preserving attorney-client privilege in patent...

Preserving Attorney-Client Privilege in Patent

ProceedingsProtecting Confidential Communications With Patent Counsel or Patent Agents

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THURSDAY, APRIL 23, 2020

Presenting a live 90-minute webinar with interactive Q&A

Sharon A. Israel, Partner, Shook Hardy & Bacon, Houston

Stephen T. Schreiner, Partner, Carmichael IP, Tysons, Va.

Thomas J. Scott, Jr., Senior Vice President and General Counsel,

Personalized Media Communications, Reston, Va.

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Preserving Attorney-Client Privilege in Patent

Proceedings

Overview

• Historical Background and Communications relating to patent applications

• Application to Patent-Specific Documents

• Application to Patent Agent Communications – Domestic and Foreign

• Defenses/Exceptions

• Best Practices

Attorney-Client Privilege as applied to Communications

relating to Conception of Invention, Technical Aspects of Invention’s Embodiments and Availability of Invention for

Patenting

Historical Background -Assessing Privilege for

Communications between Patent Attorneys and Inventors

• Sperry v. Florida ex rel. Florida Bar, 373 U.S. 379, 383 (1963)

Preparation of Patent Application – Providing Legal Services

• Jack Winters, Inc. v. Koratron Co., 50 F.R.D. 225 (N.D. Cal. 1970)

35 USC §112 –Requires Enabling Disclosure and Best Mode

37 C.F.R. §1.56 – Mandates Duty of Candor

Result - Attorney deemed “Conduit” to USPTO

• Knogo Corp. v. United States, 213 U.S.P.Q. 936 (Ct. Cl. Trial Div. 1980)

Attorney Client Privilege Applied to Communication between Patent Attorney and Client – Not Disclosed Information

Following the issuance of the Knogo decision, many jurisdictions adopted the US Court of Claims, Trial Division, approach.

• Advanced Cardiovascular Sys. v. C.R. Bard, Inc., 144 F.R.D. 372, 378 (N.D. Cal. 1992) California court rejected Jack Winter and adopted Knogo. A/C applied on basis of intent of communication to obtain legal advice

• Laitram Corp. v. Hewlett-Packard Co., Inc., 827 F. Supp. 1242 (E.D. La. 1993) A/C applied based on understanding of parties as to confidentiality of disclosure

• Confusion remains based on split of authority

In re Spalding Sports Worldwide, 203 F.3d 800(Fed. Cir. 2000)

• “Conduit” Theory Rejected

• Privilege applied based on “whether the communication is one that was made by a client to an attorney for the purpose of obtaining legal advice or services.”

• Invention disclosure document provided to Spalding’s Legal Department to determine whether invention was patentable, thus clearly seeking legal advice

• Privilege to be decided on a “case-by-case” basis. Court must consider circumstances under which the information was provided

In re Spalding Sports Worldwide, 203 F.3d 800(Fed. Cir. 2000)

• Spalding decision rejected application of the “fraud crime” exception to the attorney-client privilege solely on allegation of inequitable conduct

• While allegation of withholding pertinent reference could support pleading inequitable conduct charge, allegation alone could not pierce privilege

• Court specifically distinguished inequitable conduct from so-called “Walker Process” common law fraud

• No Prima Facie Case of Fraud made

Smithkline Beecham Corp. v. Apatex Corp., No. 98-C-3952, 2000 WL 1310668 (N.D. Ill. Sept. 13, 2000)

District court found that the principles announced in Spalding not limited to invention disclosure documents but to any communication between patent counsel and inventors on the basis of which legal advice is being sought

Current Application of Spalding Principles

• Basic concepts in Spalding straight forward but substantial confusion remained

• McCook Metals v. Alcoa Inc., 192 F.R.D. 242 (N.D. Ill. 2000)

Draft patent applications privileged but documents delivered to patent attorney including technical information not

• Fordham v. OneSoft Corp., 2001 WL 641759 (E.D. Va. Nov. 6, 2000)

Invention records were deemed privileged while draft patent applications were not

Current Application of Spalding Principles

• Over time, courts have delved more deeply into the precise circumstances behind the disclosure as Spalding requires.

• Raytheon Co. v. Cray, Inc. Civil Action No. 2:2015cv01554 (E.D. Tex. June 5, 2017), invention disclosure documents sent first to a company committee charged soley with assessing invention’s technical and business merits and only thereafter for a legal evaluation. Not privileged.

• California Inst. of Tech. v. Broadcom Ltd. Civil Action No. 2:16-CV-03714 (C.D. Cal. Mar. 19, 2018), invention disclosure documents submitted to a patent review committee via corporate intranet portal. Committee including attorneys charged assessing whether inventions are patentable. Documents deemed privileged.

Application to Specific Documents

• Invention Disclosure Forms

Protected as A/C communication if provided to lawyer to obtain advices as to patentability of disclosed invention. If sent to review committee, protected if committee has lawyer member and purpose of review is legal assessment.

• Prior art (including requests and searches)

Protected as either A/C or Attorney Work Product if the request is the Work Product of an attorney and the results used as basis for legal advice, such as determination of patentability of invention.

Application to Specific Documents

• Patent applications

Draft applications protected as A/C if used to convey legal advice to client

• Validity opinions

Protected under same standards as any other opinion delivered to client

(i.e., opinion must kept confidential within proper control group, etc.)

• Patentability opinions

Protected under same standards as other opinions

• Non-infringement opinions

Protected under same standards as other opinions

Preserving Attorney-Client

Privilege in Patent ProceedingsSharon A. Israel | Partner

COMPANY + SHOOK

APRIL 23, 2020

Patent Attorney Communications

PRESERVING ATTORNEY CLIENT PRIVILEGE

▪ Protects confidential communications between a client and lawyer for the purpose of rendering legal advice.

▪ Clients expect and assume that communications with their legal representative are privileged.

▪ Facts are not privileged.

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What is Protected?

▪ Protects certain things done in anticipation of litigation.

▪ Opinion work product (mental impressions, strategies, etc., of the lawyer) is rarely discoverable.

▪ Ordinary work product (non-opinion) may be discoverable upon showing of “need and hardship.”

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Work Product Doctrine

• Members of the patent department were deemed “mere solicitors of patents who fall outside the privilege” and to function “less as detailed legal advisers than as a branch of an enterprise founded on patents.”• United States v. United Shoe Mach. Corp., 89 F. Supp. 357, 358 (D. Ma. 1950)

• Attorney-employees of patent departments “do not ‘act as lawyers’…when largely concerned with…the general application of patent law to developments of their companies and competitors.”• Zenith Radio Corp. v. Radio Corp. of America, 121 F. Supp. 792 (D. Del. 1954)

• Patent attorney “acts as a conduit between his client and the Patent Office…attorney-client privilege is absent.”• Jack Winter, Inc. V. Koratron Company, Inc., (N.D.Cal. 6-30-1970)

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Patent Attorneys: Privilege Didn’t Always Apply

• Encourage frank and open communications between practitioners and their clients.

• Support broad public interest of observing the law and administration of justice.

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Purpose behind Privileges

• The “preparation and prosecution of patent applications for others constitutes the practice of law.”• Sperry v. Florida, 373 U.S. 379 (1963).

• Rejection of the theory that patent attorneys are “mere conduits” to the PTO, and confirming that communication to a patent attorney is privileged “as long as it is provided to the attorney ‘for the purposes of securing primarily legal opinion, or legal services, or assistance in a legal proceeding.’”• In Re Spalding Sports Worldwide, Inc, 203 F.3d 800 (Fed. Cir. 2000), quoting Knogo Corp. v. United States, 213 USPQ

936, 940 (Cl. Ct. 1980) and Sperry v. Florida, at 379.

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Privilege Issue Now Largely Resolved for Patent Attorneys

• Communications with a US patent attorney relating to ex parte practice before the USPTO (i.e.conception, invention, and patenting)* are broadly privileged.

• Federal Circuit law should apply.

• Some cases hold as privileged even statements made during unauthorized practice, if client had reasonable belief in U.S. patent attorney’s authority.

• *See 37 CFR 11.5(b)(1).

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Ex Parte Practice

Before the

USPTO—

Communications

with Patent

Attorney Protected

• Inter partes proceedings [i.e., Inter Partes Review, Covered Business Method and Derivation proceedings] are adversarial proceedings so both attorney-client privilege and work product immunity protect communications with U.S. attorneys.

• However, underlying facts not covered by work product.

• Adobe Inc. v. RAH Color Technologies LLC, IPR2019-

00627, -00628, -00629, and -00646, Paper 59 (Dec. 12, 2019).

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Inter Partes Practice—Communications Also Protected

• Use of foreign patent attorneys more problematic.

• In most foreign countries patent preparation and prosecution services are performed by patent attorneys, who are typically not lawyers.

• Just like in the United States for patent agents, the qualifications to become a foreign patent attorney typically are rigorous: a technical background is usually required, there is often an apprenticeship requirement, and an examination must be passed (some countries have reported pass grades in the low 10%).

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Foreign Agents

• Supervision• U.S. patent attorneys may use both non-lawyers and foreign attorneys

to provide services and privilege protects almost as fully as direct communications.

• But:• Expensive

• Agent may have more expertise than “supervising” lawyer.

• What’s “supervision”?

• How much “supervision” is realistic/practical?

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One Easy Solution to Privilege Waiver Concerns

• Beware of issues with in-house counsel

• Communications between a company and its in-house counsel may not be protected by EU legal privilege (See Akzo Nobel v. European Commission)

• German law may not protect communications with in-house counsel, as they may not be sufficiently independent.

• Swedish law generally does not protect communications with in-house counsel.

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Foreign Pitfalls

• Some countries have “professional secrecy” obligations, but these are not as protective as the American attorney-client privilege.

• See, e.g., In re Rivastigmine Patent Litig., 239 F.R.D. 351 (S.D.N.Y. 2006) (finding that, despite Swiss patent agent’s professional secrecy obligation, a judge could require disclosure of the confidential material where the interest in disclosure outweighed the interest in confidentiality).

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Foreign Pitfalls . . .Continued

• Which country’s law applies?

• Most U.S. courts use choice-of-law analysis.

• Consider the “contacts” with the U.S. (See, e.g., Golden Trade, S.r.L. v. Lee Apparel Co., 143 F.R.D. 514, 520 (S.D.N.Y. 1992)).

• Consider issues such as “whether the client is domestic or foreign, and whether the foreign patent agent was working on foreign patent matters or assisting in efforts to obtain a United States patent.” (Id.)

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Waiver Disputes Regarding Foreign Attorneys

• Most U.S. courts apply the “touching base” standard:• “[A]ny communications touching base with the United States will be governed by the

[U.S.] federal discovery rules while any communications related to matters solely involving [a foreign country] will be governed by the applicable foreign statute.” (Id.(quoting Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp. 1146, 1169-70 (D.S.C. 1975)).

• Considers which country has the most compelling or predominant interest in whether the communications should remain confidential. (See Astra Aktiebolag v. Andrx Pharm., Inc., 208 F.R.D. 92, 98 (S.D.N.Y. 2002)).

• This is typically either the place where the allegedly privileged relationship was entered into or the place in which that relationship was centered at the time the communication was send. (See id. (citing Golden Trade, 143 F.R.D. at 533)).

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Choice-of-Law Analysis

“[C]ommunications by a foreign client with foreign patent agents ‘relating to assistance in prosecuting patent applications in the United States’ are governed by American privilege law whereas communications ‘relating to assistance in prosecuting patent applications in their own foreign country’ or ‘rendering legal advice ... on the patent law of their own country’ are, as a matter of comity, governed by the privilege ‘law of the foreign country in which the patent application is filed,’ even if the client is a party to an American lawsuit.” (Golden Trade, 140 F.R.D. at 520 (quoting Duplan, 397 F. Supp. at 1170-71).)

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Touching Base Standard

“Communications that relate to legal proceedings in the United States, or that reflect the provision of advice regarding American law, “touch base” with the United States and, therefore, are governed by American law, even though the communication may involve foreign attorneys or a foreign proceeding.” (Gucci America, Inc. v. Guess?, Inc., 271 F.R.D. 58, 65 (S.D.N.Y. 2010).) “Conversely, communications regarding a foreign legal proceeding or foreign law “touch base” with the foreign country.” Id.

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Touching Base Standard Continued

• E.g., Astra Aktiebolag, 208 F.R.D. at 102 (finding that U.S. privilege law applies despite the fact that under the touching base analysis, Korean law should apply).

• The court made its determination because, while Korean law did not provide for attorney-client privilege and work product protections, discovery under Korean law does not compel production of such material, and therefore such protections are not needed.

• Not uncommon for non-U.S. jurisdictions not to have privilege protections where those jurisdictions do not have discovery to compel them.

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Exceptions Exist

• Lack of Uniformity Across Jurisdictions

• U.S. System

• Know the applicable law of the specific U.S. jurisdiction:

• Subject matter test (more common)

• Communications privileged where employees disclose information within the scope of their duties and at the direction of their supervisors for the purpose of the corporation receiving legal advice.

• Control group test (less common)

• Communications privileged if the employee is a high-level employee authorized to act on the company’s behalf.

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Privilege Scope

• Waiver allegations commonly arise in patent infringement litigation when a party affirmatively places a confidential communication at issue, such as with an advice-of-counsel defense to willfulness, or in defense to inequitable conduct allegations regarding disclosing prior art at the USPTO.

• William S. Blair, Intellectual Property - The Pitfalls of Attorney-Client Privilege Waiver in Patent Law, 39 S. TEX. L. REV. 769, 791 (1998).

• In such situations, waiver extends broadly to advance the underlying goal of “prevent[ing] a party from using the advice he received as both a sword, by waiving privilege to favorable advice, and a shield, by asserting privilege to unfavorable advice.”

• In re EchoStar Communications Corp, 448 F.3d 1294, 1303 (Fed. Cir. 2006).

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Scope of Waiver

Applicability to US Patent Agents

PATENT AGENT COMMUNICATIONS

The Federal Circuit now recognizes non-lawyer patent agent privilege (In re Queen’s Univ. at Kingston, 820 F.3d 1287 (Fed. Cir. 2016).

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U.S. Patent Agent Privilege

• Limited to the patent agent’s permitted activities practicing before the USPTO, e.g.:• preparing and prosecuting any patent application.

• consulting with or giving advice to a client in contemplation of filing a patent application or other document with the Office.

• drafting the specification or claims of a patent application.

• drafting an amendment or reply to a communication from the Office that may require written argument to establish the patentability of a claimed invention.

• drafting a reply to a communication from the Office regarding a patent application.

• drafting a communication for a public use, interference, reexamination proceeding, petition, appeal to or any other proceeding before the Patent Trial and Appeal Board, or other proceeding.

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Scope of Patent Agent Privilege

Also includes those tasks “which are reasonably necessary and incident to the preparation and prosecution of patent applications or other proceeding before the Office involving a patent application or patent in which the practitioner is authorized to participate.” See In re Queen’s Univ. at Kingston, 820 F.3d at 1301.

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Scope Catch-All

• Things that fall outside the patent agent privilege include: “communications with a patent agent who is offering an opinion on the validity of another party’s patent in contemplation of litigation or for the sale or purchase of a patent, or on infringement.” Id.

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Communications Outside the Privilege

• The Fifth District Court of Appeal in Texas decided not to recognize patent agent privilege in state cases.

• Although overruled by the Texas Supreme Court, other states might not recognize privilege. See In re Silver, 540 S.W.3d 530 (2018).

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Beware of State Law Concerns

• Similar protections to U.S. attorney-client privilege

• Began recognizing patent agent privilege when Amendments to its Patent Act went into effect on June 23, 2016.

• Privilege extends not only to Canadian patent agents, but also to foreign patent agents where such agents enjoy such a privilege in their own countries.

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Foreign Countries-Canada

• Similar protections to U.S. attorney-client privilege

• Regarding patent agents: similar statute (section 200 of the Patents Act of 1990, as extended by the Intellectual Property Laws Amendment (Raising the Bar) Act of 2012) to that in Canada

• Communications (or records or documents) made for the dominant purpose of a registered patent attorney (not the same as a lawyer) providing intellectual property advice to his or her client is privileged in the same way as such a communication would be between a legal practitioner and client would be.

• This extends to foreign attorneys authorized in their own countries to perform the same sorts of things as Australian patent attorneys.

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Australia

• United Kingdom

• Similar protections to U.S. attorney-client privilege.

• Protection exists for UK patent attorneys/agents.

• Germany

• Provides strong protections for privileged communications, including those with German lawyers and German patent agents

• This has been recognized by US district courts (see, e.g., Golden Trade, 143 F.R.D. at 524; Cadence Pharms., Inc. v, Fresenius Kabi USA, LLC, 996 F. Supp. 2d 1015, 1022 (S.D. Cal. 2014)).

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Europe

• France

• Has an evidentiary privilege that requires “industrial property attorneys” to “observe professional secrecy.” Commissariat a l’Engergie Atomique v. Samsung Elec. Co., 245 F.R.D. 177, 182 (D. Del. 2007).

• Industrial property attorneys “must be independent from other professions and commercial influences and may only associate with or report to supervisors, persons, or entities within their profession.” Id. at 186.

• Therefore, in-house counsel, as employees corporations, do not have the necessary independence to assert the privilege (unlike advocates employed by law firms or industrial property attorneys employed by entities consisting of their profession). Id. at 187.

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Europe Continued

• Amended its Code of Civil Procedure to provide greater protections for communications involving bengoshi (registered attorneys) or benrishi (registered patent attorneys), similar to attorney-client privilege.

• This has been recognized as a matter of comity in at least some US district courts (see, e.g., Eisai Ltd. v. Dr. Reddy’s Labs., Inc., 406 F. Supp. 2d 341 (S.D.N.Y. 2005)).

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Partner | Houston713.546.5689

sisrael@shb.com

Sharon A. Israel

PRESERVING ATTORNEY-CLIENT

PRIVILEGE IN PATENT PROCEEDINGS

Stephen T. Schreiner | Carmichael IP PLLC

APRIL 23, 2020

PRESERVING ATTORNEY-CLIENT PRIVILEGE

DEFENSES/EXCEPTIONS

Definition:

• Communication between Client

and Attorney (or agents of

either) that is:

•Expected to be Confidential

•For Purpose of Seeking or

Rendering Legal Advice, and

•Not for Purpose of Crime or

ATTORNEY-CLIENT

PRIVILEGE (A REFRESHER)

ATTORNEY-CLIENT PRIVILEGE REFRESHER (Cont.)

Covers substance of communication, not underlying facts.

• The fact of the communication is normally not covered.

• “Who,” “When” and “Where” is not covered.

• “What” (substance of the communication) is covered.

Definition:

•Materials, Things and Information

• Prepared in Anticipation of

Litigation, reflecting

•Mental Impressions, Conclusions,

Opinions or Theories of Counsel

- Not a privilege, not absolute

protection.

- Protected items must be prepared

in anticipation of litigation, not

ordinary course of business.

WORK PRODUCT

IMMUNITY

(A REFRESHER)

DEFENSES/EXCEPTIONS

INEQUITABLE CONDUCT DEFENSE

INEQUITABLE CONDUCT Therasense v. Beckton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011)

Requires Clear and Convincing Evidence of

1. Specific intent to deceive the PTO, not gross

negligence or constructive “should have known” intent,

2. But-for materiality of withheld reference or other

material,

3. Except in the case of affirmative egregious conduct.

INEQUITABLE CONDUCT

Party must have known of reference, must have known it was material,

and must have made a deliberate decision to withhold it.

• No sliding scale between intent and materiality. Cannot infer intent based

on materiality. The specific intent to deceive must be “the single most

reasonable inference able to be drawn from the evidence.”

• But-for materiality means that the claim would not have been allowed if

the examiner knew of the withheld reference.

• Affirmative act of egregious misconduct such as filing of false affidavit is

per se material even if but-for materiality is not established.

“A finding of inequitable

conduct may also prove the

crime or fraud exception to

the attorney-client privilege.”

Therasense, 649 F.3d at 1289 (citing In re

Spalding Sports Worldwide, 203 F.3d,

800, 807 (Fed. Cir. 2000)

CAN INEQUITABLE

CONDUCT MAY

PIERCE THE

PRIVILEGE?

Walker common law fraud

required to pierce privilege.

Unigene Laboratories v. Apotex,

655 F.3d 1352 (Fed. Cir. 2011).

INEQUITABLE

CONDUCT MAY NOT

BE SUFFICIENT TO

PIERCE THE

PRIVILEGE

Walker Process/Common law fraud is

required.

Rejects theory that “affirmative

egregious conduct” under Therasense can

pierce privilege.

Avnet v. Motio, 2015 WL 5474435 (N.D. Ill. 2015)

INEQUITABLE

CONDUCT NOT

SUFFICIENT

TO PIERCE

PRIVILEGE

Prima facie case of inequitable conduct

is insufficient.

Therasense relied on In re Spalding

Sports Worldwide, which held that

“inequitable conduct it not by itself

common law fraud.”

Milwaukee Electric Tool v. Chevron,

2017 WL 2312905 at *6 n.4 (E.D. Wis. 2017)

INEQUITABLE

CONDUCT NOT

SUFFICIENT

TO PIERCE

PRIVILEGE

Inequitable Conduct is Insufficient to Pierce Privilege

In re Spalding Sports Worldwide, 203 F.3d 800, 807 (Fed. Cir. 2000

Invention disclosure from inventor to legal department for purposes of

determining patentability or other legal services is privileged.

“Inequitable conduct is not by itself common law fraud.”

Common law fraud is required to pierce the privilege.

DEFENSES/EXCEPTIONS

CRIME/FRAUD EXCEPTION

Attorney-Client privilege is pierced

under Crime-Fraud Exception when:

1. Client intended to commit a crime

or fraud, and

2. Attorney-client communications

were in furtherance of crime or

fraud.

CRIME/FRAUD

EXCEPTION

UNITED STATES V. ZOLIN, 491 U.S. 554 (1989)

Attorney-client privilege does not extend to communications

between lawyer and client “in furtherance of future illegal

conduct,” or that are “made for the purpose of getting

advice for the commission of a fraud or crime.”

Zolin, 491 U.S. at 556, 562-563.

WALKER PROCESS FRAUDUnigene Laboratories v. Apotex, 655 F.3d. 1352 (Fed. Cir.

In patent cases, a party must establish Walker Process fraud,

also known as common law fraud, to pierce attorney-client

privilege under the crime-fraud exception:

1. misrepresentation of material fact;

2. falsity of fact;

3. actual or constructive intent to deceive;

4. reliance upon misrepresentation by deceived party, and:

5. injury to deceived party as a result of justifiable reliance.

UNIGENE LABORATORIES

•Alleged fraudulent misrepresentations and omissions

a) typographical error in patent that was corrected in reissue; and

b) allegedly withheld reference that was not material to patent

did not establish common law fraud to justify piercing attorney-

client privilege.

SPOLIATION

• Spoliation is the destruction of evidence or failure to preserve relevant

evidence when there is a pending or reasonably foreseeable litigation. Duty

to preserve is when litigation was reasonably foreseeable, which does not

require that litigation is imminent or probable based on some contingencies.

• Attorney-client privilege was pierced under crime-fraud exception because

destruction of relevant evidence violated California Penal Code Sec. 135,

which prohibits destruction of documents “about to be produced in evidence.”

Hynix Semiconductor v. Rambus, 645 F.3d 1336 (Fed. Cir. 2011)

DEFENSES/EXCEPTIONS

JOINT DEFENSE & COMMON INTEREST DOCTRINE

•Generally, privilege (or work product immunity) is waived if there

is a voluntary disclosure of materials to third party.

• Most jurisdictions recognize an exception where third party is a joint

client, joint litigant, or “shares a common legal interest” with the disclosing

party.

• Common interest is not itself a privilege, rather, it is an exception to the

usual rule of waiver.

• Decisions tend to be very fact specific.

THREE REQUIREMENTS

1. Communications between attorneys must be germane to and in

furtherance of a Common Legal Interest, not mere Common

Commercial Interest;

2. Communications must be made with Expectation of

Confidentiality; and

3. Attorney-Client Privilege or Work Product Immunity protecting

the communications must not otherwise be waived.

HOW TO “CREATE” COMMON INTEREST

Formalize Common Interest Agreement into a writing.

- Document common legal interest and documents/information shared in furtherance of

common interest. Foreseeable joint litigant in future suit?

- Specify common legal interests; do not focus on matters relating to commercial interests.

- Specify privileged information is to be used solely for transaction at issue.

- Restrictions on who can access information (need to know), how it can be accessed, how

long it can be accessed, what format (hard copy versus electronic), limitations on copies,

procedures for return or disposal.

EXPANSIVE VIEW OF COMMON INTEREST DOCTRINE

Common Interest doctrine protects communications between counsel of patent

licensor and licensee during prosecution.

- Licensee Eli Lilly counsel provided advice and services to UC during prosecution.

- Common legal interest in obtaining valid/enforceable patents.

- Significant that Eli Lilly was exclusive licensee, not non-exclusive licensee.

- Common interest does not have to be in anticipation of litigation. Pre-litigation

advice and assistance is subject to common interest protection. Consultation with

counsel during prosecution has goal of reducing or avoiding litigation.

In re Regents of the University of California, 101 F.3d 1386 (Fed. Cir. 1996)

RESTRICTIVE VIEW OF COMMON INTEREST DOCTRINE

Exception to rule of waiver must be narrowly construed to avoid creating

entirely new privilege.

- E-mail from Affymetrix scientist inventor seeking legal advice to Affymetrix in-house

counsel copying co-inventor from third party AAT.

- Affymetrix and AAT were negotiating but had not finalized License & Supply Agreement

for production of fluorescent die used as biomarker.

- Common interest applies if “on-going and joint effort to set up a common defense

strategy” for shared common legal interest in pending or potential litigation or other

shared common legal interest even if not for litigation preparation.

RESTRICTIVE VIEW CONTINUED

- Common interest exception applies only if both parties are represented by counsel. Here,

third party recipient of privileged email was not represented by counsel. Reasoning is that

common interest exception allows attorneys for different parties to develop a joint legal

strategy.

- In re Regents of the University of California distinguishable because both licensee Eli Lilli

and UC had counsel. There was also an executed license agreement where here there was

just a non-binding letter of intent. Common interest doctrine does not apply.

Regents of Univ. of Calif. v. Affymetrix, 326 F.R.D. 275 (N.D. Cal. 2018)

DEFENSES/EXCEPTIONS

ADVICE OF COUNSEL DEFENSE

Halo Electronics v. Pulse Electronics, 136 S.Ct. 1923 (2016)

Award of enhanced damages for willful infringement under 35 U.S.C. § 284 is

subject to the discretion of the district court based on finding of egregious case

of culpable behavior such as knowing or intentional infringement.

35 U.S.C. § 298: “The failure of an infringer to obtain the advice of counsel

with respect to any allegedly infringed patent . . . may not be used to prove

that the accused infringer willfully infringed the patent or that the infringer

intended to induce infringement of the patent.”

FRE 502(a): Waiver extends to “communications or information” that “concern

the same subject matter.”

In re EchoStar Communications, 448 F.3d 1294 (Fed. Cir. 2006)

Assertion of advice of counsel defense to willfulness waives attorney-client

privilege to all communications relating to same subject matter.

- EchoStar relied on advice of in-house counsel that it did not infringe TiVo patent. A

separate opinion by Merchant & Gould was not delivered to EchoStar. Waiver was found

as to advice of in-house counsel but not Merchant & Gould work product that was not

communicated.

- Once party relies on advice of counsel defense, the attorney-client privilege is waived as

to all communications relating to same subject matter. This includes communications with in-

house counsel as well as communications with counsel other than in-house counsel.

ECHOSTAR CONTINUED

- Purpose of waiver is to prevent party from using privilege as a sword and

a shield by selectively waiving privilege for favorable advice and invoking

privilege to withhold unfavorable advice.

- Attorney-client privilege and Work Product Doctrine are related but

waiver of one does not necessarily waive the other. Work product immunity

applies to documents and tangible things prepared in anticipation of

litigation even though not necessarily communicated.

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