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Technology company accuses law firm of conflict of interest

One important consideration when selecting an attorney to represent you is conflict of interest. This principle holds that some pre-existing relationships should preclude a lawyer from taking a case. For example, few plaintiffs would want their attorney to be married to the person they are suing. How could the attorney possibly represent you to the best of his or her ability?

Another way conflict of interest could arise is if an attorney or law firm represents two businesses that are in competition with one another. If the firm does not take steps to keep the interests of each client from clashing, one or both could be harmed by this risky arrangement.

A company that develops radio frequency identification (RFID) products has sued its former law firm, accusing the attorneys of failing to protect its interests against a competing business that was also a client of the firm. The company, Axcess International, sought $51 million in damages, which implies the extent to which it believes the firm’s conduct damaged it.

Axcess hired the firm, Baker Botts, in 1998 to advise it on intellectual property law and pursue patents on its behalf. The next year, Baker Botts also agreed to represent Savi Technologies Inc., a company that also creates RFID products.

According to the legal malpractice suit, in 2002 Axcess read a Savi press release that described a new product from the latter company. The product had pending patent applications, but appeared to infringe on Axcess’ own patent applications.

Baker Botts was allegedly already aware of the potential conflict, but did nothing about it, Axcess’ attorney told the jury at the recent trial on the matter. When the company asked Baker Botts about its concerns, the law firm “deflect[ed] the issue and refused to run a conflicts check, the attorney said.

Source: The Dallas Morning News, “Jury deliberating Baker Botts’ legal malpractice case,” Natalie Posgate, May 14, 2014