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lawyermotionpatent

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Mustang Enterprises, Inc. v. Plug-In Storage Systems, Inc., 874 F.Supp. 881

Facts

Plug-In Storage Systems, Inc. sought to disqualify the Hill Firm from representing Mustang Enterprises, Inc. in a patent dispute. The Hill Firm is affiliated with Bachman & LaPointe P.C., which has been representing Plug-In since 1991. The court noted that Bachman Firm possessed confidential information regarding the patents in question, which could provide an unfair advantage if Hill Firm were to represent Mustang against Plug-In. The relationship between the two firms was publicly acknowledged, leading to concerns about conflicts of interest.

Plug–In Storage Systems, Inc. has moved to disqualify the law firm of Hill, Steadman & Simpson as counsel for Mustang Enterprises, Inc. in this patent action.

Issue

Whether the Hill Firm should be disqualified from representing Mustang due to its affiliation with Bachman Firm, which represents Plug-In and possesses confidential information relevant to the case.

Rule

Under Rule 1.10(a) of the Illinois Rules of Professional Conduct, no lawyer associated with a firm shall represent a client when another lawyer associated with that firm would be prohibited from doing so due to conflicts of interest.

Here is the Rule most relevant to the current dispute— Rule 1.10(a), which this District Court adopted in the identical language that has been employed in the Illinois version: No lawyer associated with a firm shall represent a client when the lawyer knows or reasonably should know that another lawyer associated with that firm would be prohibited from doing so by Rules 1.7, 1.8(c) or 1.9, except as permitted by Rules 1.10(b), (c), or (d), or by Rule 1.11 or Rule 1.12.

Analysis

The court determined that the affiliation between Hill Firm and Bachman Firm created a conflict of interest that warranted disqualification. It reasoned that the term 'associated' in the context of the rules broadly encompasses all forms of lawyer associations, including those between affiliated firms. The court highlighted that the confidential information held by Bachman Firm could be detrimental to Plug-In if Hill Firm were allowed to represent Mustang, thus violating the principle of undivided loyalty to clients.

Thus even the concept of representations that are 'substantially related'—a concept that, it should be emphasized, need not be met to cause Bachman Firm to be disqualified if it sought to represent Mustang here—is not at all as narrow as Mustang portrays it.

Conclusion

The court granted Plug-In's motion to disqualify the Hill Firm from representing Mustang, emphasizing that the benefits of the affiliation designation came with the responsibility to avoid conflicts of interest.

Accordingly Plug–In's motion for disqualification of the Hill Firm is granted.

Who won?

Plug-In Storage Systems, Inc. prevailed in the motion to disqualify the Hill Firm due to the court's finding of a conflict of interest stemming from the affiliation with Bachman Firm.

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