This is a slide deck I used for a legal ethics program for Intellectual Property lawyers. It covers some of the main ethics issues faced by IP lawyers, including: investigating infringement, use of deception, communicating with represented and unrepresented parties, settlement negotiations, conflicts of interest and confidentiality.

1. Selected Ethics Issues in
Intellectual Property Enforcement
Presented by
Nicole I. Hyland
and
Katie M. Lachter

2. Hypo 1: Investigating Infringement


Your client sells high-end leather goods
under its own brand. The owner of the
company has reason to believe a local store
is selling knock-offs of its products. She asks
you to oversee an investigation to determine
the extent of the counterfeiting activities.
You hire an investigator who sends in
several employees posing as customers
pretending to be interested in buying
products. They ask various questions of the
store personnel and tape the conversations.

3. Rule 4.1 – Truthfulness in
Statements to Others
Lawyer shall not knowingly
make a false statement of
fact or law to a third person

4. Rule 8.4(c) – Deceptive Conduct
Lawyer shall not engage in
conduct involving
dishonesty, fraud, deceit
or misrepresentation

5. Rule 8.4(a) – Acts of Another
Lawyer shall not violate or
attempt to violate the
Rules, knowingly assist or
induce another to do so,
or do so through the acts
of another

6. Rule 5.3 – Duty to Supervise
Nonlawyers
Lawyer shall be responsible for
the conduct of a nonlawyer
employed or retained by or
associated with the lawyer
that would be a violation of
these Rules if engaged in by a
lawyer, if certain conditions
are met.

7. Cases and Opinions


Gidatex v. Campaniello Imports
(SDNY 1999)
Apple Corps Ltd. v. Int’l
Collectors Society (D.N.J. 2005)
NYCLA Ethics Op. 737 (2007)
 NYCBA Ethics Op. 2010-2


8. Hypo 2: Settlement Negotiations
You represent a trademark holder in
a Lanham Act case. You have
conveyed a settlement demand to
opposing counsel but you have not
heard back. You are concerned that
the demand has not been
communicated to the defendant.
What are your options?

9. Rule 4.2 – Communicating with
Represented Party


Lawyer shall not communicate about
subject of representation with a
represented party, unless lawyer has
prior consent of the other lawyer
or is authorized to do so by law
Lawyer may cause and counsel
client to communicate with
represented person, provided lawyer
gives reasonable advance notice to
counsel

10. Hypo 3: Settlement Negotiations
Same as Hypo 2, but you
receive a call directly from the
defendant. He tells you that he
has fired his lawyer and wants
to negotiate a settlement with
you directly. What are your
options and obligations?

11. Rule 4.3 – Communicating with
unrepresented persons

Lawyer shall:



Not state or imply lawyer is
disinterested
Make reasonable efforts to correct
misunderstandings about lawyer’s
role
Not give legal advice other than to
secure counsel if person’s interests
have a reasonable possibility of being
in conflict with client’s interests

12. Prohibition Against Giving
Legal Advice

Applies where non-client’s interests
may “conflict” with client’s interests

“Conflict” not defined

Rule 1.7 uses “differing interests”

“Legal Advice” not defined

13. “Conflict” vs. “Differing Interests”


Conflict: “unrepresented parties
whose interests may be adverse” to
the client’s (Rule 4.3, Cmt [2])
Differing interests: “every interest
that will adversely affect either the
judgment or the loyalty of a lawyer
to a client, whether it be conflicting,
inconsistent, diverse, or other
interest.” (Rule 1.0(f))

14. What is Legal Advice?



“Lawyer exercises professional judgment to
apply legal principles to particular facts and
to impart some particular advice . . . so as
to help guide decisions of the recipient.”
(NYSBA Op. 898 (2011))
Lawyer may explain meaning of documents
or view of legal obligations (Rule 4.3, Cmt.
2)
Lawyer may state client’s legal position
(NYSBA 768 (2003))

15. Advice to “Secure Counsel”


Lawyer may flag particular legal
issues about which non-client
should seek counsel
Lawyer may have a duty to do so
when it advances the client’s
interests and does not violate
confidentiality
NYCBA Op. 2009-2

16. Duty Not to Mislead (again)


Rule 4.1 – In the course of
representing a client, a lawyer shall
not knowingly make a false
statement of fact or law to a third
person
Rule 8.4 – A lawyer shall not
engage in conduct involving
dishonesty, fraud, deceit or
misrepresentation

17. Hypo 4: Conflicts of Interest


You represent a client in connection with a patent
application for a new product. As part of a patent
search, you identify a patent of potential relevance.
You prepare an opinion letter stating that the patent
is invalid your client’s product will not infringe.
Subsequently, one of those patent holders sues for
patent infringement and your firm defends. The
plaintiff moves to disqualify your firm and exclude
your opinion on the ground that another lawyer in
your firm previously represented the patent holder in
connection with its patent application. What
outcome?

18. Conflicts of Interest
Rule 1.7 (Concurrent Conflicts)
 Rule 1.9 (Former Conflicts)
 Rule 1.10 (Imputation of
Conflicts)
 Andrew Corp. v. Beverly Mfg Co.
(N.D. Ill. 2006)
 NYCBA Ethics Op. 2005-05
(unforeseeable conflicts)


19. Hypo 5: Conflict Waiver
Same as Hypo 4, except that your firm’s
standard retainer agreement (which both
clients signed) contains the following
provision:
“You understand that this firm represents many
clients in your industry and that conflicts of
interest may arise between or among our clients.
You agree to waive any such conflicts of interest
that currently exist or may arise in the future and
that such conflicts of interest shall not be a basis
to disqualify this firm from representing any other
client in any matter, including litigation.”

20. Hypo 6: Restriction on Practice of Law
Same as Hypo 4, but after narrowly escaping
disqualification, you are negotiating a settlement.
Through back channels, you learn that opposing
counsel is already gearing up to start a second
lawsuit against your client for patent infringement on
behalf of a different patent holder. You include the
following provision in your settlement agreement:
“Counsel for plaintiff agrees not to assert any
claims or commence any legal proceedings on
behalf of any other party against Defendant
relating to Patent no. XXXXX.”

21. Rule 5.6 – Restriction on Right to
Practice
A lawyer shall not participate in
offering or making an agreement
in which a restriction on a
lawyer’s right to practice is part
of the settlement of a client
controversy

22. Hypo 7: Blogging/Confidentiality
You start a blog where you write
about copyright and trademark
issues. You want to use examples
from your own matters, both
transactional and litigation,
particularly your big wins. You plan
to confine your discussion to public
information.

23. Confidentiality – Rule 1.6

A lawyer shall not knowingly reveal
confidential information, unless:



Client gives informed consent
Disclosure is impliedly authorized to
advance the best interests of the
client and is reasonable or customary
Disclosure is otherwise permitted by
the Rule

24. What is “Confidential Information”?

Information gained during or
relating to the representation,
whatever its source, that:



Is protected by the attorney-client
privilege;
Is likely to be embarrassing or
detrimental to the client; or
Client has requested be kept
confidential.

25. What is “Informed Consent”?

Agreement by a person to a
proposed course of conduct after:


Lawyer has communicated
information adequate for the person
to make an informed decision; and
Lawyer has adequately explained to
the person the material risks of the
proposed course of conduct and
reasonably available alternatives.

26. Questions?