December 2015

Massachusetts SJC Holds No Ethical Violation Based on Patent “Subject Matter Conflict”

December 28, 2015

If  a patent lawyer represents separate clients applying for patents involving the same subject matter, has she violated her ethical responsibility to either client? On December 23, 2015, the Massachusetts Supreme Judicial Court became one of the first state courts to address this issue. Maling v. Finnegan Henderson, Farabow, Garrett & Dunner, LLP. The central issue in this case was whether the simultaneous representation of clients competing for patents in the same technology area — a so-called “subject matter conflict” — was a conflict of interest.  The court found no conflict, stating, “we conclude that although subject matter conflicts in patent prosecutions often may present a number of potential legal, ethical, and practical problems for lawyers and their clients, they do not, standing alone, constitute an actionable conflict of interest that violates [Mass. R. Prof. C.] rule 1.7.” However, the court suggested a few ways in such “potential” problems might give rise to an actionable conflict of interest. First, it would be improper, without disclosure and consent, for a lawyer to represent two clients where the claims are identical or obvious variants of each other and a reasonable patent lawyer should reasonably foresee that an interference proceeding (or, under the American Invents Act, a derivation proceeding) was likely. Second, the patent lawyer must be careful to avoid a directly adverse conflict. Finnegan avoided such a conflict in this case when the plaintiff sought a legal opinion from Finnegan…

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Federal Circuit: Disparagement Provision of Trademark Statute is Unconstitutional

December 23, 2015

The Court of Appeals for the Federal Circuit (“Federal Circuit”) has issued a typically fractured en banc decision (12 judges, 5 opinions) holding that the 70 year old disparagement provision of § 2(a) of the Lanham Act (the federal trademark statute) is unconstitutional under the First Amendment. This law states, in relevant part: No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it— (a) Consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute …. (emphasis added) The background of this decision is straightforward.  Simon Shiao Tam named his band, “The Slants”, and attempted to register it as a trademark.  Tam asserted that he had chosen this name to make a statement about racial and cultural issues in the United States, and by chosing this name his band sought to “reclaim” or “take ownership” of Asian stereotypes. The Patent and Trademark Office denied registration, finding the name disparaging to persons of Asian descent. After the usual appeals, during the course of which the trademark office’s denial of registration was affirmed, the Federal Circuit took the case “en banc” (meaning all judges in the circuit would rule on…

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New Employment Agreement Leaves Noncompete Provision in Earlier Agreement Unenforceable

December 22, 2015

I’ve often written about how easy it can be for an employer to lose the ability to enforce an employee noncompete provision.  In recent years the courts have come down hard on employers who materially change an employee’s job responsibilities but fail to require the employee to enter into a new contract, holding in many cases that a noncompete provision in the old contract does not survive the job change.  (For example, see Rent-A-PC Fails to Enforce Restrictive Covenants Against Former Employees). However, there is an even more fundamental mistake employers can make, as illustrated in the decision in Meschino v. Frazier Industrial Co. (D. Mass. November 18, 2015). In this case the employee entered into an agreement in 2005 which contained a covenant not to compete and a confidentiality provision.  The employee then signed a new employment agreement in 2012, but the 2012 agreement did not include these terms or refer back to the 2005 agreement. As the court noted, the 2012 agreement “states on its face that it contains ‘the terms of [the employee’s] employment’ without any reservation or reference to any other document or agreement.” That, so far as Massachusetts Federal District Court Judge Stearns was concerned, was the end of the matter.  The employer may have intended to preserve the 2005 noncompete provision in the 2012 contract (as it claimed), but the 2012 agreement contained not even the…

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