On March 7, 2016, the Federal Circuit clarified a long-standing ambiguity in the law of privilege between patent agents and their clients, holding that an independent patent agent privilege should be recognized. See In Re: Queen's University At Kingston, PARTEQ Research And Development Innovations, 2015-145 (Fed. Cir. March 7, 2016). The Federal Circuit's decision could have a significant impact on the procedures for in-house patent agents and counsel. But those utilizing patent agents should be mindful that the privilege protects only a limited scope of activities.
The Case
Queens University at Kingston and PARTEQ ("Queens
University") sued Samsung Electronics Co.
("Samsung") in the Eastern District of Texas for patent
infringement. Throughout fact discovery, Queens University refused
to produce certain documents relating to communications with its
patent agent concerning the prosecution of the patents-in-suit on
the grounds that such documents were privileged. The district court
granted Samsung's motion to compel the production of the patent
agent communications, holding that the documents were not protected
by the attorney client privilege and that a separate patent agent
privilege does not exist. Queens University petitioned the Federal
Circuit for a writ of mandamus directing the district court to
withdraw its order compelling production.
In granting the petition for writ of mandamus, the majority
analyzed Rule 501 of the Federal Rules of Evidence, determining
that it authorizes federal courts to define new privileges by
interpreting "common law principles." Under Rule 501, the
Federal Circuit reasoned that the unique roles of patent agents,
the congressional recognition of their authority to act, the U.S.
Supreme Court's characterization of their activities as the
practice of law, and the current realities of patent litigation
counsel in favor of recognizing an independent patent agent
privilege.
The majority put particular weight on the Supreme Court's
holding in Sperry v. State of Florida ex rel. Florida
Bar, 373 U.S. 379 (1963), that "the preparation and
prosecution of patent applications for others constitutes the
practice of law" as well as the history of Congress permitting
patent agents to practice before the United States Patent and
Trademark Office. Based on its analysis, the majority concluded
that "[a] client has a reasonable expectation that all
communications relating to obtaining legal advice on patentability
and legal services in preparing a patent application will be kept
privileged.... Whether those communications are directed to an
attorney or his or her legally equivalent patent agent should be of
no moment."
The majority noted that there are some important limitations to the
patent agent privilege as it applies only to documents and
communications that are reasonably necessary and incident to a
patent agent's permitted practice before the USPTO.
Specifically excluded from these permitted tasks are opinions on
validity of patents not being prosecuted, the sale or purchase of
patents, and infringement.
Judge Reyna dissented, questioning the court's role in creating
the privilege. The dissent argues that Congress or the USPTO are
better suited to address whether a patent agent privilege should be
created, but as the majority argues, Congress empowered the federal
courts to determine issues of privilege in the Rules Enabling Act
of 1934.
Key Takeaway
The Federal Circuit's holding expands the law of privilege as it relates to patent agents. In light of this holding, assuming it is not overturned on en banc review, in-house counsel might be able to more easily allocate resources without having to worry about waiving privilege in a future litigation.
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