Federal Circuit Adopts Patent–Agent Privilege

In a case of first impression, the Federal Circuit, in a 2–1 decision, adopted an evidentiary privilege protecting from discovery communications between non-attorney patent agents and their clients. The privilege extends only to communications the agents make “while acting within the agent’s authorized practice of law before the Patent Office.”  In re Queen’s University at Kingston, 2016 WL 860311 (Fed. Cir. Mar. 7, 2016).

My thanks to Sriranga Veeraraghavan for bringing this opinion to my attention.


Ontario-based Queen’s University filed a patent-infringement lawsuit against Samsung alleging that Samsung’s SmartPause feature infringed on the university’s patent directed to Attentive User patentInterfaces.  Samsung moved to compel production of communications between Queen’s University employees and non-attorney patent agents discussing the patent prosecution.

The USDC for the Eastern District of Texas, where the case was pending, ordered production because the attorney–client privilege was inapplicable and a separate patent–agent privilege did not exist.  The Federal Circuit subsequently granted the university’s petition for mandamus.

No Attorney–Client Privilege

The court and parties acknowledged that the attorney–client privilege does not protect communications between individuals and non-attorneys, whether the non-lawyers are jailhouse lawyers, patent agents, or any other non-lawyer.

Choice of Law

The court first addressed the threshold choice-of-law question—did Federal Circuit or Fifth Circuit law apply?  Noting that regional-circuit law applies to non-patent issues and Federal-Circuit law applies to “questions impacting substantive patent questions,” the court held that Federal-Circuit law applied to the patent–agent privilege question because the subject communications “are potentially relevant to numerous substantive issues of patent law.”

Reasons for Adoption

Federal courts considering adopting a new evidentiary must start with FRE 501, which permits courts to develop privilege common law “in light of reason and experience.”  And the Supreme Court’s decision in Jaffee v. Redmond, 518 U.S. 1 (1996), directed that courts consider whether the putative privilege (1) is rooted in the imperative need for confidence and trust; (2) serves the public interest; (3) promotes sufficiently important interests to outweigh the need for probative evidence; and (4) has any consensus among the states.

No federal appellate court has adopted a patent–agent privilege; nor, unsurprisingly, has any state court adopted the privilege.  The district courts that have addressed the issue are split.  See footnote 1 in the court’s opinion for a list of these cases.

Nonetheless, the court held that “reason and experience” compelled adoption of a new patent–agent privilege.  The court effectively cast Jaffee aside because the circumstances there were “vastly different,” and was more persuaded by the Supreme Court’s decision in Sperry v. State of Florida, 373 U.S. 379 (1963), where the Court found that patent agents engage in the practice of law.

The court also found persuasive Congress’s authorization of non-attorney patent agents to practice before the Patent Office, and held that the patent–agent privilege “is coextensive with the rights granted to patent agents by Congress.”  The court expressly stated that, as to the practice before the Patent Office, patent agents are “legally equivalent” to lawyers.

In short, given that clients can choose between patent agents and attorneys when coming before the Patent Office, “the patent–agent privilege furthers the same important public interests as that of the attorney–client privilege.”

Scope of the Privilege

Relying on USPTO regulations, the court defined the privilege’s scope by a indefinite demarcation line.  The privilege covers communications between non-attorney patent agents and their clients that are “reasonably necessary and incident” to the preparation and prosecution of patent applications.  Communications that are not “reasonably necessary and incident” to patent prosecutions “fall outside the privilege.”

The court did not define “reasonably necessary and incident,” leaving that interpretation to future disputes and future courts.


The dissent challenged virtually all of the majority’s findings and rulings.  The dissent found no requisite public interest, no federal-appellate or state-court support, and that “the scope of this new privilege is more complicated than the Majority perceives.”

The dissent had a simple alternative to a patent–agent privilege: “A company desiring to use a patent agent but maintain a privilege may have its counsel, be it in-house or outside counsel, supervise the agent or hire an agent already working for a law firm.”

We shall see whether the Supreme Court ultimately weighs in on this first-impression privilege issue.

The Accountant–Client Privilege in MDL Proceedings

There is no federal common-law accountant–client privilege. Couch v. United States, 409 U.S. 322 (1973). Some, but not all, states recognize an accountant–client privilege, but the privilege’s scope and application vary.

In diversity-jurisdiction actions, federal courts apply the privilege law as dictated by the conflict-of-laws rules of the forum state. For an example of how these issues become tangled, see my post discussing a federal court aaccountantpplying Georgia’s accountant–client privilege to a Texas party and his North Carolina-based accountant.

Matters become even trickier when the Judicial Panel on Multidistrict Litigation consolidates several federal-court cases into a single MDL court. Convoluted choice-of-law issues arise, particularly regarding application of state-created evidentiary privileges.

Kelly J. Balkin identifies and discusses these complicated issues in her excellent law-review article, The Accountant–Client Privilege in Multidistrict Litigation: An Efficient Federal Common Law Solution, 69 U. Miami L. Rev. 833 (2015). In this article, available here , Ms. Balkin summarizes in a straight-forward manner the state and federal conflict-of-laws issues with respect to evidentiary privileges, and then proposes that MDL courts apply a blanket accountant–client privilege in MDL proceedings where at least one party had relied on the privilege in its accountant dealings.

This article is worth reading for understanding the federal and state conflict-of-laws rules in applying evidentiary privileges in general, as well as for those litigants confronting trouble applying a state-law privilege when a MDL court assumes control of multiple, related actions. And you will also find helpful another article, cited by Ms. Balkin, titled The Application of Conflict of Laws to Evidentiary Privileges, and available here.

My thanks to Kelly Balkin and The University of Miami Law Review for permission to re-publish this first-rate article in this post.

No Privilege or Work-Product Protections for Communications between Insured and its Broker

Author’s note: I apologize for the recent absence of blog posts.  Over the last three months I have tried two cases, one of which lasted seven weeks.  These trials prevented me from posting on recent privilege developments, but I resume today with this interesting opinion.

In an insured’s bad-faith claim against its insurer, the USDC for the Western District of Kentucky (Louisville) rejected attorney–client privilege and work-product assertionBrokers over communications between the insured and its broker.  In doing so, the court ruled that the communications did not pertain to legal advice even though the broker “shepherded the insured through the claims process.”  Cardinal Aluminum Co. v. Cont’l Cas. Co., 2015 WL 4483991 (WD Ky. July 22, 2015).  You may read the decision here.

Third-Party Subpoena to Broker

Cardinal Aluminum Co. sued Continental Casualty Co. claiming breach-of-contract and bad faith after Continental rejected Cardinal’s coverage claim for a crack in a piece of industrial equipment.  Continental subpoenaed Cardinal’s insurance broker seeking opinions, reports, and examinations related to the equipment and all documents related to the case.

Cardinal filed a motion to quash and filed in support its CFO’s affidavit.  The CFO stated that the broker “shepherded Cardinal through the eleven-month claims process,” negotiated with Continental on Cardinal’s behalf, met with Cardinal’s lawyer “to develop strategies,” and “acted to protect and advance Cardinal’s legal interests.”  You may read the affidavit here.

The broker was clearly involved with Cardinal’s counsel, and it is easy to see why Cardinal fought so hard to protect these communications.

Court Rejects Attorney–Client Privilege

In this diversity case, the federal court correctly applied Kentucky state privilege law to Cardinal’s privilege assertions over its broker communications.  Kentucky Rule of Evidence 503 requires the privilege proponent to prove that the communication was confidential, for purposes of legal advice, and made between two of these four parties: client, client’s representatives, the lawyer, or the lawyer’s representatives.

Cardinal argued that its broker was a “client representative” under Kentucky’s privilege rule.  After reading the CFO’s affidavit, however, the court ruled that the broker’s actions “do not amount to legal advice.”  And the broker’s negotiations with Continental over the policy “were not undertaken to obtain legal advice, but rather to secure insurance coverage.”  In short, the court found that, contrary to an attorney–client relationship, “the broker–insured relationship arises simply from a commercial transaction for the sale of insurance.”

Court Rejects Work-Product Doctrine

Contrary to the privilege conflict-of-law result, federal law governs work-product claims in federal court.  Cardinal claimed that the work-product doctrine protected communications with its broker arising after the date it submitted its claim to Continental.

The court rejected this assertion, however, stating that Cardinal failed to prove that the broker prepared the documents in anticipation of litigation.  Indeed, the CFO’s affidavit was silent in this regard.  The court further noted:

Documents prepared as part of the ordinary business functions of an insurance broker are not prepared as a result of anticipated litigation.

Small Hope

Although rejecting Cardinal’s privilege and work-product claims and ordering the broker’s deposition to move forward, the court provided Cardinal some hope.  The court permitted Cardinal to review the broker’s documents and submit a specific privilege log and to re-assert any privilege or work-product claims.  The court’s rulings, however, create a high hurdle for any future argument.