Opinion

Alison Frankel

18 years after end of client relationship, Latham is disqualified

By Alison Frankel
September 24, 2012

Disqualifying defense counsel two years into a case is a rare and drastic step, but on Monday that’s what U.S. District Judge Richard Andrews of Wilmington, Delaware, did to a company called MobiTV and its lawyers at Latham & Watkins. Andrews tossed Latham because it formerly represented the parent of the company suing MobiTV (and many, many others) for patent infringement — even though the client relationship ended in 1995, two years before the patent at issue in the case was even awarded and eight years before any alleged infringement by MobiTV began.

Latham’s onetime client, a company once called TV Answer and now known as EON Corp, claimed in a disqualification motion filed almost a year ago that the firm had become privy to proprietary information about interactive video data service technology, which underlies the patent EON is asserting against MobiTV. The firm worked closely with the inventor of the technology and represented EON’s predecessor company before the Federal Communications Commission. A total of 34 Latham lawyers worked on EON matters, including one who became the company’s general counsel and another who sat on EON’s board. “The potential harm and detriment to EON are obvious,” wrote EON’s lawyers at Reed & Scardino and Fox Rothschild. “Latham is seeking to discredit EON’s attempt to protect the same … technology that formed the basis of Latham’s prior relationship with EON Corp and that Latham previously lauded and advocated on EON Corp’s behalf.”

In its response, Latham pointed out that of those 34 lawyers, only 7 are still practicing at the firm, and the two partners leading the MobiTV case, Bob Steinberg and Ryan Hatch, weren’t even at Latham during the long-ago representation of EON. No Latham lawyers, moreover, had anything to do with obtaining EON’s patent, according to the firm, since Latham doesn’t do patent prosecution. And besides, the Latham brief said, EON’s supposedly private information entered the public domain when its patent was issued. EON, the brief argued, “does not identify any specific item of information that Latham allegedly has that would benefit MobiTV in this case.”

Every reference to a specific piece of information is redacted from the Latham brief, but the Delaware judge disclosed that he reviewed a bunch of letters and memos between Latham and EON’s predecessor that involved (among other things) licensing and patent valuation issues. All of the documents Andrews cited date from 1990 to 1992 — almost two decades before Latham began representing MobiTV and at least 17 years before the firm established an ethical wall in October 2010.

Nevertheless, Andrews said that because the validity of EON’s patent is part of MobiTV’s defense, EON might long ago have disclosed to Latham confidential information that could be relevant to the case. That information certainly wasn’t revealed to the Latham lawyers representing MobiTV, Andrews conceded, but under U.S. District Judge Leonard Stark’s ruling last year in Intellectual Ventures v. Checkpoint Services, the law firm’s knowledge is imputed to its partners. Latham’s ethical wall wasn’t a good enough answer to that conflict of interest, according to Andrews, because the firm’s prior representation of EON might come before a jury, and any accommodation that might be made to prevent that “is the sort of thing that would give rise to the perception by the general public that the (conflict) rules are designed to avoid.”

A Latham spokesman responded to a phone message I left with Steinberg. “While we disagree with the court’s opinion, which ironically detailed the myriad steps we took to prevent a conflict and the long passage of time since we represented EON, it is in the best interests of our client for us not to further challenge this matter so that they may proceed with the case,” he said in an email. EON counsel Jeff Johnson of Reed & Scardino didn’t return my call.

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