By Andrew Williams --
Are communications between a patent agent and a client privileged? Up until last week, the Federal Circuit had not addressed the subject, although there had been a split with the district courts that had considered the issue. But, in In re Queen's University at Kingston, the Federal Circuit decided the question in the affirmative. Therefore, unless the Court rehears this case, otherwise takes up the issue en banc, or the holding is overturned by the Supreme Court, there will be a patent agent-client privilege. The panel was not in complete agreement, however. Writing in dissent, Judge Reyna indicated that he would not have created this new privilege. He complained, in part, that the extent of the new privilege is unclear. However, without trying to be tautological, the privilege should extend as far as a patent agent is ethically allowed to practice before the Patent Office.
The facts of the case are essentially irrelevant. The Canadian Queen's University at Kingston and PARTEQ Innovations had sued Samsung in the Eastern District of Texas, alleging that the SmartPause feature on Samsung's newest devices infringed the patents-in-suit. Samsung moved the District Court to compel the production of documents withheld because of "privilege relating to communications with its patent agents." The magistrate judge granted the motion to compel. The District Court did not alter that determination and did not certify the issue. However, it did agree to stay production pending a writ of mandamus (from which this case stems).
The first question is whether the Federal Circuit should even have granted mandamus review in the first place. There are three considerations for review when a claim of privilege is at issue: "whether (1) there is raised an important issue of first impression, (2) the privilege would be lost if review were denied until final judgment, and (3) immediate resolution would avoid the development of doctrine that would undermine the privilege." Slip Op. at 5 (citing In re Seagate Tech., LLC, 497 F.3d 1360, 1367 (Fed. Cir. 2007) (en banc)). As noted above, this is a case of first impression for the Federal Circuit. In addition, the Court reasoned that if it waited until final judgement on the merits, it would basically be impossible for the Court to "disentangle" the impact of these documents. It is, however, unclear how this element would ever be considered in the negative (wouldn't it always be difficult to disentangle the impact of wrongly-compelled produced documents). Finally, immediate resolution would avoid further inconsistent development of the doctrine in the district courts. As such, even though the Court noted that the legal standard is exacting, it found it to be present in this case.
In ultimately finding that the privilege exists, the Court relied heavily on Sperry v. State of Florida, 373 U.S. 379 (1963). This is the same case that the Patent Office cites as authority for promulgating ethics rules, such as the recent adoption of the USPTO Rules of Professional Conduct (see "USPTO Publishes Final Rule Adopting New Rules of Professional Conduct"). The Federal Circuit in this case relied on Sperry because Rule 501 of the Federal Rules of Evidence allows a court to define new privileges based on the common law, which is not static but interpreted "in light of reason and experience . . . ." The Sperry case addressed two issues. First, the Supreme Court determined that non-attorney patent agents practicing before the Patent Office were, in fact, practicing law. Second, it held that the State of Florida could not regulate this practice. This is because Congress authorized this practice of law by non-attorneys, and the States could therefore not prohibit or regulate this activity. As the Federal Circuit noted, "[i]n holding that the State of Florida had no authority to regulate the admitted practice of law by patent agents, the Supreme Court emphasized that it is Congress who has authorized and continues to permit the practice of law by patent agents when appearing before the Patent Office."
Of course, new privileges are not created lightly. Indeed, the Court noted that there is a presumption against recognizing a new privilege. The attorney-client privilege is most well-known, which exists to "encourage full and frank communication." However, there are plenty of cases where new privileges were not adopted, such as with accountants and jailhouse lawyers. It was the unique role of patent agents as established by Congress that weighed in favor of the privilege. In essence, clients have a reasonable expectation that all communications related to legal services in preparing and prosecution patent applications will be kept privileged. As the Court put it:
Whether those communications are directed to an attorney or his or her legally equivalent patent agent should be of no moment. Indeed, if we hold otherwise, we frustrate the very purpose of Congress's design: namely, to afford clients the freedom to choose between an attorney and a patent agent for representation before the Patent Office.
Slip Op. at 19.
The dissent did call into question the scope of the patent agent-client privilege. The majority did address the issue in the original analysis: "reason and experience compel us to recognize a patent-agent privilege that is coextensive with the rights granted to patent agents by Congress." Slip Op. at 18. Nevertheless, it also included a section entitled "D: Scope of Privilege," in which it held that:
Communications between non-attorney patent agents and their clients that are in furtherance of the performance of these tasks, or 'which are reasonably necessary and incident to the preparation and prosecution of patent applications or other proceeding before the Office involving a patent application or patent in which the practitioner is authorized to practice' receive the benefit of the patent agent-privilege.
Slip Op. at 24-25. Conversely, "[c]ommunications that are not reasonably necessary and incident to the prosecution of patents before the Patent Office fall outside of the scope of the patent-agent privilege." Slip Op. at 25. Of course, such a pronouncement was probably unnecessary, because if a patent agent were to so make a communication, it would likely be an unauthorized practice of law, as the Court recognized and noted in Footnote 8.
Because the standard for creating new privileges is exacting, it was not surprising that one of the judges dissented. The dissent had several reasons why it did not think it was appropriate to create a patent-agent-client privilege. As already referenced, one of the top reasons was that the new privilege was complicated and uncertain. Judge Reyna did not see the scope of a patent agents work as being cut-and-dry. In fact, he found that there was plenty of grey area, such as issuing invalidity opinions for potential reexamination or inter partes review filings or drafting assignments for still pending applications. In fact, in a somewhat ironic twist, the dissent noted:
I believe that advising clients on whether a privilege would apply in court to the various acts a patent agent might be asked to perform is itself outside scope of an agent's authorized practice before the USPTO. Therefore, a client concerned about maintaining a privilege may need to hire an attorney to determine whether this court's newly created agent-client privilege would apply in her circumstances.
Slip Op. at 10 (J. Reyna, dissenting).
Judge Reyna's logic probably faltered a bit when he tried to argue that there is insufficient public interest to support such a finding. For example, in his footnote 2, he compares the zero amicus briefs that were filed in the present case with the 14 that were filed in the Supreme Court case of Jaffee v. Redmond. However, even he must recognize the distinction between an original three-judge panel at an appellate court and a case for which the Supreme Court has granted cert. Almost certainly if this case is reheard at the Federal Circuit, there will be amicus briefs filed. Moreover, Judge Reyna asserts that because both a patent agent and a patent applicant have a duty of disclosure with the Patent Office, that a privilege between the two is unnecessary. According to the argument, the encouraging of "full and frank communication" is less effective. Of course, this does not address the fact that communications between an agent and its client to determine what falls within this duty are the exact types of communications that should be privileged. If not, then it does not make sense to protect any communication related to patent practice before the Office, regardless of whether it is made by an agent or attorney.
Because there was a dissent filed in this case, it is very possible that there will be a request for rehearing or a petition for cert. to the Supreme Court. We will continue to monitor this case in the event that there are any further developments.
In re Queen's University at Kingston (Fed. Cir. 2016)
Panel: Circuit Judges Lourie, O'Malley, and Reyna
Opinion by Circuit Judge O'Malley; dissenting opinion by Circuit Judge Reyna