Andrew Corp. v. Beverly Mfg. Co., No. 04 C 6214.

415 F.Supp.2d 919

ANDREW CORPORATION, Plaintiff, v. BEVERLY MANUFACTURING COMPANY, Defendant.

No. 04 C 6214.

United States District Court, N.D. Illinois, Eastern Division.

February 16, 2006.

Barry Warren Sufrin, Darren Steven Cahr, David Arthur Frey, David J. Moorhead, Lori A. Oosterbaan, Nicole M. Murray, Gardner Carton & Douglas LLP, Chicago, IL, for Plaintiff.

Loletta L. Darden, Marshall Seeder, Alfred E. Hanna, Jennifer Yule Depriest, Sachnoff & Weaver, Ltd., Alan R. Dolinko, Robinson, Curley & Clayton, P.C., Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

HOLDERMAN, District Judge.

On August 31, 2005, plaintiff Andrew Corporation ("Andrew"), filed its first amended complaint alleging that defendant Beverly Manufacturing Company, ("Beverly"), infringed three of Andrew's patents: United States Patents Nos. 5,850,056 ("the '056 patent"); 6,354,543 ("the '543 patent"); and 6,899,305 ("the '305 patent"). (Dkt. No. 74). These patents relate to cable hangers and other technology used in telecommunication towers. Andrew's first amended complaint also alleges that Beverly willfully infringed Andrew's '056 and '543 patents after Beverly received written notice from Andrew of the alleged infringement. (Dkt. No. 74 at ¶¶ 10, 14). Beverly wishes to use three opinion letters written by its counsel from the law firm of Barnes & Thornburg in Beverly's defense to Andrew's allegations of willful infringement.

On November 8, 2005, Andrew filed the pending "Motion to Disqualify Counsel and Exclude all Opinion Letters Issued by Counsel," (Dkt. No. 93), seeking to prevent Beverly from presenting evidence regarding the three Barnes & Thornburg opinion letters and to bar Barnes & Thornburg attorneys from testifying or otherwise participating in this case. Both Andrew and Beverly are current clients of Barnes & Thornburg. Barnes & Thornburg has not filed an appearance in this case on behalf of either party. In light of the allegations set forth in the pending motion, this court on December 23, 2005 ordered the parties to furnish Barnes & Thornburg a copy of their filings on the pending motion. (Dkt. No. 125). The court then provided Barnes & Thornburg with an opportunity to file a response. (Id.) Barnes & Thornburg's response was filed on January 23, 2006 in the form of a letter dated January 20, 2006 from its General Counsel Kenneth H. Inskeep. (Dkt. No. 134). The parties filed their respective final replies on February 1, 2006. (Dkt.Nos.138-39). For the reasons set forth below, this court grants Andrew's motion.

FACTUAL BACKGROUND

Barnes & Thornburg's three opinion letters were issued to Beverly on July 8, 2003, July 15, 2003 and August 28, 2003. Each of these opinion letters state positions that are adverse to Andrew. The July 8, 2003 letter, signed by Barnes & Thornburg attorneys Timothy J. Engling¹ ("Engling"), and Dennis M. McWilliams ("McWilliams"), opined that Beverly's newly "modified stackable hanger does not fall within the claims of [Andrew's] '543 patent." (Dkt. No. 128 at Ex. A, pg. 1). The July 15, 2003 letter, signed by Barnes and Thornburg attorneys Engling and Mark J. Nahnsen² ("Nahnsen"), provided a similar opinion that Beverly's newly designed "grounding kit does not fall within the claims of [Andrew's] '056 patent." (Id. at Ex. B, pg. 1). The July 15, 2003 letter was supplemented by the third opinion letter dated August 28, 2003 which was also signed by Engling and Nahnsen. The August 28, 2003 letter opines that Beverly's "new embodiment of the grounding kit does not literally infringe the '056 patent, and there would be no infringement under the Doctrine of Equivalents ...." (Id. at Ex. B., stamped number B509).

Beverly was previously represented by McWilliams and Engling when they were members of the law firm of Lee Mann, Smith, McWilliams, Sweeney & Ohlson ("Lee Mann"). (Dkt. No. 134 at pg. 2). In 2000, attorneys from Lee Mann, including Engling, were counsel for Beverly in a dispute that Beverly had with Andrew. In that dispute, Andrew threatened to sue Beverly for unfair competition and misappropriation of trade secrets over Beverly's "snap-in hangers," (Dkt. No. 130 at Ex. 2, pg. 3), but before a lawsuit was filed, the parties reached a settlement in which Beverly agreed to adjust the design of the "snap-in hanger." (Id. at Ex. 5). According to the July 8, 2003 opinion letter, Beverly's post-2000 settlement "modified snap-in hanger" is a "variation on a hanger described in Andrew's expired '132 patent." (Dkt. No. 128 at Ex. A, pg. 1). Beverly renamed the modified "snap-in hanger" to be called "the modified stackable hanger." The modified stackable hanger is analyzed in the July 8, 2003 opinion letter and Andrew now asserts in this litigation that Beverly's modified stackable hanger infringes Andrew's '543 patent.

While still at the Lee Mann firm in 2002, McWilliams and Engling began working for Beverly on their opinions with regard to Andrew's patents at issue in this case and opened two legal files in the Lee Mann's filing system regarding that work. (Dkt. No. 134 at pg. 2). According to Barnes & Thornburg's General Counsel, these Lee Mann files, however, did not list Andrew as the adverse party. (Id. at pg. 3). The Lee Mann law firm merged into Barnes & Thornburg in January 2003 and McWilliams and Engling joined Barnes & Thornburg as partners. (Id.)

At the time of that merger in January 2003, Andrew was a client of Barnes & Thornburg. Barnes & Thornburg lawyers Daniel P. Albers³ ("Albers"), and Thomas J. Donovan⁴ ("Donovan"), among others, were representing Andrew in the patent infringement case Andrew Corp. v. Kathrein, Inc., No. 02 C 3522, 2002 WL 32677936 (N.D.Ill.) (Guzman, J.). Barnes & Thornburg's conflicts department analyzed Lee Mann's client information in conjunction with the merger to determine whether Beverly could be a Barnes & Thornburg client. Barnes & Thornburg recognized no conflict between Andrew and Beverly despite the fact that the work McWilliams and Engling performed for Beverly had analyzed Andrew's patents adversely to Andrew. (Dkt. No. 134 at pg 3). Failing to identify the conflict during the merger, Barnes & Thornburg approved Beverly as one its new clients without informing Andrew or Beverly of any conflict or requesting consent from either. (Id.) Barnes & Thornburg in July and August 2003 provided Beverly the three opinion letters that were adverse to Andrew.

Barnes & Thornburg continued not to recognize the conflict during 2003 and the first half of 2004 despite the fact that, as of June 30, 2003, McWilliams, Engling, Nahnsen, Albers and Donovan were all physically located in same Barnes & Thornburg office in Chicago performing patent related services. (Albers and Donovan were representing Andrew and McWilliams, Engling and Nahnsen were representing Beverly.) In August 2004, both Andrew and Beverly contacted Barnes & Thornburg with each seeking representation in the dispute that has led to this litigation between Andrew and Beverly.⁵ (Id. at pg. 4). Barnes & Thornburg finally recognized that it concurrently represented both Andrew and Beverly and declined both companies' request for representation against one another. (Id.) Consequently, Andrew and Beverly are represented by other law firms in this case. Despite Barnes & Thornburg's August 2004 recognition that it could not represent either Beverly and Andrew against one another, and that Barnes & Thornburg's 2003 opinion letters were adverse to Andrew, lawyers at Barnes & Thornburg still represent both Andrew and Beverly in other matters through the present. (Dkt. No. 138 at pg. 3).

Barnes & Thornburg General Counsel asserts that, despite the current representation of both Andrew and Beverly, "the Barnes & Thornburg lawyers who represented Andrew have never discussed any Beverly matter with the Barnes & Thornburg lawyers who represented Beverly and visa versa." (Dkt. No. 134 at pg. 5). Although further discovery may be necessary, the record in this case appears to show that there were Barnes & Thornburg lawyers who were personally representing both Andrew and Beverly simultaneously in July and August 2003, the time period when the opinion letters adverse to Andrew were provided to Beverly.

Andrew's supplemental reply filed February 1, 2006 includes a copy of Beverly's patent application dated August 13, 2003 entitled a "One—Piece Resilient Stackable Hanger" submitted to the U.S. Patent and Trademark Office ("PTO"), by Barnes & Thornburg attorneys. (Dkt. No. 138 at Ex. 1). Beverly's patent application for the One—Piece Resilient Stackable Hanger mentions both Andrew's '132 and '543 patents and identifies Andrew's '543 patent as the closest prior art to Beverly's invention. (Id. at Ex. 1, pg. B6189). In Beverly's appeal, prosecuted by Barnes & Thornburg attorneys, from an adverse decision by the patent office examiner, Beverly attempted to distinguish its invention from Andrew's '543 patent. (Id. at Ex. 1, pgs. B6291-95).

Beverly's August 13, 2003 "One—Piece Resilient Stackable Hanger" patent application includes a power of attorney declaration appointing 34 Barnes & Thornburg attorneys to prosecute the patent application on Beverly's behalf. Although Engling appears to be the primary Barnes & Thornburg attorney involved in Beverly's patent application, Albers and Donovan, who were counsel of record for Andrew in Andrew Corp. v. Kathrein, Inc., No. 02 C 3522, 2002 WL 32677939 (N.D.Ill.) (Guzman, J.), were also included in the power of attorney listing for Beverly's August 13, 2003 patent application. (Dkt. No. 138 at Ex. 1, pg. B6185). The Andrew Corp. v. Kathrein, Inc. case remained pending case in August 2003. Albers also represented Andrew in Andrew Corp. v. EMS Tech Inc., No. 04 C 3594 (N.D.Ill.) (Gettleman, J.), a case that was filed in 2004 and remained pending during the first part of 2005 when Beverly's patent application, seeking relief adverse to Andrew, was being prosecuted through...