Articles Posted in Civil Procedure

Indianapolis, Indiana – In what has turned into a real “dog” of a case, Judge Jane E. Magnus-Stinson of the Southern District of Indiana has confirmed her ruling disqualifying the Barnes & Thornburg LLP (“B&T”) law firm in a patent infringement suit. The disqualification bars B&T’s from representing defendant Miller Veneers, Inc., based on B&T’s “substantially related” earlier legal work for plaintiff Capital Machine Company, Inc. B&T had represented Capital for at least 20 years in the 1980’s, 1990’s and 2000’s.

About a year after the suit was filed, B&T entered its appearance for Miller Veneers, and Capital promptly moved to disqualify B&T as counsel. Capital argued that five areas in which B&T had previously represented Capital were “substantially related” to the patent infringement issues with Miller Veneer. , Judge Jane E. Magnus-Stinson granted the Motion to Disqualify based on B&T’s prior work for Capital “regarding employment matters generally, and specifically, as they relate to: (a) the ownership of inventions; and (b) Capital’s employment relationship with Defendant Robert Brand.” This decision is discussed here.

Unhappy with this ruling, Miller Veneers filed a motion for reconsideration of the disqualification order. In denying the motion for reconsideration, the Court not only confirmed that B&T’s work regarding invention ownership and employment matters required disqualification, but so did other areas of work B&T had performed for Capital. These other areas included: patent prosecution, including a patent relating to a “Dog Systems;” Capital’s assets, joint ventures, and acquisitions; and tax matters.

Interestingly, the infringed patents included those relating to a “dog system,” and Miller Veneers had recently filed a claim construction statement arguing that “dogs” meant “mechanical devices having . . . a shape which . . . resembles that of a pin.” However, B&T’s work for Capital in the 1980’s had included obtaining Patent No. 4,503,896, DOG SYSTEM FOR VENEER SLICER, (expired in 2002) which showed that the dogs could be rectangular and have teeth. Here are excerpts of Miller’s claim construction statement and Capital’s patent:

In commenting on this issue the court stated

“In this case, Miller, and thus B&T, are seeking to have “dogs” construed differently than the term is used in the original patent that B&T prosecuted. Miller argues this is a “red herring ” and asserts that B&T should be able to argue that the term “means one thing in one patent and one in another patent, even where the prior patent was cited as prior art.” But Miller omits a significant fact in its theory about B&T’s purported freedom of argument – B&T is making the argument in support of a client in one circumstance and in opposition to that same former client in the second circumstance.”

Practice Note: This ruling exemplifies how providing patent prosecution services can lead to disqualification in future matters involving similar technology for a different client. In 1984, B&T filed Capital’s patent application for a “Dog System for Veneer Slicer” and the the resulting patent expired in 2002. However, Miller’s decision to seek construction of the term “dog” as used in Capital’s later patents made the present infringement suit “substantially related” to B&T’s prior patent prosecution work for Capital, resulting in B&T’s disqualification.

This Court’s opinion elaborates on the Seventh Circuit’s three-step analysis for disqualifying counsel in litigation generally, as articulated in La Salle Nat’l Bank v. County of Lake, 703 F.2d 252, 255 (7th Cir. 1983):

(1) Determining the scope of the prior representation;
(2) Asking whether “it is reasonable to infer that the confidential information allegedly given would have been given to a lawyer representing a client in those matters;” and if so,
(3) Asking whether that confidential information “is relevant to the issues” raised in the present action.

This opinion also illustrates the dangers of filing a motion for reconsideration. Sometimes, a ruling on a motion for reconsideration is not only denied, but includes more reasons why the original ruling was proper. This makes the ruling less likely to be overturned on appeal.

The patent litigation attorneys of Overhauser Law Offices, the publisher of this site, represented Capital Machine Company in obtaining disqualification of B&T. The Case No. is 1:09-cv-00702-JMS-DML, and the Order on the Motion for Reconsideration is below.

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Indianapolis, Indiana – In a patent infringement lawsuit pending in the Southern District of Indiana, plaintiff Capital Machine Company, Inc., an Indianapolis-based manufacturer of veneer production equipment, achieved dismissal of opposing party Miller Veneers‘ attorneys based on the law firm’s previous work for Capital on matters “substantially related” to the present one.

Miller Veneers, also of Indianapolis, IN, is a wood veneer manufacturer and past Capital Machine customer accused of infringing several patents covering machinery and methods for more efficiently cutting veneer. Co-Defendant Robert Brand is Capital’s former Vice President of Engineering, and the inventor of the patents at issue. After leaving Capital in 1996, worked for Miller Veneers, where he assisted in designing the allegedly infringing machines.

About a year after the suit was filed, Miller retained the services of Indianapolis-based law firm Barnes & Thornburg LLP (“B&T”). Upon B&T’s appearance in the case, Capital filed an Emergency Motion to Disqualify Counsel to disqualify B&T. This Motion was based on a conflict of interest arising from work that B&T had done for Capital, including providing advice regarding employment Brand’s relationship with Capital.

Under the law of the Seventh Circuit, a lawyer is prohibited from representing a new client who is adverse to a former client in a “substantially related matter.” In granting Capital’s motion top disqualify B&T, Judge Jane E. Magnus-Stinson noted that “Capital had, to varying degrees, used B&T for legal services, including both patent and labor/employment issues since the mid-1980’s” and found that B&T records corroborated in part, and did not refute, Capital’s claims that the current litigation is substantially similar to the prior B&T representation. The Court afforded “significant weight” to evidence that Capital had shared confidential information with B&T lawyers and that B&T provided Capital with, among other things, “[c]ounseling regarding employment matters generally, and specifically, as they relate to: (a) the ownership of inventions; and (b) Capital’s employment relationship with Defendant Robert Brand.”

Note: The patent litigation attorneys of Overhauser Law Offices, the publisher of this site, represented Capital Machine Company in obtaining the disqualification of Barnes & Thornburg. The Case No. is 1:09-cv-00702-JMS-DML, and a copy of the Order is available below.

Update: Click Here for an update on this Ruling.

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