Conflict of interest can extend beyond country borders, implications for IP cases

Finding the right attorney is no easy task. You want someone that you feel comfortable discussing your legal issues but who is also well trained and competent enough to win your case. When you find this person, you also want a firm that does not have a conflict of interest. Any connection to the other side of the case will not only work against you, but it is also a violation of standards of ethical and professional conduct.

A failure to follow these rules can result in malpractice. The conflict of interest rule is a pretty basic rule, but the application can be complex. A recent case provides an example.

In this case, a business moved forward with a legal matter involving patent enforcement efforts only to find its counsel disqualified because it had a branch in Canada that had represented one of the defendants in a previous legal matter. The attorney attempted to argue that it was insulated from the Canadian branch, but the courts disagreed. The clients argued that the cost to replace attorneys at that stage of litigation was too large a hurdle and that they were forced to instead settle the case. As such, they are currently successfully moving forward with a legal malpractice claim.

What can IP businesses learn from this case?

There are two important lessons. First, those in a similar situation can likely hold their legal counsel accountable for the financial loses. Second, it is an avoidable situation. The court in this case notes that the client and counsel could have avoided the conflict-of-interest issue had they entered into an agreement that included an explanation of the potential for conflict as well as received an independent opinion on the potential impact of the issue.

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