Subject Matter Conflicts of Interest

In a highly watched case by patent prosecution firms, the Massachusates Supreme Court has determined that representing two competing clients in the same subject mater is not a conflict of interest.  The decision was in the context of a dismissal of a malpractice complaint for failure to state a claims. Maling v. Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. The case involved the simultaneous representation of two competing clients both seeking patents in the area of screwless eyeglasses. 

The court explained that while simultaneous representation of two competing clients may pose a number of legal, ethical, and practical problems, it does not, by itself, estalish a per se ethical vilation. The court analyzed Rule 1.7 which prevents an attorney from representing two parties that are directly adverse to one another.  Because the parties were not on opposite sides of litigation, and rather were in separate proceedings each before the US Patent and Trademark office, the court concluded that there was no direct conflict.  

The court made a specific note that the complaining client (Maling) did not allege that his claims were the same as or obvious variants of the other competitor's patents obtained by the Finnegan law firm, in which case there may have been a potential for an interference. If so, Finnegan might have had a problem for failing to anticipate that there was a reasonable likelihood of an interference. 

Most interesting is the court's discussion of the need for a proper system for checking conflicts when commencing representation of a client. The court notes the current trend of very large law firms and the fact that proper protocols, no matter how complex, are needed to ensure identification of conflicts at the time of commencing representation.