Judge Richard G. Anderson recently disqualified the law firm Latham & Watkins as defense counsel in a patent infringement action filed by the subsidiary of a former Latham client. Eon Corp. IP Holdings LLC v. Flo TV Inc., et al., C.A. No. 10-812-RGA (D. Del. Sept. 24, 2012). Latham represented the plaintiff’s parent company between 1988 and 1995, but did not represent it in patent prosecution matters, or with regard to any licensing efforts involving the patent at issue. Id. at 3, 7. Instead, Latham represented the plaintiff’s parent company in general corporate and regulatory matters. Id. at 3. The Court noted that some of those corporate and regulatory matters related to the same or similar technology at issue in the patent litigation. Id. at 3.
There was no dispute that the two Latham attorneys who had been admitted pro hac vice in the litigation were not at Latham during the firm’s prior representation, and it was acknowledged that they were subject to an ethical wall. Id. at 3. Neverthelss, the Court was concerned because, “[s]ome of the invalidity defenses, if pursued, could involve factual inquiry into” the activities of the plaintiff’s parent company when it was represented by Latham, “and it is conceivable that the information about related factual matters could have been shared with Latham attorneys.” Id. at 7. As a result, the Court found that “the answer to the question, ‘might [the plaintiff] have disclosed to Latham confidences which could be relevant to the present action, and detrimental to [the plaintiff] in this action,’ is surely yes.” Id. at 8.
The Court explained that, “[i]n terms of the conflict [of interest] analysis, it makes no difference that seventeen years have passed since Latham represented [the plaintiff’s parent company], when the lawsuit will in part concern events that occurred twenty years ago.” Id. The Court acknowledged that the conflict of interest could be viewed as having been ameliorated in various ways: by the passage of time, the imposition of an ethical wall, and the fact that the two attorneys involved in the litigation were not involved in the previous representation. Neverthelss, the Court found that “on balance, 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 … .” Id. at 10.