On April 29, 2009, ALJ E. James Gildea issued the public version of Order No. 7 (dated April 17, 2009) denying a motion by Complainants 02 Micro International Ltd. and 02 Micro Inc. to disqualify counsel for Respondents LG Electronics Inc., LG Electronics USA, Inc., LG Display Co., Ltd., and LG Display America, Inc. in Certain Cold Cathode Fluorescent Lamp (“CCFL”) Inverter Circuits and Products Containing the Same (337-TA-666).

O2 Micro argued that Morgan Lewis & Bockius LLP (“MLB”), the firm representing LG, had two conflicts of interest which should prevent it from representing LG in the investigation: (1) prior to joining LG’s law firm, MLB attorney Daniel Johnson had been lead counsel for O2 Micro in a lawsuit against Monolithic Power Systems (the “MPS Litigation”) involving a patent in the same family as the patent at issue in the Investigation, and (2) MLB represented O2 Micro in the MPS Litigation after Mr. Johnson joined the firm.  O2 Micro argued that MLB’s representation of LG violated loyalties and ethical obligations owed to O2 Micro and that confidences and secrets O2 Micro might have conveyed to Mr. Johnson and MLB during the MPS Litigation might give LG an unfair advantage.

LG and the Commission Investigative Staff opposed the motion.  LG argued that the portion of the MPS Litigation concerning the O2 Micro patent was dismissed before Mr. Johnson joined MLB, so MLB was only exposed to the remaining trade secret and MPS patent issues.  Since MLB’s work on the MPS Litigation did not involve work on O2 Micro’s patents, LG argued the work is not substantially related to the investigation and, therefore, is not a conflict.  LG also pointed to the timely implementation of an ethical wall screening Mr. Johnson and any other attorneys who worked on the MPS Litigation from MLB attorneys working on the LG ITC matter.

ALJ Gildea first noted that “disqualification of counsel is drastic and disfavored.”  He then rejected O2 Micro’s argument that ethics rules from the District of Columbia should apply in this matter.  ALJ Gildea cited Commission precedent holding that the American Bar Association’s Model Rules of Professional Conduct (“Model Rules”), which reflect a “national consensus,” are used in resolving motions to disqualify counsel at the ITC.  Under the Model Rules, “the crucial issue is whether continued representation will cause prejudice or adversely impact the rights of another party in the matter and whether such prejudice outweighs the prejudice caused by disqualification of another party’s choice of counsel.”  Disqualification is warranted only if there is a showing that the unethical conduct “tainted” the investigation.

ALJ Gildea found that Mr. Johnson’s former representation of O2 Micro in the MPS Litigation was substantially related to the Investigation.  But since there was no evidence that Mr. Johnson is involved in the LG ITC action or discussed confidential information about O2 Micro’s patents with anybody at MLB, and there is an ethical wall that safeguards against the danger of disclosure, ALG Gildea found that O2 Micro is not prejudiced by MLB’s representation of LG.  He also found that MLB’s representation of O2 Micro was not substantially related to the Investigation since the related patent had been dismissed from the case by the time MLB began representation and because MLB had erected an ethical wall.

Finally, while he found no prejudice to O2 Micro, ALJ Gildea suggested that MLB “would do well” to make sure O2 Micro received further written assurances of MLB’s compliance with the Model Rules.