WPCqX #BiZ/.=p8H )9#dIKY™Z%[ᜌ%;zhc~hqz?ylBS΂b "p@^1A&CgŒ+8ʳ/)jiP'jUn 󾾚2h^:k(QH.aB"^/эXOnʘ7x{^==Qcskb`fd>֓N8l䗦,`V4"߳RNx""0ɭ4P 5x˹ƞ޼BiyÉ:nq ATQ 0 0Y 0  0a 0"  0]! 09" 0J" 02&# 0X# 0:T$ 0$ 0_% 0 r% 0k|& 0' B*) D3) C * D+%* 0P* 0, 06, 04- 0:<. 0hv. 0F.U6$/U>Z/U*/N// 0M3M3U:3,4UH35M{558M::";F;>?z@AEBCsD8CE{HI 1I 1J 1J-K BKLLMOU R3X\\750-FPS2\750_10_IPD01_HP4050WINSPOOL0!(hH  Z6Times New Roman RegularX($(5hCEKQW]cioAutoList1I.I.I.I.I.I.I.I.#'e37=CIQYag1.a.i.(1)(a)(i)1)a)(;3$2'e  0  .3  0  (CEKQW]cioAutoList2A.A.A.A.A.A.A.A.H,c DDUDDDDx<x<2,(Backup3|xU h $    2    _XXԀRULE1.70 ConflictofInterest:GeneralRule (# (#   (a)Alawyershallnotrepresentaclientiftherepresentationofthatclientwillbedirectlyadverseto0  anotherexistingclient,unless: (#(#  ` (1)thelawyerreasonablybelievestherepresentationwillnotadverselyaffecttherelationshipwith0 ` theotherclient;and ` (#` (#  ` (2)eachclientconsentsafterconsultation.  (b)Alawyershallnotrepresentaclientiftherepresentationofthatclientmaybemateriallylimitedbythe0  lawyer'sresponsibilitiestoanotherclientortoathirdperson,orbythelawyer'sowninterests,unless: (#(# 0   ` (1)thelawyerreasonablybelievestherepresentationwillnotbeadverselyaffected;and (#(# 0   ` (2)theclientconsentsafterconsultation.Whenrepresentationofmultipleclientsinasinglematterisundertaken,theconsultationshallincludeexplanationoftheimplicationsofthecommonrepresentationandtheadvantagesandrisksinvolved. (#(# #X^XS#((3$ !      0  (#$  0    $    3    _ԀXXRULE1.90 ConflictofInterest:FormerClient (# (# 0   ` (a)Alawyerwhohasformerlyrepresentedaclientinamattershallnotthereafterrepresentanotherpersoninthesameorasubstantiallyrelatedmatterinwhichthatperson'sinterestsaremateriallyadversetotheinterestsoftheformerclientunlessboththepresentandformerclientconsentafterconsultation. (#(# 0   ` (b)Alawyershallnotknowinglyrepresentapersoninthesameorasubstantiallyrelatedmatterinwhichafirmwithwhichthelawyerformerlywasassociatedhadpreviouslyrepresentedaclient (#(#    ` (1)whoseinterestsaremateriallyadversetothatperson;and0   ` (2)aboutwhomthelawyerhadacquiredinformationprotectedbyRules1.6and1.9(c)thatismaterialtothematter; (#(# 0  unlessboththepresentandformerclientconsentafterconsultation. (#(# 0   ` (c)Alawyerwhohasformerlyrepresentedaclientinamatterorwhosepresentorformerfirmhasformerlyrepresentedaclientinamattershallnotthereafter: (#(# 0  0` (#(# (1)useinformationrelatingtoorgainedinthecourseoftherepresentationtothe $  disadvantageoftheformerclientexceptasRule1.6orRule3.3wouldpermitorrequirewithrespecttoaclient,orwhentheinformationhasbecomegenerallyknown;or ` (#` (# 0  0` (#(# (2)revealinformationrelatingtotherepresentationexceptasRule1.6orRule3.3#X^XU#XX^would ^ permitorrequirewithrespecttoaclient.#X^Xd#(` (#` (#  $    5    _XXԀRestatementoftheLaw(Third)GoverningLawyers,121,cmt.b(2000)#X^XS#  $    6    _ԀXXSamuelC.Miller,PracticalMeasuresforReducingtheRiskofConflictsofInterestinthePracticeof  0  IntellectualPropertyLaw,TheProfessionalLawyer(2001SymposiumIssue)at80[ Miller].#X^XV#(#(# 0.Normal<:Definition T<GD:Definition L , ;1` hp x (#;  8.` hp x (#886Definition('z&H1      XXX(o&H2  XXX(o&H3  XXX(&H4 XXX XXX(o&H5  XXX } $    7    _ԀXXId.(o&H6  XXX20Address8SP6Blockquote , , ;1` hp x (#;   8.` hp x (#8,*CITE,dl*CODEK6<6X9`(Courier NewKXXXS7\  `&Times New RomanS42Emphasis6&)4Hyperlink            <:FollowedHype    4go2Keyboard K6<6X9`(Courier NewK XXXS7\  `&Times New RomanS<:Preformatted/%  ,Kk (#/K6<6X9`(Courier NewKXXXS7\  `&Times New RomanS/%  ,Kk (#/<:zBottom of I,-4$ ** ddI  B    ?8%2A`Arial?9.-*  dd9  XXXS7\  `&Times New RomanS  &0 d d++++'dxddd'dxd<:zTop of ForI,-4$** ddI  B    ?8%2A`Arial?9.-*  dd9  XXXS7\  `&Times New RomanS  0Kl.SampleK6<6X9`(Courier NewKS7\  `&Times New RomanS0.Strong 8dl6TypewriterK6<6X9`(Courier NewKXXXS7\  `&Times New RomanS42Variable:8HTML MarkupB      2 0CommentB  <6X9`(Courier New\  `&Times New Roman%2A`Arial $    8    _ԀXXEthics2000Commission,August2001ReporttoABAHouseofDelegates,ProposedDraftRule1.7,  0  cmt.[2] _mR XX9#X^X mR!#XX^ԀPlantGeneticSystems,N.V.v._Ciba_ԀSeeds,933F.Supp.514,518(_M.D.N.C._Ԁ1996)citingRogersv.  _Pittston_ԀCo.,800F.Supp350,353(W.D.Va.1992),_affd_,966F.2d1212(4thCir.1993);TheGilman z Corp.v.TheGilmanBros.Co.,20U.S.P.Q.2d1238,1240(Comm.Dec.1991)citingGovernmentofIndia D v.CookIndustries,Inc.,599F.2d737,73940(2dCir.1978)#X^Xd#XX^7\  `"TimesNewRoman $    12    _XXԀEthics2000Commission,August2001ReporttoABAHouseofDelegates,ProposedDraftRule1.9,  0  cmt.[3]7\  `0TimesNewRoman-Italic u $    13    _ԀXXAmgen,Inc.v._Elanex_ԀPharmaceuticals,Inc.,160_F.R.D._Ԁ134,140(W.D.Wash.1994)(patent);_Hydril_Ԁ  0  Co.v._Multiflex_,Inc.,553F.Supp.552,555(S.D.Tex.1982)(conflictcreatedbyobtainingtrademark  registration,thenswitchingsides).Seealso_Asyst_ԀTechnologies,Inc.v._Empak_,Inc.,962F.Supp.1241, j 1242(N.D.Cal.1997)( Fewpeoplearemorelikelytohaveconfidentialinformationwithwhichtoattackthevalidityofapatentthanthelawyerswhoprosecutedit.) ~ $    14    _ԀXX_Telectronics_ԀProprietary,Ltd.v._Medtronic_,836F.2d1332(Fed.Cir.1988);SunStuds,Inc.v.Applied  0  TheoryAssoc.,Inc.,772F.2d1557(Fed.Cir.1985). $    15    _ԀXXSeenote10,supra. $    9    _ԀXXMiller,supra,note5at86. < $    4    _ԀXXAstoimputeddisqualification,37_C.F.R._Ԁ10.66(d)states: Ifapractitionerisrequiredtodecline  0  employmentortowithdrawfromemploymentunderaDisciplinaryRule,nopartner,orassociate,orotherpractitioneraffiliatedwiththepractitionerorthepractitionersfirm,mayacceptorcontinuesuchemploymentunlessotherwiseorderedbytheDirectororCommissioner.  $    17    _ԀXXSomedecisionshaveheldthatgovernmentalentitiescannotwaivetheprotectionoftheconflictsof  0  interestrules.See,e.g.,StateofWestVirginiav._MacQueen_,416S.E.2d55(W.Va.1992)andCityof  LittleRockv.Cash,644S.W.2d229(Ark.1982). $    10    _ԀXXId.at87. $    18    _ԀXXRichardPainter,AdvancedWaiverofConflicts,8_Geo_.J.LegalEthics289,296(Winter2000). $    16    _ԀXX2Rest.(3d)GoverningLawyers122,cmt.(d)(F.D.2000).  $    19    _ԀXXActually,theAceElectriclitigationandtheothersubcontractorsdisputearoseoutofthesame  0  constructioncontractbetween_Jelco_ԀandUnitedSewerage,butthesubjectmatterofthetwocaseswerequitedifferent. $    20    _XXԀ547F.Supp.at180. $    21    _XXԀOnlythe_Westlaw_Ԁcitationiscurrentlyavailable. . $    1    _XXSeealso,_Buchel_Ԁv._Bain_,275A.D.2d65,713N.Y.S.2d332(2000)holdingthatPTORule10.64(a)(3)  0  permittingalawyertoobtainaninterestinapatentinlieuofafeedidnotpreemptstatesethicsrulesmakingsuchapracticeimproper.See,e.g.,ABARule1.8(j).Thecourtcited37_C.F.R._Ԁ10.1: Nothing D inthispartshallbeconstruedtopreempttheauthorityofeachStatetoregulatethepracticeoflaw,excepttotheextentnecessaryforthePatentandTrademarkOfficetoaccomplishitsfederalobjectives. $    22    _XXԀ5F.Supp.2dat1359. ~ $    23    _XXԀId.(UhCEKQW]cioAutoList3IIIIIIIIIIIIIIII(ehCEKQW]cioAutoList4IIIIIIIIIIIIIIII(uhCEKQW]cioAutoList5IIIIIIIIIIIIIIII $    24    _ԀXX37_C.F.R._Ԁ10.66(a),(c). d $    25    _ԀXXABAModelRules1.7(a)(2),(b)(2);1.9(a),(b)(2)  $    26    _ԀXX37_C.F.R._Ԁ10.66(c);SeealsoUnifiedSewerage,supra,646F.2dat1350: Indeterminingwhetherit  0  isobviousthatanattorneycanrepresentadverseparties,thecourtshouldlookatfactorssuchas:thenatureofthelitigation;thetypeofinformationtowhichthelawyermayhavehadaccess;whethertheclientisinapositiontoprotecthisinterestsorknowwhetherhewillbevulnerabletodisadvantageasaresultofthemultiplerepresentation;thequestionsindispute(e.g.,statutoryconstructionversusdisputesoverfacts)andwhetheragovernmentbodyisinvolved. C $    27    _ԀXXVa.LegalEthicsOp.1652(1996): Z[_C]onsent_Ԁisnotacontractualobligationandaclientundercertain  0  circumstancesmaywithdrawtheconsent.See,e.g.,LEO#1354;Commercial&_Sav_.Bankv._Brundige_,5  Va.Cir33,34(1981)#Z#.%\ `  $    28    _ԀXXCasesinvokingtheestoppeldoctrinewhenclientsrevokeconsenttoconflictsincludeUnifiedSewerage,  0  supra,note26at1346;7CityofClevelandv.ClevelandElec.IlluminatingCo.,440F.Supp.193(N.D.Ohio  1976,_aff'd_Ԁmem.,573F.2d1310(6thCir.1977)(advancewaivercouldbeinferredfromthefactthattheclient'sinhouselawyerknewallthatwasgoingon).B.` hp x (#XB#7#  $    28    _Ԁ]XXCasesinvokingtheestoppeldoctrinetoenforceconsentstoconflictsincludeUnifiedSewerage,supra,  0  note26at1346,n.6;_CityofClevelandv.ClevelandElec.IlluminatingCo.,440F.Supp.193(N.D.Ohio  1976,_aff'd_Ԁmem.,573F.2d1310(6thCir.1977)(advancewaivercouldbeinferredfromthefactthattheclient'sinhouselawyerknewallthatwasgoingon).B.` hp x (#XB#]7#(hH  Z6Times New Roman Regular\  `&Times New Roman !  _@!AmericanBarAssociation@rrSectionofIntellectualPropertyLaw@  The17thAnnualIntellectualPropertyConference  ` @; ; AdvanceConsentsorWaiversofConflictsofInterest@JamesM.McCauley,EthicsCounsel@  $VirginiaStateBar@$Richmond,Virginia@II% April1112,2002 D! @FF%Washington,D.C.(#(#K(# @-(, L 5h(3L Hg   Hg2  I  .3  0 `   IntroductionandOverviewofConflictsHg݌` (#` (# Ќ  L ((L Hg   Hg2  A  .3  0 `   ApplicableRulesHgK݌` (#` (# Ќ  0 ` Forpurposesofthispaper,IwillrefertotheABAModelRulesofProfessionalConductandtheDCodeofProfessionalResponsibilityadoptedbythePatent&tradeamaTrademarkofOffice(PTO).Alawyermust,ofcourse,reviewtheethicsrulesofthestatewhereheorsheisadmittedtopractice.NotallstatesfollowtheABAModelRules,andmanystateshaveadoptedtheirownvariantsoftheABARules.Generally,alawyerissubjecttotheprofessionalconductrulesofthestatewhereheorsheisadmittedtopractice,evenifthelawyermaybepracticingelsewhere.See,e.g.,ModelRule8.5(a).Alawyermaybesubjecttoboththerulesofthe P  statewhereheorsheisadmittedtopracticeandthestatewhereheorsheactuallypractices.Id.Thereisapreferredchoiceoflawifthelawyersconductarisesout 0  oflitigation.ModelRule8.5(b)(1).Therulesofthestatewherethecourtsits ` (#` (# 0 ` willcontrol.Id.Also,ifthelawyerislicensedinonestateandpracticesin  another,andthelawyersconductatissuehasits predominanteffectinajurisdictionotherthanthestatewhereheorsheisadmittedtopractice,thatotherjurisdictionsruleswillgovern.ModelRule8.5(b)(2).` (#` (# 0 ` LawyerspracticingbeforethePatentandTrademarkOffice(PTO)arealsogovernedbythePTOsownethics p rules,patternedaftertheoldABAModelCodeofProfessionalResponsibility.37_C.F.R._Ԁ10.20,etseq.ThePTOsethicsrulesdonotpreemptthestatesfrom P regulatingattorneymisconductandthePTOandthestatescansharejurisdictionovercertaindisciplinarymatters.SeeKrollv._Finnery_,242F.3d1359(Fed.Cir. 0 2001).O %  1       p` (#` (#  Hg   Hg 2  B  .3  0 `   RulesProhibitingConflictsofInterestHg ݌P` (#` (# Ќ  0 ` Rulesprohibitingconflictsofinterestsarebaseduponfiduciaryprinciplesand 0 corevaluesinvolvingthedutytoprotectconfidentialityofclientinformation,thedutyofloyaltyandthedutytoexerciseindependentprofessionaljudgmentonbehalfofaclient.ThebasicprohibitionissetoutsuccinctlyintheRestatementof "  theLaw(Third)GoverningLawyersatSection121:#!` (#` (# 8 ` 8 ` ` Unlessallaffectedclientsandothernecessarypersonsconsenttotherepresentationunderthelimitationsandconditionsprovidedin122,alawyermaynotrepresentaclientiftherepresentationwouldinvolveaconflictof P(#& interest.Aconflictofinterestisinvolvedofthereisasubstantialriskthatthelawyersrepresentationoftheclientwouldbemateriallyandadverselyaffectedbythelawyersowninterestsorbythelawyersdutiestoanothercurrentclient,aformerclient,orathirdperson.p x x 0 ` Absentclientconsent,ABAModelRule1.7prohibitsconflictscreatedby P  concurrentrepresentationofmultipleclientsaswellasconflictscreatedbythelawyersowninterestsordutiesowedtothirdparties. %  2      ׀ABAModelRule1.9 0  prohibitsrepresentingaclientadversetoaformerclientina substantiallyrelatedmatterunlesstheformerclientconsentsafterconsultation.  %  3      ` ` (#` (# Ї Hg   Hgg2  C  .3  0 `   ImputationHgg݌` (#` (# Ќ  0 ` Perhapsthemostvexingproblemwithconflictsofinterestistheconceptofimputation.Ifonelawyercannotrepresentaclientbecauseofaconflict,noneoftheotherlawyersinthefirmmaydoso.ModelRule1.10;DR5105(D);37_C.F.R._Ԁ10.66(d)._Gr %  4      _ԀUndertheformulationadoptedbythePTO,theconflictis `  imputedtoany partner,orassociate,oranyotherpractitioneraffiliatedwiththepractitionerorthepractitionersfirm.Id.Atleastonecourthasheldthatthis @  broadlanguageimputesconflictsto ofcounselassociations._Atasi_ԀCorp.v. 0  SeagateTechnology,847F.2d826(Fed.Cir.1988).Thus,alawfirmdisqualified  p  undertherulesmayalsofindthatitsaffiliated ofcounselfirmisequallydisqualified. ` (#` (#  Hg   Hgk2  D  .3  0 `   ImpactofConflictsRulesonIntellectualPropertyPracticeHgk݌0 ` (#` (# Ќ  0 ` Asonecansee,wWhiletheconflictsrulesservetoprotectimportantclientinterests,avoiding  conflictsofinterestscanimposesignificantburdensonlawyersandclients.Insomeinstancestherulesnotonlymakerepresentationmoreexpensive,buttheyalsointerferewithclientchoiceandexpectations.  %  5      ׀Theseproblemsareacutein  theintellectualpropertypractice.Intellectualpropertypracticeissospecializedthatthepooloflawyersfromwhichclientsmaychooseisalreadyshallow.  %  6      ׀ p Moreover,theconvergenceandconsolidationoflargelawfirmsincreasestheriskthataclientscompetitororadversarywillberepresentedbythesamefirm, %  7      ׀or P thatthefirmwillasktheclienttoallowrepresentationadversetotheclient.Somefirmsofferexpertisesoextraordinarythatsophisticatedclientsareawareandallowthatthefirmmayrepresenttheclientscompetitorsoradversaries.The  p clientsoptionsarelimitedbecausefindingcompetentrepresentationelsewhereinahighlyspecializedfieldmayprovedifficult. ` (#` (#  Hg   Hg&!2  E  .3  0 `   ApplicationoftheRules:IdentifyingandDealingWithConflictsofInterestHg&!T!݌` (#` (# Ќ  0 ` ResolutionofaconflictofinterestproblemunderRule1.7requiresthelawyerto: `  1)clearlyidentifytheclientorclients;2)determinewhetheraconflictofinterestexists;3)decidewhethertherepresentationmaybeundertakendespitetheexistenceofaconflict,i.e.,whethertheconflictis_consentable_;and4)ifso,consultwiththeclientsaffectedandobtaintheirinformedconsent,preferablyinwriting.: %  8      ׀ResolutionofconflictsofinterestswithformerclientsunderRule1.9 `  requires(1)anidentificationofclients!currentandformer;(2)adeterminationof P  whetheradversityorconflictexists;(3)adeterminationofwhetherthecurrentandformerclientslegalmattersare substantiallyrelatedand(4)whethertheconflictis_consentable_. ` (#` (# 0 ` Generally,goodscreeningforconflictsneedstooccur(1)beforeconfidentialinformationisreceivedfromtheprospectiveclient,and(2)beforetheattorneyclientrelationshipisestablished.FJ %  9      ׀Inotherwords, [_t]he_Ԁchallengeistoclearthe  conflictwithoutprematurelyundertakingtherepresentationorconfidentialityobligations.I %  10      p` (#` (# 0 ` Theterm substantiallyrelatedisthoughtbyanumberofcourtstomean identicalor essentiallythesame._; %  11      _ԀAccordingtotheABAEthics2000 @ Commission: ` (#` (# 8 ` Mattersare"substantiallyrelated"forpurposesofthisRuleiftheyinvolvethesametransactionorlegaldisputeorifthereotherwiseisasubstantialriskthatconfidentialfactualinformationaswouldnormallyhavebeenobtainedinthepriorrepresentationwouldmateriallyadvancetheclient'spositioninthesubsequentmatter.Forexample,alawyerwhohasrepresentedabusinesspersonandlearnedextensiveprivatefinancialinformationaboutthatpersonmaynotthenrepresentthatperson'sspouse "  inseekingadivorce.Similarly,alawyerwhohaspreviouslyrepresentedaclientinsecuringenvironmentalpermitstobuildashoppingcenterwouldbeprecludedfromrepresentingneighborsseekingtooppose_rezoning_Ԁofthepropertyonthebasisofenvironmentalconsiderations;however,thelawyerwouldnotbeprecluded,onthegroundsofsubstantialrelationship,fromdefendingatenantofthecompletedshoppingcenterinresistingevictionfornonpaymentofrent.Informationthathasbeendisclosedtothepublicortootherpartiesadversetotheformerclientordinarilywillnotbedisqualifying;norwillgovernmentinformationthatthelawyerisimpliedlyauthorizedtouseordiscloseorthatisotherwiseknowntopersonsoutsidethegovernmentagencyinvolved.Informationacquiredinapriorrepresentationmayhavebeenrenderedobsoletebythepassageoftime,acircumstancethatmayberelevantindeterminingwhethertworepresentationsaresubstantiallyrelated.Inthecaseofanorganizationalclient,generalknowledgeoftheclientspoliciesandpracticesordinarilywillnotprecludeasubsequentrepresentation;ontheotherhand,knowledgeofspecificfactsgainedinapriorrepresentationthatarerelevanttothematterinquestionordinarilywillprecludesucharepresentation.Aformerclientisnotrequiredtorevealtheconfidentialinformationlearnedbythelawyerinordertoestablishasubstantialriskthatthelawyerhasconfidentialinformationtouseinthesubsequentmatter.Aconclusionaboutthepossessionofsuchinformationmaybebasedonthenatureoftheservicesthelawyerprovidedtheformerclientandinformationthatwouldinordinarypracticebelearnedbyalawyerprovidingsuchservices.? %  12      0` `  B.` hp x (#XB0 ` B.` hp x (#XBLegalmattershandledbyanintellectualpropertylawfirminvolvingthesame ` patentortrademarkmayberegardedas substantiallyrelated.B$ %  13      ׀TwoFederal P Circuitdecisionsinvolvedisqualificationmotionsbasedonassertedconflictswhereanattorneywasengagedtochallengeapatentwhichhisfirmpreviouslyprosecutedforaformerclient.C %  14      >X^XXXTheleadingcaseondisqualificationofcounsel   becausecounsel?+ 4 <DL!X?hasprosecutedapatentapplicationonbehalfoftheadversepartyis#X^XX>X^]6#@X^XXX^Sun_Studs,Inc.v.Applied_ԀTheory_Assocs_.,Inc.,#X^XX@X^{7#>X^XXX^772F.2d1557(_Fed.Cir_.1985).#X^XX>X^,8#@X^XXX^Sun "  Studs#X^XX@X^8#>X^XXX^involvedmotionsbyeachsidetodisqualifyopposingcounsel.#X^XX>X^9#>X^XXX^SunStuds  movedtodisqualifythe_Kolisch_Ԁfirmbecausethefirmhadbeeninvolvedintheprosecutionofthe#X^XX>X^9#>X^XXX^patentswhichwerelaterassignedtoSunStuds.InSunStuds,  thecourtheld,withoutashowingbythemovingpartythatsharedconfidencesandsecretswereatissue,thatisnot withintheboundsofproprietytopermitalawfirmtoassistaclientinobtainingapatentwhichwasequitablyownedbyanotherandthenleadtheattackagainstthepatentsvalidityonceitistransferredtoitsrightfulowner.772F.2dat1567. ` (#` (# 0 ` Incontrast,thecourtin_Telectronics_ԀProprietary,Ltd.v._Medtronic_,Inc.E %  15      #X^XX>X^:#Ԁruled  p  thattheattorneyswerenotdisqualifiedinrepresentingaclientseekingtoinvalidateapatentwhereithadbeenassignedtoanentitythatwasnotaclientofthelawfirm.Theproofusedtoestablishinvaliditywaslimitedtopriorartnotknownatthetimetheattorneysprosecutedtheapplication,andtherewasnoshowingthattheattorneyspossessedconfidentialinformationthatcouldbeusedtotheunfairadvantageofthecurrentclient. ` (#` (# 0 ` Inanothercase,Inter*ActSystems,Inc.v.CatalinaMarketingCorp.,51  U.S.P.Q.2d1382(D.Conn.1999),anattorneymerelycorrectedtheclientsfailuretotimelypayamaintenancefeeonapatent.Subsequently,theattorneysfirmrepresentedanotherclientinapatentinfringementcaseadversetotheformerclient,whichmovedtodisqualifythefirm.Thecourtheldthatthetwomatterswerenot substantiallyrelatedandoverruledthemotiontodisqualify. ` (#` (# 0 ` Anextremelydifficultconflictofinterestcanarisewherealawfirmhastwoclientsseekingrelatedpatents.UnderthePTORules,37_C.F.R._Ԁ1.56,alawyerforanapplicantmustdiscloseall priorartintheapplicantsfield.Whenconsideringtheapplicationsinitially,however,thecompetingapplicationsareconfidentialandthelawfirmwouldbeobligatedunderABARule1.6toprotecttheinformationcontainedineachapplicationasconfidential.Inonecase,whilerecognizingthelawfirmsdilemma,thecourtheldthatthefailuretodisclosetheapplicationofoneclientintheapplicationoftheotherwas inequitableconductthatrenderedtheissuedpatentinvalidandunenforceable._Molins_ԀPLCv.Textron, "  Inc.,48F.3d1172(_Fed.Cir_.1995).#!` (#` (# 0 ` Thereismuchthatcanbesaidorwrittenaboutthevarioustypesofconflictslawyersface,howconflictsmaybeavoided,orhowconflictscanbedealtwithaftertheydevelop.Theseissuesarebeyondthescopeofthispaper.IwillnowshiftmyTherremainderofthispaperremainfocusestoonthepracticeofprospectiveoradvancewaivers. ` (#` (# II.ProspectiveorAdvancewaivers  +p&) ЇHereisthesituation:YourfirmhasbeenaskedbyaverylargecompanytotakeonasingleIPmatterthatwillresultinverysubstantialfees,sotheengagementappearsworthwhile.However,youandyourpartnersknowthatthiscompanyistypicallyrepresentedbyanotherlawfirmandthereforeyouandyourcolleagueshavelittlereasontobelievethatthisclientwillgenerateotherbusinessforthelawfirm.Youexpectthissingleengagementtogoonforquitesometime.Youalsoknowthatyourfirmhasonaregularbasisrepresentedcompetitorsofthisverylargecompany.Therefore,duringthecourseoftherepresentation,itisquitepossiblethatthefirmcouldbeaskedtorepresentotherclientsonunrelatedmattersadversetothisprospectiveclient.Absentconsentfromthisverylargecompany,yourfirmwouldbedisqualifiedfromrepresentingthoseotherclients.ABARule1.7(a).Hereisthequestion:Attheoutsetoftheengagementwiththisverylargecompany,andasaconditiontoacceptingtheengagement,mayyouaskthecompanytowaiveanyobjectioninfuturematterswhereyourlawfirmisretainedtorepresentsomeotherclientagainstthiscompany,ifsuchmattersareunrelated?OnecouldarguethatthelanguageinRule1.7(a)(2)prohibitsadvancewaiversbecauseifthereisaconflict,theclientmust consentafterconsultation.Thislanguagesuggeststhatalawyermustexplaintotheclientallormostoftherelevantfactsbeforeobtainingawaiver,thusrulingoutthepossibilityofan advanceconsent.AccordingtotheRestatement(3d)GoverningLawyers: P 8 ` Clientconsenttoconflictsthatmightariseinthefutureissubjecttospecialscrutiny,particularlyiftheconsentisgeneral.Aclientsopenendedagreementtoconsenttoallconflictsshouldnormallybeineffectiveunlesstheclientpossessessophisticationinthematterinquestionandhashadtheopportunitytoreceiveindependentlegaladviceabouttheconsent. ` `  8 ` Ontheotherhand,particularlyinacontinuingclientlawyerrelationshipwhichthelawyerisexpectedtoactonbehalfoftheclientwithoutanewengagementforeachmatter,thegainstoboththelawyerandtheclientfromasystemofadvanceconsenttodefinedfutureconflictsmightbesubstantial.Aclientmight,forexample,giveinformedconsentinadvancetotypesofconflictsthatarefamiliartotheclient.Suchanagreementcouldeffectivelyprotecttheclientsinterest,whileassuringthatthelawyerdidnotundertakeapotentiallydisqualifyingrepresentation.K %  16      P(#&` `    @)$' Thecurrenttrend,atleastwithrespecttoprivateclients,H %  17      ׀isthatsophisticatedclients   may,attheoutsetoftherepresentation,waivetheprotectionofRules1.7and1.9andthatitisnotperseunethicalforlawyerstoobtainsuchawaiverfromtheclient.J %  18      ׀Whether  thecourtswillholdtheclienttoanadvancewaiverdependson(1)whetherthefuture unrelatedmatterisadequatelyidentified;(2)whethertheconsentingpartyisadequatelysophisticated;(3)whetherthewaivergivenisrecentenough;and(4)whethertheconsentingpartywasadvisedtoseek,orhadanopportunitytoseektheadviceofindependentcounsel.@PPEnforcementofAdvanceWaivers:_Caselaw_Ԉ  p  1._Kennecott_ԀCopperv.CurtissWright(_S.D.N.Y._)(_MacMahon_,J.)(MemorandumOp. P  andOrder,April10,1978)_Curtiss_ԄWright(CW)hiredSkadden,_Arps_,Slate,Meagher&Flomonatenderofferfor_Airco_ԀInc.SkaddenagreedtorepresentCWinthetenderofferonlyifCWagreedthatSkaddencouldrepresentothertargetcorporationswhichCWmightseektoacquire.Theretaineragreementstated,inpertinentpart:8 ` Shouldyourcompanyoranypersonaffiliatedwithitseektoacquireorinvestinanycompanywhichisaclientofouroffice,wewillbefreetorepresentthatclientandthesameshallnotresultinthereductionoftheretainer. ` `  Threeandahalfyearslater,_Kennecott_ԀretainedSkaddeninconnectionwithadivestiture.Ninemonthslater,CWbeganbuyingup_Kennecott_Ԁstockonthemarketanddeclaredaproxybattletotakeover_Kennecott_._Kennecott_ԀrespondedbyfilingsuitagainstCWforsecuritiesandantitrustviolations.CWalsomovedtodisqualifySkaddenfromadvising_Kennecott_smanagementregardingtheproxyfight.CWclaimedSkaddenviolatedCanons4(confidencesandsecrets)andCanon5(conflictsofinterest)oftheCodeofProfessionalResponsibilitybecauseSkaddenstillrepresentedCWinpendinglitigationoverthe_Airco_Ԁtenderoffer.Thecourt,however,foundthatCWwasasophisticatedclientwhoseofficersknewthatCWsaggressivenessandSkaddensspecializedareaofpracticemightcollide.CWwasfullyawarethatitwasnotoneofSkaddensregularclientsonageneralretainer,butmerelyaminor oneshotengagementonthe_Airco_tenderofferonly.Thecourtenforcedthelanguageofthecontractandtheconflicthadbeenwaived. `'"% 2.UnifiedSewerageAgencyofWashingtonCountyv._Jelco_ԀCorp.,646F.2d1339(9th  Cir.1981)._Jelco_,aUtahcontractor,asked_Kobin_Ԁ&Meyer(KM),aPortland,Oregonlawfirm,todefenditinlitigationoveracompensationclaimbyAceElectric,_Jelco_ssubcontractoronasewerplantproject.Attheoutset,KMtold_Jelco_Ԁthatitwasrepresentinganothersubcontractorinconnectionwithaunrelateddisputewith_Jelco_.L %  19      ׀Ifforcedtochoose, P  KMmadeitclearto_Jelco_Ԁthatthelawfirmwantedtocontinuetherepresentationofthislongstandingclient.Althoughwarnedontwooccasionsofthepotentialconflict,_Jelco_insistedthatKMrepresentitsinterestsintheAceElectriccase.SeveralmonthsaftertheitlosttheAceElectriccase,_Jelco_ԀdischargedKM,duringthedamagesphaseofthelitigation.Thereafter,_Jelco_ԀfiledamotiontodisqualifyKMintheothersubcontractorslitigationwith_Jelco_,whichthedistrictcourtdenied,and_Jelco_Ԁappealed.TheNinthCircuitaffirmed,holdingthat_Jelco_Ԁwas_estopped_Ԁfromrevokingitsconsent,becauseofallthepartieslongstandingrelianceon_Jelco_swaiver.3.InterstatePropertiesv.PyramidCo.,547F.Supp.178(_S.D.N.Y._Ԁ1982)  ThelawfirmofFinley,_Kumble_,Wagner,Heine,_Underberg_Ԁ&CaseyrepresentedInterstate,theownerofashoppingmall,whichsuccessfullyopposedanapplicationbyPyramidUticaCompanyforapermittoconstructacompetingmall.Thereafter,PyramidUticaandInterstateformedajointventuretoconstructthenewmall,andPyramidUticaretainedFinley_Kumble_Ԁtohandlethejointventuresapplicationforthepermit,whichthistimewasgranted.PleasedwithFinley_Kumble_swork,Pyramidsparentcompany,PyramidCompanies,hiredFinley_Kumble_Ԁtoperformsimilarworkforpropertiesitownedelsewhere.Ultimately,Finley_Kumble_ԀbecamePyramidCompaniesgeneralcounselforitsrealestate,corporateandbusinessmatters.Unfortunately,InterstateandPyramidUticahadafallingoutoverfinancingarrangementsfortheirjointventureandFinley_Kumble_ԀfiledalawsuitonInterstatesbehalfagainstPyramidUtica.Finley,_Kumble_ԀcontinuedtorepresentthePyramidCompaniesonenvironmentalmattersconcerningitsotherproperties.PyramidUticamovedtodisqualifythelawfirm.InrulingonPyramidsmotion,thecourtobservedthat Finley,_Kumble_szealinitspursuitofexpandingitsrosterofclientsbroughtitcloseto,althoughnotquitebeyond,thelimitsofprofessionalconduct.M %  20      ׀Thecourtexaminedthewrittenwaiverwhichgranted #! permissionforthefirmtoactasgeneralcounselforInterstateinanyandallpendingandfuturemattersincludinganymattersadversetoPyramid.ThewaiveracknowledgedthatPyramidwasawareofthelawfirmslongstandingrelationshipwithInterstate.ThewaiveralsoconfirmedthatPyramidhadbeenrepresentedbyothercounselinconnection `'"% withthejointventureagreement,thatdifferenceshadarisenbetweenPyramidandInterstateovertheagreement,andthatFinley,_Kumble_ԀhadactedasInterstatescounselinconnectionwitheffortstoresolvethedispute.Finally,PyramidacknowledgedthatnoconfidentialinformationexistedthatwouldinhibitthelawfirmsrepresentationofInterstateandthatPyramidhadnotreliedonanyadvicefromFinley,_Kumble_ԀinconnectionwithPyramidsrevieworexecutionofthejointagreement.ThecourtnotedthatthelawfirmcarefullyrestricteditsrepresentationofthePyramidCompaniestomakesurethatitwouldnotconflictwithInterstatesinterests.ThefirmconfineditsrepresentationofPyramidUticatoenvironmentalpermitrelatedworkandwasnotinvolvedinthefinancialaspectsofthejointventureoverwhichthedisputearosebetweenPyramidandInterstate.ThefirmalsomadeitclearthatitwouldnotrepresentPyramidinthedevelopmentofanysiteinwhichInterstatewouldbeacompetitor.TheinformedconsentrequirementwasmetinthiscasebecausePyramidknewtheidentityoftheotherclient(Interstate)andthebasicnatureofthepotentialconflict(disputeoverthejointventureagreementbetweenInterstateandPyramidUtica).4._Fisons_ԀCorporationv._Atochem_ԀNorthAmerica,Inc,No.90Civ.1080(_JMC_),1990  WL180551(_S.D.N.Y._Ԁ1990)N %  21        _Fisons_ԀCorporationacquiredapharmaceuticaldivisionfrom_Atochem_ԀNorthAmerica,formerlyknownas_Pennwalt_ԀCorporation._Dechert_,Priceand_Rhoads_Ԁhadbeen_Pennwalt_sprimaryoutsidecounselformorethanthirtyyears._Dechert_,Pricerepresented_Pennwalt_Ԁnotonlyinthesaleofthepharmaceuticaldivision,butalsoonthetrademarkdisputesinvolvingthepharmaceuticalproductswhichwerestillpendingatthetimethedivisionwassoldto_Fisons_._Fisons_Ԁwanted_Pennwalt_Ԁtoagreetoallow_Dechert_Pricetocontinuehandlingtwoofthesetrademarkdisputes.However,_Pennwalt_Ԁand_Dechert_ԀPricewereconcernedthatthelawfirmwouldbecomeconflictedfromrepresenting_Pennwalt_Ԁinanyfuturelitigationbetween_Pennwalt_Ԁand_Fisons_.Consequently,_Pennwalt_Ԁrequired_Fisons_advanceconsentto_Dechert_ԀPricesrepresentationof_Pennwalt_Ԁinanyfuturelitigationbetweenthetwocompanies.Inrelianceupontheadvanceconsent,_Dechert_ԀPriceagreedtorepresent_Fisons_Ԁinthetrademarkdisputes.Morethanayearlater,_Fisons_Ԁfiledsuitagainst_Atochem_,claimingfraudandbreachofwarranty,allegingthat_Pennwalt_Ԁconcealedmanufacturingandregulatoryproblemswithacoughmedicinemanufacturedbythedivisionthatithadsoldto_Fisons_._Fisons_Ԁmovedtodisqualify_Dechert_ԀPricefromrepresenting_Atochem_Ԁinthissuit,revokingitsconsentandobjectingtotheconcurrentrepresentationof_Fisons_Ԁonthetrademarkdisputeswhiledefending_Atochem_.Thecourtfoundthat_Dechert_ԀPricehadaconflict,butruledthat_Fisons_Ԁhadconsentedtotheconflictmorethanayearbeforethesuitwasfiled.Thecourtruledthatadequatedisclosureofthedualrepresentationhadbeenmade,particularlysince_Fisons_Ԁwasasophisticatedclient,andthatitwasunnecessarytospecifytheexactnatureofthefuturedisputethatcouldarisebetweenthetwoclients._Fisons_Ԁunsuccessfullyarguedthatbecauseitwascharging_Atochem_s  +p&) managementwithfraud,therewasaperseconflictfor_Dechert_ԀPrice.Thecourtdisagreed,recognizingthatperhapsaperseconflictwouldexistif_Dechert_ԀPricewaschargingoneofitsownclientswithfraud,buthere_Dechert_ԀPricewasnotassertingsuchclaimsbutratherdefendingthem.5._Worldspan_ԀL.P.,et.alv.The_Sabre_ԀGroupHoldings,Inc.,5F.Supp.2d1356(N.D. `  Ga.1998)Alston&Bird,alargeAtlantafirm,represented_Worldspan_Ԁontaxmattersforanumberofyears._Worldspan_Ԁoperatedacomputerizedtravelreservationsystemlinkingthepublictoairlinesandotherserviceproviders(hotels,carrentals,etc.).Alston&Birdobtainedfrom_Worldspan_Ԁanadvanceconsenttofutureconflictsinunrelatedmatters.Thepertinentlanguageinthestandardengagementletterread:8 ` Aswehavediscussed,becauseoftherelativelylargesizeofourfirmandourrepresentationofmanyotherclients,itispossiblethattheremayariseinthefutureadisputebetweenanotherclientand_WORLDSPAN_,oratransactioninwhich_WORLDSPAN_sinterestsdonotcoincidewiththoseofanotherclient.Inordertodistinguishthoseinstancesinwhich_WORLDSPAN_Ԁconsentstoourrepresentingsuchotherclientsfromthoseinstancesinwhichconsentisnotgiven,yourhaveagreed,asaconditiontoourundertakingthisengagement,thatduringtheperiodofthisengagementwewillnotbeprecludedfromrepresentingclientswhomayhaveinterestsadverseto_WORLDSPAN_Ԁsolongas(1)suchadversematterisnotsubstantiallyrelatedtoourworkfor_WORLDSPAN_,and(2)ourrepresentationoftheotherclientdoesnotinvolvetheuse,tothedisadvantageof_WORLDSPAN_,ofconfidentialinformationwehaveobtainedasaresultofrepresenting_WORLDSPAN_. ` `  8 ` WehaveadvisedyouthatwehaveservedasspecialcounseltoDeltaAirLinesforcertaintypesofmatters,includingstateandlocaltaxmatters.WedonotviewourworkforDeltatobeinconflictwithourrepresentationof_WORLDSPAN_,andDelta...hasconsentedtoourrepresentationof_WORLDSPAN_.WehavealsoadvisedyouthatwehaverepresentedAmericanAirLines.WedonotbelieveourrepresentationofAmericanAirLinesisinconflictwithourrepresentationof_WORLDSPAN_.Wehavealsorepresentedvariousotherairlinesfromtimetotimeonlimitedmatters.Wedonotviewourrepresentationofanyofthesecarrierstobeinconflictwithourproposedrepresentationof_WORLDSPAN_.P %  22      ׀@)$'` `  Sixyearslater,_Worldspan_Ԁsued_Sabre_,anAmericanAirlinesaffiliate,thatcompetedwith  +p&) _Worldspan_Ԁintheoperationofcomputertravelreservationsystems,allegingtheftoftradesecrets,fraudandantitrustviolations.Alston&Birdenteredanappearanceonbehalfof_Sabre_,and_Worldspan_Ԁsuccessfullymovedtodisqualifythefirm.Thecourtopinedthatthelawfirmcouldnotusetheengagementagreementtocircumscribeitsprofessionalobligationstoitsclients,statingthattherulesofprofessionalconduct transcendmerecontractlaw.Thecourtfoundthelanguageintheengagementletter ambiguousandtherewasnoinformedconsentbecausethefirmfailedtoexplicitlydescribethedirectconflictbeingwaived:8 ` ItistheopinionoftheCourtthatfuturedirectlyadverselitigationagainstonespresentclientisamatterofsuchanentirelydifferentqualityandexponentiallygreatermagnitude,andsounusualgiventhepositionoftrustexistingbetweenlawyerandclient,thatanydocumentintendedtograntstandingconsentforthelawyertolitigateagainsthisownclientmustidentifythatpossibility,ifnotinplainlanguage,atleastbyirresistibleinference,includingreferencetospecificparties,thecircumstancesunderwhichadverserepresentationwouldbeundertaken,andallrelevantlikeinformation.Q %  23      ׀` `  Unlikethecourtin_Fisons_,supra,thiscourtdidnottreat_Worldspan_Ԁasa sophisticated  clienteventhoughthecourtacknowledgedthat_Worldspan_ԀhadthebenefitofexperiencedcorporatecounselmonitoringtheengagementofAlston&Bird.Instead,thecourttreated_Worldspan_Ԁasthenormaluninformedclientnotindependentlyrepresentedbycounsel.Fewifanyadvancewaiverscouldmeetthecriteriaimposedbythecourtinthisdecision.6.ABAComm.onEthicsandProfessionalResponsibility,FormalOp.93372(1993) ` TheABAspositiononwaiversoffutureconflictsofinterestrecognizesthevalidityofsuchagreements,providedthatthefirmidentifiesthetypeofmattersbeingwaivedwithspecificity:8 ` ItistheviewoftheCommitteethatitisnotordinarilyimpermissibletoseeksuchprospectivewaivers;thatthemereexistenceofaprospectivewaiverwillnotnecessarilybedispositiveofthequestionwhetherthewaiveiseffective;thatsuchwaiverwillordinarilybeeffectiveonlyincircumstancesinwhichthelawyerdeterminesthatthereisnoadverseeffectonthefirstrepresentationfromundertakingthesecondrepresentationandthattheparticularfutureconflictofinterestastowhichthewaiverisinvokedwasreasonablycontemplatedatthetimethewaiver @)$' wasgiven;andthatconsenttoaconflictingrepresentationdoesnotin 0*%( itselfconstituteconsenttothelawyersdisclosure,oruseagainstthe  +p&) clientsinterest,ofinformationrelatingtotherepresentationunderRule1.6.ItisalsotheCommitteesviewthatanysuchwaivershouldbeinwriting. ` `  7._Hasco_,Inc.v._Roche_,700N.E.2d768(Ill.App.1998) p _Schuyler_,_Roche_Ԁ&_Zwirner_Ԁ(_SRZ_)represented_ATLP_,anIllinoislimitedpartnershipanditssolegeneralpartner,_AGI_,inanarbitrationoverdisputeswith_ATLP_sclearingbroker,_FOC_._SRZ_sclients,_ATLP_Ԁand_AGI_,wereengagedintradingequitiesandoptionsontheChicagoBoardOptionsExchange(_CBOE_).Inthemeantime,_SRZ_Ԁagreedtorepresentsubordinatedlendersto_ATLP_Ԁinasuitagainst_FOC_.Later,_ATLP_Ԁand_AGI_Ԁbegannegotiationswith_FOC_Ԁinanattempttosettletheunderlyingdisputeandthependinglitigationsandweresuccessfulinreachingasettlementagreement.Adisputearosebetweenthesubordinatedlenders,including_Hasco_,and_ATLP_Ԁregardingtheallocationofthesettlementfundspaidoverby_FOC_.Attemptstosettlethisdisputefailedand_Hasco_filedacivilactionagainst_ATLP_Ԁtorecoveritsloantothepartnership._ATLP_Ԁsoughttoresumeitstradingactivitieswith_FOC_.However,thepartiesbelievedthat,underfederallaw,theamendedsettlementagreementwouldrequirethesignatureofthesubordinatedlendersand_Hasco_Ԁwouldnotagreetosigntheagreement.Consequently,_FOC_Ԁwouldnotresumetradesfor_ATLP_._FOC_Ԁinitiatedanarbitrationtohavedeterminationofitsrightsandliabilitiesunderthesettlementagreementwith_ATLP_._SRZ_Ԁappearedonbehalfofthe_ATLP_Ԁparties,filedananswerto_FOC_sarbitrationclaim,andfiledacrossclaimagainst_Hasco_._Hasco_Ԁfiledastatementfordeclaratoryreliefandaskedthat_SRZ_Ԁbedisqualifiedfromrepresenting_ATLP_ԀintheNASDarbitrationagainst_Hasco_.TheNASDpaneldeclinedtoruleonthedisqualificationissue._Hasco_Ԁthenfiledmotionstodisqualify_SRZ_intheotherpendinglitigations,buttheNASDarbitrationpanelrefusedtostaythearbitrationpendingtheresolutionofthedisqualificationmotions.Consequently,_Hasco_filedamotionforatemporaryrestrainingorder,whichthecourtgranted,enjoiningthearbitrationpendingapreliminaryinjunctionhearing._Hasco_Ԁfiledadeclaratoryjudgmentactionseekingtoenjoin_ATLP_ԀfromparticipatingintheNASDarbitrationaslongas_SRZ_wastheircounsel.Thecourtordered_SRZ_Ԁdisqualifiedfromrepresenting_ATLP_Ԁinthearbitrationandpermanentlyenjoined_ATLP_Ԁfromparticipatinginthearbitrationaslongas_SRZ_Ԁwasitscounsel.Onappeal,_SRZ_Ԁarguedthat_Hasco_Ԁandthesubordinatedlendersexecutedaletteragreementcontaininganadvancewaiverofconflictofinterestwhichprovided:8 ` [_Hasco_],asasubordinatedlenderto[_ATLP_],hasaclaimagainst[_ATLP_]arisingfromanydefaultby[_ATLP_]inrepaymentofthesubordinateddebt.[_Hasco_]hasbeenadvisedby{_ATLP_]that[_ATLP_]lackssufficientresourcestorepaythesubordinateddebt._SRZ_Ԁispresentlyrepresenting[_ATLP_]initspursuitofclaimsagainst_FOC_Ԁtorecoverlostprofitsonthe_Sytex_Ԁtransactionandforotherrelief._SRZ_Ԁisalsofurnishingotherlegaladviceto[_ATLP_]anditsgeneralpartner[_AGI_].Aconflictexistsbetweentheinterestsof[_ATLP_],[_AGI_]and[_Hasco_].Byexecutingthisletter -@), agreement,eachofthe[subordinatedlenders,including_Hasco_]consentstowaiveanyconflictofinterestassociatedwiththerepresentationby_SRZ_Ԁof[_ATLP_]andtherepresentationof[_Hasco_]by_SRZ_Ԁwithrespecttotheirclaimsagainst_FOC_.[_Hasco_]furtheragreesthat_SRZ_Ԁwillhavenoobligationtoadvise[_Hasco_]withtoanyactualorpotentialclaimagainst[_ATLP_]. ` `  Thecourtheld,however,thattheplainlanguageoftheadvancewaiverwaslimitedtothelawfirmsrepresentationofthesubordinatedlendersinthelitigationwith_FOC_,anddidnotwaive_SRZ_sconflictinconnectionwiththeNASDarbitration.AmoreliberalcourtcouldhaveeasilyfoundthatthelanguageintheadvancewaiverwasbroadenoughtoincludetheNASDarbitrationproceedinginitiatedby_FOC_.7.RiteAidSecuritiesLitigationv.Grass,139F.Supp.2d649(E.D.Pa.2001). 0  RiteAidanditsChiefExecutiveOfficer,MartinL.Grass,werenameddefendantsinaclassactionsuitfiledfollowingadisappointingpublicearningsannouncementbythecompany.RiteAidandGrasshired_Ballard_Ԁ_Spahr_Ԁtodefendtheirinterests.Intheengagementletter,_Ballard_Ԁ_Spahr_Ԁnoted:8 ` AtthepresenttimewedonotseeanyconflictthatwouldpreventthefirmfromrepresentingboththeCorporationandMr.Grass.Itispossible,however,thatsuchaconflictmayariseorbecomeapparentinthefuture,inwhichcaseitisunderstoodthatMr.GrasswouldobtainseparatecounselandthefirmwouldcontinuetorepresenttheCorporation. ` `  Overtheensuingmonths,thingsgotworseasthecompanydiscoveredthatitneededtorestateitsearningsforthepastthreeyears,resultinginadramaticreductionofitspreviouslyrepresentedpretaxearnings.GrassresignedhispositionasCEO,apparentlyunderunpleasantcircumstances,andwithoutanycompensationorbenefits.Incontrast,thecompanysCFOwasforcedtoresignbutreceivedaratherlavishseveranceagreementfromRiteAid.Furtherauditandinvestigationrevealed,forthefirsttime,thatGrassandothershadengagedinconductwhichappearedtoconstituteseriousbreachesoffiduciaryduty,andtheseofficersconcealedsuchconductfromRiteAidand_Ballard_Ԁ_Spahr_.GrassandtheformerCFOwereinstructedtoretaintheirowncounsel.Inthecourseofnegotiatingasettlementofthismultidistrictlitigation,counselfortheclassandderivativeplaintiffsinsistedthattheywantedtoreservelegalrecourseagainstGrassandotherseniormanagementandthereforetheyshouldbeexcludedfromthesettlement.Thesenegotiationsweresuccessfulandresultedinamemorandumofunderstanding.ItisimportanttonoteherethatGrassneverclaimedthatherevealedto_Ballard_Ԁ_Spahr_Ԁanyconfidentialinformation,andtheadversitywhichdevelopedbetweenRiteAidandGrassdidnotemergeuntilasignificantboardmeetingatleastsixmonthsafter_Ballard_Ԁ_Spahr_wasretained.Inaddition,Grassdidnotobjectforatleastanothertwomonthsafterheretainedindependentcounselto_Ballard_Ԁ_Spahr_scontinuedrepresentationofRiteAid.OnlyafterGrasslearnedofthepartialsettlement,didhemovetodisqualify_Ballard_ -@), _Spahr_._Ballard_Ԁ_Spahr_Ԁopposedthemotionbased,inpart,ontheadvancewaiversetoutabove.ThecourtoverruledGrassmotion,holdingthat_Ballard_Ԁ_Spahr_ԀdidnotengageinanyunethicalorinappropriateconductwithrespecttoGrass.Thecourtfoundthat_Ballard_Ԁ_Spahr_ԀdidnotdropGrassasaclienttoswitchrepresentationtoamorefavoredclient,whichissometimesreferredtoasthe hotpotatodoctrine.Rather,_Ballard_Ԁ_Spahr_undertooktorepresentGrassonlythroughRiteAid,theprimaryclient,atapointintime `  whenitappearedthatthejointclientsinterestsweremutuallyaligned.AlsosinceRiteAidwaspayingforGrasslegalrepresentation,itcouldnotbesaidthat_Ballard_Ԁ_Spahr_droppedGrassasaclientformorelucrativerepresentation.Inaddition,thecourtregardedGrassasan accommodationclientundertheRestatement(Third)oftheLaw  p  GoverningLawyers132_cmt_Ԁ(_i_),inwhichtheaccommodationclientimpliedlyconsents `  tothecontinuedrepresentationoftheprimaryclient,shouldadversitydevelopbetweenthetwo.Finally,thecourtheldthatGrasswasboundbytheengagementletterinwhichGrassexplicitlyagreedthat,intheeventofapotentialconflict,_Ballard_Ԁ_Spahr_ԀcouldcontinuerepresentingRiteAid.8.FloridaIns.Guar._Assn_,Inc.v.CareyCanada,Inc.,749F.Supp.255(S.D.Fla.  1990)The_Shackelford_ԀfirmbeganrepresentingCareyCanada,anasbestosminingcompany,inconnectionwithliabilityinsuranceforasbestosclaimsinthelate1970's._Shackleford_alsorepresented_FIGA_Ԁsinceitsinceptionin1971.In1986,oneofCanadaCareysinsurers,MidlandInsuranceCompany,becameinsolvent.Overthenextthreemonths,threeotherinsurersbecameinsolvent!TransitCasualty,MissionNationalandIntegrity. @ UnderFloridastatutes,_FIGA_ԀsteppedintotheshoesoftheseinsolventcarriersandthusbecameobligatedtocoverCareyCanadasasbestosclaims.Aboutayearlater,CareyCanadawaspreparingtofileclaimsagainst_FIGA_Ԁbasedonitspolicieswiththenowinsolventcarriers.Inalettertoa_FIGA_Ԁclaimsadjusteronanunrelatedcase,the_Shackleford_Ԁfirmpurportedtoadvise_FIGA_Ԁofthepotentialconflict:8 ` Finally,as_FIGA_Ԁisaware,ourfirmhasandcontinuestorepresent_FIGA_Ԁinseveralmatterswhileatthesametimewerepresentotherclientswithinterestsadverseto_FIGA_Ԁinunrelatedmatters.Inanabundanceofcaution,Iwantedtolet_FIGA_ԀknowthatIambecominginvolvedinthequestionofpotentialclaimsbyourclients(JimWalterCorporationanditssubsidiaries[_Celotex_ԀCorp.andCareyCanada])thatarearisingoutofseveralexcesslevelliabilityinsurersgoingintoreceivership.ThisisamatterthathasalreadybeenwiththefirmforsometimeandobviouslydoesnotrelatetotheworkIamdoingfor_FIGA_Ԁinanyway.Presently,[thatwork]isonly[an]appeal,butithasalwaysbeenautomobilecases.However,consistentwithourrelationshipwith_FIGA_Ԁanditsstandingconsentinsuchmatters,Iwantedtobringthisparticularsituationtoyourattention.Shouldyouhaveanyquestions,pleasefeelfreetocontactme. ` `  Theletteronlyreferredgenerallytoapotentialconflict.Itdidnotrevealthenatureand -@), extentoftheadverseinterestsinvolved,includingsome80,000asbestosbodilyinjuryclaimsandasbestosrelatedpropertydamageclaimsaggregatingsome$95,000,000indisputedinsurancecoverage.The_FIGA_Ԁclaimsadjusterdidnotfollowuponthe_Shackleford_Ԁletterandtheconflictofinterestissueitraised._Shackleford_Ԁtooktheadjusterssilenceasmanifesting_FIGA_sconsenttotheconflict.Nofurtherattemptwasmadeby_Shackleford_Ԁtoconsultwith_FIGA_Ԁovertheconflictuntilameetingsomeelevenmonthslater,when_FIGA_Ԁraisedtheissueafter_Shackleford_ԀbeganfilingclaimsonbehalfofCareyCanada.Fiveweekslater,_FIGA_ԀfiledadeclaratoryactiontohavedetermineditsrightsandobligationswithrespecttoCareyCanada.When_Shackleford_ԀappearedonbehalfofCareyCanada,_FIGA_Ԁobjectedandmovedtodisqualify._Shackleford_Ԁopposedthemotion,relyingonthelettertotheclaimsadjuster,assertingthatthefirmhad standingconsentfrom_FIGA_Ԁtorepresentclientswithadverseinterestsonmattersunrelatedto_Shackleford_sworkfor_FIGA_._Shackleford_ԀdidnotdisputethatitsrepresentationofCareyCanadawasdirectlyadverseto_FIGA_.However,thefirmcontendedthatthelettertotheclaimsadjusterprovidedadequatedisclosureoftheconflictandthat_FIGA_slackofobjection,coupledwith_FIGA_sgeneralpolicyof standingconsenttoconcurrentconflictingrepresentationsinunrelatedmatters,mettheconsultationandconsentrequirementsunderFloridasversionofRule1.7.Thecourtdisagreed.First,theletterwassenttoaclaimsadjuster,notmanagementorcounselfor_FIGA_.Second,thepotentialconflictwasnotpresentedasamatterofsingularconcern,butwasburiedinthelastparagraphofaletterconcerninganunrelated_FIGA_Ԁcase.Mostimportantly,the_Shackleford_Ԁ consultationdidnotdisclosethemagnitudeoftheadverseinterests.Therefore,_FIGA_sfailuretorespondtothelastparagraphoftheletteratissuecouldnotbeproperlyconstruedas consentbecausetheletteritselfwasnot adequateconsultation.Thecourtalsofoundthat_Shackleford_Ԁfailedtomeetitsburdenofestablishingthatithad standingconsentfrom_FIGA_Ԁtoconflictingrepresentationsinunrelatedmatters.Evenifsuch standingconsentweregiven,thecourtheld,suchanarrangementisinsufficienttomeetthelawfirmsaffirmativedutyofconsultationandconsentundertheconflictsrules.Inorderforsuch standingconsenttomeettherequirementsundertheconflictsrules,suchstandingconsentmustbe exceedinglyexplicit.L Tuh((LIII.CONCLUSIONVarioustypesofconflictscanbecuredwithconsent.Atleasttwofundamentalrequirementsmustbeobserved:(1)therepresentationscannotbeadverselyaffected;and(2)theclientsconsentmustbeinformed.ThePTOethicsrulesrequirethatitbe obviousthatthepractitionerinconcurrentrepresentationscan adequatelyrepresenttheinterestsofeach.U %  24      ׀Theclientconsentmustbe afterconsultationW %  25      ׀whichmeans P(#&  afterfulldisclosureofthepossibleeffectofsuchrepresentationontheexerciseofthe @)$' practitionersindependentprofessionaljudgmentonbehalfofeach._X %  26      _ԀAsdemonstrated  bythecitedcases,thestandardforconsentmayvarywiththesophisticationandexperienceoftheclientandtheparticipationofinhousecounselforacorporateclientincreasesthelikelihoodthatthecourtwillupholdtheadvanceconsent.Afinalnote:theclientmayrevoketheconsentduringthecourseoftheengagement,assuchagreementsarenotconsideredbindinginthecontractualsense._Yr %  27      _ԀWhetherrevokingconsenttothe `  clientsownrepresentationprecludesthelawyerfromcontinuingtorepresenttheotherclientsdependsonvariouscircumstances,includingthenatureoftheconflict,whethertheclientrevokedtheconsentbecauseofamaterialchangeofcircumstances,thereasonableexpectationsandrelianceoftheotherclientsontheconsentandwhethermaterialdetrimenttothelawyerorotherclientswillresult.[ \  %  28       `