Judge Richard G. Andrews recently granted defendant’s motion to disqualify plaintiff’s lead counsel because “[the lead counsel] was serving as [defendant’s] opinion counsel at the time [plaintiff] filed” its patent infringement suit against defendant, and “thus creat[ed] an impermissible concurrent conflict of interest.” Parallel Iron, LLC v. Adobe Systems Incorporated, C.A. No. 12-874-RGA, at 1, 7 (D. Del. Mar. 4, 2013). The lead counsel had provided opinion letters with infringement analyses to defendant in three previous engagements, with the findings of its final opinion letters presented during a conference call between the lead counsel and defendant in February 2012. Id. at 1-3. The provision that guided Judge Andrews’s analysis was Model Rule 1.7(a), which states that “‘a lawyer shall not represent a client if the representation involves a concurrent conflict of interest’ absent client consent.” Id. at 4.
Judge Andrews concluded that it was reasonable for defendant to believe that an active attorney-client relationship existed between the lead counsel and defendant at the time the lead counsel filed the instant suit, five months after the conference call in February 2012. Id. at 3, 5. Plaintiff argued that the attorney-client relationship was terminated because at the end of the conference call the partner from the lead counsel handling the matter “asked whether anything further was needed from [the lead counsel],” and defendant responded in the negative. Id. at 7. Judge Andrews disagreed, noting that “[s]uch a customary gesture to conclude a conversation is not sufficient to terminate [defendant’s] expectations.” Id. As Judge Andrews explained, “the six year history between [defendant] and [the lead counsel] was sufficient to instill in [defendant] reasonable belief that it would not be sued by [the lead counsel], at least absent some sort of prior notice that [the lead counsel] would no longer be available to serve as [defendant’s] opinion counsel.” Id. at 5. Further, Judge Andrews noted that the lead counsel was aware of the active nature of the litigation for which it provided its final opinions and should have expected that defendant would want updates in view of any developments that would bear on its infringement analyses. See id. Judge Andrews emphasized that “[i]t is the law firm’s responsibility to ensure there are no questions regarding the status of its current client relationships.” Id.
While disqualifying the lead counsel from the litigation at hand, Judge Andrews did not find it necessary to create an “ethical wall” between the lead counsel and co-counsel, because “[t]he complete bar of communications between [the lead counsel] and co-counsel would seriously hamper [the lead counsel’s] ability to litigate on behalf of [plaintiff]” in other ongoing actions. Id. at 8. To this end, Judge Andrews found it significant that there was “no reason to believe that [the lead counsel] operated in bad faith when it sued [defendant].” Id. at 7.