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Ipvx Patent Holdings, Inc. v. 8X8, Inc.

United States District Court, Ninth Circuit

December 19, 2013

IPVX PATENT HOLDINGS, INC., Plaintiff,
v.
8X8, INC., Defendant.

ORDER DENYING DEFENDANT 8X8, INC.'S MOTION TO DISQUALIFY PLAINTIFF'S COUNSEL (Dkt. No. 71)

KANDIS A. WESTMORE, Magistrate Judge.

Before the Court is Defendant 8x8, Inc.'s Motion to Disqualify Plaintiff's Counsel filed on August 20, 2013. (Def.'s Mot. to Disqualify ("Def.'s Mot."), Dkt. No. 71.)

8x8, Inc. moves to disqualify Sean Luner and Pierre Yanney from representing IPVX Patent Holdings, Inc. ("IPVX") in this matter on the grounds that Pierre Yanney is tainted by the alleged conduct of attorney/co-counsel Sean Luner, who held a client representation meeting with 8x8, Inc. prior to the filing of the instant action, during which alleged confidential information was shared with Mr. Luner.

On November 21, 2013, the Court held a hearing and after consideration of the parties' arguments, the Court denies Defendant's motion to disqualify counsel for the reasons set forth below.

I. BACKGROUND

In December 2009, and prior to the filing of this action, Sean Luner held a telephone meeting with 8x8, Inc.'s Bryan Martin, Chairman and Chief Executive Officer for 8x8, Inc., and Dan Weirich, Chief Financial Officer, to discuss possible representation. (Def.'s Mot. at 1.) 8x8, Inc. alleges that highly confidential information was disclosed during the 30 minute meeting. Id. Ultimately, Luner did not undertake representation of 8x8, Inc., Inc.

Defendant, however, alleges that Sean Luner and Pierre Yanney act as co-counsel on behalf of Klausner and IPVX, and have met privately to "investigate" the confidential communications from the Luner-8x8, Inc. meeting. (Def.'s Mot., at 8.)

On November 1, 2011, then-Plaintiff Klausner Technologies, Inc. filed a complaint against 8x8, Inc. in the U.S. District Court for the Eastern District of Texas, alleging that Defendant had infringed on United States Patent No. 5, 572, 576 ("576 Patent"). (Compl., Dkt. No. 1.) At the time of filing, Klausner was represented by attorneys S. Calvin Capshaw, III, Pierre Yanney, and William J. Seymour. Id. at 5.

On December 7, 2011, Pierre Yanney sent an email to 8x8, Inc.'s counsel informing them that Sean Luner stated that he never represented to 8x8, Inc. that it did not infringe on Klausner's patents. (Dkt. No. 71, Ex. A.)

On May 17, 2012, Klausner assigned to IPVX all right, title and interest in, the 576 Patent, including the right to enforce the patent and to recover for past infringement as to the Defendant in this lawsuit. (First Amend. Compl., Dkt. No. 31 at 1.)

On August 10, 2012 IPVX was substituted for Klausner Technologies as the plaintiff in this action. (Dkt. Nos. 24-25.) On August 23, 2012, 8x8, Inc. filed a motion to change venue. (Dkt. No. 25.) On January 30, 2013, 8x8, Inc. filed a motion to disqualify counsel. (Dkt. No. 71.) On March 21, 2013 this action was transferred to U.S. District Court for the Northern District of California. (Dkt. No. 40.) On August 20, 2013, 8x8, Inc. renoticed its previously filed motion to disqualify, which was referred to the undersigned for disposition on August 22, 2013.

On October 11, 2013, the Court ordered the parties to submit supplemental briefs to specifically address the applicable law in the Ninth Circuit.

II. LEGAL STANDARD

"The right to disqualify counsel is a discretionary exercise of the trial court's inherent powers." Certain Underwriters at Lloyd's London v. Argonaut Ins. Co., 264 F.Supp.2d 914, 918 (N.D. Cal. 2003). Under Civil L.R. 11-4(a)(1), all attorneys who practice in the Northern District of California must comply with the standards of professional conduct required of members of the State Bar of California. Accordingly, state law applies in determining matters of disqualification. In re County of Los Angeles, 223 F.3d 990, 995 (9th Cir. 2000). In California, a lawyer may not, "without the informed written consent of the client or former client, accept employment adverse to the client or former client where, by reason of the representation of the client or former client, the member has obtained confidential information material to the employment." Cal. R. Prof'l. Conduct, 3-310(E). "Depending on the circumstances, a disqualification motion may involve such considerations as a client's right to chosen counsel, an attorney's interest in representing a client, the financial burden on a client to replace disqualified counsel, and the possibility that tactical abuse underlies the ...


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