A Delaware federal judge has barred Latham & Watkins from representing a defendant in a patent infringement case because the firm represented the plaintiff’s predecessor 17 years ago.
On September 24, Judge Richard Andrews of the District of Delaware disqualified Latham from representing MobiTV in EON Corp. IP Holdings LLC v. FLO TV Inc. He found that a potential conflict of interest exists even though Latham set up an ethics wall.
In an emailed statement, Latham spokesman Frank Pizzurro, said, “While we disagree with the court’s opinion, which ironically detailed the myriad steps we took to prevent a conflict and the long passage of time since we represented EON, it is in the best interests of our client for us not to further challenge this matter so that they may proceed with the case.”
In September 2010, EON IP sued 17 defendants, claiming they infringed a patent for “Software Controlled Multi-Mode Interactive TV Systems.”
Latham Los Angeles partner Bob Steinberg and associate Ryan Hatch were admitted pro hac vice to to represent MobiTV in November 2010.
From 1988 to 1995, Latham attorneys represented EON Corp.’s predecessor, TV Answer. At least 34 Latham Washington attorneys billed time to EON during that time period, mostly for corporate and regulatory matters. Neither Steinberg nor Hatch were at Latham during the time.
In October 2010, Latham set up an ethics wall in the case in order to avert the conflict of interest.
In his opinion, Andrews considered the factors for and against Latham’s continued representation of MobiTV.
First, in analyzing the connection between the the firm and EON, Andrews noted that Latham’s representation was broad, but the firm wasn’t involved in obtaining the patent. He noted that the patent issued long after Latham stopped representing the company, and he found that it was far-fetched to think that Latham may have had access to confidential information about licensing because the firm’s representation ended two years before the patent issued.
But Andrews identified problems with Latham’s work on the case. So far, he wrote, “at least one of EON’s co-defendants has identified two former Latham lawyers as potential witnesses.”
He also noted that some of MobiTV’s potential invalidity defenses “could involve factual inquiry into EON’s activities in the relevant time period, and it is conceivable that information about related factual matters could have been shared with Latham attorneys.”
“In terms of the conflict analysis, it makes no difference that seventeen years have passed since Latham represented EON, when the lawsuit will in part concern events that occurred twenty years ago,” Andrews wrote.
Another factor was that Latham’s prior representation would be presented to the jury. “I am not concerned that the jury would see Latham on both sides of the same case, because I believe that could be dealt with simply by not having defense counsel identify their affiliation with Latham. The fact that some accommodation might have to be made, however, is the sort of thing that would give rise to the perception by the general public that the rules are designed to avoid,” Andrews wrote.
On balance, he said, “an ethics wall is not the appropriate cure.”
Andrews also noted that the plaintiff could have filed the motion to disqualify more promptly, but “the case is still young.”
“Thus, on balance,” Andrews wrote, “considering the rather unusual circumstances of the conflict of interest here, I believe the most appropriate exercise of my discretion is to disqualify Latham and Watkins from representing MobiTV.”
Gregory Williams, a Wilmington, Del., partner at Philadelphia’s Fox Rothschild who represents EON, filed the motion to disqualify Latham. He did not respond to requests for comment.
In an emailed statement, Daniel Scardino, a partner at Reed & Scardino of Austin, which also represented EON, said that Latham “worked extensively” for EON from 1998 to 1995. Scardino noted that former Latham partner and Federal Communications Commission chairman Mark Fowler was on EON’s board at the time the patent in this case was filed. Scardino said the firm “was a crucial advisor and representative in EON’s petition to the FCC to allocate spectrum for EON’s service.”
Scardino also said that EON hired a Latham lawyer that did work for it as general counsel in 1991. He added that EON “never imagined” that the same lawyers would be on the other side of one of its matters.
In addition, Scardino said, “EON is still owned and controlled today by some of the same people that sat in EON’s boardroom when Latham & Watkins lawyers were at the table. Those individuals were understandably dismayed that Latham & Watkins refused to honor their former client relationship. The Court’s decision confirms to EON and to the public the sanctity of the attorney-client relationship. Even if many years pass, clients should be able to rely on their lawyers’ confidentiality and trust that lawyers will not be allowed to later switch sides. While it is unfortunate EON had to go to such lengths in seeking this right result, here the rules protected EON’s investment in technology and legal services.”
Sheri Qualters can be contacted at firstname.lastname@example.org.