Thursday, August 27, 2009

Foley & Lardner Sued for Allegedly Revealing Trade Secrets [United States]

A patent holding firm has sued Foley & Lardner for allegedly revealing confidential information and for undermining the company's settlement negotiations during a separate lawsuit.
Virginia-based SPH America, a company formed in 2008 by former Fish & Richardson associate Choongoo Park, filed suit against Foley Friday at the U.S. District Court for the Eastern District of Virginia, alleging breach of contract, misappropriation of trade secrets and contract interference, among other claims.

Foley represented Japanese electronics manufacturer Kyocera in 2008 after SPH brought a patent infringement case against the company over technology used in its cell phones. According to last week's complaint, Foley allegedly publicized confidential information it gained during the course of that case by incorporating it in another lawsuit.
The new suit, filed for SPH by Kevin Mun of Virginia's Echelon Law Group, states that during settlement negotiations in the 2008 case, SPH revealed that it had patent rights to 3G wireless technology that allows cell phones to carry high speed internet applications. SPH said it kept those patent rights "confidential," and shared information about them under a non-disclosure agreement. Moreover, SPH claims it informed Kyocera -- represented by Foley partners David Kleinfeld and Kurt Kjelland and senior counsel Steven Foley -- that it did not plan to sue the company over those patents.
In February 2009, Foley filed a complaint in the Southern District of California on behalf of Kyocera, asking for a declaratory judgment that it had not violated any of the 3G patents. The suit, signed by Kjelland and Foley, identified the patents by name and quoted pieces of SPH's settlement talks with Kyocera.
"Neither Foley nor Kyocera notified SPH America, let alone obtained SPH America's consent, prior to filing the complaint, nor did they even attempt to file the complaint under seal or with redaction," SPH claims in its complaint.
The new suit also claims that Foley lawyers published SPH's patent infringement charts, which they acquired during discovery. The charts were made public when the firm asked the U.S. Patent & Trademark Office to re-examine two of SPH's patents. According to the SPH, the infringement charts were "attorney eyes only" under the terms of a court order.
SPH also claims that Foley lawyers violated a protective order issued by the U.S. International Trade Commission, where the patent firm had also sued Kyocera.
Aside from revealing confidential information, SPH also claims that Foley partners distorted SPH's infringement position towards Kyocera, which "undermined" the patent firm's position during settlement negotiations.

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