MasterObjects, Inc. v. Amazon.com, Inc., No. 3:2020cv08103 - Document 354 (N.D. Cal. 2022)
Court Description: ORDER DENYING 254 MOTION TO DISQUALIFY. SIGNED BY JUDGE ALSUP. (whalc2, COURT STAFF) (Filed on 6/13/2022)
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1 2 3 4 5 UNITED STATES DISTRICT COURT 6 7 NORTHERN DISTRICT OF CALIFORNIA 8 9 10 MASTEROBJECTS, INC., Plaintiff, United States District Court Northern District of California 11 12 13 14 No. C 20-08103 WHA v. AMAZON.COM, INC, Defendant. ORDER DENYING MOTION TO DISQUALIFY 15 16 17 INTRODUCTION In this patent-infringement action, patent owner seeks to disqualify alleged infringer’s 18 counsel of record because in-house counsel worked at the firm that prosecuted the parent 19 patent of the patents-in-suit. For the reasons that follow, the motion is DENIED. 20 21 STATEMENT Previous orders described our facts (Dkt. Nos. 159, 206). In brief, patent owner 22 MasterObjects, Inc. brought this action against defendant Amazon.com, Inc. in 2020 for 23 infringement of several patents that touch on an asynchronous communication system that can 24 suggest search terms based on the characters a user types into a search bar, i.e., autocomplete 25 or predictive search results (Sec. Amd. Compl. ¶ 8–11). The current motion does not concern 26 the patents-in-suit directly but the prosecution of MasterObjects’ patent family. 27 28 In 2000, MasterObjects’ outside counsel Fliesler Meyer LLP (later Fliesler, Dubb, Meyer & Lovejoy, LLP, both hereinafter “FDML”) began preparations to prosecute U.S. Patent No. 1 8,112,529. Although the ’529 patent is not asserted in this litigation, all the patents-in-suit are 2 its descendants and share or incorporate its specification, as illustrated below. The asserted 3 patents are highlighted in blue, the full line demarcates a continuation of the earlier patent, and 4 the dashed line represents a continuation-in-part: 5 6 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 (Dkt. No. 280 at 14). As indicated, MasterObjects filed the application for what would become 16 the ’529 patent on August 20, 2001. One of the attorneys working at FDML when it filed the 17 application for the ’529 patent was Scott Sanford. Specifically, after graduating from law 18 school, Attorney Sanford joined the firm in October 2000. He worked at the firm for 19 approximately eighteen months before shifting to O’Melveny & Myers LLP in April 2002 20 (Sanford Decl. ¶¶ 3–4). 21 Attorney Sanford now works at Amazon. In his in-house counsel role, he works closely 22 with outside counsel Hueston Hennigan LLP and generally oversees this litigation for Amazon. 23 His prior work history did not come to light until a witness in this action, Karl Kenna, flagged 24 the connection to MasterObjects’ attorneys during Mr. Kenna’s deposition preparation. FDML 25 was not listed on Attorney Sanford’s public-facing resume on his LinkedIn account. 26 MasterObjects interpreted this omission as concealment of a conflict, and moved to disqualify 27 both Sanford and Hueston Hennigan. 28 2 1 This order follows full briefing and oral argument. After the hearing on the motion, an 2 order granted MasterObjects a three-hour deposition of Attorney Sanford (Dkt. No. 341). A 3 further order also instructed MasterObjects to seek out his time records while he worked at 4 FDML (Dkt. No. 343). ANALYSIS 5 6 For the reasons that follow, this order concludes that although MasterObjects has raised a 7 non-frivolous concern regarding a potential conflict, the record is not strong enough to warrant 8 disqualification of Attorney Sanford and Hueston Hennigan. District courts apply state law in determining matters of disqualification. In re Cnty. of 9 L.A., 223 F.3d 990, 995 (9th Cir. 2000). California Rule of Professional Conduct 1.9(b) states: 10 United States District Court Northern District of California 11 A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client 12 13 (1) whose interests are materially adverse to that person; and 14 (2) about whom the lawyer had acquired information protected by Business and Professions Code section 6068, subdivision (e) and rules 1.6 and 1.9(c) that is material to the matter; 15 16 17 unless the former client gives informed written consent.* The parties agree that Adams v. Aerojet-Gen. Corp., 86 Cal. App. 4th 1324 (2001), 18 provides our standard. There, the California Court of Appeal held: 19 20 [W]here there is a substantial relationship between the current case and the matters handled by the firm-switching attorney’s former firm, but the attorney did not personally represent the former client who now seeks to remove him from the case, the trial court should apply a modified version of the “substantial relationship” test as described in Ahmanson. The court’s task, under these circumstances, is to determine whether confidential information material to the current representation would normally have been imparted to the attorney during his tenure at the old firm. In answering this question, the court should focus on the relationship, if any, between the attorney and the former client’s representation. It should consider any time spent by the attorney working on behalf of the former client and “the attorney’s possible exposure to formulation of policy or strategy” in matters relating to the current 21 22 23 24 25 26 27 28 * Asterisks identifying defined terms omitted. 3 dispute. The court should also take into account whether the attorney worked out of the same branch office that handled the former litigation, and/or whether his administrative or management duties may have placed him in a position where he would have been exposed to matters relevant to the current dispute. 1 2 3 4 Id. at 1340. Where a substantial relationship between the former firm’s representation of the 5 client and the current lawsuit has been demonstrated, the attorney bears the burden of proving 6 he had no exposure to confidential information. Id. at 1340–41. United States District Court Northern District of California 7 Pursuant to the guidance in Adams, this order finds the modified substantial relationship 8 test applicable to the instant dispute. A substantial relationship exists between the current 9 litigation and the matters handled by FDML while Attorney Sanford was employed at the firm. 10 At that time, FDML drafted and filed the application that matured into the ’529 patent. As 11 discussed, the ’529 patent is highly relevant to this litigation. Attorney Sanford, however, 12 states in a declaration he did not personally represent MasterObjects during his tenure at 13 FDML (Sanford Decl. ¶ 8). MasterObjects does not dispute this. 14 This order must then consider whether confidential information material to the current 15 litigation would normally have been imparted by MasterObjects or the firm to Attorney 16 Sanford during his time at FDML. In this analysis, the reviewing court may apply reasonable 17 inferences and presumptions about the way attorneys work together. Adams, 86 Cal. App. 4th 18 at 1340. 19 First, MasterObjects subpoenaed the successor firms and individuals most likely to 20 possess Attorney Sanford’s billing entries from his time at FDML. None of these subpoenas 21 resulted in any documents connecting him to MasterObjects (Dkt. Nos. 351, 352). Attorney 22 Sanford also unconditionally asserts: “While at FDML, I did not work on any matters for 23 MasterObjects or Mark Smit” (Sanford Decl. ¶ 8). 24 Second, the size and structure of FDML does not compel the conclusion Attorney 25 Sanford would have received confidential material information regarding MasterObjects 26 during his time at the firm. FDML was a boutique prosecution firm with approximately a 27 dozen attorneys, most of whom worked at the firm’s San Francisco office, which occupied 28 two-thirds of a single floor. Further, Karl Kenna — a patent agent at FDML during the 4 1 relevant period — states that “associates, paralegals, and patents agents were not ‘siloed’” with 2 a single partner, and instead would work on a variety of subject matter (Kenna Decl. ¶¶ 4, 6). 3 4 were largely siloed from each other, working with associates to service their individual clients. 5 Junior associates were largely tasked specifically to partners with similar expertise” (Sanford 6 Decl. ¶ 7). To this end, Attorney Sanford explains that he had a mechanical engineering 7 background, so his practice focused on “matters related to semiconductors, semiconductor 8 wafer handling systems, medical devices, and other non-software technologies” (id. at ¶ 11). 9 He further states he never worked with Karl Kenna or Martin Fleisler, who did work on the 10 11 United States District Court Northern District of California Attorney Sanford does not contest the firm’s size but does assert: “Partners at FDML prosecution of MasterObjects’ patents (ibid.). Third, Attorney Sanford’s ability to access client files is not dispositive. Attorney 12 Sanford explains that if he was not staffed on a particular matter, he had no reason to access 13 those files (id. at ¶¶ 14–15). He further explains that FDML would have all-hands meetings, 14 but that they concerned “presentations of public developments in the law, such as recent case 15 opinions that would impact how patent attorneys should draft claims” (id. at ¶ 13). 16 In contrast, on this point MasterObjects again relies on Mr. Kenna’s declaration, where 17 he states that “although there were instances where access to particular client files was 18 restricted, [e.g.], those related to specific litigation matters, the firm’s attorneys were otherwise 19 generally not restricted from accessing all of the firm’s client files. I do not recall a restriction 20 being placed on accessing MasterObjects[’]files” (Kenna Decl. ¶ 8). He also states FDML 21 would occasionally have all-hands meetings where updates would be given regarding 22 particular client matters (id. at ¶ 9). However, “whether described as access to confidential 23 information or as the opportunity to acquire confidential information, that factor alone is not a 24 sufficient basis for finding or conclusively presuming that ‘confidential information material to 25 the current representation would normally have been imparted to the attorney during his tenure 26 at the old firm.’” Ochoa v. Fordel, Inc., 146 Cal. App. 4th 898, 911–12 (2007) (quotation 27 omitted). 28 5 United States District Court Northern District of California 1 Fourth, Attorney Sanford’s junior status at FDML also counsels against a conclusion he 2 would typically have received MasterObjects’ material confidential information. Attorney 3 Sanford worked at FDML his first eighteen months as a practicing attorney. He explains that 4 he thus had no administrative or management responsibilities that would have exposed him to 5 MasterObjects’ information (Sanford Decl. ¶ 15). In contrast, the attorney in Adams was the 6 named partner at his previous law firm prior to joining a new firm and the potential conflict 7 arising. Yet that opinion reversed the trial court’s decision to disqualify and remanded for 8 further proceedings. Adams, 86 Cal. App. 4th at 1329–30, 1341. This order finds it 9 unreasonable to infer that a junior associate like Attorney Sanford would typically be privy to 10 the confidential information of a client completely unrelated to his fledgling practice such as 11 MasterObjects. “[A]t some point, it ceases to make sense to apply a presumption of imputed 12 knowledge as a lawyer moves from firm to firm.” Goldberg v. Warner/Chappell Music, Inc., 13 125 Cal. App. 4th 752, 762 (2005). 14 Fifth, the deposition of Attorney Sanford conducted after the hearing on this motion does 15 not justify a different conclusion. At several points during the deposition Attorney Sanford 16 testified that he himself raised his connection with Mr. Fliesler and FDML to Amazon’s 17 outside counsel Hueston Hennigan. (Sanford Dep. 92, 104, 107, 110, Dkt. No. 342-2). For 18 example: 19 20 21 22 23 Q. You finally told your lawyers, in January 2022, after we raised the issue; right? A. I don’t recall when I told them. Q. Did you -- was it before January 2022, sir? A. I believe so, yes 24 (id. at 104, objections omitted). This contradicts Attorney Sanford’s declaration dated 25 February 15, 2022, wherein he stated the “first time I realized that MasterObjects was a client 26 of FDML . . . during the 2001–2002 timeframe was earlier this year, when I learned of 27 MasterObjects threat to disqualify myself and Hueston Hennigan” (Sanford Decl. ¶ 16). After 28 a break during the deposition and a discussion with his lawyers, Attorney Sanford walked back 6 1 his testimony: “[S]o I just want to be clear. When we were on a break, I talked to Mr. Kaba 2 real quick, because I felt like I was getting all my dates mixed up. So I told Hueston Hennigan 3 that I worked at Fleisler Myer back in 2000/2002 when you brought up the DQ 4 [disqualification] issue. That was the first time I brought it up to them” (Sanford Dep. 116). United States District Court Northern District of California 5 This does undermine Attorney Sanford’s credibility somewhat. However, when he first 6 told outside counsel about his former affiliation with FDML has little bearing on the core issue 7 in dispute here — “whether confidential information material to the current representation 8 would normally have been imparted to the attorney during his tenure at the old firm.” Adams, 9 86 Cal. App. 4th at 1340. Without more, this contradiction does not lead to the conclusion that 10 Attorney Sanford must be disqualified. This order finds that Attorney Sanford had no access to 11 and did not receive confidential information of MasterObjects during his eighteen months at 12 the law firm. The most convincing point is his own declaration and the absence of more 13 clearcut evidence of access. His credibility is not perfect but it is adequate for these purposes. 14 In light of the foregoing, this order declines to disqualify either Attorney Sanford or 15 Hueston Hennigan from providing counsel to Amazon on this litigation. CONCLUSION 16 17 For the foregoing reasons, MasterObjects’ motion for disqualification is DENIED. This 18 order has considered Amazon’s objections to evidence submitted in support of MasterObjects’ 19 reply brief. To the extent this order’s analysis implicates any evidence to which there was an 20 objection, such objection is overruled. This ruling on Amazon’s objections remains within the 21 context of the instant motion and comes without prejudice to any future evidentiary objections. 22 IT IS SO ORDERED. 23 24 Dated: June 13, 2022. 25 26 WILLIAM ALSUP UNITED STATES DISTRICT JUDGE 27 28 7
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