Federal Circuit disposition — 26-131

NOTE: This order is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
In Re EHUD ARBIT, ISAAC RUBINSTEIN,
Petitioners
______________________
2026-131
______________________
On Petition for Writ of Mandamus to the United States
District Court for the District of New Jersey in No. 2:21-cv-
11088-EP-AME, Judge Evelyn Padin.
______________________
ON PETITION
______________________
Before LOURIE, CHEN, and STARK, Circuit Judges.
STARK, Circuit Judge.
O R D E R
Petitioners Ehud Arbit and Issac Rubinstein (“Petition-
ers”), defendants in an action pending in the United States
District Court for the District of New Jersey, seek a writ of
mandamus directing the district court to vacate its Decem-
ber 27, 2025 order disqualifying Banner & Witcoff, Ltd. and
Saiber, LLC (collectively, “Counsel”) from representing Pe-
titioners in the underlying action. Dr. Ziv Harish, plaintiff
in the district court, opposes. For the following reasons, we
deny the petition.
Case: 26-131 Document: 12 Page: 1 Filed: 04/21/2026

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IN RE ARBIT 2
I
Both of the Petitioners as well as Dr. Harish are named
inventors of U.S. Patent No. RE46,823 (“the ’823 patent”),
which relates to an allergy testing device. Dr. Harish filed
this action in 2021 against Petitioners asserting a claim for
correction of inventorship under 35 U.S.C. § 256, alleging
that he is the sole inventor of the ’823 patent.
Non-party Lincoln Diagnostics, Inc. (“Lincoln”) has
paid Petitioners’ legal fees in this action. Soon after Dr.
Harish filed his complaint, Petitioners and Lincoln entered
into agreements with Banner & Witcoff memorializing
their common interest and purporting to waive any con-
flicts of interest. Appx49. Petitioners and Lincoln exe-
cuted similar documents with Saiber. Thereafter, Lincoln
participated in this action, at least in settlement discus-
sions, via Counsel’s representation.
At the center of the disqualification dispute is an as-
signment agreement (“Agreement”) between Lincoln and
Petitioners. Under that Agreement, Petitioners assigned
their rights in the ’823 patent to Lincoln. Appx28. Peti-
tioners further warranted that they owned all rights and
title to the interests assigned and promised to “do all things
necessary to aid Lincoln to obtain and enforce for its own
benefit, ownership of and patent protection for” the ’823 pa-
tent. Appx137. Petitioners additionally agreed to refund
all amounts paid to them under the Agreement in the event
they were found to have breached the Agreement. For its
part, Lincoln agreed to indemnify Petitioners for chal-
lenges to their inventorship of the ’823 patent.
In late 2023, after initially rebuffing Dr. Harrish’s in-
quiries, Petitioners disclosed that Lincoln was paying
Counsel’s legal fees. In February 2024, Dr. Harish moved
to disqualify Counsel. On January 25, 2025, a magistrate
judge to whom the motion was assigned granted the
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IN RE ARBIT 3
motion. Relying on Rules 1.7(a) and 1.8(f) of the New Jer-
sey Rules of Professional Conduct (“New Jersey Rules”),1
the magistrate judge concluded Counsel’s representation of
both Lincoln and Petitioners created an impermissible con-
flict that could not be waived because “Lincoln has influ-
enced decisions during the course of this litigation.”
Appx71.
Petitioners and Lincoln then amended the Agreement
to, among other things, clarify that an adverse outcome in
this action would not constitute a breach of the Agreement
by Petitioners. Petitioners then sought reconsideration of
the disqualification order, which was denied. The magis-
trate judge reiterated his view that the Agreement materi-
ally limited Counsel’s scope of advocacy and loyalty to
Petitioners. On review, the district judge adopted the mag-
istrate judge’s findings. The district judge agreed that the
representation of Petitioners “is materially limited by De-
fense Counsel’s loyalty to Lincoln and by their responsibil-
ity to advance Lincoln’s interests,” Appx38, and further
agreed that disqualification was the proper remedy.
Petitioners now seek mandamus review of the disqual-
ification order. We have jurisdiction pursuant to 28 U.S.C.
§§ 1295(a)(1), 1651.
II
A party seeking a writ of mandamus bears the burden
of proving (1) it has “no other adequate means to attain the
relief [it] desires,” (2) the right to the writ is “clear and in-
disputable,” and (3) “the writ is appropriate under the cir-
cumstances.” Cheney v. U.S. Dist. Ct. for D.C., 542 U.S.
1 The District of New Jersey has adopted the Rules
of Professional Conduct of the American Bar Association as
revised by the New Jersey Supreme Court. Local Civil
Rule 103.1(a); see also In re Boy Scouts of Am., 35 F.4th
149, 159 (3d Cir. 2022).
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IN RE ARBIT 4
367, 380-81 (2004). When reviewing matters (including
mandamus petitions) not unique to patent law, this court
applies the law of the regional circuit, which here is the
United States Court of Appeals for the Third Circuit. See
In re Shared Memory Graphics LLC, 659 F.3d 1336, 1340
(Fed. Cir. 2011). Under Third Circuit law, a disqualifica-
tion decision is generally committed to the sound discretion
of the district court. See United States v. Miller, 624 F.2d
1198, 1201 (3d Cir. 1980). The same is true of motions to
reconsider. See Gibson v. State Farm Mut. Auto. Ins. Co.,
994 F.3d 182, 186 (3d Cir. 2021). Under Third Circuit law,
an “[a]buse of discretion occurs when the district court’s de-
cision rests upon a clearly erroneous finding of fact, an er-
rant conclusion of law or an improper application of law to
fact.” Chao v. Cmty. Tr. Co., 474 F.3d 75, 79 (3d Cir. 2007)
(internal quotation marks omitted).
Under Third Circuit law, an abuse of discretion occurs
“when the judicial action is arbitrary, fanciful or unreason-
able” or “where the trial court utilizes improper standards
or procedures.” Tomasko v. Ira H. Weinstock, P.C., 255
Fed. Appx. 676, 681 (3d Cir. 2007). “A court necessarily
abuses its discretion when its ruling rests on an error of
law.” Lundeen v. 10 W. Ferry St. Operations LLC, 156
F.4th 332, 337 (3d Cir. 2025).
III
Petitioners have not shown the district court commit-
ted a clear abuse of discretion. For at least that reason,
they have likewise failed to demonstrate that mandamus
relief is warranted.
Under the New Jersey Rules, Counsel could not accept
fees from Lincoln if there was a significant risk that doing
so could materially limit or interfere with Counsel’s repre-
sentation of Petitioners’ interests. See N.J.R.P.C. 1.8(f)(2)
(prohibiting lawyer from accepting compensation for repre-
senting client from anyone other than the client unless
“there is no interference with the lawyer’s independence of
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IN RE ARBIT 5
professional judgment or with the lawyer-client relation-
ship”); see also N.J.R.P.C. 1.7(a) (prohibiting representa-
tions involving concurrent conflict of interest where “there
is a significant risk that the representation of one or more
clients will be materially limited by the lawyer’s responsi-
bilities to another client”); N.J.R.P.C. 1.7(b) (allowing for
representation, with proper consent, of clients having
known concurrent conflict only if lawyer reasonably be-
lieves that she will be able to provide competent and dili-
gent representation to each); N.J.R.P.C 5.4(c) (prohibiting
“a person who . . . pays the lawyer to render legal services
for another to direct or regulate the lawyer’s professional
judgment in rendering such legal services”); see also
MaxLite, Inc. v. ATG Elecs., Inc., 2024 WL 1526749 (3d Cir.
2024) (nonprecedential) (noting these rules ensure that
third-party payer does not “influence the course of the liti-
gation”).
Whatever force Petitioners’ arguments might have un-
der a less demanding standard of review, we cannot say
they have shown entitlement to mandamus relief to disturb
what amounts to a case-specific discretionary judgment
that Counsel violated the applicable rules. The magistrate
judge plausibly found both that the terms of the Agreement
“convey the dominance of Lincoln’s interests to the subor-
dination of [Petitioners’] interests,” and also that Lincoln
had been “directing, regulating, and interfering with . . .
Counsel’s professional judgment in its representation of”
Petitioners, as evidenced by, among other things, Lincoln’s
involvement in the denial of settlement offers that would
not have furthered Lincoln’s interests. Appx62, 66. We are
not prepared to say that the district judge clearly and in-
disputably erred in adopting the magistrate judge’s find-
ings, which suffice to establish a plausible basis for the
district court’s exercise of discretion here.
Nor can we say that the decision to disqualify Counsel
was clearly arbitrary or erroneous. See United States v.
Stewart, 185 F.3d 112, 120 (3d Cir. 1999). The court
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IN RE ARBIT 6
reviewed all the relevant factors on the record before it and
reasonably balanced those weighing for and against dis-
qualification. See id. (describing this standard). The dis-
trict court noted, for example, that Petitioners can now
retain new counsel, who will be able to familiarize them-
selves with the case (which is of limited scope) and that any
prejudice to Petitioners is limited and at least partially
self-inflicted, given their delay in disclosing Lincoln’s in-
volvement. The court also considered alternatives to dis-
qualification but found them inadequate.
Finally, the magistrate judge did not abuse its discre-
tion in denying Petitioners’ motion for reconsideration.
Accordingly,
IT IS ORDERED THAT:
The petition is denied.
April 21, 2026
Date
FOR THE COURT
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