The Patent Trial and Appeal Board (PTAB), acting under ethical rules 37 CFR 11.109 and 11.108, granted a patent owner discovery in relation to a potential disqualification motion in connection with several covered business method (CBM) patent reviews, notwithstanding the target law firm’s representation that it would not participate in the portion of the proceeding involving the patents it helped to prosecute. Miami International Holdings, Inc. v. NASDAQ ISE, LLC, Case Nos. CBM2018-00020, -00021, -00029, -00030, -00031, -00032 (PTAB Feb. 15, 2019) (Sawert, APJ).

NASDAQ sought discovery for purposes of bringing a motion under Rule 11.109, which prevents a practitioner from representing a party adverse to a former client in substantially similar proceedings, to disqualify Fish & Richardson from representing Miami International Holdings (MIAX) in the CBM proceedings MIAX brought against certain NASDAQ patents. In its motion, NASDAQ argued that the PTAB should adopt a magistrate judge’s finding in a related matter that the defense of MIAX, including the CBM reviews challenging the validity of the patents asserted against MIAX, was a collaborative effort with MIAX’s other law firm, Reed Smith.

From 1998 to 2011, Fish represented NASDAQ in intellectual property matters and prosecuted many patents relating to electronic trading technology on behalf of NASDAQ, including several patents involved in the CBM proceeding. With regard to the specific patents challenged in the case at hand, Fish represented MIAX against some of the patents, i.e., the ones that Fish did not prosecute (Fish CBMs), and Reed Smith represented MIAX against the others (Reed Smith CBMs).

The PTAB granted a rare reconsideration of an earlier ruling on discovery in order to clarify the ethics rules regarding former representation in substantially related matters. In partially granting patent owner’s motion, the PTAB rendered a tutorial on 37 CFR §§ 11.109(a) and 11.109(c). As the PTAB explained, § 11.109(a) provides that “[a] practitioner who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.” Section 11.109(c) provides that:

A practitioner who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter:

(1) Use information relating to the representation to the disadvantage of the former client except as the USPTO Rules of Professional Conduct would permit or require with respect to a client, or when the information has become generally known; or

(2) Reveal information relating to the representation except as the USPTO Rules of Professional Conduct would permit or require with respect to a client.

The PTAB applied § 11.109(a) and ABA Model Rule 1.9 (the latter as to what constitutes a “substantially related” matter) in order to determine whether Fish’s representation of MIAX in the Fish CBMs qualified as “the same or a substantially related matter in which” MIAX’s “interests are materially adverse to the interests of” NASDAQ. The PTAB found that the Fish CBMs did not involve the “same transaction or legal dispute.”

In regards to the Reed Smith CBMs, the PTAB found that Fish’s alleged involvement did not implicate 37 CFR § 11.109(a) because Fish did not represent MIAX in the Reed Smith CBMs. The PTAB concluded that, at most, Fish’s alleged involvement would fall under 37 CFR § 11.109(c), which would prohibit Fish from using information related to its prosecution of NASDAQ’s patent to the disadvantage of NASDAQ or revealing information relating to the same. Thus, the PTAB allowed discovery it found pertinent to the question of whether Fish used or revealed information to Reed Smith relating to its prosecution of the NASDAQ patents.