In what is an unusual set of facts, a court recently disqualified a law firm from acting as trial advocates in a case where the lead litigation attorney also prosecuted the patents-in-suit and was deemed to be a lawyer-as-witness. The court determined that all attorneys who participated in the prosecution of the patents-in-suit must be walled off, but the other firm attorneys could continue to be involved during hearings, depositions, and at trial (but still not as trial advocates) but only if the court entered a proper confidentiality agreement containing a prosecution bar. Dkt no. 73, Mark Barry M.D. v. Medtronic, Inc., 1:14-cv-104 (E.D.Tex. 2015).
Disqualifying a law firm on this ground is rare because, generally, where it is necessary for the attorney who prosecuted the patent-in-suit to be a witness, courts try to minimize the disruption to plaintiff’s choice of counsel by coming up with creative ways to allow the lawyer-witness and the firm to still participate in the litigation. For example, the court may require the lawyer’s testimony be submitted in written form in an effort to minimize potential juror confusion and/or prejudice to the parties. This effort is often unnecessary because the issues that are most likely to involve attorney testimony would generally not be heard in front of a jury because they are issues involving matters of law or equity. One example of attorney testimony involving equitable issues is inequitable conduct, which is more often-than-not presented solely to the bench.
So, what happened in the Mark Barry case? The court considered many factors in ruling to disqualify the plaintiff’s chosen counsel:
- At an initial case management conference, the plaintiff’s lead trial counsel represented to the Court that he was only involved “initially” in the prosecution because the prosecution was handed over to another firm. To the contrary, it was later shown that the lead trial counsel had acted as prosecution counsel for the entirety of the prosecution of plaintiff’s three granted patents and one pending patent application. Moreover, the plaintiff had even transferred patent prosecution files from the “another firm” to the lead counsel’s firm.
- Plaintiff’s lead trial counsel never corrected any of the misstatements he made to the Court.
- In a letter to opposing counsel after the case management conference, the plaintiff’s lead trial counsel stated that he was only informed of the prosecution but did not actively participate (even though the prosecution files show that he, in fact, signed many of the prosecution documents.)
- The plaintiff’s lead trial counsel was even identified as having discoverable information in plaintiff’s “Amended Initial Mandatory Disclosures.”
- After lead trial counsel’s deposition, plaintiff, itself, filed a motion for the withdrawal of the lead counsel and to substitute lead counsel, which was opposed by the defendant.
- The defendant filed an amended answer raising inequitable conduct as an affirmative defense.
- The defendant also asserted a public use bar affirmative defense, which relied on the same nucleus of facts as the inequitable conduct claim (i.e. certain pre-priority date documents known to the attorney were not properly submitted to the United States Patent and Trademark Office during prosecution).
- As the public use defense is a jury issue and the inequitable conduct defense are largely overlapping, the lead trial counsel would have to be called in front of the jury to testify. As a result, there was a high possibility of possibility for jury confusion if the lead trial counsel acted as both advocate and witness. Moreover, there would be a high risk of prejudice to the defendant who will need to criticize the lead counsel and his firm to prove its defense.
- The motion to disqualify was not a tactical weapon, and was reasonable once the defendant discovered the lead trial counsel’s role in the prosecution.
- There is no substantial hardship on the plaintiff, especially since new trial counsel had already been hired.
Basically, this case is the result of a number of rare issues, including one that the Court seemed to find very concerning - an uncorrected misrepresentation to the Court.
In determining whether to disqualify the law firm, the court discussed the ethical rules relating to lawyer-as-witness. Generally, under ABA Model Rule 3.7:
(a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness unless:
(1) the testimony relates to an uncontested issue;
(2) the testimony relates to the nature and value of legal services rendered in the case; or
(3) disqualification of the lawyer would work substantial hardship on the client.
(b) A lawyer may act as advocate in a trial in which another lawyer in the lawyer's firm is likely to be called as a witness unless precluded from doing so by Rule 1.7 or Rule 1.9.
Subsection (b) is different from the general rule on disqualification. In this instance, even if an attorney is disqualified as lawyer-witness, the firm can still participate in the litigation (i.e. the disqualification is NOT imputed to the entire firm). However, the Texas Disciplinary Rules of Professional Conduct (“Texas Rules”) differs from the Model rule to two relevant respects. First, Rule 3.08(c) specifically indicates “[w]ithout the client’s informed consent, a lawyer may not act as advocate in an adjudicatory proceeding in which another lawyer in the lawyer’s firm is prohibited by paragraphs (a) or (b) from serving as advocate.” Second, Rule 3.08(c) has a more expansive preclusive effect - not only does it preclude a lawyer-witness from acting as an advocate at trial, but it further states that “[i]f the lawyer to be called as a witness could not also serve as an advocate under this Rule, that lawyer shall not take an active role before the tribunal in the presentation of the matter.”
Likely mindful of the admonition found in Comment 10 to Texas Rules 3.08, which cautions that this rule should never be used as a tactical weapon, the Court emphasized this disqualification was based on unique circumstances, including the potential prejudice to the defendant, potential juror confusion, the lack of substantial hardship to the plaintiff’s client (plaintiff had previously file a motion seeking to replace their own counsel), and that the motion to disqualify was not used as a tactical weapon.
So, can a firm ethically prosecute and litigate patents?
Yes. There is no rule that says participating in both activities is unethical.
But, firms should be aware that problems may arise when a prosecuting attorney, who also acts as litigation counsel, may be a necessary witness at a trial. In the rare instances this happens, there will always be a risk of attorney disqualification. However, as this case shows, the most draconian result is unlikely except in the strangest of circumstances. And then, even if the primary attorney is disqualified, it is unlikely that the firm generally will be disqualified. However, firms should familiarize themselves with their jurisdiction’s rules.
Additionally, while attorneys (or potentially firms) may be disqualified, they can generally only be disqualified from acting as advocates at trial. Thus, the attorneys should still be able to do other litigation activities such as hearings, appeals, participating in discovery, and directing the litigation. This is without considering the possibility that the firm’s patent prosecuting attorneys will be subject to a prosecution bar and confidentiality agreement, and potentially be walled off from the litigation. But that is fodder for an entirely separate blog post.
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