(CN) – The Federal Circuit has clarified the circumstances under which courts may block attorneys from prosecuting certain patents to keep them from inadvertently disclosing confidential information gleaned in another case.
The ruling marks the first time the Washington, D.C.-based court has outlined the standards and scope of patent prosecution bars, which prohibit attorneys from using confidential material exchanged during litigation for any other purpose.
The decision stems from Deutsch Bank’s efforts to block attorneys for Island Intellectual Property from prosecuting any patents related to financial “deposit sweep services.”
Island had sued the bank for patent infringement, and Deutsch was concerned that if Island’s lawyers gained access to its confidential documents, they might disclose that sensitive information while prosecuting Island’s patents in other cases.
The district court lifted the temporary patent prosecution bar against Island’s attorneys, but the Federal Circuit reinstated the protective order pending appeal.
The bank then sought a writ of mandamus forcing the district court to apply the patent prosecution bar to all of Island’s attorneys, including lead counsel Charles Macedo, who had been exempted from the temporary protective order.
The appeals court first established that its own law — and not 2nd Circuit law – governs whether a protective order should include a patent prosecution bar. And the circuit has held that patent prosecution bars should be determined on a case-by-case basis, focusing on the extent to which an attorney is involved in “competitive decision-making.”
Despite this guidance, district courts have developed differing views on whether and to what extent patent prosecution involves competitive decision-making. Some courts have held that patent prosecution is inherently competitive, while others have said it does not automatically create an “unacceptable risk of inadvertent disclosure.”
“Because patent prosecution is not a one-dimensional endeavor and can encompass a range of activities, it is shortsighted to conclude that every patent prosecution attorney is necessarily involved in competitive decision-making,” Judge Linn wrote.
“It is therefore important for a court, in assessing the propriety of an exemption from a patent prosecution bar, to examine all relevant facts surrounding counsel’s actual preparation and prosecution activities, on a counsel-by-counsel basis.”
A court must also balance the risk of disclosure against a party’s right to be represented by its attorney of choice, the court added.
In Deutsch’s case, the panel agreed that a blanket patent prosecution bar on all Island attorneys went too far, but said it wasn’t clear whether the company’s lead attorney should have been exempted from the bar.
The court remanded to reassess his role in prosecution.