Commercial Litigation and Arbitration

Conflicts, Disqualification & the Revolving Partnership Door at Big Firms

The plaintiff in LifeNet, Inc. v. Musculoskeletal Transplant Foundation, 2007 U.S. Dist. LEXIS 29058 (E.D. Va. April 10, 2007), accused the defendant of willful patent infringement. In its defense, defendant MTF intended to rely on the opinion that was rendered in 2002 by a Pennie & Edmonds’ partner named Stimpson who concluded that defendant MTF’s process did not infringe the plaintiff LifeNet’s patent. In 2003, as Pennie & Edmonds dissolved, Stimpson moved to Morgan Lewis & Bockius. In February 2007, after this case was in suit, plaintiff’s longtime IP counsel moved from Baker & McKenzie to Morgan, Lewis. The defendant promptly moved to disqualify plaintiff’s counsel. Almost as promptly, Stimpson left Morgan Lewis. Held, no disqualification. Three facts led District Judge Henry Hudson to this conclusion: (i) the departure of Stimpson from Morgan Lewis; (ii) the fact that Stimpson did not actually impart any privileged information to the two longtime lawyers for LifeNet who moved to Morgan Lewis (and, in light of Stimpson's departure, there was no imputation of Stimpson's knowledge to them); and (iii) the fact that, by relying on the opinion of Stimpson, defendant MTF was waiving its attorney-client privilege with Stimpson. ‛[T]he withdrawal of Mr. Stimpson from the firm appears to relieve the imputed conflict driving the disqualification requirement. There is no evidence in this case that Mr. Stimpson provided any information to [plaintiff’s lawyers] concerning the non-infringement opinion prepared for [defendant] MTF. In fact, it appears that [plaintiff’s lawyers] have never met Mr. Stimpson.... Therefore, even if the attorney-client privilege continued to attach to communications related to the non-infringement opinion, there is no indication that any such confidential information was imparted to“ plaintiff’s two longtime lawyers.

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