[Patentpractice] PoA/Representation of licensee and licensor?

Wed Jun 11 13:55:37 UTC 2025

There’s a handful of cases where lawyers don’t paper similar arrangements and this go sideways.  Here’s an excerpt from a CLE paper I did, fwiw, and see the tail end for a suggestion to consider but if this were legal advice, it would include a bill:

B.        The Other Party to a License or Shared Prosecution  <>Agreement.   

             It is common for different entities to have input into prosecution, as where a licensee has input into prosecution of pending applications.  In such circumstances, the parties likely can assert a “common interest” privilege so that third parties cannot access their communications.  However, courts continue to conflate the existence of a common interest with implied joint attorney client relationships.

            In one example, DePuy Orthopaedics, Inc. ("DePuy") entered into a research agreement with Orthopaedic Hospital (“OH”).  OH would develop products and DePuy would pay a royalty if any were commercialized. Some patent applications were filed. OH later contended that DePuy had developed products that required it pay OH a royalty; DePuy refused, and OH brought a declaratory judgment.  See DePuy Orthopaedics, Inc. v. Orthopaedic Hosp., 2016 WL 7030400 (Dec. 1, 2016). 

            During the suit, OH moved to compel all documents from DePuy related to prosecution of the applications.  DePuy refused to provide the documents. In doing so, it conceded that the parties shared a common interest with respect to the patent applications, but contended that DePuy’s in-house attorney did not jointly represent both OH and DePuy when doing so.

            The court held that as a matter of law DePuy’s in-house lawyer represented both it and OH.  In doing so, it applied the test for determining whether a lawyer represents a client.  Thus, because the lawyer jointly represented both OH and DePuy, nothing was privileged between them in this dispute.

            As I've written, this is legally incorrect.  The issue isn't whether DePuy's in-house lawyer represented one client, but whether she represented two.  When that is the issue, courts that appropriately analyze this issue recognize that a different analysis is required. See U.S. v. Holmes, 2021 WL 2309980 (N.D. Cal. June 3, 2021). 

Applying the “reasonable belief” test in a joint client context to imply an attorney client relationship can create conflicts of interest. See id.  For example, if a lawyer is being paid by one client, believing it is the “only” client, but a court implies a joint attorney-client relationship, then the rule against accepting payment from anyone to represent a client is implicated, which can require full disclosure to the client and ensuring no interference with the lawyer’s exercise of independent judgment on behalf of either client. See Model Rule 1.8; Harish v. Arbit, 2025 WL 354484 (D.N.J. Jan. 31, 2025).

Further still, with respect to in-house counsel, this could create the unauthorized practice of law (for example, if in-house counsel were not licensed in the state where the activities occurred, but registered by the state, and the “representation” went beyond that necessary to practice before the USPTO.  It could also result in liability by in-house counsel to third parties, and in-house counsel typically don't have malpractice insurance.

         This same fact pattern has bitten several outside firms and in-house counsel before.  Any time a lawyer is prosecuting patents where there is some agreement where a “non-client” has input -- a joint venture agreement, a license, a joint development agreement -- the lawyer should be extremely careful to ensure that the “non-client” knows it is not a client. 

For example, in Naturalock Solutions, LLC v. Baxter Healthcare Corp., No. 14-cv-10113, 2016 WL 2958374 (N.D. Ill. May 20, 2016), Naturalock entered into a License and Development Agreement with Baxter to patent a natural replacement for Heparin that Naturalock had invented.  Baxter agreed to test, develop, commercialize and patent the invention and retained K&L Gates to file applications.  Naturalock then sued Baxter, claiming breach of the agreement, and sought production of all communications about prosecution with K&L Gates. Baxter objected but the court ordered production. In its motion to compel, Naturalock argued that it was the sole client, but if not it was a joint client, and Baxter argued it was the sole client.

            Naturalock had its own counsel. Even so, the court held it was a joint client of K&L Gates because K&L Gates had “provided legal services to Naturallock and acted at the direction of Naturalock in addition to Baxter.”  The court reasoned that it “does not matter what K&L Gates or Baxter perceived the relationship to be” but instead on “whether the attorney was acting in a professional relationship to the person asserting the privilege.”  Among other things, the court noted that Naturalock had never been “explicitly informed that K&L Gates represented only Baxter.”

            There are other cases with mixed results or similar facts. E.g., Takeda Pharmaceutical Co. Ltd. v. Zydus Pharmaceuticals (USA) Inc., 2019 WL 3284673 (D. N.J. June 6, 2019) (denying motion to disqualify based upon firm’s representation of client who had joint defense agreement with moving party); Speed RMG Partners, LLC v. Arctic Cat Sales Inc., 2020 WL 12442105 (D. Minn. Aug. 21, 2020). See also BlueRadios, Inc. v. Hamilton, Brook, Smith & Reynolds, P.C., 2024 WL 4228929 (D. Mass. Sept. 18, 2024) (holding in a legal malpractice case that plaintiff’s claim that law firm had jointly represented it was barred by limitations).

            Including a clause that states something like the following may help to reduce problems:

The parties recognize that they share a common interest in prosecuting patent applications. However, Firm A represents only Company A and does not owe a duty of loyalty or confidentiality to Company B. Company B has been given the opportunity to retain independent counsel and understands it cannot rely on Firm A for legal advice or to protect its interests.

David Hricik

> On Jun 11, 2025, at 9:47 AM, Masson, Roger M. via Patentpractice <patentpractice at oppedahl-lists.com> wrote:
> 
> Jim,
>  
> I haven’t had this situation in patent prosecution but the representation agreement should spell out that you do not represent Licensor assuming you decide to represent only Licensee, which I would be inclined to go with to avoid issues when the parties disagree on something.
>  
> Roger 
> Masson
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> From: Patentpractice <patentpractice-bounces at oppedahl-lists.com <mailto:patentpractice-bounces at oppedahl-lists.com>> On Behalf Of Jim Larsen via Patentpractice
> Sent: Tuesday, June 10, 2025 10:04 PM
> To: For patent practitioners. This is not for laypersons to seek legal advice. <patentpractice at oppedahl-lists.com <mailto:patentpractice at oppedahl-lists.com>>
> Cc: Jim Larsen <jim at larsen-ip.com <mailto:jim at larsen-ip.com>>
> Subject: [Patentpractice] PoA/Representation of licensee and licensor?
>  
> Dear Listmates, I have a question of first impression (for me) regarding power of attorney. A new client (Licensee) has, by license agreement, agreed to solely “be responsible for and shall control the preparation, filing, prosecution, protection,
> Dear Listmates,
>  
> I have a question of first impression (for me) regarding power of attorney.  
>  
> A new client (Licensee) has, by license agreement, agreed to solely “be responsible for and shall control the preparation, filing, prosecution, protection, defense and maintenance of all claims relating to the Patent Rights [i.e., full interest in several existing foreign patents] licensed hereunder which are solely applicable to the Field of Use (“Licensee Claims”).”  Note: Licensor is currently a part owner of Licensee.
>  
> The agreement also requires that Licensor have a chance to review the text of each patent application “relating to Licensee Claims” before filing, and “Licensee shall give Licensor the opportunity to provide comments concerning the preparation, filing, prosecution, protection, defense and maintenance of the Licensee Claims, and shall give reasonable consideration to such comments….”
>  
> Acknowledging the potential breadth of “relating to” language, the license agreement was reportedly hard-fought, was executed before we got involved, and is not likely to change.  So, my question regards power of attorney and (joint?) representation.  I think we needn’t represent the Licensor, and Licensor’s “opportunity to provide comments” does not necessarily require us to directly communicate with Licensor.  Is it nevertheless advisable to get POA and conflicts waiver from both Licensor and Licensee? Or, since Licensor is a part owner of Licensee, would POA from and representation of Licensee be sufficient?   
>  
> I see these and other variations as each having pluses and minuses, but I bet some of you have dealt with a similar situation.  What works best?
> Hinshaw & Culbertson LLP is an Illinois registered limited liability partnership that has elected to be governed by the Illinois Uniform Partnership Act (1997).
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