05
Oct
By Eric Schweibenz
On September 29, 2010, Chief ALJ Paul J. Luckern issued the public version of Order No. 6 (dated September 1, 2010) granting in limited part Complainant Flashpoint Technology Inc.’s (“Flashpoint”) motion to disqualify Kirkland & Ellis (“Kirkland”) from representing Respondents Research in Motion, Ltd. and Research in Motion Corp. (collectively, “RIM”) in Inv. No. 337-TA-726.

On August 4, 2010, Flashpoint moved to disqualify Kirkland from representing RIM in Inv. No. 337-TA-726, arguing that Kirkland’s representation of RIM directly conflicted with Kirkland’s representation of Eric C. Anderson (“Anderson”) and Apple, Inc. in Inv. No. 337-TA-704.  According to the Order, Flashpoint argued that Anderson is the sole named inventor on at least one of the patents asserted in Inv. No. 337-TA-704, and is a named inventor on all three of the asserted patents asserted in Inv. No. 337-TA-726, and that Kirkland has had and continues to have access to Flashpoint’s confidential and privileged information by virtue of Kirkland representing Anderson and Apple, and Anderson being a part-time employee of Flashpoint.

ALJ Luckern first determined that Flashpoint had standing to move to disqualify Kirkland, even though it is a third party and not a client of Kirkland.  ALJ Luckern determined that the Flashpoint patents asserted in the 726 investigation were filed less than three months from the date of the Anderson patent filed in the 704 investigation, and the patents are such that Flashpoint’s confidential business information could lead to admissible evidence in both investigations.  ALJ Luckern further determined that in view of the above, the conflicting interests at issue were open and obvious, to the point that he had a plain duty to act, and Flashpoint had a direct interest in any conflict of interest and had standing to bring the instant motion.

ALJ Luckern next determined that Kirkland’s representation of RIM in the 726 investigation and of Anderson in the 704 investigation are directly adverse and substantially related, because there could be common issues of fact with respect to priority dates, inventorship, inequitable conduct, invalidity and other affirmative defenses, and Anderson is a witness or potential witness on any number of issues regarding his patents asserted in the 726 and 704 investigations.  Specifically, ALJ Luckern determined that in the 704 investigation, Kirkland is defending Anderson, yet in the 726 investigation, the best interests of RIM would be served if Anderson’s patents were proven invalid or unenforceable, making Anderson an adverse witness to RIM.  ALJ Luckern determined this created a “concurrent conflict of interest” under ABA Model Rule 1.7(a).

ALJ Luckern additionally rejected Kirkland’s argument that Anderson had no interest in his patents after assigning them to another entity, finding, to the contrary, that an inventor’s professional standing and employment prospects could be adversely affected by any holding that the inventor’s patents were invalid.  Moreover, in this instance, ALJ Luckern determined Anderson was currently employed by Flashpoint to assist with the licensing and litigation of his patents and therefore had a direct economic interest in maintaining his patents’ enforceability and validity.

ALJ Luckern also rejected Kirkland’s argument that Anderson consented to Kirkland’s representation and waived rights to challenge such representation in his retention agreement with Kirkland.  Although this section of the opinion was heavily redacted, ALJ Luckern determined that the retention letter could not stand as a waiver at least because he found that Kirkland’s concurrent representations of RIM and Anderson are substantially related.

Although ALJ Luckern found a concurrent conflict of interest, he determined that to warrant disqualification, there must be an additional showing that the investigation has been “tainted” and that continued representation will cause prejudice or adversely impact the rights of another party in the matter, and this prejudice outweighs the prejudice caused by the disqualification of another party’s counsel.  ALJ Luckern determined that Flashpoint had not identified any actual instance where privileged or confidential business information of Flashpoint has been compromised.  Additionally, ALJ Luckern determined that Kirkland and/or RIM had already taken several actions to address Flashpoint’s concerns, by engaging separate counsel for questioning Anderson at any hearing or deposition, and that attorneys defending Anderson for deposition will not be involved in the 726 investigation, and no information obtained from Kirkland’s representation of Anderson in the 704 investigation has been or will be shared with any attorney representing RIM in the 726 investigation, nor will any RIM confidential information be shared with individuals preparing or defending Anderson.  ALJ Luckern ordered that in addition to continuing the above practices, the Kirkland attorneys involved in the 726 investigation must additionally file declarations representing that they have not received any Flashpoint privileged information from Anderson.  ALJ Luckern also ordered that Kirkland shall have no substantive contact with the law firm RIM hired to perform questioning of Anderson at any hearings or depositions, and that any confidential business information obtained in the 704 investigation is unusable in the 726 investigation unless separately produced in the 726 investigation.
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