13.13. Representing economic competitors

Can a lawyer represent multiple clients who are economic competitors in the marketplace or does that create a conflict of interest?  The answer is yes.  The fact that two clients are merely economic competitors does not create a conflict of interest for the lawyer.

A lawfirm represented Chris Maling in obtaining a patent with regard to his invention for a screwless eyeglass.  The law firm also represented another client – Mansuga – seeking a similar (but not identitical) patent.  The firm was able to obtain a patent for Maling, but when Maling discovered that the firm was also representing Mansuga, he sued alleging breach of fiduciary obligations and legal malpractice.  Should the law firm be liable for representing both Maling and Mansuga? [Maling v. Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, 42 N.E.3d 199 (Mass. 2015)]

No.  The fact that the two clients were merely economic competitors with similar but distinct patents does not create a conflict of interest.  The court points out that if the patents had been identical and the patent office would have had to choose one of the two patents the case would be different, but here:  “Maling’s complaint provides little more than speculation that [the law firm’s] judgment was impairedor that he obtained a less robuts patent than if he had been represented by other, “conflict-free” counsel.  Maling does not alleg that the claims contained in his application were altered or narrowed in light of the Masunaga applications… or, importantly, that his client confidences were disclosed or used in any way to Masunaga’s advantage.”  There was no evidence of how the lawfirm was “materially limited” in its representation of Maling.