Conflicts in Patent Prosecution: Avoiding the Ethical Pitfalls - - PowerPoint PPT Presentation

Conflicts in Patent Prosecution: Avoiding the Ethical Pitfalls

Minimizing Risks of Malpractice Liability and Ethics Sanctions

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific THURSDAY, JUNE 22, 2017

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Philip Furgang, Partner , Furgang & Adwar, New York

• Dr. Sandra P

. Thompson, Of Counsel, Slater Hersey & Lieberman, Irvine, Calif.

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Hidden Traps: Subject Matter Conflict of Interest in Patent Law Hidden Traps: Subject Matter Conflict of Interest in Patent Law

Sandra Thompson, PhD, JD Slater Hersey & Lieberman, LLP

A conflict of interest is a situation in which someone in a position of trust, such as a lawyer, has competing professional or personal interests. Such competing interests can make it difficult to fulfill his or her duties impartially.

Conflict of Interest

A conflict of interest is a situation in which someone in a position of trust, such as a lawyer, has competing professional or personal interests. Such competing interests can make it difficult to fulfill his or her duties impartially.

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Conflict of Interest

A conflict of interest exists even if no unethical or improper act results from it. A conflict of interest can create an appearance of impropriety that can undermine confidence in the person, profession, or court system. A conflict of interest exists even if no unethical or improper act results from it. A conflict of interest can create an appearance of impropriety that can undermine confidence in the person, profession, or court system.

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USPTO Rules

§ 11.108 Conflict of interest; Current clients; Specific rules.  (b) A practitioner shall not use information relating to representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by the USPTO Rules of Professional Conduct.  (k) While practitioners are associated in a firm, a prohibition in paragraphs (a) through (i) of this section that applies to any one of them shall apply to all of them. § 11.108 Conflict of interest; Current clients; Specific rules.  (b) A practitioner shall not use information relating to representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by the USPTO Rules of Professional Conduct.  (k) While practitioners are associated in a firm, a prohibition in paragraphs (a) through (i) of this section that applies to any one of them shall apply to all of them.

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USPTO Rules

§ 11.109 Duties to former clients.

 (a) A practitioner who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.  (b) A practitioner shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the practitioner formerly was associated had previously represented a client:  (1) Whose interests are materially adverse to that person; and  (2) About whom the practitioner had acquired information protected by Sections 11.106 and 11.109(c) that is material to the matter; unless the former client gives informed consent, confirmed in writing.  (c) A practitioner who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter:  (1) Use information relating to the representation to the disadvantage of the former client except as the USPTO Rules of Professional Conduct would permit or require with respect to a client, or when the information has become generally known; or  (2) Reveal information relating to the representation except as the USPTO Rules of Professional Conduct would permit or require with respect to a client.

§ 11.109 Duties to former clients.

 (a) A practitioner who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.  (b) A practitioner shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the practitioner formerly was associated had previously represented a client:  (1) Whose interests are materially adverse to that person; and  (2) About whom the practitioner had acquired information protected by Sections 11.106 and 11.109(c) that is material to the matter; unless the former client gives informed consent, confirmed in writing.  (c) A practitioner who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter:  (1) Use information relating to the representation to the disadvantage of the former client except as the USPTO Rules of Professional Conduct would permit or require with respect to a client, or when the information has become generally known; or  (2) Reveal information relating to the representation except as the USPTO Rules of Professional Conduct would permit or require with respect to a client.

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USPTO Rules

§ 11.118 Duties to prospective client.

 (a) A person who discusses with a practitioner the possibility of forming a client- practitioner relationship with respect to a matter is a prospective client.  (b) Even when no client-practitioner relationship ensues, a practitioner who has had discussions with the prospective client shall not use or reveal information learned in the consultation, except as 11.109 would permit with respect to information of a former client.  (c) A practitioner subject to paragraph (b) of this section shall not represent a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if they practitioner received information from the prospective client that could be significantly harmful tot hat person in the matter, except as provided in paragraph (d) of this section. If a practitioner is disqualified from representation under this paragraph, no practitioner in a firm with which that practitioner is associated may knowingly undertake or continue representation in such a matter, except as provided in paragraph (d) of this section.  (d) When the practitioner has received disqualifying information as defined in paragraph (c) of this section, representation is permissible If: (1) both the affected client and the prospective client have given informed consent, confirmed in writing; or (2) the practitioner who received the information took reasonable measures to avoid exposure to more disqualifying information than was reasonably necessary to determine whether to represent the prospective client; and (i) the disqualified practitioner is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; and (ii) written notice is promptly given to the prospective client.

§ 11.118 Duties to prospective client.

 (a) A person who discusses with a practitioner the possibility of forming a client- practitioner relationship with respect to a matter is a prospective client.  (b) Even when no client-practitioner relationship ensues, a practitioner who has had discussions with the prospective client shall not use or reveal information learned in the consultation, except as 11.109 would permit with respect to information of a former client.  (c) A practitioner subject to paragraph (b) of this section shall not represent a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if they practitioner received information from the prospective client that could be significantly harmful tot hat person in the matter, except as provided in paragraph (d) of this section. If a practitioner is disqualified from representation under this paragraph, no practitioner in a firm with which that practitioner is associated may knowingly undertake or continue representation in such a matter, except as provided in paragraph (d) of this section.  (d) When the practitioner has received disqualifying information as defined in paragraph (c) of this section, representation is permissible If: (1) both the affected client and the prospective client have given informed consent, confirmed in writing; or (2) the practitioner who received the information took reasonable measures to avoid exposure to more disqualifying information than was reasonably necessary to determine whether to represent the prospective client; and (i) the disqualified practitioner is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; and (ii) written notice is promptly given to the prospective client.

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Model Rules of Prof. Conduct

Client-Lawyer Relationship: Rule 1.7 Conflict Of Interest: Current Clients  (a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict

• f interest. A concurrent conflict of interest exists if:

 (1) the representation of one client will be directly adverse to another client; or  (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.  (b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:  (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;  (2) the representation is not prohibited by law;  (3) the representation does not involve the assertion of a claim by

• ne client against another client represented by the lawyer in the

same litigation or other proceeding before a tribunal; and  (4) each affected client gives informed consent, confirmed in writing. Client-Lawyer Relationship: Rule 1.7 Conflict Of Interest: Current Clients  (a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict

• f interest. A concurrent conflict of interest exists if:

 (1) the representation of one client will be directly adverse to another client; or  (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.  (b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:  (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;  (2) the representation is not prohibited by law;  (3) the representation does not involve the assertion of a claim by

• ne client against another client represented by the lawyer in the

same litigation or other proceeding before a tribunal; and  (4) each affected client gives informed consent, confirmed in writing.

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Client-Lawyer Relationship: Rule 1.10 Imputation Of Conflicts Of Interest: General Rule  (a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9, unless  (1) the prohibition is based on a personal interest of the disqualified lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm; or  (2) the prohibition is based upon Rule 1.9(a) or (b) and arises out of the disqualified lawyer’s association with a prior firm, and  (i) the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom;  (ii) written notice is promptly given to any affected former client to enable the former client to ascertain compliance with the provisions of this Rule, which shall include a description of the screening procedures employed; a statement of the firm's and of the screened lawyer's compliance with these Rules; a statement that review may be available before a tribunal; and an agreement by the firm to respond promptly to any written inquiries or

• bjections by the former client about the screening procedures; and

 (iii) certifications of compliance with these Rules and with the screening procedures are provided to the former client by the screened lawyer and by a partner of the firm, at reasonable intervals upon the former client's written request and upon termination of the screening procedures.

Model Rules of Prof. Conduct

Client-Lawyer Relationship: Rule 1.10 Imputation Of Conflicts Of Interest: General Rule  (a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9, unless  (1) the prohibition is based on a personal interest of the disqualified lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm; or  (2) the prohibition is based upon Rule 1.9(a) or (b) and arises out of the disqualified lawyer’s association with a prior firm, and  (i) the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom;  (ii) written notice is promptly given to any affected former client to enable the former client to ascertain compliance with the provisions of this Rule, which shall include a description of the screening procedures employed; a statement of the firm's and of the screened lawyer's compliance with these Rules; a statement that review may be available before a tribunal; and an agreement by the firm to respond promptly to any written inquiries or

• bjections by the former client about the screening procedures; and

 (iii) certifications of compliance with these Rules and with the screening procedures are provided to the former client by the screened lawyer and by a partner of the firm, at reasonable intervals upon the former client's written request and upon termination of the screening procedures.

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Removing a Conflict

Don’t take the client/matter. Conflict waivers from both sides. “Firewall” at firm – does this actually work? Don’t take the client/matter. Conflict waivers from both sides. “Firewall” at firm – does this actually work?

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The Tougher Question

What about Subject Matter Conflicts? Are you able to “represent zealously” both clients on the same subject matter? Are you able to segregate arguments related to each client’s patent application? What is the perception that your clients have about your representation? What about Subject Matter Conflicts? Are you able to “represent zealously” both clients on the same subject matter? Are you able to segregate arguments related to each client’s patent application? What is the perception that your clients have about your representation?

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Key Questions

Who is the client? inventor, parent company, subsidiary, trust What field of intellectual property? Patents – inventors, assignees, joint

• wnership

Trademarks – source of the goods What is the subject matter? Has everyone been counseled in advance

• f the representation?

Who is the client? inventor, parent company, subsidiary, trust What field of intellectual property? Patents – inventors, assignees, joint

• wnership

Trademarks – source of the goods What is the subject matter? Has everyone been counseled in advance

• f the representation?

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Subject Matter Conflicts

 Need to Look for:

• Similar/related subject matter
• Competitors in the marketplace
• Inventor who worked for one of

your clients is out on his own at a new company.  Need to Look for:

• Similar/related subject matter
• Competitors in the marketplace
• Inventor who worked for one of

your clients is out on his own at a new company.

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What’s The Big Deal?

 How do we learn chemistry?  How do we build our knowledge base?  Can we actually turn that knowledge off?  Do you have “stock language” or “good definitions” that you include in certain patent applications? How do you decide when to use that stock language?

 (Tethys Bioscience v. Mintz Levin & the Confidentiality of Patent Applications)

 How do we learn chemistry?  How do we build our knowledge base?  Can we actually turn that knowledge off?  Do you have “stock language” or “good definitions” that you include in certain patent applications? How do you decide when to use that stock language?

 (Tethys Bioscience v. Mintz Levin & the Confidentiality of Patent Applications)

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Examples

Attorney at Big Law represents Microsoft in litigation against Apple. Apple executive contacts a friend at Big Law to set up an estate plan. Conflict? Attorney at Big Law represents Microsoft in litigation against Apple. Apple executive contacts a friend at Big Law to set up an estate plan. Conflict?

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Examples

Attorney at Big Law represents Microsoft in patent litigation against Apple. Apple executive contacts a friend at Big Law to work on patent portfolio. Conflict? Attorney at Big Law represents Microsoft in patent litigation against Apple. Apple executive contacts a friend at Big Law to work on patent portfolio. Conflict?

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Examples

 Attorney represents Conagra for patents on prepared foods and methods/additives that allow them to be “shelf stable”.  Attorney networks at Food Science Convention and meets someone at Cheesecake Factory who wants to discuss new patent application on method of treating cream cheese so that it is tolerant of temperature ranges.  Conflict? Problem under USPTO new rules?  Attorney represents Conagra for patents on prepared foods and methods/additives that allow them to be “shelf stable”.  Attorney networks at Food Science Convention and meets someone at Cheesecake Factory who wants to discuss new patent application on method of treating cream cheese so that it is tolerant of temperature ranges.  Conflict? Problem under USPTO new rules?

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A Case Study

 Large Firm in Northern California represents Applied Materials and Intel  Large Firm files patent applications for both companies around semiconductor materials.  One patent family for each company discloses and claims inorganic porous dielectric materials.  Large Firm in Northern California represents Applied Materials and Intel  Large Firm files patent applications for both companies around semiconductor materials.  One patent family for each company discloses and claims inorganic porous dielectric materials.

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A Case Study (cont’d)

 Office actions issue in both patent

• applications. One office action

cites patents from Applied Materials against Intel patent application.  How do you act as an effective advocate for Intel without attacking Applied Materials patents?  Office actions issue in both patent

• applications. One office action

cites patents from Applied Materials against Intel patent application.  How do you act as an effective advocate for Intel without attacking Applied Materials patents?

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A Case Study (cont’d)

 Declarations (regarding prior art references)  Background Sections of Patent Applications  Information Disclosure Statements  New Expediting Process (distinguishing client’s claims from public references)  How do you handle these situations as practitioners?  Declarations (regarding prior art references)  Background Sections of Patent Applications  Information Disclosure Statements  New Expediting Process (distinguishing client’s claims from public references)  How do you handle these situations as practitioners?

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How Do We Fix It?

 Small Firm/Small IP Group  Mid-Size Firm/1-2 Patent Prosecutors  Large Firm/Large Prosecution Group

• How do you choose who takes

which client?

• Attorneys who leave firm?
• Appearance of impropriety
• Massive Awards Against Law

Firms/Increasing Price of Malpractice Insurance  Small Firm/Small IP Group  Mid-Size Firm/1-2 Patent Prosecutors  Large Firm/Large Prosecution Group

• How do you choose who takes

which client?

• Attorneys who leave firm?
• Appearance of impropriety
• Massive Awards Against Law

Firms/Increasing Price of Malpractice Insurance

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Adequate System for Checking?

 E-mail everyone in the group?  Key Word Search/Update Conflicts Checking System

• Use series of “Business Code

Identifiers”

• Specify intelligent key words
• List all inventors and in-house

counsel

• List common competitors

 E-mail everyone in the group?  Key Word Search/Update Conflicts Checking System

• Use series of “Business Code

Identifiers”

• Specify intelligent key words
• List all inventors and in-house

counsel

• List common competitors

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Thank you!

• Dr. Sandra Thompson

Slater Hersey & Lieberman, LLP sthompson@slaterhersey.com Direct: 949-398-7507 Mobile: 949-702-4448

Thank you!

• Dr. Sandra Thompson

Slater Hersey & Lieberman, LLP sthompson@slaterhersey.com Direct: 949-398-7507 Mobile: 949-702-4448

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IT’S A MINEFIELD OUT THERE IT’S A MINEFIELD OUT THERE Philip Furgang Furgang & Adwar, L.L.P. New York, New York

Conflicts and Waivers

Concurrent, Successive and Subject

Matter Conflicts









Concurrent:

 Where waiver by clients is of no use –

 Example: Representing opposing sides in an inter-

parties review or post grant review

 37 C.F.R. § 11.107(b)(3) ABA Rule 1.7(b)(3)

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Concurrent Representation Permitted

ABA Rule 1.07(b) and PTO 11.107(b)

(1) the lawyer reasonably believes that the lawyer will be able to provide

;



(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; (2) the representation is not prohibited by law;

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Concurrent Representation Permitted

(3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and litigation or other proceeding before a tribunal; and (4) each affected client gives informed consent, confirmed in writing.

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Waivers and What They Should Contain

Galderma Laboratories, L.P., v. Actavis Mid

Atlantic LLC, 927 F.Supp. 2d 390 (N.D.Tex 2013) (relying upon commentary to ABA Rule 1.7)

 

Rule 1.7) But see:

Lennar Mare Island, LLC v. Steadfast Ins.

Co., 105 F. Supp.3d 1100, 1117 (E.D. Cal. 2015) (citing with approval the release at Visa U.S.A., Inc. v. First Data Corp.,241 F.Supp.2d 1100, 1107 n. 5 (N.D.Cal. 2003))

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Successive Representation

 Example 1–

Attorney represents Company A

during patent prosecution

 





during patent prosecution

Company A assigns patent

application to Company B

Company B wants Attorney to

continue prosecution

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Successive Representation

Example 2:

Represented Company A on closure device



device Representing Company B on competitive device

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Successive Representation

 Waivers in Successive Representation

Waivers are required if representing

successive clients on the same invention





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Successive Representation Same Invention

Telectronics Proprietary LTD v Medtronic.

Inc., 836 F.2d 1332 (C.A.F.C. 1988) – but see:

 

see:

Soverain Software LLC v. Gap, Inc., 340 F.

• Supp. 2d 760, 763 (E.D. Tex. 2004)

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Subject Matter Conflict

 May a lawyer represent two clients in applications

directed to the same general subject matter? Yes and No:





?

Maling v. Finnegan, Henderson,

Farabow, Garrett & Dunner, LLP 473

• Mass. 336, 42 N.E.3d 1999 (2016)

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Furgang & Adwar, L.L.P.

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Be sure you are right, then go ahead.

Davy Crockett 1786-1836

FINAL ADVICE

Furgang & Adwar, L.L.P.

Be sure you are right, then go ahead.

Davy Crockett 1786-1836

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Thank you,

Philip Furgang philip@furgang.com 212-725-1818 212-725-1818 Furgang & Adwar, L.L.P. 1325 Avenue of the Americas 28th Floor New York, NY 10019

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