Earlier this year, the Federal Circuit in a 2-1 panel decision in In re Queen’s University held there was a privilege over communications between a patent agent and client with respect to patent prosecution. That decision is here. I gave a talk earlier this year about how I think this case creates some risks even if it is followed, and the powerpoint for that talk is here.
A civil case in Texas has given another reason to be careful. Plaintiff filed a patent application and apparently used a patent agent to do the work. When the defendant refused to pay the plaintiff for using the invention (it seems), the defendant sought discovery of all communications between the patent agent and the plaintiff. The trial court ordered their disclosure.
The plaintiff sought mandamus review. The court of appeals refused to grant that extraordinary relief, stating in part:
No Texas statute or rule recognizes or adopts a patent-agent privilege. The trial court declined to recognize such a privilege here. Relator asks this Court to recognize a new discovery privilege and determine that the trial court abused its discretion for not recognizing the new privilege. Neither this Court nor the trial court has the authority to adopt a new discovery privilege. In re Fischer & Paykel Appliances, Inc., 420 S.W.3d at 848. We decline to do so here and, therefore, conclude the trial court did not abuse its discretion by refusing to adopt the privilege.
Further, Queen’s University is not binding here. The Federal Circuit applies its own law for substantive and procedural issues if those issues are “intimately involved in the substance of enforcement of the patent right.” 820 F.3d at 1290. This includes determination of whether documents are discoverable “in a patent case because they relate to issues of validity and infringement.” Id. at 1291. If the case involves substantive issues of patent law, such as claim construction, validity, and inequitable conduct, then the Federal Circuit applies its own patent law precedent. Id. Communications between a non-attorney patent agent and his client “that are not reasonably necessary and incident to the prosecution of patents before the Patent Office,” however, are outside the scope of a patent-agent privilege. Id. at 1301–02. Whereas the federal common law governs privilege in a federal case, “in a civil case, state law governs privilege regarding a claim or defense for which state law supplies the rule of decision.” Id. at 1294 (quoting FED. R. EVID. 501).
This case is not a patent infringement case. It is a breach of contract case governed by Texas law. The underlying dispute does not involve a determination of the validity of the patent or whether Tabletop Media, LLC infringed on the patent. The Queen’s University court expressly excluded such cases from the scope of the privilege, and neither this Court nor the trial court is required to apply federal patent law to the merits of the case. Where, as here, the substantive claims are governed by state law, the state privilege law also applies. Texas does not recognize a patent-agent privilege, and we decline to create a new common law privilege.
A copy of that decision, In re Andrew Silver (Dallas Ct. App. 05-160074-CV, Aug. 17, 2016) is here.
I am not sure that reasoning makes sense, since the choice of law analysis underlying it is missing: whether a communication is privileged doesn’t turn on where the proceeding is filed or what law gave rise to the claim, which seems to be the Dallas court of appeals’ view. (For example, the Dallas approach would mean that a communication that is not privileged under some foreign country’s law would be privileged if suit were filed in the US.)
Hopefully the Texas Supreme Court will fix this, since it seems to be wrong and is going to make a mess.
What a load of crap, both from the TX district court and the appellate court. It’s not a matter of whether or not the person giving legal counsel jumped through one set of hoops (called law school and the state bar exam) or or a different set of hoops (viz. a science degree and the USPTO licensing exam). Irrespective of which set of hoops were jumped through, the person in question is providing legal advice and service that cannot be properly rendered without an expectation of privilege, and the client has an expectation of such privilege, regardless of which set of hoops the practitioner jumped through.
Agree.
David,
On March 7, you wrote: “The case, In Re Queens University, is here. I need to read it more closely, as it has a dissent that cites a leading authority in this area…”
I saw Judge Reyna’s name in your slides, but no mention of a leading case. Could you tell us what you had in mind?
David, I also think the case is wrongly decided. Patent agents are creatures of federal law, and whether they have or do not have privileges in their communications, and the scope of the privilege, seem a matter of federal common law.
I think the Texas state court got it right and that it expressly did a choice of law analysis — concluding that the state law applicable to evidentiary privileges applies.
When the situation arises in California I think the outcome will be the same. See Welfare Rights Organization v. Horia Crisan (1983) 33 Cal.3d 766, 773-74 (courts are prohibited from creating new, non-statutory privileges and citing, among other cases, Kent Jewelry Corp. v. Kiefer (1952) 113 N.Y.S.2d 12, 15-17 holding that no privilege attaches to patent agent communications).
Dan,
I do not think that you are correct. The question is not one of “creating” privilege – the creation occurs the moment the client engages with an agent on the Federal matter. The question rather is whether the State is going to recognize the extant Federal privilege.
Anon, before this year’s In re Queen’s University there was no “extant Federal privilege.” Now there is [over a dissent] — but only in federal court when the rule of decision is patent law. When the litigants are in state court and the rule of decision is state law then the federal privilege created by In re Queen’s University does not apply. The issue in that situation is whether a state court can expand its state’s statutory list of privileges to include a client – patent agent privilege. The Texas appellate court concluded it cannot — as will a California court.
Dan,
Again, you are not correct – there was a Florida case awhile back, and the privilege has been well established.
As to the type of privilege, there is not argument that this is a Federal matter, but that changes nothing, as I have already made the point that the distinction here is one of “creation” – which simply is not correct.
Are you referring to Sperry v. Florida?
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