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Presentation on theme: " AIPLA Annual Meeting 2014: Attorney-Client Privilege for In-House Counsel October 23, 2014 Presented By Matthew M. D’Amore."— Presentation transcript:

1 AIPLA Annual Meeting 2014: Attorney-Client Privilege for In-House Counsel October 23, 2014 Presented By Matthew M. D’Amore

2 2 Sources of Privilege & Protection Attorney-client privilege Derives from Federal common law Common interest / joint defense protection Also Federal common law Work product protection Derives from Federal Rules of Civil Procedure

3 3 Sources of Privilege & Protection Protections can vary circuit by circuit “The applicability of attorney-client privilege in a case such as this, in which subject matter jurisdiction extends from the underlying presence of a federal patent law question, is determined by federal common law. Fed. R. Evid. 501. In an appeal from a district court's handling of a subpoena, where the issues concerned are not unique to patent law, this court applies the law of the regional circuit of the court under whose authority the subpoena was issued.” Wi- LAN, Inc. v. Kilpatrick Townsend & Stockton LLP, 684 F.3d 1364, 1368 (Fed. Cir. 2012).

4 4 Sources of Privilege & Protection State law may control some issues

5 5 Privileged? Business meeting with company employees? Privilege applies only if in-house counsel acts in legal capacity and only to legal (not business) advice. Ordinary business communications may not be privileged. Nat’l. Union Fire Ins. Co. of Pittsburgh, Pennsylvania v. TransCanada Energy USA, Inc., 119 A.D.3d 492 (1st Dep’t. July 31, 2014) (insurance claim investigation documents prepared by attorney not legal advice because they were part of the ordinary business activities of the company). Possibly same rules for outside counsel, i.e., no privilege if “predominant purpose” of communication is business advice. See Koumoulis v. Indep. Fin. Mktg. Grp., Inc., 2014 U.S. Dist. LEXIS 7695 (E.D.N.Y. Jan. 21, 2014).

6 6 Privileged? Email between two employees, CC to in-house counsel? Copying in-house counsel on an email does not render it privileged. Oracle Am., Inc. v Google Inc., 2011 WL 5024457 (N.D. Cal. Oct. 20, 2011). Email must be prepared for purpose of obtaining legal advice and directed to in-house counsel, among other things.

7 7 Privileged? MLR, LLC v. Dell Inc. (E.D.Va. Oct. 17, 2014) In the circumstances presented here … the phrase “in anticipation of litigation” in Fed. R. Civ. P. 26(b)(3)(A) be limited, with respect to non-opinion material, to material generated solely with respect to MLR’s relationship with a particular potential licensee/defendant beginning at the time that potential licensee/defendant is identified. Other or more general relationship to litigation will render the material presumptively business-related and not protected. Opinion work product that relates solely to legal issues as distinguished from financial issues is protected even if it does not relate solely to a particular licensee/defendant. Other opinion work product is presumptively business-related and not protected.

8 8 Privileged? MLR, LLC v. Dell Inc. (E.D.Va. Oct. 17, 2014) “In the circumstances presented here, internal communications to and from internal counsel are presumptively business communications not protected by the attorney-client privilege unless they relate solely to MLR’s relationship with a specific potential licensee/defendant at or after the time that potential licensee/defendant is identified.”

9 9 Privileged? Co-defendants in a U.S. lawsuit? “Joint defense” or “common interest” privilege may apply if: (1) communications made in course of a joint defense effort; (2) parties share a common interest; and (3) statements were made in furtherance of that effort. Best protected by Common Interest Agreement or Joint Defense Agreement.

10 10 Privileged? Same lawyer representing two defendants: “When the same attorney represents the interests of two or more entities on the same matter, those represented are viewed as joint clients for purposes of privilege….As explained in Griffith v. Davis, 161 F.R.D. 687, 693 (C.D.Cal.1995), ‘the joint client doctrine typically has been applied to overcome what would otherwise have constituted a waiver of confidentiality because a communication had been shared between two clients.’” In re Regents of Univ. of Cal., 101 F.3d 1386, 1389 (Fed. Cir. 1996) (citations omitted). Licensor and exclusive licensee: “Here, the agreement between plaintiffs and the licensor was exclusive, which makes their interests essentially identical. Regents, 101 F.3d at 1390… Thus, we can conclude that there was a common legal interest between plaintiffs and Ferrosan/AS, and later between plaintiffs and Novo Nordisk.” Smithkline Beecham Corp. v. Apotex Corp., 193 F.R.D. 530, 539 on reconsideration in part, 194 F.R.D. 624 (N.D. Ill. 2000).

11 11 Privileged? Supplier / Distributor: “Inevitably, as a matter of both litigation strategy and business necessity, Johnson and Dickson were de facto allies. Both faced a threat of liability if Mabuchi prevailed on its infringement theories. Moreover, Johnson, as a supplier anxious to please its customer, had a strong economic incentive to avoid unnecessarily embroiling that customer in litigation that arose from Johnson's activities in marketing the assertedly infringing equipment. From this confluence of interests, it is not surprising to discover that Hong Kong counsel represented both Johnson and Dickson at the deposition and that Johnson entered into an indemnification agreement with Dickson. This congeries of circumstances amply demonstrates that the two companies had strong common interests in the course of discovery taken by Mabuchi from Dickson.” Johnson Elec. N. Am., Inc. v. Mabuchi N. Am. Corp., 1996 WL 191590 (S.D.N.Y. Apr. 19, 1996).

12 12 Privileged? But maybe not: “I find in the alternative that the communications were ancillary to the principal activity in which Oneida, Ullmann, and Pasabahce were engaged: namely, the negotiation of an agreement for Pasabahce to make and for Oneida to buy and distribute glassware to compete with Libbey. All parties apprehended that their venture involved some legal risk, but that apprehension was merely a part of their larger endeavor. Responding to those concerns on the part of the other parties, Oneida sought commercial gain, not legal advantage, through disclosure of its lawyer's advice to Ullmann and Pasabahce. The parties were formulating not a ‘common legal’ strategy, but a joint commercial venture.” Libbey Glass, Inc. v. Oneida, Ltd., 197 F.R.D. 342, 349 (N.D. Ohio 1999) (emphasis added).

13 13 Privileged? Potential acquisition: “The legal interests of AFI and Medtronic in evaluating these legal interests were aligned as both parties were committed to the transaction and working towards its successful completion…. AFI and Medtronic shared common legal interests in whether the products that AFI and Medtronic would market infringed third party IP, and the communications addressing the scope of the IP certainly were designed to further that interest. The Court finds that this mutual interest in valid and enforceable patents fits within the confines of the common legal interests doctrine. Morvil Tech., LLC v. Ablation Frontiers, Inc., 2012 WL 760603 (S.D. Cal. Mar. 8, 2012) (citations omitted).

14 14 Privileged? But maybe not: “[T]he Court concludes that the common interest doctrine does not preclude the production of the BD Documents. The Court concludes that SRU has not provided proof sufficient to establish that, at the time of their negotiations, BD and SRU shared identical legal interests in the subject opinions of counsel. Instead, the Court views the negotiations between these two corporations to reveal that SRU's disclosures to BD were made not in an effort to formulate a joint defense but rather to persuade BD to invest in SRU. Accordingly, the Court concludes that SRU has failed to demonstrate that the parties had agreed to a joint defense strategy or that the opinions were a precaution against anticipated joint litigation. Corning Inc. v. SRU Biosystems, LLC, 223 F.R.D. 189, 190 (D. Del. 2004)

15 15 Practical Tips re: A/C Privilege Clearly identify when you are communicating in your role as an attorney (particularly those with multiple titles). Mark documents as privileged when you think the privilege applies (having automatic fillers that say attorney-client privileged not helpful). Be mindful of “business” communications. Repeatedly remind non-lawyer fact gatherers to mention in their written work product that work was done at the request of counsel. But be careful to rely on “work product” only when truly anticipating litigation.

16 16 Practical Tips (cont.) Understand privilege laws in all relevant jurisdictions in which the company does business. For matters in jurisdictions where privilege may not apply to in-house counsel, consider oral advice as opposed to written (but still may be required to testify). Instruct employees about how best to preserve privilege in written communications to you (e.g., use “To” field, indicate “at request of legal,” and do not forward privileged communications to people without need to know). Understand and evaluate potential “common interest” situations case by case.

17 17 Questions? Matthew M. D’Amore Partner, Morrison & Foerster Phone: (212) 468-8168 Email:

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