Free Answering Brief in Opposition - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE MICROSOFT CORPORATION, Plaintiff, v. ALCATEL BUSINESS SYSTEMS and GENESYS TELECOMMUNICATIONS LABORATORIES, INC., Defendant. C.A. No. 07-90-SLR

PLAINTIFF MICROSOFT CORPORATION'S OPPOSITION TO DEFENDANT ALCATEL BUSINESS SYSTEMS' MOTION TO DISQUALIFY FISH & RICHARDSON P.C., AND FOR OTHER SANCTIONS FISH & RICHARDSON P.C. Thomas L. Halkowski (#4099) 919 N. Market Street, Suite 1100 P.O. Box 1114 Wilmington, DE 19899-1114 Tel: (302) 652-5070 Fax: (302) 652-0607 E-Mail: [email protected] Ruffin B. Cordell Linda Liu Kordziel 1425 K Street N.W., Suite 1100 Washington D.C. 20005 Tel: (202) 783-5070 Fax: (202) 783-2331 E-Mail: [email protected] E-Mail: [email protected] John E. Gartman 12390 El Camino Real San Diego, CA 92130 Telephone: (858) 678-5070 Facsimile: (858) 678-5099 E-Mail: [email protected] DATED: September 17, 2007 Attorneys for Plaintiff Microsoft Corporation

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TABLE OF CONTENTS Page I. II. INTRODUCTION .............................................................................................................1 FACTUAL BACKGROUND............................................................................................3 A. B. C. III. The Acquisition Of The OXE System ...................................................................3 Initial Installation and Training on The Purchased OXE System..........................6 Mr. Lin Returned the Following Week to Complete His Installation of The Purchased OXE System...........................................................8

ARGUMENT...................................................................................................................10 A. B. Applicable Law....................................................................................................10 Rule 4.2 Does Not Apply to Communications with Mr. Lin...............................11 1. 2. Mr. Lin is not an employee of a "represented party" under Rule 4.2..........................................................................................11 Even if there is no corporate distinction between ABS and Alcatel USA, Mr. Lin is not a protected employee of a represented party under Rule 4.2 ..........................................................14 F&R Did Not Seek Admissable Evidence from Mr. Lin, and Mr. Lin's Statements Will Not Be Used as Admissions against ABS..........................................................................16 Rule 4.2 requires actual knowledge that Mr. Lin is represented by counsel.............................................................................18

3.

4. C.

F&R Did Not Violate Model Rule 4.3.................................................................19 1. Rule 4.3 Is Not Applicable To The Facts at Hand...................................19 a. b. 2. Rule 4.3 Is Not Implicated Here ..................................................19 Rule 4.3 Does Not Require Unnecessary Disclosure Here............................................................................20

Rule 4.3 Does Not Apply To Commercial Transactions .........................21

D.

F&R Did Not Make any Misrepresentations Under Rules 8.4(c) and 4.1..................................................................................................................22 i

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TABLE OF CONTENTS (cont'd) Page 1. ABS Misinterprets The Requirements of Rules 8.4(c) and 4.1......................................................................................................22 a. b. 2. There Is No Heightened Duty to Third Parties ............................22 Courts Have Recognized The Propriety Of Purchasing Accused Goods In The Open Market........................23

F&R complied with Rules 8.4(c) and 4.1 ................................................25 a. b. F&R made no misrepresentations................................................25 F&R's communications with Mr. Lin were typical customer-trainer interactions............................................28

E. F.

Rule 4.4 Does Not Apply in This Case................................................................29 ABS's Request for Sanctions Is Unfounded........................................................30 1. There Is No Proper Grounds For Disqualification...................................30 a. Disqualification of Counsel is a Severe Sanction that is Not Warranted under the Circumstances Present Here .................................................................................30 ABS's Arguments Based On the Model Rules Do Not Warrant Disqualification.................................................31

b. 2.

Disqualification of Microsoft's Expert is a Drastic and Unnecessary measure and ABS Has Not Proven That Mr. Jack Chang Should Be Disqualified..................................................33 F&R's Notes And Other Materials Regarding The Installation Of The OXE System Are Protected Work Product That It Should Not Have To Turn Over To ABS .......................35 Only Egregious Conduct Warrants Monetary Sanctions, And F&R's Conduct Was Never Improper .............................................36 ABS suffers no prejudice here. ................................................................37

3.

4. 5. IV.

CONCLUSION................................................................................................................38

ii

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TABLE OF AUTHORITIES Page(s) Cases Apple Corps Ltd. v. Int' l Collectors Soc' y, 15 F. Supp. 2d 456 (D.N.J.) ...................................................................... 21, 23, 24, 27, 32 Best Western Int' l, Inc. v. CSI Int' l Corp, No. 94 Civ. 0360 (LMM), 1995 U.S. Dist. LEXIS 12314, at *6 (S.D.N.Y. Aug. 22, 1995 ............................................................................................ 30, 33 Certain Switches And Products Containing Same, Inv. 337-TA-589, Order No. 6, 2007 ITC LEXIS 328 at *9-11 (Mar. 14, 2007) ........................................................................................................................... 10 Cobb Publ' n. v. Hearst Corp., 907 F. Supp. 1038 (E.D. Mich. 1995)............................................................................... 31 Cordy v. The Sherwin-Williams Co., 156 F.R.D. 575 (D.N.J. 1994)........................................................................................... 34 Eaton Corp. v. Rockwell Int' l Corp., No. 97-421-JJF, 1998 U.S. Dist. LEXIS 9742, at *3-4 (D. Del. Jun. 18, 1998) ................................................................................................................................. 34 EEOC v. Hora, Inc., No. 05-5393, 2007 WL 1875834, at *3 (3d Cir. Jun. 29, 2007)........................... 11, 15, 38 Elonex I.P. Holdings, Ltd., v. Apple Computer, Inc., 142 F. Supp. 2d 579 (D. Del. 2001)............................................................................ 10, 31 Faison v. Thornton, 863 F. Supp. 1204 (D. Nev. 1992).............................................................................. 36, 37 Gidatex v. Campaniello Imports, Ltd., 82 F. Supp. 2d 119 (S.D.N.Y. 1999)..................................................................... 24, 27, 32 Hammond v. Junction City, 167 F. Supp. 2d 1271 (D. Kan. 2001)............................................................. 30, 32, 36, 37 Hansen v. Umtech Industrieservice und Spedition, No. 95-516 MMS, 1996 WL 622557, at *6 (D. Del. Jul. 3, 1996)................................... 34 Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982).......................................................................................................... 23 Hill v. Shell Oil Co., 209 F. Supp. 2d 876 (N.D. Ill. 2002) .......................................................................... 16, 33 iii

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TABLE OF AUTHORITIES (cont'd) Page(s) In re Air Crash Disaster Near Roselawn, Indiana on October 31, 1994, 909 F. Supp 1116 (N.D. Ill. 1995) .................................................................................... 36 Kleiner v. First Nat' l Bank of Atlanta, 751 F.2d 1193 (11th Cir. 1985) ........................................................................................ 37 Michelson v. Merrill Lynch Pierce Fenner & Smith, Inc., 1989 U.S. Dist. LEXIS 3013 at *1-2 (S.D.N.Y. Mar. 28, 1989) ...................................... 35 Midwest Motor Sports v. Arctic Cat Sales, Inc., 347 F.2d 693(8th Cir. 2003) ............................................................................................. 27 Monsanto Co. v. Aetna Casualty & Surety Co., 593 A.2d 1013 (Del. Super. Ct. 1990) .............................................................................. 32 Niesig v. Team I, 558 N.E.2d 493 (N.Y. 1990)....................................................................................... 17, 25 Owen v. Wangerin, 985 F.2d 312 (7th Cir. 1993)............................................................................................. 34 Panduit Corp. v. AllStates Plastic Mfg, Co., Inc., 744 F.2d 1564 (Fed. Cir. 1984)......................................................................................... 10 Papanicolaou v. Chase Manhattan Bank, 720 F. Supp. 1080 (S.D.N.Y. 1989)............................................................................ 31, 32 Paris v. Union Pac. R.R., 450 F. Supp. 2d 913 (E.D. Ark. 2006).............................................................................. 15 Parker v. Pepsi-Cola, 249 F. Supp. 2d 1006 (N.D. Ill. 2003) .............................................................................. 37 Penda Corp. v. STK LLC, 2004 U.S. Dist. LEXIS 13577 at *2, *20 n.6 (E.D. Pa. July 16, 2004)...................... 35, 37 People ex rel. Dep' t of Corp. v. SpeeDee Oil Change Sys., Inc., 980 P.2d 371 (Cal. 1999) .................................................................................................. 30 Republic Servs. v. Liberty Mut. Ins. Co., 2006 U.S. Dist. LEXIS 77363, at *31-32 (E.D. Ky. Oct. 20, 2006)................................. 31 Syngenta Seeds, Inc. v. Monsanto Co., Civ. No. 02-1331-SLR, 2004 U.S. Dist. LEXIS 19817, at *4 (D. Del. Sept. 27, 2004) .................................................................................................................. 34 Talecris Biotherapeutics, Inc. v. Baxter Int' l, Inc., 491 F. Supp. 2d 510 (D. Del. 2007)...................................................................... 10, 11, 31 iv

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TABLE OF AUTHORITIES (cont'd) Page(s) Wang Labs. v. Toshiba Corp., 762 F. Supp. 1246 (E.D. Va. 1991) .................................................................................. 34 Statutes ABA Model Rule 1.7 .................................................................................................................... 13 ABA Model Rule 4.1 .................................................................................................................... 23 ABA Model Rule 4.4 .................................................................................................................... 29 D.C. Rule 4.3 ................................................................................................................................ 21 D.C. Rule of Professional Conduct 4.2 ............................................................................. 11, 13, 21 OTHER AUTHORITIES American Bar Association, A Legislative History: The Development of the ABA Model Rules of Professional Conduct, 1982-2005, at 542 (2006) .......................... 15 Annot'd Model R. Prof.'l Conduct at 400 (6th ed. 2007) ............................................................. 15 David B. Isbell & Lucantonia N. Salvi, " Ethical Responsibility of Lawyers for Deception by Undercover Investigators and Discrimination Testers: An Analysis of the Provisions Prohibiting Misrepresentation Under the Model Rules of Professional Conduct," 8 Geo . J. Legal Ethics 791, 817 (1995) ................................................................................................................................ 23 Geoffrey C. Hazard , Jr. and W . William Hodes , The Law of Lawyering, § 39.2 (3d. ed. 2003 ) ........................................................................................................ 19 Phillip Barengolts , "Ethical Issues Arising from the Investigation of Activities of Intellectual Property Infringers Represented by Counsel ," 1 NW. J. Tech. & Intell . Pro n . 47, 58 (2003 ) ............................................................................ 17, 29 Restatement of the Law Governing Lawyers .......................................................................... 16, 22

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Pursuant to Local Rule of the United States District Court for the District of Delaware 7.1.2(b), Plaintiff Microsoft Corporation (" Microsoft" ) respectfully submits this opposition to Defendant Alcatel Business Systems (" ABS" )' s Motion To Disqualify Fish & Richardson P.C. (" F&R" ), And For Other Sanctions. For the reasons detailed below, the evidence and the law do not support ABS' s eleventh-hour motion to create a meritless and distracting collateral dispute. ABS complains that Microsoft bought a sample of the accused system on the open market from third party suppliers. One of these third party suppliers employed a technician that ABS now claims as an employee. However, the facts clearly show that this technician is not an ABS employee but instead works for a distant sister company, and Microsoft did nothing other than to buy on the open market what ABS did not produce in discovery. Accordingly, this Court should deny ABS' s motion in its entirety. I. INTRODUCTION When there is no support in the facts or the law, the last resort of desperate litigants is to attack the other side' s lawyers. And that is exactly what ABS attempts to do through the present motion. The trial in the parallel case pending in the International Trade Commission (" ITC" ) is scheduled to begin on October 9, 2007. To distract Microsoft from preparing for the ITC trial, ABS filed this groundless motion in the ITC, as well as this Court, to disqualify F&R as trial counsel, disqualify Microsoft' s expert, pierce Microsoft' s work-product immunity, and impose other sanctions. There is one key problem however: none of ABS' s arguments supporting the motion has any merit. As to ABS' s allegation that F&R violated Rule 4.2 by improperly interacting with a party it knew to be represented by counsel in this action, there is no basis in fact or law. Indeed, Mr. Lin is not an employee of ABS; as his declaration indicates, he is an employee of Alcatel USA, which is not a party in this action. Interestingly, ABS has insisted on separating the various Alcatel-Lucent corporate entities when it suited its litigation goals, insisting on removing 1

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Alcatel-Lucent from this case, and substituting ABS as the proper defendant. But even if the corporate separation between Alcatel USA and ABS were a sham, Rule 4.2 nonetheless would extend only to individuals with control or authority over the litigation, a role that Mr. Lin certainly does not play. As to the argument that F&R violated Rule 4.3, which governs a lawyer' s contacts with unrepresented persons, ABS improperly ignores that Rule 4.3 aims to prevent an unrepresented person from being deceived to his disadvantage about the lawyer' s role, and that precedent excludes from the scope of the Rule any arms-length commercial transaction in which the firm acts as a customer, even if the transaction benefits a client. Rule 4.3 does not, as ABS contends, require F&R to tell the Mr. Lin that the firm was representing Microsoft in a lawsuit against ABS concerning these products. Indeed, it is undisputed that Mr. Lin treated the installation of the accused products at F&R and the training of F&R' s personnel as a routine transaction in the ordinary course of his business. ABS' s accusations of dishonesty and misrepresentation in violation of Rules 8.4 and 4.1 are of course without merit. Indeed, F&R made no misrepresentations whatsoever in connection with the purchase of the accused system, but instead acted in accordance with the prevailing case law which authorizes lawyers and their agents to investigate and gather evidence informally by means of garden-variety consumer transactions. In particular, the case law establishes that F&R may accept routine training and installation services, without having to disclose that the purchase occurred in connection with litigation against ABS. The applicable ethics rules thus permit a lawyer or investigator to seek services from employees of a corporate adversary on the same basis as the general public and observe how these employees act in the ordinary course of business. There is simply no legal obligation for F&R to announce why it was buying the system. ABS misreads Rules 8.4 and 4.1 to try to impugn F&R and its actions in this context. Because F&R did not violate any ethical rules, including Model Rules 4.1, 4.2, 4.3, 4.4 and 8.4(c), there is no basis whatsoever to disqualify F&R as counsel for Microsoft or impose any other sanction. Moreover, ABS has failed to demonstrate any prejudice resulting from 2

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F&R' s actions. To the contrary, the timing of ABS' s motion ­ more than seven weeks after ABS became aware that F&R personnel had spoken to Mr. Lin and just three business days prior to the due date for extensive prehearing briefs in the parallel ITC Investigation ­ belies any suggestion that its effort to deprive Microsoft of its longstanding counsel stems from any concern about prejudice to ABS. ABS' s delay, which ABS fails to explain or even acknowledge in its motion, is purely an act of gamesmanship, seeking to improperly distract this Court and the ITC from the merits of this case. At bottom, ABS' s motion is nothing more than an improper litigation tactic timed to disrupt Microsoft' s preparation for the trial scheduled to begin in the ITC on October 9, 2007. Such tactics, which in this case involve serious but unfounded allegations of misconduct by attorneys, should not be condoned. For these reasons, this Court should deny ABS' s motion in its entirety. II. FACTUAL BACKGROUND A. The Acquisition Of The OXE System

On February 16, 2007, Microsoft filed its initial Complaints in this Court and with the ITC alleging patent infringement based on four U.S. patents. After the filing of its complaints, Microsoft started the process of purchasing a complete OmniPCX Enterprise (" OXE" ) system in order to perform a full array of tests and thus provide this Court and the Commission with a full and complete evidentiary record. [Ex 7 at ¶ 4-5.]1 To do so, Microsoft' s counsel, Fish & Richardson P.C. (" F&R" ), requested the assistance of a third party company named Miercom to expedite the purchase. [Id. ¶ 4-5.] It, however, took much longer than anticipated to purchase the latest OXE system with the latest version of its software. [Id. ¶ 6.] By the time the ITC instituted its investigation on March 20, 2007 with Alcatel-Lucent as a named Respondent, the purchase was still in progress. [Ex 7 at ¶ 4.] To

Unless otherwise specified, " Ex __" refers to the Declaration of Thomas L. Halkowski in Support of Plaintiff Microsoft Corporation' s Opposition to Defendant Alcatel Business Systems' Motion to Disqualify Fish & Richardson P.C. and for Other Sanctions. 3

1

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ensure that there would be an OXE system for testing in the Investigation, Microsoft separately requested that Alcatel-Lucent produce " [o]ne sample of each version of each Accused Product" in its discovery requests to ABS2. [Ex. 1 (Mar. 23, 2007 Microsoft' s 1st Set of Req. for Prod.) at p. 6 (RFP No. 18).] Instead of responding to either Complaint, counsel for Defendant instead informed Microsoft that Alcatel-Lucent was not the proper named party in either this case or the ITC investigation, and that a separate French entity called Alcatel Business Systems should be substituted: As we have discussed this past week, Alcatel Lucent is not the proper party to the action Microsoft brought in the ITC and Delaware alleging infringement against the OmniPCX and OmniTouch Unified Communications Suite. Alcatel Lucent is a holding company that owns stock in various subsidiaries, but does not make any products, including those at issue in the recent actions filed by Microsoft. Instead, Alcatel Business Systems is the entity that makes the OmniPCX and OmniTouch Unified Communications Suite. To confirm the discussion we had earlier this week concerning the relationship between Alcatel Business Systems and Alcatel Lucent, Alcatel Business Systems is owned by Alcatel Participations. Alcatel Participations is owned by Compagnie Financiere Alcatel-Lucent, which is owned by Alcatel Lucent. So, you can see that Alcatel Lucent, the holding company you have named in both actions, is three steps from the company that makes and sells the accused products. [Ex. 2 (Apr. 13, 2007 Ltr. fr. Mr. Nelson to Mr. Colaianni) at 1 (emphases added).] Based on this representation, Microsoft moved to amend its Complaint in the ITC on April 19, 2007, and filed a proposed stipulation in this Court on April 20, 2007 that defendant need not respond to the initial Complaint. On May 30, 2007, Microsoft filed an amended Complaint in this Court to reflect the correct Defendant in this case, Alcatel Business Systems. While Microsoft' s motion to amend was pending in the ITC and over a month after service of Microsoft' s requests for production in the ITC, ABS responded to Microsoft' s request for production of an OXE system by indicating that it would only produce documents in

Plaintiff Microsoft and Defendant Alcatel Business Systems have agreed that discovery obtained in the ITC shall be available for use in this case. [D.I. 26 Scheduling Order.] 4

2

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response to this request. [Oppo. Ex. 3 (Apr. 23, 2007 Respondent' s Resp. to Microsoft' s 1st Set of Req. for Prod.) at 17 (Subject to and without waiving the foregoing objections, Respondent will produce any responsive, non-privileged documents in its possession, custody or control that are located after a reasonable search." (emphases added)).] Given ABS' s unilateral decision to only produce documents instead of an actual system, Microsoft proceeded with its plans to acquire an OXE system on the open market. On April 27, 2007, Miercom forwarded to Microsoft' s counsel a commercial offer for sale from Alliance Telecommunications (" Alliance" ), an authorized independent reseller, willing and able to sell the latest OXE hardware and software. [Ex 7 at ¶ 5; Ex. 4 (Apr. 20, 2007 Ltr fr. Alliance to Miercom re pricing proposal).] Alliance' s commercial sales offer covered the components of an OXE system, as well as time and labor to install the system and train someone to use the system:

[Ex 4 (Apr. 20, 2007 Ltr fr. Alliance to Miercom re pricing proposal) at 1.] As the offer noted, the OmniTouch software suite for use with the OXE system required proper installation and training, leading Alliance to state: " Because of this additional software, I had to increase my labor cost to cover my technician' time to install these packages and train the personnel who s will be using them." 3 [Id. (emphases added).] The Alliance offer directly stated that an Alliance technician ­ not an Alcatel technician ­ would install the system and train the system' s user. [Id.] Given this opportunity to acquire an OXE system on the open market, F&R placed an order on the same day it received Alliance' s offer for sale, making a deposit of about a third of the Such training appears to be customary with the purchase of an OXE system, as reflected in Mr. Lin' s own declaration: " As part of the installation of OXE and OTUC, I also provide training on the administration, use and configuration of the products." [Declaration of Poching Lin (" Lin Decl." ) at ¶ 7.] 5
3

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$26,387 purchase price with a check drawn on F&R' s bank account. [Ex. 7 at ¶ 5.] Delivery and installation of the phone system were unfortunately delayed repeatedly by Alliance. B. Initial Installation and Training on The Purchased OXE System

After repeated delays, Alliance finally confirmed that it would deliver and install the purchased OXE system on Tuesday June 26, 2007. On that date, Mr. Dan McGirr ­ one of Alliance' s technicians ­ came to F&R' s office with the components of the OXE system. [Ex 7 at ¶ 7.] Without any advanced notice to F&R and upon Alliance' s own initiative, another person-- Mr. PoChing Lin--accompanied Mr. McGirr. [Id.; Mtn. at 6 (acknowledging that Alliance requested assistance to avoid embarrassing installation problems).] By the time they announced themselves to the F&R receptionist, both Messrs. McGirr and Lin knew that the installation would take place within F&R' s office. [Mtn. at 7.] Ms. Elluru greeted Messrs. McGirr and Lin in the F&R lobby and escorted them to a secure case room where they needed to install the OXE system. [Ex 7 at ¶ 7.] The door of this secured room and the bookshelf inside were conspicuously labeled with signs stating:

[Ex 5 (pictures of signs).4] After situating Messrs. Lin and McGirr and exchanging pleasantries with them, Ms. Elluru provided each of them with her business card, which expressly identified her as an attorney for a law firm specializing in " Intellectual Property \ Litigation \ Corporate" :

4

" ALU" is a well-known acronym for Alcatel-Lucent, and is used as its stock ticker. 6

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[Ex 6 (Elluru Business Card).] To ensure that they could contact her that day in case they needed anything, Ms. Elluru further noted her direct extension on the business cards she gave them. [Ex 7 at ¶ 10.] In return, Messrs. McGirr and Lin gave to Ms. Elluru their respective business card, with Mr. Lin' s indicating an affiliation with Alcatel Internetworking, which is not a party to this action. [Lin Decl. Ex. C (Lin Business Card).] After Ms. Elluru left the secured room and returned to her office, either Mr. Lin or Mr. McGirr called her direct line a number of times to ask questions, indicating that they had reviewed the card she had given them. [Ex. 7 at ¶ 10.] As they continued their installation, they ran into numerous technical difficulties. [E.g., Lin Decl. ¶ 25 (noting technical problems).] As the technicians were troubleshooting the system, Ms. Elluru periodically checked on their progress. [Ex. 7 at ¶ 12.] On other occasions when Ms. Elluru was unavailable, Mr. Joshua Pond, one of her colleagues, intermittently came to the secured room to assess their progress. [Ex 8 at ¶ 4-5.]5 On such occasions, Mr. Pond introduced himself and exchanged pleasantries with the technicians. [Id. ¶ 4-5.] After three and a half days of installation and technical troubleshooting, the technicians represented that the OXE system was finally operational in the afternoon of Friday June 29, 2007. [Ex 7 at ¶ 14.] At that point, Messrs. Lin and McGirr proceeded with some training, as is customary with such installation and as specifically provided by the purchase agreement with

5

Ex. 8 Declaration of Joshua Pond In Support of Microsoft' s Opposition. 7

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Alliance. [Lin Decl. ¶¶ 5 & 7.] Mr. Lin began a demonstration on network administration and configuration for Ms. Elluru and Mr. Pond, with the demonstration turning into a conversation ­ similar to one Mr. Lin would have with any customer learning to operate the system ­ about the system' s operations and features. [Ex 7 at ¶ 13.] During his demonstration, Mr. Lin realized that multiple features ­ such as the telephones ­ were not operating properly and that the installation was far from complete. [Id. ¶ 14.] Because both technicians stated that they had to catch flights later that afternoon, they were unable to complete the troubleshooting that day. [Id. ¶ 14.] Because Alliance had contractually agreed to perform the installation and training, Ms. Elluru contacted Alliance to arrange for continued installation and training. [Id. ¶ 14.] C. Mr. Lin Returned the Following Week to Complete His Installation of The Purchased OXE System

Mr. Lin' s return, which Alliance apparently coordinated without consulting with F&R, occurred on Tuesday July 3, 2007, and not on Monday July 2, 2007 as Mr. Lin noted. [Lin Decl. ¶ 27 (stating that he returned on July 2); Ex. 7 at ¶ 15; Ex. 8 at ¶ 7.] Not only did Mr. Lin incorrectly recall his dates, he also mistakenly asserted that he spoke with Mr. Ahmed Davis, one of the F&R principals representing Microsoft in this litigation, " at some point, possibly on July 2, 2007." [Lin Decl. ¶ 28-29.] As Mr. Davis unequivocally states in his sworn declaration, he is certain that he had no contact with Mr. Lin, either on July 2 or on any other date. [Ex 9 at ¶ 5.]6 Perhaps Mr. Lin had memory lapses, or perhaps ABS needed to implicate someone other than an associate to buttress its motion. The fact nonetheless remains that Mr. Davis never even met or spoke with Mr. Lin. [Id. ¶5.] It is also a fact that Mr. Lin returned to F&R' s office on Tuesday July 3 to complete the installation of the system. [Ex 7 at ¶ 15.] Once the installation appeared to be completed, Mr. Lin discharged Alliance' s obligations to provide training by providing instructions to Ms. Elluru and Mr. Pond about various features of the OXE system, including the functionality of OTUC software applications, the configuration of the system, and the manner in which it performed call
6

Ex. 9 Declaration of Ahmed J. Davis In Support of Microsoft' s Opposition. 8

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routing. [Id. ¶ 13; Ex 8 at ¶ 7; Lin Decl. ¶ 30.] The information he provided to Ms. Elluru and Mr. Pond, including the user guides, was typical information which any purchaser of the OXE system would receive after paying over $26,000 for a functioning system. At no time did F&R personnel ask Mr. Lin about the pending lawsuit. [Ex 7 at ¶ 18; Ex 8 at ¶ 9.] They did not seek information covered by the attorney-client privilege or the work product doctrine, and they received none. [Ex 7 at ¶ 18; Ex 8 at ¶ 9.] Similarly, no one asked Mr. Lin anything about his purported role in the development or testing of the products by ABS, nor inquired about the past conduct of Mr. Lin or anyone else associated with these products. [Ex 7 at ¶ 18.] And certainly, F&R and Microsoft do not rely on any statements or acts or omissions by Mr. Lin as evidence in these proceedings. [Ex 7 at ¶ 21; Ex 8 at ¶ 12.] The evidence on which Microsoft relies is the independent analysis of its technical expert, Mr. Jack Chang. When Mr. Lin returned to complete his installation and troubleshooting of the OXE system on Tuesday July 3, Mr. Chang already had arrived in Washington D.C. to work on his initial expert report, which was due to be submitted on July 11, 2007. [Ex 7 at ¶ 15; Mtn. Ex. (Chang Opn. Rpt.).] Because Mr. Chang desired to perform his tests independently in order to develop his expert opinions, he had no contact with Mr. Lin. [Id.] For this reason, Mr. Lin had to wait in a conference room after he completed his installation, while Mr. Chang performed a number of tests on the OXE system. [Ex 7 at ¶ 15.] When the system required additional " debugging," Mr. Chang left the room before Mr. Lin returned to make additional adjustments to the equipment. [Id. ¶ 15.] The result of his own independent analysis and opinion appears in the expert report Mr. Chang submitted on July 11, 2007. [Mtn. Ex. 4 (Chang Opn. Rpt.).] Not only did he provide a detailed basis for his opinion, he clearly stated that he performed his tests on an OXE system located at F&R' s D.C. office. [Mtn. Ex. 4 at 24-25.] Thus, ABS and its counsel have known for almost two months that F&R had acquired a recent version of the OXE system before July 11, and that Mr. Chang had performed tests using this system. [See id.] Since installation and training services are customarily provided with these products, [Lin Decl. ¶ 7], ABS and its 9

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counsel were certainly on notice for more than seven weeks before filing this Motion to Disqualify that F&R personnel had received such services in connection with this litigation. ABS' s motion does not explain this delay, preferring hyperboles and exaggerations to the facts and law. III. ARGUMENT A. Applicable Law

As a matter of policy, the Federal Circuit reviews procedural matters that are not unique to patent matters under the law of the particular regional circuit court where appeals from the district court would normally lie. Panduit Corp. v. AllStates Plastic Mfg, Co., Inc., 744 F.2d 1564 (Fed. Cir. 1984). Accordingly, Third Circuit law applies to the present motion for disqualification. Disqualification of counsel is a " severe sanction" ; as such, motions to disqualify are generally disfavored by the courts. See Elonex I.P. Holdings, Ltd., v. Apple Computer, Inc., 142 F. Supp. 2d 579, 581, 583 (D. Del. 2001); see also Talecris Biotherapeutics, Inc. v. Baxter Int' l, Inc., 491 F. Supp. 2d 510, 513 (D. Del. 2007). In fact, courts are skeptical of such motions because they are " frequently filed as dilatory tactics intended to divert the litigation from attention to the merits." Elonex, 142 F. Supp. at 584 (citation omitted). The moving party " must clearly show that continued representation would be impermissible" under the Model Rules of Professional Conduct, which the District of Delaware has adopted. See Elonex, 142 F. Supp. 2d at 581; Talecris, 491 F. Supp. 2d at 513. " [V]ague and unsupported allegations" are insufficient to carry this burden of proof. Elonex, 142 F. Supp. 2d at 581. The court must first determine whether the Model Rules have been violated and, if so, whether disqualification is an appropriate sanction for such a violation. Id. Disqualification is never automatic even if an ethical rule has been violated. Id. at 583; Talecris, 491 F. Supp. 2d at 513. Further, this district has embraced a balancing test announced by the Third Circuit to determine the appropriateness of disqualification of an attorney: 10

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[T]he court should disqualify an attorney only when it determines, on the facts of a particular case, that disqualification is an appropriate means of enforcing the applicable disciplinary rule. It should consider the ends that the disciplinary rule is designed to serve and any countervailing policies, such as permitting a litigant to retain counsel of his choice and enabling attorneys to practice without excessive restrictions." See Talecris, 491 F. Supp. 2d at 514. Relevant factors here are (1) the client' s interest in retaining the attorney whose disqualification is sought, and (2) the court' s interest in protecting the integrity of judicial process and public confidence in the judicial system. In EEOC v. Hora, Inc., the Third Circuit called disqualification of counsel a " draconian measure" that was unwarranted in circumstances even where plaintiff' s counsel had contact with a low-level employee of the opposing party, a corporation. See Hora, No. 05-5393, 2007 WL 1875834, at *3 (3d Cir. Jun. 29, 2007) (unpublished). There, the employee was the administrative assistant to a high-level manager and part-owner, and funneled plaintiff' s counsel information she had access to due to her employment. Hora, 2007 WL 1875834, at *5-25. The district court had disqualified counsel for violation of Model Rule 4.2, inter alia, as adopted by Pennsylvania. Reversing the district court, the Third Circuit held that Rule 4.2 was not violated by such contact since (a) the employee was not a represented person per Rule 4.2 and (2) even if she were a represented person per 4.2, the company had not demonstrated prejudice because it conceded all the information that the employee gave plaintiff' s counsel was produced during discovery. Id. at *1-3. B. Rule 4.2 Does Not Apply to Communications with Mr. Lin 1. Mr. Lin is not an employee of a "represented party" under Rule 4.2

Rule 4.2 does not apply here for at least three reasons: (i) Mr. Lin is not an employee of a party to this litigation; (ii) ABS' s counsel is not representing Mr. Lin' s employer in this litigation; and (iii) ABS misrepresents D.C. Rule of Professional Conduct 4.2(b). First, Rule 4.2 is inapplicable here because Mr. Lin is not an employee of ABS, the only named defendant in this action. Although ABS tries to obscure the identity of Mr. Lin' s

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employer,7 he is not an employee of ABS. As Mr. Lin admits in his declaration, he is an employee of Alcatel USA, Inc. (" Alcatel USA" ), which is not a named defendant in this action. [D.I. 15 (First Amended Complaint).] Certainly, Latham & Watkins, ABS' s counsel, has not entered an appearance on behalf of Alcatel USA in this case. That Mr. Lin is an employee of Alcatel USA (instead of ABS) is a very important distinction that completely disposes of ABS' s arguments under Rule 4.2, because this Rule only applies to a represented party. [Ex 10 at ¶ 13; 8 Ex 11 at ¶ 18(a) at 7.]9 While ABS is indeed a defendant and party in this case, Alcatel USA is not a defendant and party in this case. ABS should not be allowed to blur these corporate distinctions, especially when it has relied on these distinctions to its benefit. For example, Microsoft identified Alcatel-Lucent as the Defendant in the original complaint filed in this case. Shortly after institution, Latham & Watkins sought to substitute ABS for Alcatel-Lucent as the Defendant, representing that AlcatelLucent is " three steps from the company that makes the accused products." [Oppo. Ex. 2 (Apr. 13, 2007 Ltr. fr. Mr. Nelson to Mr. Colaianni) at 1.] According to representations made by Latham & Watkins, Alcatel-Lucent is a holding company that owns Compagnie Financiere Alcatel-Lucent, which owns Alcatel Participations, which in turn owns ABS, a French corporation. [Id.] Not only is Alcatel USA outside of this chain of ownership, it is in fact a U.S.

ABS refers to itself in the motion papers as " Alcatel," [Mtn. at 1], and then proceeds to describe Mr. Lin as a " Alcatel engineer," [See, e.g., id. at 2, 7, 8], and an " Alcatel employee." [See, e.g., id. at 8.] ABS' s expert likewise adopts this usage. [Morgan Decl. ¶ 5b.] 8 Ex. 10 Declaration of Bruce Green In Support of Microsoft' s Opposition. Professor Green, is the Stein Professor of Law at Fordham University School of Law, where he directs the Louis Stein Center for Law and Ethics. Among his other distinctions, Professor Green has chaired the New York State Bar Association' s Committee on Professional Ethics and the American Bar Association Litigation Section' s Committee on Ethics and Professionalism. 9 Ex. 11 Declaration of W. William Hodes In Support of Microsoft' s Opposition. Prof. Hodes is Professor Emeritus of Law at the Indiana University School of Law, where he taught legal ethics for twenty years. He is the co-author, with Professor Geoffrey C. Hazard, Jr., of a treatise on legal ethics and related subjects. He served as a member of the Advisory Council to the Ethics 2000 Commission, a task force of the American Bar Association that proposed significant revisions to the Model Rules of Professional Conduct, 12

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subsidiary of Alcatel-Lucent, which is, as ABS' s counsel admits, at least several steps removed from ABS. [Id.] Second, neither Alcatel USA nor Mr. Lin is deemed to be represented by Latham & Watkins merely because that firm represents ABS in this action. [Ex 10 at ¶ 13 (" The fact that one member of a corporate family is represented by counsel does not mean that other members of the same corporate family are also represented for purposes of Rule 4.2." ).] It is indeed well settled that " [a] lawyer who represents a corporation or other organization does not, by virtue of that representation, necessarily represent any constituent or affiliated organization, such as a parent or subsidiary." ABA Model Rule 1.7, Comment [34].10 Third, ABS' s expert misinterprets D.C. Rule of Professional Conduct 4.2(b) ­ which ABS' s expert notes does not appear in the Model Rule or Delaware Rule 4.2 ­ when it asserts that F&R was required to inform Mr. Lin that the firm was representing Microsoft in this action. [Morgan Decl. ¶6(f).] Because Mr. Lin' s employer, Alcatel USA, is not a party in the case, D.C. Rule 4.2 (b) authorized F&R to speak with him without any notice to Latham & Watkins or any disclosure whatsoever. Indeed, the Rule expressly permits a lawyer to communicate with a nonparty employee of an organization without the prior consent of the organization' s counsel: During the course of representing a client, a lawyer may communicate about the subject of the representation with a nonparty employee of an organization without obtaining the consent of that organization' s lawyer. If the organization is an adverse party, however, prior to communicating with any such nonparty employee, a lawyer must disclose to such employee both the lawyer' s identity and the fact that the lawyer represents a party that is adverse to the employee' s employer. D.C. Rule 4.2 (b) (emphases added). Contrary to ABS' s assertions, D.C. Rule 4.2(b) requires a lawyer to disclose his identity and the fact that his client is adverse to the employer, if, and only if, that employer is an adverse party in the matter. Since Mr. Lin' s employer, Alcatel USA, is not adverse to Microsoft in the pending litigation, no such disclosure was required. As a result, a lawyer who represents a parent company may oppose a subsidiary of that company in an unrelated matter. Annotated Model Rules of Professional Conduct 126 (6th ed. 13
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At bottom, ABS and Alcatel USA are separate corporate entities, organized under the laws of different countries, and located on different continents. Based on the representations made by Latham & Watkins, it was certainly F&R' s understanding that ABS, Alcatel-Lucent, and Alcatel USA are separate corporate entities. ABS should not be allowed to ignore these corporate distinctions to further its litigation purposes.11 2. Even if there is no corporate distinction between ABS and Alcatel USA, Mr. Lin is not a protected employee of a represented party under Rule 4.2

In arguing that Mr. Lin (an Alcatel USA employee) is also an ABS employee, ABS appears to be taking the position that the corporate structure between ABS and Alcatel USA is in fact a sham. If it were indeed a sham and assuming that Mr. Lin were an ABS employee (which he is not), Rule 4.2 still would not apply because he is not a protected employee under Rule 4.2. ABA Model Rule 4.2 prohibits an attorney from communicating directly with a person whom the lawyer knows to be represented by counsel: In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do by law or a court order. ABA Model Rule 4.2. The issue becomes, who is the " person" for the purposes of a large corporation. The rule does not, however, bar communications with all employees of a represented corporation. In the case of a represented corporation, Rule 4.2 only bars communications with an employee of the corporation who (1) who supervises, directs or regularly consults with the organization' s lawyer concerning the matter or (2) who has authority to obligate the organization with respect to the matter or (3) whose act or omission in connection

2007) (" The majority rule is that there is no per se prohibition against undertaking a representation that is adverse to an affiliate of a corporate client." ) 11 If ABS is indeed taking the position that ABS, Alcatel-Lucent, and Alcatel USA are not separate corporate entities for the purposes of Rule 4.2 (e.g., such that an employee of Alcatel USA is an employee of ABS), then ABS should not be allowed to argue that the acts of Alcatel USA cannot be imputed to ABS for other purposes. Stretched to its logical conclusion, ABS' s argument would compel the immediate addition of Alcatel USA as a co-defendant. 14

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with the matter may be imputed to the organization for purposes of civil or criminal liability. ABA Model Rule 4.2, cmt. 7; see Hora, 2007 WL 1875834 at *1-3 (admistrative assistant to high-level manager and part owner was not represented person of company under Rule 4.2). Mr. Lin does not, however, fit within any of these categories. Certainly, ABS does not rely on option (1) or (3) in its motion. [Mtn. at 19-20.] ABS even tacitly concedes that Mr. Lin does not supervise, direct or consult with Latham & Watkins in this litigation, and that his acts or omissions may not be imputed to ABS for liability. [Mtn. at 7-8, 19-20; Lin Decl. ¶¶ 3-5.] Relying instead on option (2), ABS argues that Mr. Lin has authority to obligate ABS with respect to the matter in dispute because his statements might be admissible against ABS under the hearsay rules. [Mtn. at 19-20.] ABS' s argument is wholly without merit. The ABA adopted the current Comment [7] to Rule 4.2 in 2002, precisely to foreclose the overbroad interpretation now argued by ABS. [Ex 10 at ¶ 12-16; Ex 11 at ¶ 18(a) at 6-7.] The ABA' s published commentary on the Model Rules confirms this fact: The original formulation, which included `any other person . . . whose statements may constitute an admission on the part of the organization,' had proved too broad and potentially open-ended; it had been read to prohibit communication with anyone whose testimony would be admissible against the organization as an admission with anyone whose testimony would be admissible against the organization as an exception to the hearsay rule. Annot' d Model R. Prof.' l Conduct at 400 (6th ed. 2007), citing American Bar Association, A Legislative History: The Development of the ABA Model Rules of Professional Conduct, 19822005, at 542 (2006); see also, e.g., Paris v. Union Pac. R.R., 450 F. Supp. 2d 913, 915 (E.D. Ark. 2006) (noting that, since 2002, Model Rule 4.2 no longer bars ex parte communications with an employee whose statements could be admissible against the organization). The current test under Rule 4.2 " is not whether the employee' s statements may subsequently be admissible against the company but whether they would be binding admissions-- the functional equivalent of stipulations that the company may not contradict." [Ex 10 at ¶ 16.] Individuals can " obligate" ABS with respect to this matter only if they have the authority to make binding decisions regarding its the pending litigation, by, for example, entering 15

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into a stipulation, settlement or other agreement on behalf of ABS. [Ex 10 at ¶ 16; Ex 11 at ¶ 18(a).]12 Even the Restatement of the Law Governing Lawyers, for which Professor Morgan served as Associate Reporter, [Morgan Decl. ¶ 2(b)], squarely contradicts the statement in his declaration that the authority to " obligate" a company (in the language of Comment [7]) or to " bind" a company (in the language of the Restatement) is synonymous with the ability to make an out-of-court statement that is admissible against the company. [Morgan Decl. ¶ 6(d); Ex 10 at ¶ 17.] Section 100 of the Restatement clearly states that there is no prohibition on contacting an employee whose statement, though admissible, may be impeached or contradicted by the employer. Restatement (Third) of the Law Governing Lawyers §100, cmt. e (2000). Thus, F&R was at liberty to communicate with Mr. Lin because he could not " obligate" ABS within the meaning of Rule. 4.2. 3. F&R Did Not Seek Admissable Evidence from Mr. Lin, and Mr. Lin's Statements Will Not Be Used as Admissions against ABS

Even accepting for the sake of argument that ABS' s erroneous interpretation of Rule 4.2 were correct, there is no violation of the rule here, because none of Mr. Lin' s statements will be offered as evidence against ABS in the pending lawsuits.13 As summarized in Hill v. Shell Oil Co., 209 F. Supp. 2d 876, 880 (N.D. Ill. 2002) " [i]f plaintiff does not intend to enter the

Rejecting ABS' s overbroad interpretation, the District of Columbia has adopted an even more detailed comment on the subject: " The rule does not prohibit a lawyer from communication with employees of an organization who have the authority to bind the organization with respect to matters underlying the representation if they do not also have the authority to make binding decisions regarding the representation itself. A lawyer may therefore communicate with such persons without first notifying the organization' s lawyer." D.C. Rule 4.2, cmt. 4. 13 The facts here are in direct contrast to Inorganic Coatings v. Falberg, 926 F.Supp. 517 (E.D. Pa. 1995), cited by ABS at pages 26-27, in which plaintiff' s counsel was disqualified after the defendant contacted him and spoke to him ex parte about " numerous matters pertinent to litigation." Id. at 520. The Pennsylvania court found that the defendant' s discussion " of the merits of the impending lawsuit" with plaintiff' s counsel ex parte would " severely prejudice" the other defendants. Id. In direct contrast, the F & R attorneys did not speak to a represented party in this matter. Moreover, ABS neither alleges that the F & R attorneys had any discussions with Mr. Lin concerning matters pertinent to litigation nor has ABS established any prejudice, much less " severe prejudice," as a result of the customer type discussions that did take place. 16

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employee' s statements as evidence of the employer' s admission, then Rule 4.2 is not implicated and plaintiff is free to have informal contact with non-managerial employees." 209 F. Supp. 2d 876, 879 (E.D. Ill. 2002). Contrary to ABS' s assertions, F&R' s communications with Mr. Lin were not interviews or interrogations. [Mtn. at 8, 18.] They were for the purpose of getting the system to work, so that it could be examined and tested by Microsoft' s expert and used by the attorneys themselves. The point was not to elicit evidence from Mr. Lin; it was to obtain a fully operational system, with a few trained users. Cf. Niesig v. Team I, 558 N.E.2d 493, 1034 (N.Y. 1990) (permitting communications with employees of corporate opponent and endorsing them as " off-the-record private efforts to learn and assemble, rather than perpetuate, information" ) (New York' s analogue to Model Rule 4.2). F&R' s questions would have been no different if the installer or trainer had been an Alliance employee, as F&R had been led to expect. ABS' s expert concedes that it was permissible for F&R to obtain an ABS system and to " talk to a random Alcatel employee during installation." [Morgan Decl. ¶ 6b.] That is precisely what F&R did. It was Alliance ­ not F&R ­ that solicited Mr. Lin' s participation in the installation and training. [Intal Decl. ¶¶ 4-6.] Overseeing the installation of equipment and learning to use it, even by attorneys, is a far cry from seeking an improper advantage by circumventing opposing counsel and communicating directly with an adverse party. 14 The questions that F&R attorneys posed to Mr. Lin merely addressed issues any user of the system would like to know, such as how the system operates. [Ex 7 at ¶ 13.] Even Mr. Lin admits that these questions called for information that ABS Indeed, the very article that ABS cites for condemnation of such conduct actually concludes that it is perfectly permissible for attorneys in intellectual property infringement matter to undertake routine consumer transactions involving the infringing products. See Phillip Barengolts, " Ethical Issues Arising from the Investigation of Activities of Intellectual Property Infringers Represented by Counsel," 1 NW. J. Tech. & Intell. Prop. 47, 58 (2003) (concluding that the ethics rules permit a lawyer or investigator in an intellectual property matter to seek services from employees of a corporate adversary on the same basis as the general public and observe how these employees act in the ordinary course of business, provided that the lawyer does not trick them into doing or saying anything that they would not otherwise do or say). 17
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provides to its customers, and he answered them accordingly. [Lin Decl. ¶ 27.] Nothing in F&R' s routine customer service/tech support communications with Mr. Lin impaired the proper functioning of the justice system by intruding into ABS' s attorney-client relationship or obtaining uncounselled disclosures about the representation itself or the event underlying it. [Ex 10 at ¶ 19]. Rule 4.2 draws the line as it does precisely because " there is not a sufficiently compelling public interest to justify shutting down informal access to individuals such as Mr. Lin, who may have some relevant information but who do not speak for the company." [Id.] 4. Rule 4.2 requires actual knowledge that Mr. Lin is represented by counsel

Furthermore, Rule 4.2 does not apply because F&R did not have actual knowledge that Mr. Lin is represented by counsel. Rule 4.2 applies only when a lawyer " knows" that the person is represented. ABA Model Rule 4.2, cmt. 8 (" The prohibition on communications with a represented person only applies in circumstances where the lawyer knows that the person is in fact represented in the matter to be discussed. This means that the lawyer has actual knowledge of the fact of the representation. . . ." ) F&R had, and still has, no reason to believe ­ let alone the actual knowledge required by Rule 4.2 ­ that Mr. Lin was or is represented by counsel in connection with the pending litigation. Nothing in the submissions to date suggests that a professional services engineer responsible for installing and explaining ABS' s products was consulting with ABS' s counsel in the litigation, had authority to settle or otherwise bind ABS with respect to the litigation, or had undertaken acts that could result in liability for ABS in the litigation. [Ex 10 at ¶ 14.] That Mr. Lin' s business card showed him to be associated with Alcatel Internetworking, which is not a party in this action, only reinforces the reasonableness of F&R' s belief that he was not represented in connection with the pending dispute. Recall, as well, that Alliance had made affirmative representations to F&R that its technicians would be performing the installation. Based on Mr. Lin' s declaration that he is employed by Alcatel USA, which is a third party to this

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action, F&R still has neither actual knowledge nor reason to believe that prior permission from Latham & Watkins was necessary or appropriate. C. F&R Did Not Violate Model Rule 4.3

Perhaps recognizing that its arguments under Rule 4.2 lack merit, ABS argues alternatively that Rule 4.3, which governs a lawyer' s dealings with unrepresented persons, applies to Mr. Lin as an " unrepresented party." 15 Again, ABS' s accusations are meritless. 1. Rule 4.3 Is Not Applicable To The Facts at Hand a. Rule 4.3 Is Not Implicated Here

Rule 4.3 is intended to prevent overreaching by restricting the ability of a lawyer to manipulate or take unfair advantage of a lay party. See Geoffrey C. Hazard, Jr. and W. William Hodes, The Law of Lawyering, § 39.2 (3d. ed. 2003). Here, however, F&R did not overreach, manipulate or take unfair advantage of Mr. Lin when it allowed him to do his job by providing the same services that he would furnish to any purchaser of the OXE/OTUC. That these customers were lawyers did not change what he would or would not have said to another customer upon request. An employee who is simply doing his job, as he would for any other non-lawyer customer, is by definition not being taken advantage of within the meaning of the Rule. [Ex 10 at ¶ 30.] Mr. Lin, of course, was in no way prejudiced by doing the job that he was paid to do. Despite ABS' s dramatic references to " improper interrogations," [Mtn. at 18], Mr. Lin' s declaration takes a far more benign view: he installed and helped configure the system, did some trouble-shooting, answered questions about the system' s capabilities, and provided the user manuals-- exactly as he does in other installation projects. [Lin Decl. ¶¶ 1-35.] He has not been In doing so, ABS tacitly admits that Rule 4.2 does not apply to Mr. Lin as a " represented party" because Mr. Lin must be either one or the other ­ he cannot be both. Moreover, ABS fails to explain how it even has standing to object to F&R' s communications with an individual whom ABS does not employ. [Ex 10 at ¶ 13 (given that Lin was not employed by ABS, it seems doubtful that ABS can have standing to complain about F&R' s interactions with him or use them to justify a request for sanctions).] 19
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sued, and there has been no suggestion that he has suffered any disadvantage. [Ex 11 at ¶ 18(b).] Not surprisingly, Mr. Lin is not the one complaining about his encounter with the F&R lawyers. Since the rule is intended for his benefit, and not for the protection of a litigant, ABS would not be entitled to any equitable relief, such as the remedies that it seeks, even if there had been a violation of the rule. [Ex 11 at ¶ 18(b).] b. Rule 4.3 Does Not Require Unnecessary Disclosure Here

Despite the import of the Rule, ABS insists that Rule 4.3 requires a lawyer to make reasonable efforts to correct the misunderstanding of an unrepresented person whom the lawyer knows or reasonably should know misunderstands the lawyer' s role in the matter. [Mtn. 21-23.] ABS' s reliance is again misplaced. Contrary to ABS' s assertions, Rule 4.3 does not require F&R to tell the installers of the OXE system that F&R was representing Microsoft in a lawsuit against ABS concerning these products. Neither Mr. Lin nor Mr. McGirr misunderstood F&R' s " role" within the meaning and intention of Rule 4.3. Mr. Lin did not believe that F&R might be acting in his interests or might be disinterested with respect to a transaction to which it was a party, that he could repose confidences in the lawyers, or that he could rely on them for legal advice or information. Instead, both appeared to know that the law firm had purchased a product, and was therefore on the " opposite side" from ABS. F&R did not present itself as " disinterested" in this transaction; it was obviously the counterparty. [Ex 10 at ¶ 27-31.] Nor was F&R required to tell Mr. Lin that it made the purchase for the purpose of benefiting its client, Microsoft. Per Comment [2] to Rule 4.1, undertaking a transaction on behalf of an undisclosed principal does not result in a misleading statement or omission of material fact, unless it doing so would constitute fraud as a matter of substantive law. [Ex 10 at ¶ 28.] D.C.' s version of Rule 4.3 is even more permissive than its ABA counterpart, and imposes no disclosure obligations on F&R with respect to Mr. Lin because F&R was not giving him legal advice. The purpose of the D.C. Rule is to require that a lawyer tell an unrepresented 20

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person to whom he is giving legal advice that he represents a client in the same matter. See D.C. Rule 4.3(a) and Comment [2] (" A lawyer is free to give advice to unrepresented persons whose interests are not in conflict with those of the lawyer' s client, but only if it is made clear that the lawyer is acting in the interests of the client." ). The lawyer' s duty to disclose is triggered only if he actually gives legal advice to the unrepresented individual. See Comment [2] to D.C. Rule 4.2 (" Thus, the lawyer should not represent to such persons[i.e. unrepresented persons whose interests do not conflict with those of the lawyer' s client and to whom the lawyer has given advice], either expressly or implicitly, that the lawyer is disinterested." ) F&R therefore had no obligation to tell Mr. Lin about its representation of Microsoft because the firm was receiving services from him, rather than giving him any legal advice. Indeed, F&R' s duty to represent Microsoft and obtain a working system would have been inconsistent with any such disclosure. 2. Rule 4.3 Does Not Apply To Commercial Transactions

Moreover, Rule 4.3 does not apply to an arms-length commercial transaction in which the firm acts as a customer, even if the transaction benefits a client. This is precisely the conclusion that the court reached in Apple Corps Ltd. v. Int' l Collectors Soc' y, 15 F. Supp. 2d 456 (D.N.J.), when it refused to impose sanctions on a law firm based on its routine consumer inquiries to unrepresented employees of its litigation adversary. See 15 F. Supp. 2d 456, 476 (D.N.J. 1998). In Apple Corps, lawyers and employees of the firm, acting as purchasers, telephoned the company to purchase Beatles stamps in order to obtain evidence that the company was violating a court order prohibiting such sales. The court concluded that the lawyers were not acting in their capacity as lawyers when they called the seller to inquire about ordinary consumer transactions. Id. (" Plaintiffs' counsel and investigators in testing compliance were not acting in the capacity of lawyers. ... RPC 4.3 does not apply to straightforward transactions undertaken solely to determine compliance in accordance with Rule 11 of the Federal Rules of Civil Procedure, the existence of a well-founded claim." ) Like their counterparts in Apple Corps, the F&R attorneys, although acting for the benefit of a client, were engaged in a straightforward 21

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business transaction in order to acquire the materials needed to prepare their case. [Ex 10 at ¶ 29.] Even the Restatement, for which Professor Morgan was one of the Associate Reporters, explicitly states that the corresponding Restatement provision applies only if dissembling about the lawyer' s status is " to the prejudice of the nonclient," and failure to correct an evident misapprehension on that score would " materially prejudice the nonclient." Restatement of the Law Governing Lawyers §103. [Ex 11 at ¶ 18(b).] Accordingly, there is no basis for ABS or its expert to assert a violation of Rule 4.3. D. F&R Did Not Make any Misrepresentations Under Rules 8.4(c) and 4.1.

Equally untenable is ABS' s outrageous contention that F&R' s informal customer contacts with Mr. Lin constituted " conduct involving dishonesty, fraud, deceit or misrepresentation," in violation of Rule 8.4(c), or " knowingly mak[ing] a false statement of material law or fact to a third person" in the course of a representation, in violation of Rule 4.1(a). As discussed below, F&R followed the law in all respects and misrepresented absolutely nothing in connection with the purchase. F&R acted in accordance with case law, which authorizes lawyers and their agents to investigate and gather evidence informally by means of garden-variety consumer transactions. [Ex 10 at ¶ 21, 24-26; Ex 11 at ¶ 18(c) at 10.] 1. ABS Misinterprets The Requirements of Rules 8.4(c) and 4.1

ABS misconstrues the purpose and effect of Rule 8.4(c) and Rule 4.1 to support its groundless claim that F&R' s attorneys acted dishonestly. To accuse a lawyer of dishonesty is a serious thing, and ABS' s allegations are unfounded, irresponsible and in conflict with the authorities interpreting these rules. a. There Is No Heightened Duty to Third Parties

The rules do not, as ABS contends, impose on lawyers a heightened disclosure duty to third parties. [Ex 10 at ¶ 22.] Rule 8.4(c) is intended to ensure that lawyers maintain the level of integrity expected of members of the profession in dealings on their own behalf of on behalf of 22

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clients. Conduct violates Rule 8.4(c) only if it is punis