Scott Graham writes for The Recorder, an American Lawyer affiliate.
A Morgan Lewis partner's role in a patent infringement suit against longtime Morgan Lewis client Apple was an embarrassment for the law firm.
But it won't be enough to derail the patent suit being waged by FlatWorld Interactives, the company headed by the wife of now-former Morgan Lewis partner John McAleese III.
U.S. District Judge William Orrick III in San Francisco sounded strongly inclined Wednesday to deny Apple's motion to disqualify FlatWorld's outside counsel at Hagens Berman Sobol Shapiro over the firm's contacts with McAleese.
"There's no doubt in my mind that John McAleese breached his ethical duties," the newly minted judge said Wednesday.
But there's no evidence that McAleese used his position at Morgan Lewis to access Apple's confidential information, and he appeared to have only "minimal contacts" with Hagens Berman, Orrick said. Besides, he added, "this case has been going on a year and half, and we're on the eve of the Markman hearing."
McAleese was an environmental lawyer at Morgan Lewis for 24 years. His wife Jennifer is part owner and CEO of FlatWorld, a small company that owns a patent on touchscreen technology. Last year the company sued Apple for allegedly infringing the patent. Apple contends that McAleese was secretly advising the company on litigation strategy through his wife, notwithstanding Morgan Lewis' longtime representation of Apple in IP matters.
Apple says it found out in February, when FlatWorld produced a privilege log that referred to more than 50 attorney-client communications to and from John McAleese. Apple emailed a relationship partner at Morgan Lewis, who in turn forwarded the email to McAleese. McAleese responded by calling Hagens Berman partner Mark Carlson and telling him his name should not appear on privilege logs. Hagens Berman then amended the privilege log by replacing attorney-client privilege with spousal privilege.
Representing Apple on Wednesday, Robert Krupka of Los Angeles' Krupka Law Group argued that Apple's email to the relationship partner was itself privileged, and that when McAleese inappropriately told Hagens Berman about it, the firm had a duty to notify Apple. "Instead they took that information and used it to improve their position in the litigation," Krupka said.
Apple doesn't bring disqualification motions lightly, Krupka said, asserting that the company has brought only two other such motions amid all its past litigation. "This is not a gotcha, your honor. We're sorry we're here," he said, asking that Orrick at least issue a stay and appoint a special master to take more discovery.
Hagens Berman partner Steve Berman said Morgan Lewis did a forensic examination that shows McAleese never tried to access Apple's confidential information. That's not surprising, Berman said, because Morgan Lewis encrypts such documents to limit access to the lawyers working on the matter.
"They're kind of stuck," Berman said. "They shot at us and they failed. And now they say, 'Well, we want more discovery.'"
Krupka said FlatWorld is hiding the ball by submitting declarations from Jennifer McAleese and Hagens Berman attorneys about John McAleese's conduct, but nothing from John McAleese himself. "They're taking advantage of the fact that he's an empty chair," Krupka said, "and they're hiding behind the spousal privilege."
Orrick took the motion under submission, but it was clear where he's heading. Afterward he scheduled a claims construction tutorial in October with Apple's attorneys — and with Hagens Berman.