Honeywell International Inc. (Honeywell) owns U.S. Patent No. 6,373,188 (‘188 patent), directed to a solid-state light emitting device that boosts efficiency by reducing the amount of radiation that escapes from the device.Â
The patented device is designed to use radiation from an LED to excite phosphors and reflects some of the emitted radiation back to the phosphor layer to further interact with and excite the phosphor material.
In 2007 Honeywell sued Philips Lumileds Lighting Co. (Philips Lumileds) and Cree Inc. in federal court in Marshall, Texas, alleging that the two LED makers infringed the ‘188 patent. Honeywell was represented by the law firm of Paul, Hastings, Janofsky & Walker (Paul Hastings).
Philips Lumileds moved to disqualify Paul Hastings from representing Honeywell on the grounds that the firm does a range of legal work for the Philip Lumileds affiliate Philips Electronics North American Corporation (PENAC). Specifically, Paul Hastings represents PENAC in government relations work, and in the course of this work represented numerous entities of the Philips Corporation.
Last month U.S. Magistrate Judge Charles Everingham granted Philips Lumiled’s motion and ordered that Paul Hastings be disqualified from representing Honeywell in the suit (paul_hastings_dq_order.pdf).Â
Judge Everingham held that the firm’s representation of Honeywell adverse to Philips Lumileds created a concurrent conflict of interest under the American Bar Association model ethics rules.
A very significant factor was that Philips Lumileds and the other Philips affiliates represented by Paul Hastings share a common internal legal department, which directs intellectual property strategy for the corporation worldwide.Â
The judge also noted that the attorneys working for PENAC and those representing Honeywell work mainly in the firm’s Washington, D.C. office, creating the possbility that the attorneys for Honeywell might have access to Philips confidential information.
These facts led the judge to disqualify Paul Hastings:
The presence of a centralized legal team, the current representation of PENAC as a client of [Paul Hastings], and the high probability of disclosure of confidential information lead the Court to give great weight in favor of disqualifying [Paul Hastings] from the present suit.Â
I imagine this won’t be the last time courts will see conflict and disqualification issues arise in clean tech litigation. Many big conglomerates, including for example, oil and energy companies, have spun out new corporate subsidiaries and affiliates in recent years to develop clean energy and environmental technologies.Â
It seems likely that big law firms that have longstanding relationships with these big companies will be sought out by others to take an adverse position in a lawsuit against one of their client’s new affiliates or subsidiaries. In these situations, the firms would have to either get the consent of their established clients or forgo the new engagement.
