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Massachusetts Supreme Court Issues Highly Anticipated Patent Ethics Decision

Simultaneous representation by a law firm in the prosecution of patents for two clients for similar inventions is not a per se violation of the Massachusetts Rules of Professional Conduct.

On December 23, in Chris E. Maling v. Finnegan, Henderson, Farabow, Garrett & Dunner LLP,[1] the Massachusetts Supreme Court affirmed a lower state court’s dismissal of the plaintiff’s legal malpractice suit against the prominent intellectual property (IP) law firm of Finnegan, Henderson, Farabow, Garrett & Dunner LLP (Finnegan) for failure to state a plausible claim for relief. In dismissing the case, the court rejected the plaintiff’s theory that it is a violation of the state’s professional conduct rules for a law firm to prosecute on behalf of multiple clients patents that disclose similar inventions.[2]

The case involved Chris Maling’s legal malpractice claim against his law firm for prosecuting his patent application for a novel eyeglass hinge through one set of lawyers at the same time that other lawyers at the same firm (albeit in a different office) were prosecuting a similar patent application for Maling’s competitor, Masunaga Optical (Masunaga).[3] Both Maling and Masunaga received patents from the US Patent and Trademark Office (USPTO) as a result of the law firm’s prosecution efforts, but the conflict came to light when the law firm later refused to provide Maling with an opinion that evaluated whether the invention that Maling’s patent covered was sufficiently different from the Masunaga patent to avoid exposure to infringement and invalidity claims.[4]

The state trial court initially dismissed Maling’s case, holding that the parties were not adverse and the complaint did not allege a material limitation on the law firm’s ability to represent Maling. Maling appealed, and the case was taken up sua sponte by the Massachusetts Supreme Court, which in December 2014 sought amicus briefing on the limited issue of “Whether, under Mass. R. Prof. C. 1.7, an actionable conflict of interest arose when, according to the allegations in the complaint, attorneys in different offices of the same law firm simultaneously represented the plaintiffs and a competitor in prosecuting patents on similar inventions, without informing the plaintiffs or obtaining their consent to the simultaneous representation.”[5]

Mass. R. Prof. C. 1.7, which is identical to professional conduct rules in most states, provides that a lawyer shall not represent a client if the representation is “directly adverse to another client,” Mass. R. Prof. C. 1.7(a)(1), or where “there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.” Mass. R. Prof. C. 1.7(a)(2).[6]

The Massachusetts case garnered national attention, with 11 prominent law firms combining forces to file an amicus brief arguing that there should be no conflict unless the claims of two patent applications are identical or merely obvious variants of each other.”[7] Finnegan maintained in its defense that prosecuting patent applications for competing clients in similar technologies is not a conflict because similar patents may still be nonobvious and novel, as demonstrated by the USPTO’s practice of frequently granting patents for slight improvements.[8] Finnegan further noted that competitors are not adverse during patent prosecution, and a lawyer’s ability to prosecute a patent is not limited by prosecuting multiple patents.[9]

In siding with Finnegan, the Massachusetts Supreme Court concluded that a conflict based on direct adversity was not adequately alleged.[10] It also noted that Maling’s complaint “provide[d] little more than speculation that Finnegan’s judgment was impaired or that he obtained a less robust patent than if he had been represented by other, ‘conflict-free’ counsel.”[11]

Regarding Finnegan’s subsequent unwillingness to provide a legal opinion addressing the similarities between the Maling and Masunaga inventions, the court found that Maling's complaint did not contain any allegations about the services or scope of representation agreed on by Maling and the law firm other than that Finnegan “agreed to file and prosecute a patent for Maling's inventions.”[12] Nor did Maling adequately allege that the law firm should have reasonably anticipated that he would need a legal opinion that would create a conflict of interest.[13] “There are simply too few facts from which to infer that Finnegan reasonably should have foreseen the potential conflict in the first place.”[14]

The Massachusetts Supreme Court concluded that “[b]ecause Maling’s claims hinge on the existence of a conflict of interest, and because we conclude there was none adequately alleged in this case, he fails to state a claim on each of the counts in his complaint.”[15] The court did note that “there are various factual scenarios in the context of patent practice in which a subject matter conflict may give rise to an actionable violation of rule 1.7.”[16] But “[o]n the facts alleged in Maling's complaint … we find that no actionable conflict of interest existed. The dismissal of the complaint is affirmed.”[17]

Although the Massachusetts Supreme Court held in favor of the law firm, it noted that, under certain circumstances, subject matter conflicts resulting from the prosecution of patents for competing clients could give rise to conflicts of interest, even if the clients are not seeking to claim the same invention. Subject matter conflicts are an important area of concern for law firms with robust patent practices. Law firms should consider processes and procedures beyond traditional conflicts checks to minimize the risks associated with subject matter conflicts. Clients can help manage the risks of subject matter conflicts by maintaining robust communication with their outside law firms.

[1]. No. SJC-11800, Commonwealth of Massachusetts Supreme Judicial Court, Slip. Op. (Dec. 23. 2015).

[2]. Id. at 3.

[3]. Id. at 3-4.

[4]. Id. at 4-5.

[5]. No. SJC-11800, Commonwealth of Massachusetts Supreme Judicial Court, Dkt. No. 4 (Dec. 26, 2014).

[6]. Slip. Op. at 7.

[7]. No. SJC-11800, Commonwealth of Massachusetts Supreme Judicial Court, Dkt. No. 16 (Aug. 21, 2015).

[8]. Slip. Op. at 12.

[9]. Id. at 10.Anchor

[10]. Id. at 16.

[11]. Id. at 18.

[12]. Id. at 20.

[13]. Id.

[14]. Id.

[15]. Id. at 21.

[16]. Id. at 23.

[17]. Id. at 24.

Copyright © 2022 by Morgan, Lewis & Bockius LLP. All Rights Reserved.National Law Review, Volume V, Number 358

About this Author

Eric Kraeutler, Litigation attorney, Morgan Lewis

Eric Kraeutler has decades of experience representing clients in complex, high-stakes litigation—including trials, appeals, and government investigations. As a member of the firm’s litigation practice and the global leader of the firm’s intellectual property practice, Eric has achieved distinction across a broad range of matters. He is a fellow of the American College of Trial Lawyers and is listed in Chambers USA: America’s Leading Lawyers for Business (2013-17) and Best Lawyers in America (2008-17). In 2016, Chambers USA described Eric as "very smooth in court" and "a...

Julie Goldemberg, Patent lawyer, Morgan Lewis

Julie S. Goldemberg represents clients in patent, trademark, trade secret, and other intellectual property matters. Building on her background in electrical engineering, she has experience litigating traditional patent infringement cases and Hatch-Waxman cases in US federal district courts at all stages from the time of filing the complaint to the completion of all appeals. Prior to joining the firm, Julie clerked for Chief Judge Sharon Prost of the US Court of Appeals for the Federal Circuit.