Tuesday, October 26, 2010

Another Hidden Law Firm Conflict? Wilson Sonsini on the Hot Seat...

Following word that another firm just faced a $150 million jury verdict tied to an alleged conflict, comes a story of another law firm facing conflicts allegations. This time a client alleges that Wilson Sonsini hid a conflict of interest as it represented a direct competitor. [PDF of Complaint.]

Organizations competing in the marketplace aren't necessarily adverse under the classic legal definition of "conflict." However, situations of "business conflicts," which may or may not trigger lawyer duties to recuse themselves, tend to raise client concerns nevertheless. This is particularly true in matters of intellectual property, where lawyers may be exposed or have access to sensitive confidential information from both parties.

In this case, Wilson Sonsini was representing two companies in patent prosecution matters. As The Recorder notes:
  • "Wilson Sonsini never asked Existence Genetics for a waiver to represent a direct competitor, the suit says. Wilson Sonsini also never told Existence Genetics that Navigenics had filed a competing patent, when it had informed the company about other competitors' patent filings."
  • "Before being retained though, Norviel told the company's CEO that he had checked for conflicts of interest and found none. A year later, the company claims, a junior associate at Wilson Sonsini "let slip" that the firm also represented a direct competitor, Navigenics Inc. The company then discovered that Wilson Sonsini was the agent on a Navigenics' patent published in early 2009, and now believes the firm represented other competitors as well."

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