Opinion
Civil Action No. 3:98-CV-2996-D
March 17, 2002
MEMORANDUM OPINION AND ORDER
In this case involving U.S. Patent No. 5,568,207 ("the '207 patent"), "Auxiliary Lenses for Eyeglasses," plaintiff-counterdefendant Aspex Eyewear, Inc. ("Aspex") moves to compel discovery of documents withheld by defendant-counterplaintiff E'Lite Optik, Inc. ("E'Lite") on the grounds of attorney-client privilege and work product immunity and documents related to E'Lite's pending patent application. The court denies the motion for the reasons that follow.
I
The court has set out the background facts of this case in two prior memorandum opinions, see Aspex Eyewear, Inc. v. E'Lite Optik, Inc., Civil Action No. 3:98-CV-2996-D, slip op. at 1-3 (N.D. Tex. Apr. 4, 2002) (Fitzwater, J.); Aspex Eyewear, Inc. v. E'Lite Optik, Inc., 2002 WL 204775, at *1 (N.D. Tex. Feb. 27, 2001) (Fitzwater, J.), and will therefore add only the relevant facts and procedural history necessary to place today's decision in context.
Aspex recently learned of a letter dated November 1, 2000 from E'Lite's President, Greg Smith ("Smith"), to certain customers in which Smith stated that E'Lite's patent lawyers had concluded that "E'Lite's current Smart Clip design does not infringe on Aspex's patent" and that E'Lite has "a patent pending on [its] own rear-mounted design." PX 2. Attached to Smith's letter was a draft letter dated April 5, 2000 from E'Lite's litigation counsel, Robert M. Mason, Esquire ("Mason"), in which Mason concluded "that no infringement exists" because "[t]he '207 patent is narrow and covers a specific apparatus for using magnetic connection between an auxiliary frame and a primary frame." Id. Moreover, Mason stated in his draft letter that "E'Lite has invented a unique eyeglass design that is even further from the claims of the '207 patent" and that "this new E'Lite design is the subject of a currently pending application for patent." Id.
Neither party included its exhibits in an appendix or cited its appendix in the required manner. N.D. Tex. Civ. R. 7.1(i)(1) provides that "[a] party who relies on documentary (including an affidavit, declaration, deposition, answer to interrogatory, or admission) or non-documentary evidence to support or oppose a motion must include such evidence in an appendix." Rule 7.2(e) states that "[i]f a party's motion or response is accompanied by an appendix, the party's brief must include citations to each page of the appendix that supports each assertion that the party makes concerning any documentary or non-documentary evidence on which the party relies to support or oppose the motion." Because the exhibits at issue are few in number and these deficiencies have not interfered with the decisional process of the court, the court has considered the parties' documents and briefing in their present form.
Aspex argues that because the Smith and Mason letters disclose legal advice given to E'Lite by its attorneys, distribution of these documents to customers constitutes a waiver of attorney-client privilege with respect to the letters' subject matter, which Aspex defines as the scope of the '207 patent claims and E'Lite's infringement of those claims. Aspex contends that, because Smith's letter indicates E'Lite's intent to rely on Mason's draft letter as a trial defense to Aspex's willful infringement allegation, E'Lite's attorney work product immunity has also been waived. Aspex also maintains that E'Lite should have produced during discovery the pending patent application disclosed in the letters and its prosecution file history, and that the application and file history are relevant to the infringement issue because the documents will likely contain information regarding the design and operation of E'Lite's rear-mounted products. Aspex therefore requests that E'Lite be compelled to produce "all documents withheld on grounds of attorney-client privilege, . . . relating to the subjects of claim interpretation . . . and the question of E'Lite's infringement of Aspex's ['207 patent]" and "all documents relating to E'Lite's patent application on a rear-mounted magnetic clip-on eyeglass design." P. Mot. at 1.
Because E'Lite states that it does not intend to rely on Mason's draft letter as the basis for a defense to willful infringement, see D. Resp. at 4-5, the court need not address the attorney work product immunity issue.
E'Lite contends that because the letters were written for the purpose of distribution to third parties and arguably do not even disclose confidential communications between Mason and E'Lite, they do not constitute waiver of the attorney-client privilege. E'Lite also argues that Aspex knew of the existence of Smith's letter and its contents as a result of its awareness of a similar letter dated May 19, 1999, which was produced during discovery. E'Lite maintains that Aspex's motion to compel should be denied because Aspex has failed to explain its delay in filing it. E'Lite also posits that its pending patent application is irrelevant to the infringement issue, and that the parties previously agreed not to produce pending applications during discovery.
II
The court first decides whether E'Lite waived the attorney-client privilege with respect to claim interpretation and infringement by disseminating the Smith and Mason letters to certain customers.
A
As a threshold matter, the court concludes that Fifth Circuit law controls this issue. In patent cases, the Federal Circuit applies its own law when the issue pertains to patent law and bears an essential relationship to matters committed to the Federal Circuit's exclusive jurisdiction by statute, or it clearly implicates the jurisprudential responsibilities of the Federal Circuit in a field within its exclusive jurisdiction. See In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 803 (Fed. Cir. 2000) (quoting Midwest Indus., Inc. v. Karavan, 175 F.3d 1356, 1359 (Fed. Cir. 1999) (en banc in relevant part)). In Spalding Sports the Federal Circuit applied its own law in deciding whether the attorney-client privilege applied to an invention record prepared and submitted to house counsel relating to a litigated patent. The Federal Circuit also holds, however, that regional circuit law controls the issue of "waiver by the disclosure of privileged material." GFI, Inc. v. Franklin Corp., 265 F.3d 1268, 1272 (Fed. Cir. 2001) (applying Fifth Circuit law to waiver issue); see also, e.g., In re Pioneer Hi-Bred Int'l, Inc., 238 F.3d 1370, 1374 (Fed. Cir. 2001) (applying Eighth Circuit precedent where attorney-client privilege issue was invoked to preclude discovery regarding merger that patent holder contended abrogated license agreement and privilege issue did not involve substantive patent law). Moreover, even if the court assumes arguendo that Federal Circuit law applies, the result the court reaches today would be the same. See Pioneer, 238 F.3d at 1374 n. 3 (noting that result would have been same under Eighth or Federal Circuit law).
B
"The attorney-client privilege exists to encourage clients to be candid with their attorneys." Indus. Clearinghouse, Inc. v. Browning Mfg. Div. of Emerson Elec. Co., 953 F.2d 1004, 1007 (5th Cir. 1992) (citing United States v. El Paso Co., 682 F.2d 530, 538 (5th Cir. 1982)). "The privilege protects only confidential communications of the client to the attorney." Id. (emphasis in original). "Where the privilege exists, it `protects communications from the client to the attorney made in confidence for the purpose of obtaining legal advice. It shields communications from the lawyer to the client only to the extent that these are based on, or may disclose, confidential information provided by the client or contain advice or opinions of the attorney.'" United States v. Neal, 27 F.3d 1035, 1048 (5th Cir. 1994) (quoting Wells v. Rushing, 755 F.2d 376, 379 n. 2 (5th Cir. 1985)). Likewise, the Federal Circuit has applied regional circuit law to hold that the privilege applies "to lawyer-to-client communications that reveal, directly or indirectly, the substance of a confidential communication by the client." Am. Standard Inc. v. Pfizer Inc., 828 F.2d 734, 745 (Fed. Cir. 1987) (citing Ohio-Sealy Mattress Mfg. Co. v. Kaplan, 90 F.R.D. 21, 28 (N.D. Ill. 1980)).
"Generally disclosure of confidential communications or attorney work product to a third party, such as an adversary in litigation, constitutes a waiver of privilege as to those items." Genentech, Inc. v. United States Int'l Trade Comm'n, 122 F.3d 1409, 1415 (Fed. Cir. 1997). "When relayed to a third party that is not rendering legal services on the client's behalf, a communication is no longer confidential, and thus it falls outside of the reaches of the privilege." Nguyen v. Excel Corp., 197 F.3d 200, 207 (5th Cir. 1999) (footnote omitted). Moreover, "`disclosure of any significant portion of a confidential communication waives the privilege as to the whole.'" El Paso Co., 682 F.2d at 538 (quoting United States v. Davis, 636 F.2d 1028, 1043 n. 18 (5th Cir. Unit A Feb. 1981)). "[A] waiver of the privilege in an attorney-client communication extends `to all other communications relating to the same subject matter.'" In re Sealed Case, 877 F.2d 976, 980-81 (D.C. Cir. 1989) (quoting In Re Sealed Case, 676 F.2d 793, 809 (D.C. Cir. 1982)); In re United Mine Workers of Am. Employee Benefit Plans Litig., 159 F.R.D. 307, 312 (D.D.C. 1994).
C
The court must decide whether E'Lite's revelations in the Smith letter, and its distribution of the Mason draft letter to third-party customers, disclosed the substance of a confidential communication by E'Lite. If the letters did so, the court must determine the extent of their subject matter in order to limn the reach of discovery concerning other communications.
1
Smith's letter, insofar as it refers to Mason's legal advice, simply summarizes Mason's draft letter: "Attached is a letter drafted by E'Lite's patent lawyers regarding Aspex's claim that we are infringing on their patent." PX 2. It explains E'Lite's position that its Smart Clip design does not infringe Aspex's patent, and that, furthermore, "we have a patent pending on our own unique rear-mounted design." Id. Mason's draft letter is clearly intended as a communication to third party customers and not to his client, E'Lite. See id. ("[I]n the event you are sued for patent infringement by reason of having sold any E'Lite product, E'Lite will indemnify and hold harmless for any damages, and engages attorneys at its own expense to defend you."). The communication offers the ultimate opinion on infringement to which Smith referred: "we have concluded that no infringement exists. The '207 patent is narrow and covers a specific apparatus for using magnetic connection between an auxiliary frame and a primary frame." Id.
This language does not reveal a confidential communication by E'Lite. It merely states in general terms Mason's opinion that the Smart Clip models do not infringe the '207 patent, and it follows this statement with a brief description of what Mason believes constitutes the invention covered by the patent. Mason does not attempt to explain in any way the manner in which he believes the Smart Clip models differ from the invention protected by the '207 patent, nor does he discuss the somewhat complicated history of the '207 patent, prior art, validity issues, or claim interpretation issues. His statement briefly describing the invention protected by the '207 patent does not address the meanings of any disputed terms in the patent language. Mason's statements likewise do not reveal E'Lite's litigation strategy, beyond E'Lite's obvious and general intent to deny having infringed the '207 patent by asserting that it does not cover the various Smart Clip designs. The court therefore holds that distribution of the Smith letter and the Mason draft letter did not constitute waiver of the attorney-client privilege as to the subject matter of the letters.
Aspex cites Electro Scientific Industries, Inc. v. General Scanning, Inc., 175 F.R.D. 539 (N.D. Cal. 1997), for the proposition that the revelations in the Smith letter and the Mason draft letter are substantive. In Electro Scientific, however, a client issued a news release that stated it had been advised by legal counsel that the patents at issue were invalid based on prior patents and publications not cited to the Patent Office. Id. at 542. The news release revealed not only the existence of prior patents and publications, which was known as the result of a confidential communication between attorney and client, but also the client's intent to argue invalidity based on the specific allegation that prior patents and publications existed. By contrast, in present case, the letters reveal no new information about the '207 patent or its prosecution history, or E'Lite's litigation strategy in denying that the Smart Clip models infringe it, that would qualify as the substance of a confidential communication by E'Lite to its attorneys. The Smith letter and the Mason draft letter are not privileged communications, and their distribution to E'Lite's customers did not effect a waiver of the attorney-client privilege.
2
Assuming arguendo that E'Lite did waive the attorney-client privilege by distributing these documents to its customers, the scope of the waiver would be quite narrow. Because E'Lite does not intend to use in litigation for any reason the statements by Mason in his draft letter, see D. Resp. at 4-5, "the disclosure of the communication [is] `extrajudicial' — and [poses] no risk of `truth garbling' in the administration of justice." Electro Scientific, 175 F.R.D. at 543. The disclosure would not of itself prejudice Aspex in this litigation. See id. at 544 ("[A]s long as GSI does not try to use in this litigation the sentence in the `News Release' that discloses the communication from counsel, the scope of the waiver should be narrow."). Because the disclosure encompasses merely a general statement arguing noninfringement and a subsequent general definition — in Mason's own words — of the invention protected by the '207 patent, the waiver would be limited to the letters themselves. Since Aspex already possesses both letters, such a waiver would neither require nor allow the additional broad discovery that Aspex seeks.
III
The court next considers whether Aspex is entitled to discovery of documents related to E'Lite's pending patent application and its prosecution file history. Aspex argues that these documents are likely relevant to the issue of infringement. E'Lite contends that the trier of fact can determine infringement through the use of testimony and by comparing the allegedly infringing products to the '207 patent, rather than by examining a separate pending patent application involving different products.
E'Lite also argues that the parties are bound by a prior agreement not to produce pending applications. Because it offers no evidence in its brief of such an agreement, see D. Resp. at 6, the court declines to deny Aspex's motion on this basis.
Aspex is correct that pending applications can be relevant to an infringement determination, specifically because they can be informative about the scope of a prior patent, or they can contain admissions relevant to an infringement determination regarding a prior patent. See Cent. Sprinkler Co. v. Grinnell Corp., 897 F. Supp. 225, 229 (E.D. Pa. 1995) ("It is possible that a PTO examiner might deny a particular claim in a [continuing] application by finding that the allegedly new claim was included within the original application."); Bott v. Four Star Corp., 675 F. Supp. 1069, 1075 (E.D. Mich. 1987) ("Information as to pending patent applications is important in patent litigation; such applications may contain admissions."). Moreover, it is not controlling that Aspex is unable to point to specific evidence in E'Lite's pending application in arguing its motion to compel, because Aspex does not have access to the application "and so must rely on supposition of what might be in [it]." Cent. Sprinkler, 897 F. Supp. at 229. Aspex is still required, however, to point to the specific relevance that the pending application might have for its infringement suit. See id. ("The most important factor in support of disclosure is that the requests seek information on patents that are directly relevant to this action."); see also Fischer Imaging Corp. v. Lorad Corp., 148 F.R.D. 273, 274-75 (D. Colo. 1993) ("Fischer has simply presented generalized arguments that the patent applications contain information which may be probative on the questions of infringement and validity. No specific showing of direct relevance or particularized need has been made.").
Aspex has failed to point to what it supposes might be the specific relevance of E'Lite's pending patent application. In its motion, Aspex simply states:
At least some of the E'Lite products accused of infringing the ['207] patent in this case are rear-mounted magnetic clip-on eyewear. Consequently, E'Lite's patent application and its prosecution file history are relevant to the issue of infringement because these documents will most likely contain information regarding the design and operation of E'Lite's rear-mounted products.
P. Mot. at 3. This statement is merely a general assertion about relevance to the infringement issue and therefore does not justify reopening discovery, especially when the discovery would ostensibly be based on Aspex's earlier request for "[a]ll patent applications or documents compiled in preparation for patent applications which relate or refer to the Magnetic Eyewear." PX 1 at 3. See Cent. Sprinkler, 897 F. Supp. at 229 (holding insufficient requests for patent applications concerning sprinkler systems in general or any other broad category). Under similar circumstances to the ones in this case, several courts have denied access to patent applications. E.g., Ideal Toy Corp. v. Taco Indus., Inc., 478 F. Supp. 1191, 1194 (D. Del. 1979); Cleo Wrap Corp. v. Elsner Eng'g Works, Inc., 59 F.R.D. 386, 388 (M.D. Pa. 1972); Struthers Scientific Int'l Corp. v. Gen. Foods Corp., 45 F.R.D. 375, 379 (S.D. Tex. 1968). The court therefore denies Aspex's request for discovery of documents related to E'Lite's pending patent application and its prosecution file history.
* * *
Aspex's March 14, 2002 motion to compel discovery is denied.
SO ORDERED.