Just last week, I blogged on an Officer’s Fiduciary Duty When Negotiating His/Her Own Compensation Agreements. Many readers expressed interest in the unique position of legal officers within the corporation, so today a follow-up on a related topic.
In The Gillette Co. v. Provost, Superior Court of Massachusetts, (May 5, 2016), the company sued a former in-house patent lawyer who went to work for a competitor alleging that he breached his ongoing fiduciary duties to his former employer/client by helping his new employer compete with Gillette. The patent lawyer worked for Gillette from 1987 to 1990, and again from 1992 through May 2006. While he represented Gillette as its lawyer, he “had access to privileged communications and information” regarding Gillette’s patents and technologies. He also developed “detailed knowledge” of Gillette’s patents and related licensing agreements while Gillette employed him.
The patent lawyer started working for a direct competitor in June 2012, more than six years after leaving Gillette. The competitor hired the lawyer “to provide freedom to operate opinions respecting Gillette patents, including patents whose prosecution he oversaw, and to identify potential voids in Gillette’s patent portfolio.” The competitor had told its investors and prospective business partners that the lawyer’s “intimate knowledge of Gillette’s intellectual property portfolio and patent strategy” gives the competitor “a competitive edge in the market.”
The court found that the lawyer owed a continuing fiduciary duty to Gillette even though he stopped representing Gillette in patent matters ten years ago. However, the court found that the scope of the lawyer’s fiduciary duty to Gillette while with a new employer six years later was narrower than the broad duty of undivided loyalty that the lawyer owed to Gillette when he represented the company as its in-house patent lawyer.
The court also found that the lawyer did not breach any fiduciary duty he owed to Gillette under the Massachusetts Rules of Professional Conduct. Representation of a current client impermissibly conflicts with a lawyer’s duty to a former client only when the matter for the new client is both “adverse” to the interests of the former client and also “substantially related” to work the lawyer had done for the former client. The lawyer’s work did not seek to invalidate any patent he had worked on at Gillette. Instead, the work focused on product designs that would not infringe on those patents.