Alsup granted a motion by counsel for Toshiba at Paul Hastings and disqualified Feinberg Day Alberti & Thompson from representing an NPE called Talon Research in an infringement suit against Toshiba over memory chip technology. Six Feinberg Day lawyers had represented Toshiba between 2005 and 2007–and collectively billed the company for almost 4,000 hours in litigation related to flash memory patents–while practicing at DLA Piper.
“In the Court’s mind, this is not a close call and Feinberg Day should have known better than to sue its recent client on a matter so similar to those on which the client had recently opened its confidences to counsel,” Judge Alsup ruled Thursday.
Feinberg Day, as we’ve reported, was formed early last year by six IP lawyers from DLA and one from Mayer Brown. According to Pacer records, the firm’s cases all seem to be brought on behalf of NPEs. Partner Elizabeth Day didn’t respond to a request for comment.
Meanwhile, a judge in East Texas had some bad news on Thursday for Dell, which has filed five separate but nearly identical motions to disqualify a firm called Antonelli, Harrington & Thompson from representing plaintiffs in a series of suits against the computer maker. Dell, represented by Winston & Strawn and Ramey & Flock, argued that the firm should be disqualified from representing plaintiff Secure Axcess in a patent suit against Dell over encryption technology. All three partners at AHT practiced at Weil, Gothshal & Manges before forming their plaintiffs-side firm two years ago, and two of them represented Dell in patent litigation at Weil.
But in the former Weil lawyers’ case, Tyler, Tx., federal district court judge Leonard Davis denied Dell’s motion, concluding that the connection between the Secure Axcess suit and the lawyers’ former representation of Dell was too tenuous to warrant disqualification. Judge Davis rejected Dell’s threshold argument that the firm must be disqualified if its past representation bore “more than a superficial relationship” to the present case. Disqualification requires a “substantial relationship” between the cases, he ruled, and he agreed with AHT that Dell couldn’t meet that standard.
“The fact that Dell has filed motions to disqualify AHT in four other cases [involving different patents and technology] undermines its substantially related argument,” Judge Davis wrote. “Under Dell’s interpretation of the law, AHT is likely precluded from ever representing any client in a patent infringement case against Dell. This reading of the law is too broad.”
Two of Dell’s other disqualification motions are still pending before Judge Davis. Two more are before a federal judge in Beaumont. Samsung has also moved to disqualify Antonelli Harrington from representing NPEs in at least two patent suits in Texas in similar grounds, but no judge has ruled on those motions.
Steven Park of Paul Hastings, who filed Toshiba’s successful motion to disqualify Feinberg Day in the California case, told us the law on disqualification in successive patent cases is still unsettled, with no definitive precedent from the U.S. Court of Appeals for the Federal Circuit on how to apply the substantial relationship test in such cases.
“I think this issue is coming up more readily now and it seems like it’s going to only continue to get bigger and bigger as all of these lawyers are leaving big firms and starting their own plaintiffs shops,” Park said. “I think plaintiffs counsel’s preference will be that there’s just a bright line rule: If I didn’t represent you in a previous case involving the same patent or a related patent, then there’s no cause for disqualification.”
Like Judge Davis in the Texas case, Judge Alsup based his California ruling for Toshiba largely on the substantial relationship standard, which he determined that Toshiba had met. But he also credited Paul Hastings’s arguments that the Feinberg Day lawyers had gained unfair knowledge of Toshiba’s general litigation strategies while at DLA. “Counsel have important insight into the risk aversion (or not) of their former client and are now in a position to capitalize on that insight,” he ruled. “Even if Feinberg Day performed a collective memory lobotomy, Toshiba would rightly fear adverse use of information it shared in confidence.”
Overcoming concerns like those poses a bigger problem than the substantial relationship test for firms like Feinberg Day and AHT, not to mention for former Kirkland & Ellis partner John Desmarais’s Desmarais LLP and former Weil IP superstar Matthew Powers’s firm, Tensegrity Law Group. (Desmarais and Tensegrity both do plaintiffs and defense work and, as far as we know, haven’t been targeted for disqualification.) It’s not that hard for newly-minted plaintiffs firms to avoid bringing suits based on similar patents to those they’ve litigated as defense lawyers. Avoiding suits against all past clients for fear of disqualification is another matter.
“Courts routinely deny disqualification motions that are based merely on counsel’s exposure to their former client’s general litigation strategies,” AHT partner Matthew Antonelli said in an e-mailed statement. “To do otherwise would severely compromise clients’ right to select counsel of their choice, and unfairly limit the ability of lawyers like me and my partners to start their own practices.”
How will the courts handle the issue going forward? Thursday’s decisions provide some clues, but we may have to wait for the Federal Circuit to weigh in to find out.
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