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Officials at Yahoo Corp. were taken aback when they walked into a meeting not long ago to discuss the company’s patent infringement suit against Xfire Inc. Xfire, a software company in Menlo Park whose signature product allows computer game players to reach other players through instant messaging, had brought along its attorneys, who happen to be from DLA Piper Rudnick Gray Cary. Yahoo knows the firm all too well. DLA is representing Yahoo subsidiary Overture Services Inc. in a separate matter. Claiming that a conflict of interest existed, Yahoo’s attorneys asked DLA to withdraw as Xfire’s counsel, which the firm refused to do. Michael Jacobs, a partner at Morrison & Foerster, pointed out in a recent court filing in behalf of Yahoo that Yahoo’s associate general counsel is managing the litigation against Xfire as well as DLA’s Overture case. “DLA’s representation of Xfire therefore puts Yahoo in the untenable position of conducting attorney-client privileged communications with one set of DLA attorneys while finding itself adverse to another set of DLA attorneys,” Jacobs wrote. He has asked U.S. District Judge Jeremy Fogel to disqualify DLA Piper Rudnick Gray Cary from the Xfire case. The alleged conflict arose as a result of Piper Rudnick’s merger first with Gray Cary Ware & Freidenrich and then with the London-based DLA. Piper Rudnick originally represented Overture and Gray Cary was counsel to Xfire before Yahoo filed its infringement suit against the instant-messaging software company. Because DLA contends that Overture and Yahoo are separate entities, the firm says that no conflict exists. “Courts start with the premise that subsidiaries and parents are separate entities and then ask, ‘Are they [separate] in the context of conflict of interest?’” says William Frimel, a DLA partner. “Sometimes they are and sometimes not.” Brenda Sandburg is a senior writer at The Recorder, where she covers developments in intellectual property law.

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