Nasdaq ISE Files Motion to Disqualify Fish & Richardson at PTAB Over Prior Representation

By Steve Brachmann
December 4, 2018

On October 11th, electronic options exchange provider Nasdaq ISE, a subsidiary of the Nasdaq stock market entity, filed a motion to disqualify counsel representing trading service provider Miami International Holdings, Inc. (MIAX), in a covered business method (CBM) review proceeding being conducted at the Patent Trial and Appeal Board. Nasdaq ISE argued that counsel from Fish & Richardson representing MIAX should be disqualified because Fish & Richardson formerly represented Nasdaq in intellectual property matters for 13 years and the firm is now representing an adverse party in a substantially related matter.

Between 1998 and 2011, Fish & Richardson prosecuted patents on behalf of Nasdaq related to inventions in electronic trading technology and was provided with information regarding Nasdaq’s strategic approach to IP. After Nasdaq and its subsidiaries filed a patent infringement suit in 2017 against MIAX, in which Nasdaq asserted four patents prosecuted by Fish & Richardson, MIAX hired both Fish & Richardson as well as Reed Smith LLP as defense counsel. Although Fish & Richardson made claims that it wouldn’t participate in the portion of the suit involving the Nasdaq patents it helped to prosecute, Nasdaq successfully moved to disqualify Fish & Richardson in the district court proceeding after a magistrate judge held that MIAX’s defense was a collaborative effort and that Nasdaq and MIAX’s interests were materially adverse.

Nasdaq ISE’s motion to disqualify Fish & Richardson was made pursuant to 37 CFR 11.109, which prevents a practitioner from representing a party adverse to a former client in substantially similar proceedings; this duty is imputed to the practitioner’s law firm under 37 CFR 11.110. In its motion, Nasdaq argued that the PTAB should adopt the magistrate judge’s finding that the defense of MIAX, including the CBM reviews challenging the validity of the patents asserted against MIAX, is a collaborative effort and Fish & Richardson should be disqualified because of the conflict of interest. The particular patent-at-issue in this CBM review was filed and prosecuted during the period in which Fish represented Nasdaq. “Because patent-eligibility, this sole issue in this CBMR, is evaluated from the time of invention… the confidential factual information Fish obtained from Nasdaq is material to the issues in this [CBM review],” the motion reads.

On October 18th, MIAX filed a response to Nasdaq’s motion to disqualify counsel where it argued that Fish & Richardson never represented ISE, which Nasdaq acquired in 2016, and that Fish spent more than a decade in litigation adverse to both ISE and the subject patent. Because Fish didn’t represent ISE, Fish also didn’t prosecute the patent-at-issue in the CBM review proceeding. “The concerns expressed in ISE’s motions are purely speculative, factually baseless, and legally unfounded,” MIAX’s response reads. MIAX said that it was “absurd” to think that Nasdaq’s strategic approach to IP and information related to the validity of its patents were in any way related to either ISE or the patent being reviewed.

MIAX also claimed that the Section 101 validity challenge to the patent claims being reviewed would be based upon publicly available proofs and not any confidential information that “might exist within the minds of a handful of screened Fish attorneys regarding Nasdaq’s prosecution of its own patent applications.” MIAX further noted that ISE had failed to identify anywhere in its brief how MIAX is relying upon Fish’s knowledge of confidential information in the present CBM review and that the PTAB has never applied Rule 11.109 to disqualify counsel in the past. Finally, MIAX argued that the motion was untimely and that ISE was improperly conflating the PTAB and district court proceedings, contending that the magistrate judge’s order was based on a different set of facts and circumstances than those at issue in the CBM review.

“Fish’s attempt to downplay and compartmentalize its involvement is too cute by half,” Nasdaq ISE argued in a November 14th reply to MIAX on the motion to disqualify counsel, especially in light of Fish & Richardson’s decision to share an expert with Reed Smith to enter very similar testimony in each of the CBM reviews challenging patent claims owned by Nasdaq ISE. ISE argued that Fish’s measures to mitigate a potential conflict of interest, including its limited-scope engagement agreement with MIAX and the screening of certain Fish attorneys, were inadequate. This is because Fish can’t credibly separate its knowledge of Nasdaq’s IP portfolio from strategies related to automated securities and options trading.

The Author

Steve Brachmann

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

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