United States: Does Patent Assignment Waive Attorney Client Privilege? District Court Holds "Yes"

Last Updated: December 6 2011
Article by Andrew S. Dallmann

HTC Corporation and HTC America, Inc. (collectively "HTC") filed a lawsuit seeking a declaratory judgment that their products do not infringe U.S. Patent No. 5,390,216 ("The '216 patent"), which was acquired by IPCom GmbH & Co. ("IPCom") from Robert Bosch GmbH ("Bosch"). HTC v. IPCom, Civil Action No. 08-1897 (RMC) (D.C.). IPCom counterclaimed that HTC's products did infringe its patents.

HTC Corporation v. IPCom GmbH & Co., Case No. 1-08-cv-01897-3061 (DCD Nov. 10, 2011).pdf

HTC moved to compel the production of documents related to the '216 patent including prosecution documents. As part of the purchase agreement with Bosch, IPCom obtained all documents related to the '216 patent including the prosecution and correspondence files. After the assignment of the '216 patent from Bosch to IPCom, these correspondence files were transferred to IPCom's counsel at the Frohwitter law firm. HTC had previously moved to compel documents from the Frohwitter firm, which IPCom opposed, claiming that the documents were attorney-client privileged.

The district court disagreed and granted HTC's motion holding that while these documents were previously privileged as to Bosch, the privilege had been waived as part of the acquisition by IPCom of these documents. The Court specifically ordered IPCom to produce documents including invention disclosure documents, correspondence between Bosch's in-house counsel and between Bosch and its U.S. prosecution counsel. The Court also ordered that IPCom not assert attorney-client privilege as to any of these documents. IPCom sought a writ of mandamus from the Federal Circuit asking it to reverse or vacate the district court's order granting HTC's motion to compel. The Federal Circuit denied the writ.

HTC then became aware that prosecution documents were not only in the possession of the Frohwitter Firm but also in the possession of Bosch's former prosecution counsel, Holtz, Holtz, Goodman & Chick (the "Holtz Firm"). Accordingly, HTC brought another motion to compel these files. IPCom opposed this motion arguing that it did not have control of these documents because they were held at the Holtz Firm and IPCom never had a relationship with that firm.

In granting HTC's new motion, the court stated that IPCom mischaracterized the law. "In order for HTC to obtain the documents from IPCom that are in the possession of the Holtz firm, HTC must show that IPCom has a legal right to demand that the Holtz firm turn over the documents." Slip Opinion at 5. "'Control' is the legal right to obtain documents on demand." Id. Because IPCom had obtained not only the rights to the '216 patent but its prosecution files as part of the acquisition of this patent, the court determined that IPCom indeed did have control over the Holtz Firm. Furthermore, to the extent these files were privileged, that privilege only applied to Bosch and Bosch waived that privilege as part of the assignment of its '216 patent.

The district court's holding raises an interesting question in terms of its breadth. Specifically, whether under all circumstances an assignment of a patent results in the waiver of the attorney-client privilege as to prosecution files or only under the specific circumstances of this transfer where the purchase agreement called for the transfer of prosecution files as well.

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