Employees routinely save documents on the company server that would have traditionally been tossed had they been stored in paper form. Many such documents are technical in nature and include schematics, calculations, patent searches, and patent applications. This raises a problem for companies that have such technical documents: If patent litigation arises, what technical documents are protected by the attorney-client privilege or work-product doctrine?
In other words, if you sue or are sued, and opposing counsel asks that you produce certain technical documents, can you refuse to do so based on either the attorney-client privilege or work-product doctrine? This article provides points to consider when you evaluate how your organization manages and retains its technical documents. The attorney-client privilege will be addressed followed by a brief discussion of the work-product doctrine.
Whether technical information is protected by the attorney-client privilege is best answered by addressing the following questions.
Is the information truly a communication?
Is the communication confidential?
Is the communication between the client and the lawyer?
Does the communication relate to the lawyer-client professional relationship?
Has the privilege been waived?
Has the privilege been pierced?
These questions are addressed below.
Question #1: Is the Technical Information Truly a Communication?
To be privileged, information must actually be communicated to or from an attorney. Information need not, however, explicitly indicate the document was sent to or from an attorney. For example, an engineer's list of technical calculations that he eventually provides to his company's attorney may constitute a communication. In re Spalding Sports Worldwide, 203 F.3d 800 (Fed. Cir. 2000). While the company may not need to produce the list of calculations, the engineer may, however, be deposed as to what the calculations were.
Question #2: Is the Communication Confidential (or at Least Intended To Be Confidential)?
To be protected by the attorney-client privilege, communications must be confidential or at least intended to be confidential. Communications made in the presence of strangers are not privileged. In fact, numerous parties listed on a technical memorandum's circulation list may significantly decrease the chances that the memo is privileged. Knogo Corp. v. United States, 213 U.S.P.Q. 936, 941 (Ct. Cl. 1980). Furthermore, a privileged communication cannot be based on a nonconfidential source such as public information or information from a third party.
Question #3: Is the Communication between the Client and Its Lawyer?
Information that is protected by the attorney-client privilege must have been communicated between the client and its lawyer. For these purposes, in-house counsel is treated no differently than outside counsel. Also, patent agents are generally treated as lawyers for purposes of determining whether a document is privileged. The communication with the agent (e.g., an email describing how an invention works), however, must pertain to the specific rights granted to him to practice before the U.S. Patent and Trademark Office. John Labatt Ltd. v. Molson Breweries, 898 F. Supp. 471, 475 (E.D. Mich. 1995).
Question #4: Does the Communication Relate to the Lawyer-Client Professional Relationship?
Question #4 is a big one. This question is best explained by considering real-life examples. The following types of information have been held to be protected by the attorney-client privilege.
Draft patent application
Completed invention disclosure form
Lawyer's notes taken during conversations with inventor regarding patent application
Memoranda between business personnel discussing legal advice
Engineer's notes regarding possible infringement by a competitor
Technical data communicated to attorney in anticipation of filing patent application.
Patent prosecution materials in general
Communications regarding the scope of the claims to be made in a patent application
Communications regarding the merits of appealing a patent examiner's rejection
To better illustrate the concept, we will further consider the engineer's infringement notes (item #5). If these notes were made to help an attorney determine whether there is infringement, the notes may relate to the lawyer-client professional relationship. If the notes were made with no intention of using them to inform the attorney, privilege may not be granted. Now, please consider the following communications that have been held to not be privileged.
Facsimile cover sheet
Client's authorization to file a patent application
Memorandum of a conference with a patent examiner
Status report regarding a patent application
Memorandum regarding a patent search
Notification that the client's patent was about to issue
Instructions to mark a client's device with the patent number
Interoffice memorandum containing technical information with no request for legal advice
Letter from a third party attached to a document that is privileged
Technical drawings, sketches, tables and test results produced from an engineering department and sent to the patent lawyer
Business advice from lawyer or that is sent to lawyer
Documents intended to be submitted to P.T.O., such as an inventor affidavit, that treat attorney as a mere conduit for information to pass through
Technical drawings (item #5) provide a good illustrative example. If the drawings were to be generated regardless of whether they were ever sent to a lawyer, a party may be unable to argue the communication truly related to the lawyer-client relationship. Opposing counsel may argue the analogy of a criminal that shoots a man and then gives the gun to his lawyer. Was the gun really given to the lawyer to further the attorney-client relationship? The answer is typically "no." The gunman is merely trying to keep the gun from the district attorney. So, were the technical drawings created and given to the lawyer so he could, for example, draft a patent application? Or, in contrast, were they generated in the normal course of business and, as an afterthought, given to the lawyer in an attempt to gain privileged status?
Question #5: Has the Privilege Been Waived?
A voluntary disclosure of an otherwise privileged communication may waive the attorney-client privilege for that specific communication and for all other attorney-client communications on the same subject. In a typical patent litigation scenario, an accused infringer may, in defense to a charge for willful infringement, produce a formal legal opinion stating there is no infringement. The opinion would normally be privileged, but production of the opinion would waive that privilege. Furthermore, such production may waive privilege for other documents concerning infringement such as, for example, an email from an engineer to the lawyer spelling out the differences in a patent claim and the accused product.
Question #6: Has the Privilege Been Pierced?
The attorney-client privilege may be pierced if the privileged communication was made in furtherance of a crime or fraud. The crime-fraud exception typically arises in the patent litigation context in cases where the accused infringer alleges that the patent in dispute was procured by inequitable conduct. To invoke the crime-fraud exception, however, a showing of inequitable conduct is insufficient. The required fraud requires higher threshold showings of both intent and materiality. In re Spalding Sports Worldwide, 203 F.3d at 807. For example, an email where the client tells his lawyer to not cite a particular journal article to the U.S. Patent and Trademark Office (because doing so would doom his efforts to patent his alleged invention) may result in the privilege being pierced?
Even if a document is not protected under the attorney-client privilege, it may be protected pursuant to work-product immunity. Information is protected from discovery by work-product immunity provided the information constitutes documents or tangible things that were prepared in anticipation of related litigation or for trial. To be "prepared in anticipation" of litigation, there must be an articulable claim that is likely to lead to litigation. Also, the claim must pertain to a particular opposing party and not to the world in general. Several courts have found that work-product immunity may attach to patent prosecution documents if the primary purpose for their creation was for use in pending or anticipated litigation. McCook Metals L.L.C. v. Alcoa Inc., 192 F.R.D. 242, 261 (N.D. Ill. 2000). To further examine the doctrine, please consider the following examples where work-product immunity has been withheld:
Technical drawings sent to a patent lawyer that would have been generated regardless of the litigation.
Patents and trademarks located pursuant to patent or trademark searches.
Routine analysis of a competitor's products.
Regarding routine analysis (item #3), items such as accident report forms filled out by insurance companies have be denied coverage because they were deemed routine and products generated in the insurance company's usual course of business. Targeted analysis of a certain accused infringer's specific device, however, may potentially be protected.
The question of what technical documents, if any, are protected by the attorney-client privilege or work-product doctrine is a complex one. The issue has been generally addressed above but the fact-intensive nature of the inquiry necessitates detailed discernment between a client and IP counsel. In short, a risk manager would be wise to consider how her company handles technical information.
Is business advice often commingled with legal advice?
Does the company engineer tend to circulate his invention disclosures to a wide audience?
How widely does the company discuss the advice of counsel?
Does the company routinely analyze competitor's products?
What policies are in place to ensure such communications do not waive any privilege?
The risk associated with these questions can be managed with forward-thinking policies and due diligence from the risk manager. Failure to meet the issue head on, however, may provide the proper environment for the "cockroaches of litigation" to breed. Ugh!
E.E. ("Jack") Richards IIis an associate with Winstead Sechrest Minick in Austin, Texas, where he specializes in intellectual property, technology, litigation, dispute resolution, and nanotechnology. He received his BS degree from Texas A&M and his JD degree, cum laude, from the University of Houston Law Center. Before entering law school, he worked as an engineer for a start-up company in the medical device industry, focusing on electronics and software related to cardiac data (electrophysiology and hemodynamics).
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