On August 20, 2015, eleven law firms filed a joint amicus brief in the Supreme Judicial Court of Massachusetts in Maling v. Finnegan, Henderson, Farabow, Garrett & Dunner. In Maling, the Massachusetts high court requested amicus briefing on whether Finnegan Henderson’s concurrent representation of two different clients who were allegedly seeking patent protection at the same time on similar inventions, without each other’s knowledge or consent, was a conflict of interest under the Massachusetts Rules of Professional Conduct. The brief opined that no conflict should be found to exist unless, “the claims of two patent applications are identical or merely obvious variants of each other, so that the PTO could properly declare an interference between the two patent applications.”
The brief (click here) was submitted by a veritable “Who’s Who” of some of the nation’s most prominent general practice and IP specialty law firms, including: (1) Knobbe, Martens, Olson & Bear, LLP, (2) Honigman Miller Schwartz and Cohn LLP, (3) Nixon & Vanderhye P.C., (4) Lewis Roca Rothgerber, (5) Schiff Hardin LLP, (6) Steptoe & Johnson LLP, (7) Snell & Wilmer LLP, (8) Barnes & Thornburg LLP, (9) Pillsbury Winthrop Shaw Pittman LLP, (10) Verrill Dana LLP, and (11) Morrison & Foerster LLP.
This case arose from a complaint for legal malpractice filed against Finnegan Henderson and several of its attorneys. The complaint alleged that Finnegan was engaged by Mr. Maling in 2003 to prosecute several patent applications in the field of screwless eyeglass hinges. At the same time, Finnegan also was representing another client in connection with what the complaint described as a “similar” invention, also related to screwless eyeglass hinges. The complaint further alleged that Maling and the other Finnegan client were competitors. The complaint alleged that Maling received four patents as a result of Finnegan’s representation. The complaint further alleged that Maling lost investment opportunities and was “damaged” because Finnegan’s representation of the two clients was a conflict of interest under Mass. Rule of Prof. Cond. 1.7.
The complaint was dismissed for failure to state a claim. The state trial court noted that the complaint failed to allege any facts to suggest that Finnegan’s representation of Maling was in any way affected by its representation of its other client, or that the representation of Maling was directly adverse to the interests of the other client. Furthermore, the state trial court held that dismissal was warranted because the complaint failed to allege that “Finnegan’s independent professional judgment was impaired as a result of the dual representation or that it otherwise failed to do something that it would have done had it not been representing” the other client.
The Supreme Judicial Court sua sponte agreed to hear the case and solicited views of interested person on the issue of whether an actionable conflict of interest arises under Mass. Rule of Prof. Conduct 1.7 when a single law firm files and prosecutes patent applications for “similar” inventions on behalf of two existing clients.
Mass. Rule 1.7(a) states, “A lawyer shall not represent a client if the representation of that client will be directly adverse to another client.” Mass. Rule 1.7(b) states a “lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third person, or by the lawyer’s own interests.” Of note to United States Patent and Trademark Office (USPTO) practitioners, the Massachusetts ethics rule for current client conflicts in Rule 1.7 is substantively identical to 37 C.F.R. Section 11.107, which is the current client conflict rule adopted by the USPTO effective May 3, 2013.
General Principles of Patent Law and Patent Prosecution
The brief began with a basic tutorial on patent law and the process of obtaining a patent. This background was particularly important foundational information since the justices of the Massachusetts Supreme Judicial Court presumably have little if any experience in patent law or patent prosecution.
The background section noted that, “It is commonplace for two inventors to apply for patents in the same field of technology at roughly the same time” and that typically “this does not give rise to any special procedures” within the USPTO since each patent application is examined independently and the claims of each patent are compared separately with the prior art.
The amicus brief explained that “A problem can arise, however, if the claims of both patents are for the same invention,” in which case the USPTO will institute a proceeding known as an “interference” to determine which application will issue as a patent. In this case, it was noted, no “interference” was declared and that, on the contrary, the USPTO determined that Maling’s inventions were entitled to patent protection notwithstanding the patent work for Finnegan’s other client, and likewise, the other client received a patent on its invention notwithstanding the patents issued to Maling. Consequently, the brief argued, “[t]he two inventions and their corresponding claims are not the same, or even close.”
The brief argued that the representation of two clients in connection with two allegedly similar inventions generally does not create a conflict of interest. This is because
the two clients are not competing for the same patent. Instead, each client is seeking its own patent for its own invention, in much the same way that clients seeking building permits or licenses to broadcast radio signals ordinarily are not competing with each other.In each case, each client may receive its grant of rights from the government without impacting the ability of the other clients to receive their grant of rights. Thus, the clients are not directly adverse to each other; and the representation of one client does not materially limit the law firm’s ability to represent the other.
The brief argued that a conflict of interest does not arise in the patent context “except in the rare case where two clients in fact are competing for a single patent” – that is, “only when the claims of two patent applications are identical or merely obvious variants of each other, so that the PTO could properly declare an interference between the two patent applications.” The brief argued that the Massachusetts court should hold that a conflict of interest arises only if two patent applications include identical claims or claims which are merely obvious variants of each other.
No Material Limitation
The amicus brief further argued that Finnegan’s representation of Maling was not limited by its own interests or its interests vis-à-vis its other client seeking patent protection on hingeless eyewear. “A patent lawyer representing two clients in the same area of technology does not suffer from any such material limitation” because the two clients are not competing with each other for the same (single) patent on one invention, and that each client was separately attempting to obtain its own respective patent on its own respective invention. Thus, according to the brief, nothing that Finnegan did for its other client materially limited its ethical duty to exercise independent professional judgment with respect to its representation of Maling.
Moreover, as the brief notes, while the complaint alleged that Finnegan’s representation of one client in the field of hingeless frames “necessarily” impaired its ability to “adequately protect the interests” of Maling, the problem with this allegation is that this is a bald assertion. Such conclusory assertions typically are insufficient as a matter of law to survive a motion to dismiss for failure to state a claim. On the contrary, the brief explained that Finnegan did in fact represent both clients effectively since the firm succeeded in obtaining patents for both clients and the complaint failed to allege that Maling could have, or would have, obtained “better” patents but for Finnegan’s concurrent representation of its other client.
How Close Is “Similar”
The brief further addressed head on one of the root problems with the question presented by the Massachusetts court – i.e. the question presented assumes that there is an easily identifiable dividing line between “inventions” based on alleged “similarity.” But “similarity” assumes that there exists both: (1) a reliable aspect of an “invention” for which the comparison should be made to determine “similarity” of “inventions; and (2) even assuming a reliable aspect of an “invention” exists to form the basis of a comparison, that there exists a reliable way to measure the similarities and differences such that one can objectively conclude that two inventions are too “similar” as to raise a conflict of interest under Rule 1.7.
Similarity of “inventions,” the brief explained, should not be the appropriate framework for the conflicts analysis. As the brief explained,
a concept of “similar” inventions would be unworkable. The phrase “similar inventions” is foreign to patent law and would be essentially meaningless to patent attorneys who would need to apply the phrase on a daily basis. The term “similar” is simply too imprecise to provide any guidance to patent attorneys, judges, or juries. For example, all eyeglass frames are “similar” in some sense of the word. Would a prohibition against representation in connection with “similar” inventions preclude a law firm from representing two clients in connection with any and all eyeglass frame inventions? All eyeglass frame hinge inventions? All screwless eyeglass frame hinge inventions? There is simply no answer to these questions because there is no way to define “similar” in this context.
The brief recommended that the Court reject any conflicts test that precludes representation of multiple clients in connection with “similar” inventions and that, instead, “the Court should hold that a conflict arises when the claims of two clients’ patent applications are identical or mere obvious variants of each other so that an interference could be declared between them.”
Public Policy Considerations
The brief further argued that compelling policy reasons exist for permitting law firms to represent multiple clients with allegedly “similar” inventions. According to the brief, “A contrary rule would deprive patent lawyers of the ability to specialize in fields of technology. This would deprive the public of the expertise that specialization creates. It also would increase the cost of patent applications, as patent lawyers would need to spend more time learning about the relevant technology before preparing their patent applications.”
A second public policy concern addressed by the brief is that a rule that would effectively restrict patent law firms to one client per field of technology “would severely limit access to patent law firms by individual inventors and small start-up companies. In order to survive in the face of such a rule, law firms would tend to select only a single large client to fill each technological niche. Only these larger clients could provide the law firm with enough work to keep the firm’s attorneys fully employed. Smaller clients then would be turned awaydue to the conflicts created by the larger client.”
The Practical Difficulty of Obtaining Client Consent
The brief further noted that seeking client consent would not be a workable solution to the alleged “similar invention” issue. Indeed, this is because patent lawyers are required to maintain confidentiality to their clients. “If Finnegan were required to obtain informed client consent for the concurrent representation of Maling” and its other client, then Finnegan would be caught in a Catch-22 because to obtain informed consent from one client would require disclosure of another client’s confidential information, and vice-versa. Thus client consent would not be a practical solution, assuming it were required.
Oral argument in scheduled in September 2015. Further details will be posted on the oral argument in future postings.