Radware, LTD. et al v. A10 Networks, Inc.

Filing 128

REDACTED ORDER by Judge Ronald M Whyte granting 77 , 94 Motion to Disqualify Counsel. Attorney Dominik B. Slusarczyk; Gavin Kenneth Snyder; Ryan Alexander Ward; Hong Annita Zhong; Elliot Brown and Morgan Chu terminated. UNREDACTED ORDER sent to parties consistent with 91 Order re: in camera review. (rmwlc2, COURT STAFF) (Filed on 3/5/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

United States District Court
For the Northern District of California

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SAN JOSE DIVISION

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RADWARE, LTD.; RADWARE, INC.,

Case Nos. C-13-02021

Plaintiffs, Counterclaim-Defendants,
v.
A10 NETWORKS, INC.,

ORDER GRANTING MOTION TO
DISQUALIFY
[Re Dkt. Nos. 77, 94]

Defendant, Counterclaim-Plaintiff.

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Plaintiff’s Radware, Ltd. and Radware, Inc. (collectively “Radware”) move to disqualify
defendant A10 Networks, Inc.’s (“A10”) counsel Irell & Manella LLP (“Irell”). For the reasons
explained below, the court grants the motion.

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I. BACKGROUND
The facts relevant to this disqualification motion are as follows:

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Radware, A10, and F5 Networks, Inc. (“F5”) are all active competitors.

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In 2003, F5 sued Radware for infringement of U.S. Patent No. 6,473,802 (the “’802

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Patent”). F5 Networks, Inc. v. Array Networks, Inc., Case No. 03-CV-0688 (W.D.

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Wash.). Radware was represented by the law firm Wilmer Cutler Pickering Hale and

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Dorr LLP (“Wilmer”).

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In 2004, Radware and F5 settled the infringement action,

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The settlement agreement signed by Radware

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included a license for Radware to fully practice F5’s ’802 Patent, which the court

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refers to as the “Radware-F5 license.”

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In 2007, Radware hired Irell to resolve a

claim arising out of the

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purported Radware-F5 settlement agreement negotiated by Wilmer. The retainer

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agreement states that Irell will represent Radware “in connection with matters

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relating to F5 Networks, Inc. and

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.” Meroz Decl., Ex. A.

Irell was tasked with evaluating the effect of the

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For the Northern District of California

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including evaluating

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to ensure that Radware complied with F5’s version of the license.

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Meroz Decl., Ex. C.
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Irell was also responsible for negotiating a settlement agreement with

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required Irell to inform itself on

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effect of the

which
and the

. Meroz Decl., Ex. B.

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In late December 2009, Radware and Wilmer entered into a settlement. Opp’n at 5.

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The

representation ended on December 30, 2009, when Irell sent a letter

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terminating their representation and returning the unused portion of Radware’s

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retainer fee. Zhong Decl., Ex. 12. Irell billed Radware for

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to the

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matter.

In February 2010, Radware again hired Irell. The representation related to

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. The

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retention letter states that Irell will represent Radware

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.” Zhong Decl., Ex. 13.

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hours of work related

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Irell billed a total of

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hours in connection with the audit,
Zhong Decl., Exs. 6-7.

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On November 20, 2012, Irell sent Radware a letter stating that Irell “last did work for

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you in May 2011” and returned the unused portion of Radware’s retainer fee. Zhong

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Decl., Ex. 17.

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On May 1, 2013, Radware filed this suit against A10 for infringement of U.S. Patent

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Nos. 6,665,702 (“’702 Patent”) and 8,266,319 (“’319 Patent”). Dkt. No. 1. Radware

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later added infringement of U.S. Patent No. 8,484,374 (“’374 Patent”). Dkt. No. 28.

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Radware alleges that AppDirector is a product that practices the asserted Radware

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patents. Id. Radware alleges that A10’s Application Delivery Controller and Server

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Load Balancing products infringe its patents.

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For the Northern District of California

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On the same day, Radware filed suit against F5 asserting the same Radware patents.

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Radware, LTD, et al. v. F5 Networks, Inc., Case No. 5:13-CV-02024-RMW (N.D.

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Cal.).

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On May 23, 2013, Radware moved to relate the A10 and F5 suits, which this court
granted on June 16, 2013. Dkt. No. 18.

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On August 29, 2013, F5 filed a counterclaim against Radware asserting infringement

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of the ’802 Patent, which infringement is not covered by the previous license entered

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into by F5 and Radware covering the ’802 Patent. See Radware, LTD, et al. v. F5

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Networks, Inc., Case No. 5:13-CV-02024-RMW, Dkt. No. 39 (N.D. Cal.).

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On January 10, 2014, Radware filed the instant motion to disqualify Irell. Dkt. Nos.
77, 94.

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II. ANALYSIS

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A. Legal Standard
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California law governs the issue of disqualification. Under California Rule of Professional
Conduct 3-310(E), a lawyer may not represent a client against a former client if the current
representation is “substantially related” to the former representation. Trone v. Smith, 621 F.2d 994,
998 (9th Cir. 1980).
Whether a substantial relationship exists is determined by reference to: (1) the relationship
between the attorney and the former client with respect to the legal problem involved in the former
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representation and (2) the relationship between the legal problem involved in the former

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representation and the legal problem involved in the current representation. Canatella v. Krieg,

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Keller, Sloan, Reilley & Roman LLP, Case No. C-11-05535 WHA, 2012 WL 847493 (N.D. Cal.

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March 13, 2012). Where the party seeking disqualification demonstrates the requisite substantial

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relationship, “access to confidential information by the attorney in the course of the first

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representation is presumed and disqualification is mandatory.” Jessen v. Hartford Cas. Ins. Co., 111

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Cal. App. 4th 698, 706-09 (2003).

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Here, there is no dispute that Radware is Irell’s former client and Irell is now adverse to
Radware. Radware and Irell dispute whether Irell actually acquired confidential information and

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For the Northern District of California

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whether Irell’s prior representations are substantially related to the current case. A substantial

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relationship is sufficient to disqualify Irell, regardless of whether it actually possesses confidential

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information. Id.

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B. There is a substantial relationship between Irell’s former representation and the
current litigation
Irell was retained twice by Radware to advise them about the
effect on

. In order to effectively represent Radware,

Irell would be expected to have learned and understood, among other things, (1) the terms of the
, (2) technical aspects of

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Irell argues that disqualification is not necessary because the technical subject matter of the
’802 Patent and the Radware patents asserted in this litigation are different, and
it received is now stale. Radware maintains that Irell has actually acquired, or would be

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as those relate to the ’802 Patent, and (3)

.

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and its

expected to have acquired, information that is still relevant to damages in the current litigation.
In connection with the 2007 representation concerning the
Radware believes that Irell acquired the following information:
•
. Meroz Decl., Ex. C.

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,

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Decl., Ex. B.
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For the Northern District of California

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Radware’s

In connection with the 2010 license audit, Radware alleges that Irell also learned about
Radware’s

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. Meroz
Decl., Ex. B.

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. Meroz

. Zhong Decl., Ex. 2.

Radware is especially concerned about the
for

information

because that information could be relevant to damages in this case. See Motion at

14; Reply at 5. Keeping in mind that Irell was tasked with helping Radware

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Irell would be expected to understand how important Radware believed the F5 ’802 patent

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was to

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showing that customers demanded the technology covered by the ’802 Patent. See Panduit Corp. v.

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Stahlin Bros. Fibre Works, 575 F.2d 1152, 1156 (6th Cir. 1996). In this situation, Irell’s duty of

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loyalty to A10 in this representation would conflict with its duty of confidentiality to Radware from

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its prior representation.

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. Irell could use that information to refute a lost profits claim by

Irell also would have been expected to acquire information relevant to a Georgia-Pacific
analysis. For example, Radware would have shared information about the
, its commercial success, and its current popularity (factor 8); the nature of the patented

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invention and its commercial embodiment (factor 10); the portion of the profit or selling price that

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may be customary in the particular business (factor 12); the portion of the realizable profit credited

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to the invention as distinguished from non-patented elements [or elements covered by other patents]

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(factor 13). See Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp. 1116, 1120

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(S.D.N.Y. 1970).

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Finally, Irell presumably would have had access to Radware’s key decision makers and how

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The court agrees with Radware that the two prior representations are substantially related to
the current case. The legal problems relating to the
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and its impact

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case, which include damages relating to

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with the damages period here. Irell also received information linking

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—overlap with the legal issues in the current
. Irell received

that overlap

. As discussed above, this information could be relevant to

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developing damages theories in the current case. Again, regardless of whether Irell actually acquired

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confidential information, they must be disqualified if their prior representation is substantially

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related to the current representation.

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Other concerns also support the motion to disqualify. In representing A10, Irell has agreed to

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zealously advocate for its client and owes a duty of loyalty to A10. It may be in A10’s best interests

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For the Northern District of California

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to see F5 succeed on its counterclaims against Radware. And, there is no question that Irell has

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confidential information relevant to F5’s counterclaims against Radware. However, Irell owes a

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duty a confidentiality to Radware. Although both parties agree that there is no evidence that Irell has

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assisted F5 in any way on the counterclaims, Irell is in a position where its duty of loyalty to a

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current client and duty of confidentiality to a former client may conflict. This is exactly what Rule

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3-310(E) is designed to avoid. None of this is to say that Irell has acted unethically or would intend

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to do so in the representation of A10. Both parties presented well-reasoned and carefully argued

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positions on the motion to disqualify. In the end, the court takes a different, broader view than Irell

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on what constitutes a “substantial relationship” and finds that the firm must be disqualified. 1

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The court briefly addresses Irell’s contention that Radware unduly delayed in bringing the motion to disqualify. It does
appear from Radware’s communication with Irell that one of Radware’s primary motivations in bringing the motion to
disqualify is Radware’s concern about F5’s counterclaims in the related case, which is not sufficient to disqualify Irell.
However, to overcome a motion to disqualify, the delay and prejudice to A10 must be extreme. Zador Corp., N.V. v.
C.K. Kwan, 31 Cal. App. 4th 1285, 1302 (1995) (quoting Western Continental Operating Co. v. Natural Gas Corp., 212
Cal. App. 3d 752, 763-64 (1989)). Irell has not shown that the delay and prejudice was extreme and nothing in
Radware’s actions suggested that it delayed for strategic reasons. A10 is also represented by Latham & Watkins, and
Radware has not moved to disqualify the Latham firm. Radware began communicating with Irell about the potential
conflict shortly after the initial CMC in this case. Sawyer Decl., Ex. H. These communications continued for some
months, with Radware maintaining that Irell should be disqualified. Irell has not shown undue or extreme delay.
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III. ORDER
For the reasons discussed above, the court GRANTS the motion to disqualify.

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Dated: March 5, 2014

_________________________________
RONALD M. WHYTE
United States District Judge

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United States District Court
For the Northern District of California

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