On May 5, 2016, a Massachusetts state court dismissed Gillette’s claims for breach of fiduciary duty against its former in-house IP counsel who left Gillette and went to work for a competitor, where he used allegedly privileged information gained during his prior employment and helped his new employer analyze and avoid infringement of Gillette’s patents—including patents over which he oversaw prosecution. The court held that Gillette’s amended complaint failed to state claims for breach of fiduciary duty as a matter of law. Consequently, the court dismissed with prejudice Gillette’s claims against its former in-house attorney. See The Gillette Co. v. Provost, No. 1584CV00149-BLS2 (Mass. Super. Ct. May 5, 2016) (order granting motion to dismiss). This is the second significant decision from a Massachusetts state court regarding patent ethics and conflicts of interest in the last six months; the first was the Supreme Judicial Court’s decision in Maling v. Finnegan Henderson, discussed in our posts here, here and here.
For 17 years, Chester Cekala worked as an in-house patent attorney for Gillette. Mr. Cekala left Gillette in 2006. In 2012, Mr. Cekala joined ShaveLogic, Inc. where he began working on patent matters.
In 2015, Gillette sued ShaveLogic and four former Gillette employees who had gone to work for ShaveLogic. The original complaint alleged that the defendants took Gillette’s confidential information and misappropriated its trade secrets for the benefit of ShaveLogic.
In 2016, Gillette filed an amended complaint adding Mr. Cekala as an additional defendant. According to Gillette’s amended complaint, Mr. Cekala had access to privileged communications and information relating to Gillette’s patents and technologies and developed “detailed knowledge” about Gillette’s patents and related licensing agreements. ShaveLogic allegedly hired Mr. Cekala to provide freedom to operate opinions regarding Gillette patents—including patents whose prosecution he allegedly oversaw—and to identify potential voids in Gillette’s patent portfolios.
The amended complaint further alleged that ShaveLogic competes with Gillette in the market for wet shaving products and that Mr. Cekala’s knowledge of Gillette’s intellectual property portfolio and patent strategy gives ShaveLogic a “competitive edge in the market.” Mr. Cekala’s work for ShaveLogic, according to the amended complaint, is substantially related to the legal services he performed while working as counsel for Gillette. The amended complaint alleged Mr. Cekala breached his ethical and fiduciary duties to Gillette, as its former counsel, and that all of the defendants conspired to cause Mr. Cekala to breach his fiduciary duty to Gillette.
Gillette moved for a preliminary injunction to prevent Mr. Cekala, from providing any legal advice regarding Gillette’s patents, not only with respect to patent validity but also on infringement and scope of Gillette’s patents. Although Cekala’s non-compete agreement with Gillette had long expired, Gillette contended that Cekala’s legal advice inevitably disclosed Gillette’s trade secrets to its competitor given his experience with the company.
The Massachusetts court rejected Gillette’s position. The court noted that “if the court were to accept Gillette’s logic, Cekala would be effectively prevented from working in any legal position for a competitor in the shaving industry even though his non-competition agreement expired years ago.”
On February 22, 2016, Mr. Cekala moved to dismiss the claims alleged against him in the amended complaint for failure to state a claim. On May 5, 2016, the court granted Mr. Cekala’s motion with prejudice. Continue reading