Rachel,
Thank you for flagging this as promptly as you did. I've now had a chance to review your email from this morning in full, including your summary of the proposed MTDC engagement and the Round 1 conflicts search results from Colleen Farrow's team. I want to lay out the Pinnacle relationship in some detail, because I think once you see the full picture, you'll agree that this presents a serious problem — one that likely cannot be managed through screening or consent.
**The Pinnacle Engagement — Scope and Current Status**
Calderwood & Harkness has represented Pinnacle Workforce Analytics, Inc. continuously since 2019. The active matter is C&H Matter No. 1031-00001, a patent-licensing and enforcement action related to Pinnacle's flagship biometric workforce-management platform, TruScan 360. We filed suit on Pinnacle's behalf against Veritas Biometrics Corp. in the U.S. District Court for the Eastern District of Virginia (Case No. 1:22-cv-01533) on September 6, 2022. This is not a dormant file — Discovery is ongoing, depositions are scheduled through the summer, and we are actively preparing claim-construction briefing. The matter is very much alive.
Pinnacle is a significant client for the firm. FY 2023 billings on this matter alone were approximately $2,137,500. Pinnacle's General Counsel, Sandra Yee, and CEO, Gregory Harmon, are both closely engaged with us on strategy. I serve as relationship partner and billing partner for all Pinnacle matters, and our lead associate is Priya Subramaniam.
**Confidential Information in the Firm's Possession**
This is where the issue becomes especially acute. Over the course of the patent-enforcement litigation, we have received and reviewed extensive categories of Pinnacle's confidential and proprietary information bearing directly on TruScan 360. These include:
- **Technical specifications** of the TruScan 360 platform in granular detail; - **Source-code architecture summaries** detailing how the biometric-recognition algorithms function; - **Data-flow diagrams** showing how biometric data — fingerprint, facial-geometry, and iris-scan data — is collected, processed, stored, and transmitted within TruScan 360; - **Biometric-data retention policies** — Pinnacle's internal policies governing how long biometric data is retained, under what conditions it is purged, and the technical mechanisms for retention and deletion; - **Algorithm design documents** related to the core biometric-recognition capabilities; and - **Patent-prosecution correspondence** bearing on the scope and design of the patented technology.
Rachel, this information maps directly onto the very issues at the center of the MTDC matter you've described. The Illinois AG's Civil Investigative Demand (Ref. No. CRB-2024-0417) and the employee class action both concern TruScan 360's biometric-data collection, storage, and dissemination practices under BIPA (740 ILCS 14/1 et seq.). Representing MTDC would place the firm in a position where our intimate knowledge of Pinnacle's confidential technical architecture could inform — or at a minimum appear to inform — the litigation strategy against Pinnacle. That is precisely the scenario the duty of confidentiality is designed to prevent.
**Fundamentally Inconsistent Legal Positions**
Beyond the confidentiality concerns, the substantive legal positions are irreconcilable.
In the Pinnacle v. Veritas patent-enforcement action, our core arguments depend on establishing the legitimacy, innovation, and commercial value of TruScan 360's biometric-recognition capabilities. The platform's technical sophistication and market value are central to both our infringement theory and our damages model. We have spent over two years building a record that TruScan 360 represents a significant and lawful technological achievement.
The proposed MTDC engagement would require the firm to argue that the very same TruScan 360 platform — the same biometric-data collection, storage, and processing capabilities — constitutes unlawful surveillance in violation of BIPA. We cannot simultaneously champion TruScan 360 as a legitimate, valuable innovation for Pinnacle while characterizing it as an unlawful privacy violation for MTDC. These positions are diametrically opposed.
Two additional facts sharpen the problem considerably. First, as you noted, Pinnacle is identified as a "responsible party" in the AG's CID, and there are signals the AG may name Pinnacle as a co-respondent. Second — and this is what moves us squarely into direct adversity — your email indicated that MTDC's proposed engagement scope includes potential cross-claims and indemnification demands against technology vendors under the Pinnacle–MTDC Master Software License and Services Agreement dated June 15, 2021. That MSLA has a contract value of $8.7 million over five years. Pursuing indemnification claims against Pinnacle on behalf of MTDC would mean the firm is directly adverse to its own existing client in the same proceeding. There is no way to characterize that as anything other than a head-on conflict.
**My Recommendation**
In my view, this matter presents both direct adversity under Illinois Rule of Professional Conduct 1.7(a)(1) and a material limitation under Rule 1.7(a)(2). Given the substantially related subject matter, the firm's possession of Pinnacle confidential information bearing directly on the disputed issues, and the fundamentally irreconcilable legal positions, I do not believe informed consent could cure the conflict. Under Rule 1.7(b), a lawyer may not proceed even with consent where the representation involves the assertion of a claim by one client against another client represented by the lawyer in the same proceeding — and that is precisely what the indemnification component of the MTDC engagement would entail.
I strongly recommend that we escalate this to Lawrence Keating and the Conflicts Committee for a formal determination. I am prepared to brief the Committee on the Pinnacle relationship and the nature of the confidential information at issue in whatever format Larry finds most useful.
I recognize this is an unfortunate outcome. I understand the MTDC matter would represent a significant engagement for the firm, and I have no doubt your team would handle it exceptionally well. But the ethical constraints here are, in my judgment, clear and not susceptible to a workaround.
I'm happy to connect by phone before we take this to the Committee if you'd like to discuss further. My direct dial is (312) 555-0178, and I'll be available over the weekend if needed.
Best regards,
Jonathan Mercer Partner — Intellectual Property Litigation Calderwood & Harkness LLP (312) 555-0178 (direct) jmercer@calderwoodharkness.com