Nonattorney Patent-Agent Privilege Recognized by the Federal Circuit

By J. Derek McCorquindale
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
Apr 1, 2016

In what was deemed “an issue of first impression for this court and one that has split the district courts,” the Federal Circuit granted mandamus in In re Queen’s University at Kingston, No. 2015-145 (Fed. Cir. Mar. 7, 2016), to resolve the following question: “whether a patent-agent privilege exists.” Slip op. at 6-7. The majority found that such a privilege does exist, but with important limitations.

During the course of discovery in a patent infringement suit in the United States District Court for the Eastern District of Texas, Petitioner Queen’s University withheld certain communications with its registered nonattorney patent agents. It created privilege logs listing these communications, but asserted that a “patent-agent privilege” applied and refused to produce these documents to defendants Samsung Electronics Co., Ltd., and Samsung Electronics America, Inc. (collectively, “Samsung”).

Samsung moved before Magistrate Judge Payne to compel the production of these otherwise discoverable documents, which included communications between Queen’s University employees and registered nonlawyer patent agents discussing the prosecution of the patents-in-suit. Id. at 3. That motion was granted. Minute Entry for Proceedings Held Before Magistrate Judge Roy S. Payne, Queen’sUniv. at Kingston v. Samsung Elecs. Co., No. 2:14-CV-53-JRG-RSP (E.D. Tex. June 17, 2015), ECF No. 149. The magistrate judge reasoned that (1) patent agent communications do not fall under the recognized attorney-client privilege, and (2) a distinct patent-agent privilege does not exist. Queen’s, No. 2015-145, slip op. at 3. The district judge refused to overrule the magistrate’s discovery order.

Queen’s University petitioned the Federal Circuit for mandamus review, arguing that such an extraordinary remedy was necessary in this case of first impression because production of such materials would mean “the confidentiality of those communications will be lost forever” and that “[t]he [c]ourt cannot unring that bell” through appeal by the ordinary course. Id. at 6 (alterations in original) (citation omitted). The court agreed that “[i]f we were to deny mandamus . . . the confidentiality of the documents as to which such privilege is asserted would be lost.” Id. at 6-7. This rationale is consistent with other cases where the confidentiality of documents is at stake. Id. at 7-8 (“[W]hen a writ of mandamus is sought to prevent the wrongful exposure of privileged communications, the remedy of mandamus is appropriate ‘because maintenance of the attorney-client privilege up to its proper limits has substantial importance to the administration of justice, and because an appeal after disclosure of the privileged communication is an inadequate remedy.’” (alteration in original) (quoting In re SpaldingSports World Wide, Inc., 203 F.3d 800, 804 (Fed. Cir. 2000))). The court also stressed “the importance of resolving this issue and clarifying a question with which many district courts have struggled, and over which they disagree.” Id. at 10.

On the merits, Samsung argued that, especially considering the presumption against creating new privileges, where counsel is not involved in the communications—as here—the court should “neither expand the scope of the attorney-client privilege nor recognize an independent patent-agent privilege.” Id. at 13. But the majority found that “[1] the unique roles of patent agents, [2] the congressional recognition of their authority to act, [3] the Supreme Court’s characterization of their activities as the practice of law, and [4] the current realities of patent litigation” all militate in favor of creating a separate patent-agent privilege. Id.

The court relied heavily on Sperry v. State of Florida ex rel. Florida Bar, 373 U.S. 379 (1963), for the proposition that “the preparation and prosecution of patent applications for others constitutes the practice of law.” Queen’s, No. 2015-145, slip op. at 13-14 (quoting Sperry, 373 U.S. at 383). “To the extent, therefore, that the traditional attorney-client privilege is justified based on the need for candor between a client and his or her legal professional in relation to the prosecution of a patent, that justification would seem to apply with equal force to patent agents.” Id. at 14.

Moreover, according to the majority, Congress has long envisioned the role before the U.S. Patent and Trademark Office (USPTO) of nonlawyer patent agents. Id. at 15-17 (there is a “strong and unchallenged implication[] that registered agents have a right to practice before the Patent Office” (quoting Sperry, 373 U.S. at 395)). In sum:

The Supreme Court’s characterization of the activity in Sperry coupled with the clear intent of Congress to enable the Office to establish a dual track for patent prosecution by either patent attorneys or non-attorney patent agents confers a professional status on patent agents that justifies our recognition of the patent-agent privilege.

Id. at 23.

But the majority held that such a privilege was not without limits. Rather, “before asserting the patent-agent privilege, litigants must take care to distinguish communications that are within the scope of activities authorized by Congress from those that are not.” Id. at 24. And, as with most privileges, the party asserting it bears the burden of demonstrating its applicability. Id. The court pointed to 37 C.F.R. §11.5(b)(1) as critical to defining the scope of privileged communications with registered, nonattorney patent agents:

Practice before the Office in patent matters includes, but is not limited to, preparing and prosecuting any patent application, consulting with or giving advice to a client in contemplation of filing a patent application or other document with the Office, drafting the specification or claims of a patent application; drafting an amendment or reply to a communication from the Office that may require written argument to establish the patentability of a claimed invention; drafting a reply to a communication from the Office regarding a patent application; and drafting a communication for a public use, interference, reexamination proceeding, petition, appeal to or any other proceeding before the Patent Trial and Appeal Board, or other proceeding.

Id. (quoting 37 C.F.R. §11.5(b)(1)).

If not in furtherance of the above activities or functions, parties will not benefit from the newly created privilege, warned the court: “Communications that are not reasonably ecessary and incident to the prosecution of patents before the Patent Office fall outside the scope of the patent-agent privilege.” Id. at 25.

With this new rule and guidance provided, the Federal Circuit majority reversed and remanded to the district court for further consideration, over a dissent from Judge Reyna who would have heeded the presumption against creating such a new privilege in derogation of the pursuit of truth in discovery..

This is an important decision for entities engaged in prosecution by registered, nonattorney patent agents. While the privilege is now firmly recognized in all jurisdictions, care should be given that the communications remain circumscribed within permitted bounds, specifically those described in 37 C.F.R. § 11.5(b)(1). For instance, communications with a nonattorney patent agent who is offering an opinion on the validity of another party’s patent in contemplation of litigation or for the sale or purchase of a patent, or on infringement, or on foreign patent prosecution are not likely to be found to be “reasonably necessary” to the preparation and prosecution of patent applications before the USPTO.