When it comes to potential conflicts…Disclose! Disclose! Disclose!
Does an attorney have any duties to disclose or for that matter not take a case where they previously represented the parent corporation of an adverse party in prior unrelated litigation?
The District of Delaware recently had on opportunity to opine as to whether such conduct violates Rule 1.9 of the Model Rules of Professional Conduct. In Talecris Biotherapeutics, Inc. v. Baxter International, Inc., C.A. No. 05-349-GMS, Memorandum (D. Del. June 14, 2007), the plaintiff moved to disqualify defendant and counterclaim plaintiff's counsel. This particular attorney had previously represented a parent company of the counterclaim defendant in a previous action fourteen years ago that surrounded infringement claims of a non-asserted patent and product. Id. at 2. The patent that was litigated in the prior litigation, however, has been asserted as prior art rendering the plaintiff's patent invalid. The attorney was only a third-year associate at the time and was a member of a four person trial team. Id.
The Court found that the motion should be denied as the attorney's conduct did not violate Rule 1.9. Rule 1.9 prevents a lawyer from "taking a position adverse to a former client in the same or related matter unless the former client consents after consultation." Id. at 3. The Court considered three factors in determining whether the matters were "substantially related" and therefore the representation would be in violation of Rule 1.9: "(1) the nature and scope of the prior representation; (2) the nature and scope of the current representation; and, (3) during the prior representation, the possibility that the client disclosed confidences to his attorney which could be relevant to the current action and detrimental to the former client in the course of the current litigation." Id. at 4.
The particular attorney in this case, was only a third-year associate during the prior representation and only interacted with the former client during the early stages of discovery in litigation that occurred 15 years ago and lasted only 6 months. Id. at 5. The Court admitted, that the fact that the defendants are now asserting the patent that was at issue in the prior litigation as prior art to the patent at issue in the current litigation does raise some overlap. Id. However, it also noted that this patent appears to have been disclosed during the prosecution of the patent at issue and appears on the face of that patent. Therefore, the Court found it not reasonable to infer that the defendant's current reliance on this prior art patent was as a result of confidential information the attorney received during that prior litigation.
The motion was thus denied as the "substantive relationship between the two litigations is tenuous." Id. at 7.
In a footnote, the Court stated that "the prudent course of action would have been" for the attorney to have provided notice to her client of the potential conflict and request a waiver as soon as identifying them as a potentially adverse party. Id. at 7 n.3.
Therefore, when in doubt, disclose and get a waiver so as to protect yourself from being in violation of the Model Rules.