Attorney-Client Privilege as an International Business Issue
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1 BEIJIN G FRAN KFU RT H O N G KO N G LO N D O N LO S AN GELES MU N IC H N EW YO RK SIN G APO RE T O KYO WASH IN GT O N, DC Attorney-Client Privilege as an International Business Issue IPO Meeting San Antonio, TX September 11, 2012
2 Introduction Q. Why is attorney-client privilege an important issue in exporting technology? A. Disclosure obligations in litigation, primarily in the U.S. but also abroad 2
3 Overview 3 Patent Agent Client Privilege in U.S. litigation U.S. patent agents Foreign patent agents Patent Agent Client Privilege in International Community International Association for the Protection of Intellectual Property (AIPPI) studies and resolutions Developments and status at WIPO Future progress Communications with In-House Attorneys in Europe
4 Overview 4 Patent Agent Client Privilege in U.S. litigation U.S. patent agents Foreign patent agents Patent Agent Client Privilege in International Community International Association for the Protection of Intellectual Property (AIPPI) studies and resolutions Developments and status at WIPO Future progress Communications with In-House Attorneys in Europe
5 U.S. Patent Agent Communications Case law is mixed on whether client communications with a U.S. patent agent are protected. Considerations include: Congressional intent v. special status of attorneys Compare Buyer s Direct Inc. v. Belk, Inc., 102 USPQ2d 1979 (C.D. Cal. Apr. 24, 2012), with Park v. Cas Enters., Inc., 2009 WL (S.D.Cal. Oct. 27, 2009) Whether patent agent is working for an attorney See Baxter Healthcare Corp. v. Fresenius Med. Care Holding, Inc., 2009 WL (N.D. Cal. Mar. 3, 2009) Whether purpose of communications concerns obtaining legal advice See AT&T Corp. v. Microsoft Corp., 2003 WL (N.D. Cal. Apr. 18, 2003) Whether communications were before or after issuance of patent See Polyvision Corp. v. Smart Techs. Inc., 2006 WL (W.D. Mich. Mar. 7, 2006) 5
6 U.S. Patent Agent Communications Reasoning where courts find patent agent client privilege: Congress permitted both patent attorneys and patent agents to practice before the USPTO Sperry v. State of Fla. ex rel. Florida Bar, 373 U.S. 379 (1963) Patent agents are regulated by the same ethical standards applied to attorneys Clients must be able to freely choose between patent attorneys and patent agents for representation before the USPTO Different privilege treatment would frustrate Congressional scheme 6
7 U.S. Patent Agent Communications Reasoning where courts reject patent agent client privilege: By virtue of their qualifications and license, only attorneys give legal advice The attorney-client privilege should be construed narrowly Patent agents are nonlawyer advocates (like accountants) who advise clients about how the law might affect their interests 7 Federal Circuit has never addressed whether patent agents should be treated like attorneys in considering privilege issues See In re Spalding Sports Worldwide, Inc., 203 F.3d 800 (Fed. Cir. 2000)
8 Overview 8 Patent Agent Client Privilege in U.S. litigation U.S. patent agents Foreign patent agents Patent Agent Client Privilege in International Community International Association for the Protection of Intellectual Property (AIPPI) studies and resolutions Developments and status at WIPO Future progress Communications with In-House Attorneys in Europe
9 Foreign Patent Agent Communications Are Communications Between Clients and Foreign Patent Agents Discoverable in U.S. Litigation? U.S. courts treat as a matter of comity -- Afford the same attorney-client privilege protection in U.S. litigation as would be given in foreign country If protected in foreign country, protected in U.S. litigation If no privilege in foreign country, no protection in U.S. litigation Where foreign law is unclear, the proponent of the privilege has the burden of establishing its applicability 9
10 Foreign Patent Agent Communications Examples Japan In 1998, Code of Civil Procedure of Japan extended privilege to Japanese patent agents (benrishi). E.g., Eisai Ltd. v. Dr. Reddy's Labs., Inc., 406 F. Supp. 2d 341 (S.D.N.Y. 2005) Canada Communications with Canadian patent agents are not covered by the solicitor-client privilege. E.g., Polyvision Corp. v. Smart Techs., Inc., 2006 WL (W.D. Mich. Mar. 7, 2006) Germany -- Communications with German patent agent are privileged under German law. E.g., 2M Asset Mgmt., LLC v. Netmass, Inc., 2007 WL (E.D. Tex. 2007) 10
11 Foreign Patent Agent Communications Examples (cont.) Great Britain Patent agent communications have the same privileges as those of a solicitor. E.g., VLT Corp. v. Unitrode Corp., 194 F.R.D. 8 (D. Mass. 2000) France French privilege law does not extend to patent agent communications. E.g., Commissariat a l'energie Atomique v. Samsung Elecs. Co., 245 F.R.D. 177 (D. Del. 2007) 11 Switzerland No applicable law. E.g., In re Rivastigimine Patent Litig., 239 F.R.D. 351 (S.D.N.Y. 2006) (N.B. -- Patent Attorney Act entered into force on July 1, 2011 provides professional secrecy obligations for patent attorneys)
12 Brief Summary of Attorney-Client Privilege in China Communications between an attorney and a client are generally not protected 12 No protection for documents Attorneys can be compelled to testify about clients private information in court (Article 70 of Civil Procedure Law), even though they have a general duty to keep clients' private information and trade secrets confidential (Article 33 of the Lawyer's Law) Amended Lawyer s Law (2008) eliminates attorney liability for refusing to disclose all of a client s known confidential information
13 Brief Summary of Attorney-Client Privilege in Korea 13 On May 18, 2012, Korean Supreme Court ruled in a criminal case that there is (1) No statutory or constitutional basis for an attorney-client privilege (2) No broad attorney-client privilege exists in Korea as found in common law jurisdictions But Korean law does protect confidential communications between an attorney and a client by permitting the attorney to refuse to testify Document discovery is very limited in Korea litigation See Astra Aktiebolag v. Andrx Pharms., Inc., 208 F.R.D. 92, 101 (S.D.N.Y. 2002)
14 Brief Summary of Attorney-Client Privilege in Taiwan 14 Attorneys may refuse to testify about matters learned from a client that relate to the representation of the client Taiwanese law and courts are silent on whether written communications are protected from discovery in a civil lawsuit Written communications between clients and attorneys may be seized in criminal matters
15 Overview 15 Patent Agent Client Privilege in U.S. litigation U.S. patent agents Foreign patent agents Patent Agent Client Privilege in International Community International Association for the Protection of Intellectual Property (AIPPI) studies and resolutions Developments and status at WIPO Future progress Communications with In-House Attorneys in Europe
16 AIPPI Committees -- Patent Agent Client Privilege AIPPI Special Committee Q163 ( ) Conducted survey of groups from 22 member countries concerning applicability of the attorney-client privilege to communications between patent or trademark attorneys and their clients 16 Issued report summarizing survey findings (See AIPPI adopted resolution: That AIPPI supports the provision throughout all of the national jurisdictions of rules of professional practice and/or laws which recognize that the protections and obligations of the attorney-client privilege should apply with the same force and effect to confidential communications between patent and trademark attorneys, whether or not qualified as attorneys at law (as well as agents admitted or licensed to practice before their local or regional patent and trademark offices), and their clients, regardless of whether the substance of the communication may involve legal or technical subject matter. (
17 IPO Resolution -- Patent Agent Client Privilege In 2006, the IPO Board of Directors adopted the following resolution: IPO supports in principle legislation to recognize that the protections and obligations of the attorney-client privilege should apply with the same force and effect to confidential communications between foreign patent and trademark attorneys, whether or not qualified as attorneys at law (as well as agents admitted or licensed to practice before their local or regional patent and trademark offices), and their clients, regardless of whether the substance of the communication may involve legal or technical subject matter. 17
18 AIPPI Committees -- Patent Agent Client Privilege 18 AIPPI Special Committee Q199 (2005-current) Mission -- Identify problems and propose solutions to the application of privilege in relation to communications between clients and their IP advisers nationally and/or internationally. Urge the establishment of minimum standards for recognition and observance of privilege Ongoing activities include: Issue working guidelines to address the problem of forcible disclosure of IP advice Gather data from groups representing member countries Provide submissions to WIPO offering recommendations and encouraging further efforts
19 Overview 19 Patent Agent Client Privilege in U.S. litigation U.S. patent agents Foreign patent agents Patent Agent Client Privilege in International Community International Association for the Protection of Intellectual Property (AIPPI) studies and resolutions Developments and status at WIPO Future progress Communications with In-House Attorneys in Europe
20 Patent Agent Client Privilege at WIPO The Standing Committee on Patents (SCP) at WIPO has conducted 3 studies on the patent agent client privilege 1. THE CLIENT-PATENT ADVISOR PRIVILEGE, SCP/14/2, December 18, CONFIDENTIALITY OF COMMUNICATIONS BETWEEN CLIENTS AND THEIR PATENT ADVISORS, SCP/16/4/Rev., April 21, APPROACHES AND POSSIBLE REMEDIES TO CROSS-BORDER ASPECTS OF CONFIDENTIALITY OF COMMUNICATIONS BETWEEN CLIENTS AND PATENT ADVISORS, SCP/18/6, April 2,
21 Patent Agent Client Privilege at WIPO Findings from the first study: Privilege could encourage open and candid discussions and communications with patent agents Patent advisors promote innovation and support dissemination of technical information Public interest requires disclosure of information to public tribunals in order to allow justice to be served Patent agents in some countries do not have to meet any legal qualifications Patent advisors provide legal advice relating to patentability and other elements of the patent laws Patent advisors acting only as intermediaries between clients and the Patent Office should not expect communications to be treated as privileged 21
22 Patent Agent Client Privilege at WIPO Conclusions from the first study -- THE CLIENT- PATENT ADVISOR PRIVILEGE: Differences in treatment are found not only between common law countries and civil law countries, but also within countries in the same legal system 22 It does not appear practical or realistic to seek a uniform rule regarding treatment of patent agent communications that could require changes in national judicial systems Conduct further investigatation into possible options to allow better recognition of the confidentiality of the communications between patent agents and their clients beyond national borders.
23 Patent Agent Client Privilege at WIPO Second study: Four possible approaches to enhancing confidentiality of communications with patent advisors Encourage country to apply the same rules that are applicable to domestic patent agents to foreign patent advisors Recognize the confidentiality of communications with foreign patent advisors designated by the respective foreign authority Establish principle that confidentiality of at least certain communications with patent advisors who meet certain criteria should be protected Apply protection to communications with domestic and foreign patent advisors who meet selected criteria 23
24 24 Patent Agent Client Privilege at WIPO Third study identified areas of concern: Communications with patent agents can become subject to disclosure in litigation in other countries Uncertainty as to whether the courts are bound to accept confidentiality arising under the law of other jurisdictions Courts are not required to recognize confidentiality of communications with non-lawyer foreign patent advisors on the basis of judicial comity Even if protected domestically, no guarantee that the patent agent communications will be protected against forcible disclosure in litigation in foreign countries Practical measures, such as involving lawyers in communications with patent agents are not efficient and may increase costs
25 Patent Agent Client Privilege at WIPO Third study identified possible remedies: Extend the recognition of privilege to foreign patent advisors by national laws Establish an international mechanism to recognize privilege for certain communications with certain types of patent agents Establish a common set of substantive rules of privilege for adoption or as a model to follow 25
26 Overview 26 Patent Agent Client Privilege in U.S. litigation U.S. patent agents Foreign patent agents Patent Agent Client Privilege in International Community International Association for the Protection of Intellectual Property (AIPPI) studies and resolutions Developments and status at WIPO Future progress Communications with In-House Attorneys in Europe
27 Patent Agent Client Privilege at WIPO At the 18th Session of the SCP held in May 2012, delegations suggested: Exploring non-binding for remedies to crossborder concerns involving confidentiality of communications with patent agents Removing the topic from the future agenda of the Committee Continuing to study the cross-border concerns involving confidentiality of communications with patent agents 27
28 Overview 28 Patent Agent Client Privilege in U.S. litigation U.S. patent agents Foreign patent agents Patent Agent Client Privilege in International Community International Association for the Protection of Intellectual Property (AIPPI) studies and resolutions Developments and status at WIPO Future progress Communications with In-House Attorneys in Europe
29 Communications with in-house attorneys in Europe Case C-550/07, Akzo Nobel Chemicals Ltd v. Commission, 2010 E.C.R Case concerned two s exchanged between the Director General of Akcros (an Akzo subsidiary) and an Akzo in-house attorney, who was a member of the Netherlands Bar, and employed in the legal department Court of Justice of the European Union (ECJ) dismissed the appeal and upheld the ruling that the s with an in-house lawyer were not protected under the legal profession privilege 29
30 Communications with in-house attorneys in Europe Case C-550/07, Akzo Nobel Chemicals Ltd v. Commission, 2010 E.C.R Legal professional privilege is subject to two conditions: Communication must be connected to the client s rights of defense Communication must emanate from independent lawyers 30
31 Communications with in-house attorneys in Europe Case C-550/07, Akzo Nobel Chemicals Ltd v. Commission, 2010 E.C.R Akzo presented three arguments on appeal: The independent lawyer requirement should not be interpreted to exclude in-house lawyers The rights to a defense should include the right to choose the lawyer who will provide legal advice Decision violates the procedural autonomy and sovereign power of the member states 31
32 Communications with in-house attorneys in Europe 32 Case C-550/07, Akzo Nobel Chemicals Ltd v. Commission, 2010 E.C.R The ECJ rejected each of Akzo s three arguments: The independent lawyer requirement means the absence of any employment relationship between the lawyer and client In-house lawyer is less able to deal with conflicts between professional obligations and the aims of client Less professional independence than outside counsel because of economic dependence and ties with employer Outside counsel and in-house lawyers have different authority and restrictions because in-house lawyers are not always able to represent their employer before all the national courts Uniformity to the legal profession privilege in European Union law trumps relying on national law approaches
33 Thank you! Christopher E. Chalsen, Partner Milbank Tweed Hadley & McCloy LLP Thanks to Nathaniel T. Browand of Milbank, Tweed, Hadley & McCloy LLP for assistance in the preparation of these materials. 33
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