Q: Dear Ethics Lawyer, Our firm is currently advising Client A on whether a product it is developing would infringe a patent held by Competitor B. B has now asked a lawyer with the firm to represent it in an unrelated breach of contract lawsuit brought by one of its distributors. Can this conflict be waived?
A: Ordinarily, a concurrent conflict under Model Rule 1.7(a) can be waived under Rule 1.7(b) if the representations would not create a “material limitation” of responsibilities to either client, the lawyers/firm involved reasonably believe they can provide competent representation, the representation is not in the same matter or proceeding before a tribunal, and the representations are not otherwise prohibited by law. An effective waiver, however, requires informed consent (confirmed in writing) by each affected client. This is difficult as one of the matters involves a patent infringement review that is most likely considered highly confidential by Client A, i.e., the simple fact that A believes that a review of B’s patent for possible infringement by its prospective product is necessary is a telling fact that would likely give B a strategic advantage, as well as perhaps the idea to conduct its own review given A’s product in development.
Therefore, unless A is willing for the law firm to disclose the nature of the patent infringement review to B, as would be necessary for B’s informed consent, this conflict precludes the firm from proceeding to represent B. Perhaps making the matter even more complicated, at the outset, the firm could not relate to B that it is A on the other side of a conflict. The firm would have to simply indicate to B that there is a conflict with a party that cannot yet be identified, and obtain B’s permission to approach that party to describe the representation requested by B in order obtain that unidentified party’s consent. This is a difficult path the firm may wisely choose not to pursue.