preserving attorney-client privilege in patent...
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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
6
Attorney-Client Privilege as applied to Communications
relating to Conception of Invention, Technical Aspects of Invention’s Embodiments and Availability of Invention for
Patenting
7
Historical Background -Assessing Privilege for
Communications between Patent Attorneys and Inventors
8
• 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
9
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
10
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
11
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
12
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
13
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
14
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.
15
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.
16
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
17
Preserving Attorney-Client
Privilege in Patent ProceedingsSharon A. Israel | Partner
COMPANY + SHOOK
APRIL 23, 2020
18
Patent Attorney Communications
PRESERVING ATTORNEY CLIENT PRIVILEGE
19
▪ 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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COMPANY + SHOOK
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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COMPANY + SHOOK
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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COMPANY + SHOOK
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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COMPANY + SHOOK
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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COMPANY + SHOOK
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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COMPANY + SHOOK
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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COMPANY + SHOOK
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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COMPANY + SHOOK
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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COMPANY + SHOOK
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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COMPANY + SHOOK
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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COMPANY + SHOOK
Scope of Waiver
Applicability to US Patent Agents
PATENT AGENT COMMUNICATIONS
38
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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COMPANY + SHOOK
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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COMPANY + SHOOK
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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COMPANY + SHOOK
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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COMPANY + SHOOK
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).
43
COMPANY + SHOOK
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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COMPANY + SHOOK
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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COMPANY + SHOOK
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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COMPANY + SHOOK
Japan
PRESERVING ATTORNEY-CLIENT
PRIVILEGE IN PATENT PROCEEDINGS
Stephen T. Schreiner | Carmichael IP PLLC
APRIL 23, 2020
50
PRESERVING ATTORNEY-CLIENT PRIVILEGE
DEFENSES/EXCEPTIONS
51
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
Fraud
ATTORNEY-CLIENT
PRIVILEGE (A REFRESHER)
52
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.
53
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)
54
DEFENSES/EXCEPTIONS
INEQUITABLE CONDUCT DEFENSE
55
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,
and
2. But-for materiality of withheld reference or other
material,
3. Except in the case of affirmative egregious conduct.
56
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.
57
“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?
58
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
59
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
THE
PRIVILEGE
60
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
THE
PRIVILEGE
61
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.
62
DEFENSES/EXCEPTIONS
CRIME/FRAUD EXCEPTION
63
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
64
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.
65
WALKER PROCESS FRAUDUnigene Laboratories v. Apotex, 655 F.3d. 1352 (Fed. Cir.
2011)
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.
66
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.
67
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)
68
DEFENSES/EXCEPTIONS
JOINT DEFENSE & COMMON INTEREST DOCTRINE
69
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.
70
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.
71
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.
72
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)
73
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.
74
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)
75
DEFENSES/EXCEPTIONS
ADVICE OF COUNSEL DEFENSE
76
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.”
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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.
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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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MORE ON ECHOSTAR
- Work product waiver extends to documents that embody a communication
between the attorney and client concerning the advice of counsel. Waiver
does not extend to documents analyzing the case and trial strategy
reflecting the attorney’s mental impressions that were not communicated to
the client. Uncommunicated documents do not inform the “state of mind” that
is central to whether the conduct was willful.
- Invocation of advice of counsel defense waives all documents that embody
or discuss a communication with the client about whether the patent is valid,
enforceable or infringed. Waiver includes opinions, memoranda,
conversation between attorney and client.
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In re Seagate, 497 F.3d 1360 (Fed. Cir. 2007)
Assertion of advice of counsel defense by disclosing opinion of opinion counsel
does not create waiver for communications with trial counsel.
- Advice of counsel defense seeks to establish that based on reasonable reliance on
opinion of counsel the client’s continued accused activity was done in good faith.
- Advice of counsel defense creates waiver to all other communications relating to same
subject matter.
- Normally disclosing opinions of opinion counsel does not create waiver of attorney-client
privilege for communications with trial counsel or a waiver of work-product immunity of
trial counsel.
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INDUCED INFRINGEMENT
Induced infringement requires showing that infringer (1) knowingly induced
infringement and (2) had specific intent to encourage another’s infringement.
Infringer has to have knowledge of patent and that induced acts constitute direct
infringement.
- Testimony of defendant’s employee who was responsible for launch of accused product
and for investigating “patent landscape” should have been admissible as to state of mind
as to whether infringer intentionally induced infringement by customers.
- Testimony of defendant’s outside counsel on analysis he provided prior to launch of
product should have been admissible as to state of mind for inducement as well as
willfulness.
Omega Patents v. CalAmp, 920 F.3d 1337 (Fed. Cir. 2019)
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Best Practices
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