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.

Issue

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.

Dissent

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.

11th Cir. Refuses to Adopt Plea-Negotiations Privilege for Financier Jeffrey Epstein’s Sex-Offense Plea Discussions

In a case involving former Bear Stearns financier Jeffrey Epstein, the 11th Circuit refused to adopt a rule-based or common-law evidentiary privilege precluding from discovery plea negotiations betweenEpstein prosecutors and a criminal defendant. Doe v. United States, 2014 WL 1509015 (CTA11 Apr. 18, 2014). You may access the opinion here.

Background

The U.S. Attorney’s office for the Southern District of Florida accepted prosecution of financier Jeffrey Epstein for allegedly sexually abusing several minor girls. You may read more about these charges in this New York Times story.

After “extensive plea negotiations” between Epstein’s lawyers, including Roy Black, and federal prosecutors, Epstein and the U.S. Government entered into a non-prosecution agreement under which the government would not pursue federal charges if Epstein pled guilty to state-law charges of solicitation of prostitution.

Two of Epstein’s victims later sued the federal government for not informing them of the plea negotiations as required by the Crime Victims’ Rights Act, 18 U.S.C. § 3771. The victims then moved to compel production of the correspondence between Epstein’s lawyers and prosecutors. Epstein and Black intervened to prevent disclosure, arguing that an evidentiary privilege precluded production of plea-negotiation correspondence.

FRE 410 Does not Create Privilege

Epstein first argued that Federal Rule of Evidence 410 created an evidentiary privilege protecting plea negotiations from disclosure. The Court quickly dismissed this argument because “Rule 410 governs the admissibility of plea negotiations, not the discoverability of them.” Privileges pertain to discoverability and Rule 410 is simply inapplicable.

No Common Law Plea-Negotiations Privilege

Epstein alternatively argued that the Court should recognize a federal common-law evidentiary privilege for plea negotiations. The Court acknowledged that FRE 501 empowers federal courts to continue the evolutionary development of evidentiary privileges, but also that courts generally disfavor “newly minted” privileges that contravene the principle that the public has a right to “every man’s evidence.”

The Court analyzed Epstein’s privilege request through the four factors enunciated in Jaffee v. Redmond, 510 U.S. 1, 10-15 (1996): 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.

Noting that a prosecutor and a criminal defendant are adversaries and “do not enjoy a relationship of confidence and trust when they negotiate, the Court held that a plea-negotiations privilege did not meet any Jaffee criteria. In fact, the Court held that a plea-negotiations privilege would upset the admissibility balance of FRE 410, which permits introduction of plea negotiations into evidence in certain circumstances.