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Advanced Messaging Technologies, Inc. v. EasyLink Services Intern. Corp.

United States District Court, C.D. California

December 19, 2012

ADVANCED MESSAGING TECHNOLOGIES, INC., and J2 Global, Inc., Plaintiffs,
v.
EASYLINK SERVICES INTERNATIONAL CORPORATION, Defendant.

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[Copyrighted Material Omitted]

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Brian R. England, Edward Eric Johnson, Jopei Shih, Robert A. Sacks, Sullivan and Cromwell LLP, Los Angeles, CA, Frank L. Bernstein, Kenyon & Kenyon LLP, Palo Alto, CA, for Plaintiffs.

Manny J. Caixeiro, Perkins Coie LLP, New York, NY, Matthew F. Carmody, Steven M. Lubezny, Timothy J. Carroll, Perkins Coie LLP, Chicago, IL, Adrian M. Pruetz, Erica Jean Van Loon, Glaser Weil Fink Jacobs Howard Avchen and Shapiro LLP, Grant E. Kinsel, Gigi C. Hoang, Perkins Coie LLP, Brad D. Brian, Stuart N. Senator, Munger Tolles and Olson LLP, Edith R. Matthai, Robie and Matthai, Los Angeles, CA, David John Palmer, Perkins Coie LLP, Phoenix, AZ, Holmes J. Hawkins, III, Thomas C. Lundin, Jr, King & Spalding LLP, Atlanta, GA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION TO DISQUALIFY COUNSEL PERKINS COIE AND TO COMPEL DISCOVERY

DEAN D. PREGERSON, District Judge.

I. Introduction

Plaintiff j2 Global Communications, Inc. has filed a Motion to Disqualify Counsel Perkins Coie and to Compel Discovery (" Motion" ) in three patent infringement cases (" the Three Current Cases" ) pending before this court. (Dkt. No. 77.) [1] Plaintiff Advanced Messaging Technologies, Inc. is a co-Plaintiff and co-movant in two of the cases (9-4150 and 11-4239) (Plaintiffs are collectively called " j2" ). In each case, one or more of the following corporations is a defendant: Open Text Corporation (" Open Text" ) EasyLink Services International Corporation (" EasyLink" ), and Captaris, Inc. (" Captaris" ) (collectively " Defendants" ). Open Text owns Easy Link and Captaris. Perkins Coie (" Perkins" ) represents the Defendants. In late

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2011, Open Text contacted Crowell & Moring (" Crowell" ) about assigning one of its attorneys to temporarily serve as Open Text's outside in-house counsel for intellectual property matters. Crowell assigned an attorney (" the Attorney" ) to fill this role, even though a conflicts check revealed the Attorney formerly represented j2. In fact, he worked on cases on behalf of j2 that involved three of the four patents at issue in the Three Current Cases. As Open Text's outside in-house counsel, the Attorney had contact with Perkins. The court therefore disqualifies Perkins. This outcome is unfortunate, because there is not a molecule of evidence that Perkins did anything other than act with integrity and in a manner consistent with the highest traditions of the legal profession.

In reaching its decision, the court has considered j2's in camera evidence, which includes billing records of the Attorney's work for j2, and various emails that the Attorney sent and received in the course of his j2 representation. ( In Camera Evidence of Billing Records and Emails ( " In Camera Evidence" ).)

II. Background

A. The Attorney's Experience at the Time He Represented j2

The Attorney worked at Kenyon & Kenyon (" Kenyon" ) from 2002 to 2005, and began representing j2 as part of a team of attorneys in 2004. (Bernstein Decl. ¶¶ 4-5, Dkt. No. 77-2.) Crowell maintains that assigning the Attorney to Open Text was appropriate in part because he was only " a junior associate" when he represented j2. (Sacks Decl. Ex. F at 16, Dkt. No. 77-3.) Although the Attorney was an associate in 2004, by the end of that year he had many years of experience as a software engineer, studied graduate-level Computer Science, graduated cum laude from a reputable law school (where he served as Managing Editor of the Law Review ), edited a publication about the International Trade Commission, co-authored another about patent litigation, and delivered a speech about international patent licensing. (Johnson Decl. Ex. 14, Dkt. No. 113.)

B. The Work the Attorney Performed for j2

Crowell also asserts that the Attorney cleared its conflicts check because he allegedly told Crowell that " he did not recall having access to any confidential information," and his representation of j2 " involved primarily the review of publicly available patent documents." (Sacks Decl. Ex. B. at 6, Dkt. No. 77.)

The records before that court indicate that from 2004 until 2005 the Attorney represented j2 in patent litigation, and he billed j2 for 234.7 hours of work. ( Id. ¶¶ 5-6; In Camera Evidence.) Based on the court's knowledge of law firm practices, 234.7 hours probably represents about ten percent of his billing over the roughly fifteen months that he worked on j2 matters. Specifically, the Attorney billed j2 69.8 hours for his work on j2 Global Communications, Inc. v. Venali, Inc. ( " Venali" ), 84.6 hours for j2 Global Communications, Inc. v. Call Wave, Inc. ( " Call Wave" ) (collectively " the Prior Cases" ), and 56 hours for " Bobo" patent analysis. (Bernstein Decl. ¶¶ 2, 6-7.)

In the Venali and Callwave actions, j2 alleged infringement of U.S. Patent Nos. 6,208,638 (" '638 Patent" ) and 6,350,066 (" '066 Patent" ), and it also alleged infringement of U.S. Patent No. 6,597,688 (" '688 Patent" ) in the Venali case. (Bernstein Decl. ¶ 2.) A number of patents comprise the Bobo patents, and the '066 Patent is one of them. (Bernstein Decl. ¶ 7.) j2 alleges that the '638 and '688 Patents were infringed in each of the Three Current

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Cases, and that the '066 Patent was also infringed in two of those cases.[2]

The Attorney's billing records from Kenyon indicate he was involved in the following tasks on behalf of j2: " reviewing claim charts, performing infringement analyses, searching for and analyzing prior art, drafting a validity opinion, analyzing documents for a settlement conference, reviewing and commenting on draft pleading, discussing discovery strategies, drafting discovery requests and responses, and drafting j2's opposition to a summary judgment motion in the Venali action." (Bernstein Decl. ¶ 6; In Camera Evidence.) The Attorney sent, received (sometimes directly, sometimes by forwarding), or was copied on over 120 emails to or from j2's General Counsel. (Bernstein Decl. ¶ 9; In Camera Evidence.) These emails were sent to about seven or eight individuals, and sometimes involved evaluations of j2's cases. ( In Camera Evidence.) One email the Attorney received analyzed possible infringement defenses. (Bernstein Decl. ¶ 12; In Camera Evidence.) That email discussed Dr. David Farber (" Dr. Farber" ), and whether his activities are relevant to an on-sale bar defense.[3] ( In Camera Evidence.) (Bernstein Decl. ¶ 12; In Camera Evidence.) In the Three Current Cases, Defendants claim products that Dr. Farber was allegedly involved in testing and analyzing give rise to an on-sale defense to j2's '688 and '638 patent infringement claims. (Defendant's Answer to Amended Compl. (" Answer" ) at 10:24-15:5, Dkt. No. 48.) In 2005, the year that the Attorney left Kenyon, the United States Patent Office began a multi-year reexamination of the '066, '638, and '688 Patents, which led to changes in at least the '066 and '638 Patents. (Carmody Decl. ¶¶ 16-18, Dkt. No. 101; See id. Exs. E-K.)

C. History of the Three Current Cases

j2 filed two of the Three Current Cases on June 26, 2008, and the other on May 17, 2011.[4] EasyLink is a defendant in two of the actions (" the EasyLink Cases" ) (case numbers 9-4189 and 11-4239), and Open Text and Captaris are defendants in the other (9-4150). Open Text owns both of these other companies, acquiring Captaris in 2008 and EasyLink in 2012. (Davies Decl. ¶ 2.) Open Text retained an attorney (" Lead Trial Counsel" ) to represent it and Captaris in 2008, before Lead Trial Counsel was at Perkins. ( See Carroll Decl. ¶ 5, Dkt. No. 100.) Lead Trial Counsel moved to Perkins in February 2012, and Open Text made Perkins its counsel of record when he did. (Carroll Decl. ¶ ¶ 14-15.) Lead Trial Counsel and another Perkins attorney began advising Open Text about the EasyLink acquisition in mid-February 2012. ( Id. at ¶ 20.) It is unclear when Perkins began working on the EasyLink Cases, but it was before Dr. Farber's deposition, which took place on July 27, 2012. ( Id. ¶¶ 28-29.)

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D. The Conflicts Check and the Attorney's Open Text Assignment

The Attorney is now Counsel at Crowell. (Johnson Decl. Ex. 14.) In 2011, Open Text began searching for an in-house attorney to work on " intellectual property and patent matters," but was " unable to fill the role even as Open Text's intellectual property and patent needs grew." (Davies Decl. ¶ 6.) It asked Crowell to provide an attorney who could temporarily assume this position until a permanent candidate was selected. ( Id. ) As discussed, Crowell assigned the Attorney to fill this role, even though it knew that he previously represented j2 ( Id. ¶ 9; Sacks Decl. Ex. B at 6.)

j2 was never asked to sign a conflict waiver, allowing the Attorney to work for Open Text. (Bernstein Decl. ¶ 13.) Perkins likewise knew nothing about the Attorney's prior involvement with j2. ( See ...


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