HDMI Licensing Administrator, Inc. v. Availink Inc.

Background

This case involves alleged trademark infringement and antitrust counterclaims. HDMI Licensing Administrator, Inc. alleged that Availink Inc. infringed its High-Definition Multimedia Interface trademark. Availink answered and alleged that HDMI Licensing Administrator restrained competition in the consumer-electronics HDMI market.

HDMI Licensing Administrator moved to disqualify King & Wood Mallesons LLP, which represented Availink. Attorneys in King & Wood’s Beijing office had previously represented HDMI Licensing Administrator in three matters. Those matters included collecting unpaid royalties and advising about an HDMI Specification Adopter Agreement under Chinese law, representing HDMI Licensing Administrator in a Chinese antitrust investigation and settlement, and advising HDMI Licensing Administrator about its business and the Adopter Agreement in a meeting with Chinese antitrust regulators.

King & Wood began representing Availink in the current case in 2023. Availink later asserted antitrust counterclaims and an affirmative defense challenging the legality of the same Adopter Agreement and related practices. HDMI Licensing Administrator filed its disqualification motion in January 2024.

Legal standard

The court applied California law under the Northern District of California’s professional-conduct rules. A lawyer generally may not represent a current client against a former client when the lawyer’s earlier work gave the lawyer confidential information material to the new matter. If the earlier and current representations are substantially related, the law presumes that the lawyer had access to relevant confidential information, and disqualification is required.

The court also addressed whether a conflict involving lawyers in one office is attributed to the entire firm. California law presumes that knowledge is shared among members of a law firm. A firm may rebut that presumption with an effective ethical screen—procedures designed to prevent confidential information from reaching the attorneys handling the new matter. The screen must be imposed promptly and must include preventative measures that effectively prevent information sharing.

Court’s analysis

The court first held that HDMI Licensing Administrator had not waived its right to seek disqualification. Although King & Wood appeared for Availink in March 2023, the court found that the conflict became clear when Availink filed antitrust counterclaims in September 2023 challenging the same agreement and practices involved in King & Wood’s earlier work. HDMI Licensing Administrator filed the motion in early January 2024. The court also found that Availink had not shown extreme prejudice from the timing because Availink had several other law firms representing it and the case still had time before the scheduled trial.

The court next found a substantial relationship between the earlier and current representations. King & Wood’s prior work involved antitrust matters concerning HDMI Licensing Administrator’s Adopter Agreement and related practices. Availink’s counterclaims and defenses likewise challenged that agreement and alleged anticompetitive conduct under United States antitrust law. Although the earlier matters involved Chinese law and the current claims involved United States law, the court found a reasonable possibility that confidential information learned during the earlier representation could be used against HDMI Licensing Administrator.

Finally, the court rejected Availink’s argument that the conflict should not extend from the Beijing attorneys to the New York attorneys handling the current litigation. King & Wood said it created an ethical screen in January 2024, after the firm had already become involved in the case and after it had filed Availink’s antitrust counterclaims. The court found that the screen was too late. It also found that the firm had not provided enough evidence of procedures preventing information sharing. The court noted that declarations from several Beijing attorneys who had represented HDMI Licensing Administrator were missing, and that the submitted declarations and statements about the offices operating independently did not eliminate the possibility that confidential information had been shared.

Disposition

The court GRANTS HDMI Licensing Administrator’s motion to disqualify King & Wood. It concludes that King & Wood is disqualified from representing Availink in this case. The court also sets a telephonic case-management conference for May 7, 2024, and directs the parties to file a joint case-management statement by April 30, 2024. The court directs the parties to be prepared to discuss whether successor counsel could permissibly pursue Availink’s antitrust counterclaims, given King & Wood’s role in researching and asserting them.