ALJ Gildea Denies Motion To Disqualify Counsel In Certain Dynamic Random Access Memory And NAND Flash Memory Devices (337-TA-803)
On June 5, 2012, ALJ E. James Gildea issued the public version of Order No. 40 (dated April 18, 2012) denying Respondents’ motion to disqualify a law firm as counsel for Complainants in Certain Dynamic Random Access Memory and NAND Flash Memory Devices and Products Containing Same (Inv. No. 337-TA-803).
By way of background, this investigation is based on a July 12, 2011 complaint filed on behalf of Intellectual Ventures Management, LLC, Invention Investment Fund I, L.P., Invention Investment Fund II, LLC, Intellectual Ventures I LLC, and Intellectual Ventures II LLC (collectively, “IV”), against several manufacturers, distributors, and retailers of DRAM and NAND Flash memory devices for alleged infringement of U.S. Patent Nos. 5,654,932; 5,963,481; 5,982,696; 5,500,819; and 5,687,132. See our July 13, 2011 post for more details.
According to the Order, Respondents Hynix Semiconductor America, Inc. and Hynix Semiconductor Inc. (collectively, “Hynix”) argued that the law firm presently representing IV should be disqualified because it had “represented Hynix for nearly 18 years in ITC and other matters that … are substantially related to the subject matter of this Investigation,” including three Section 337 investigations involving DRAM and NAND Flash Memory technology. Further, Hynix alleged that the law firm had obtained privileged and confidential information regarding Hynix’s legal and business strategies, thereby substantially prejudicing Hynix.
Both IV and the Commission Investigative Staff (“OUII”) opposed the motion, arguing that, inter alia, “Hynix has not demonstrated that this Investigation is the same or substantially related to the previous cases in which [the law firm] represented Hynix,” and that an ethical screen already implemented by the law firm is sufficient to alleviate any prejudice to Hynix.
ALJ Gildea determined that although potential prejudice to Hynix existed based upon the length and extent of the relationship between the law firm and its former client, Hynix failed to identify any specific prejudice because it did not establish that the technologies involved in the previous investigations were substantially related to the technology at issue in the current investigation. The ALJ also found that Hynix did not provide any facts to suggest that its practices and products from the 1990’s and 2000, when the other investigations were pending, are relevant to this investigation in 2012. Accordingly, ALJ Gildea determined that any potential prejudice to Hynix will be mitigated by the ethical screen already in place.
Lastly, ALJ Gildea determined that the prejudice that would occur to IV if the law firm were disqualified is substantially greater than the potential prejudice to Hynix because IV reasonably continued to develop its case through its chosen counsel after the ALJ deferred consideration on Hynix’s motion due to an anticipated, but ultimately unsuccessful, settlement between the parties.