Concurrent Client Conflict Spurs Firm’s Ouster in Patent Case

A law firm that represented the defendant and a subsidiary of the plaintiff at the same time in a patent infringement case is out as the defendant’s counsel even though it withdrew from representing the subsidiary.

There’s “no dispute” that Davidson Berquist Jackson & Gowdey LLP was representing both parties at the same time and that the subsidiary withheld consent to the firm representing the defendant because it’s adverse to its interests, said a Jan. 28 order from the U.S. Court of Appeals for the Federal Circuit.

This representation violated a professional conduct rule on concurrent conflicts of interest in California, where the patent case was originally filed, the court said. That rule prohibits representation that’s directly adverse to existing representation without obtaining consent from the clients.

Davidson Berquist Jackson & Gowdey initially represented Trimble Transportation, a wholly-owned subsidiary of the plaintiff, Trimble Inc., the court said. The circuit court sought to answer the question of whether Trimble Inc. was a “client” of the firm based on its corporate affiliation with Trimble Transportation.

The court said the answer depends on degree of control over the affiliate, and in this case Trimble Inc. and Trimble Transportation “are sufficiently intertwined to warrant treatment as one client.”

The concern here isn’t the acquisition of confidential information but the “duty of undivided loyalty” owed to the subsidiary, the court pointed out.

It gave the defendant, PerDiemCo LLC, 30 days to find new counsel, noting that it was still represented by its district court counsel, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP.

The case is Trimble Inc. v. PerDiemCo LLC, Fed. Cir., No. 19-02164, motion ruling 1/28/20.