10 March 2016
On March 7, 2016, the US Court of Appeals for the Federal Circuit issued its decision on a petition for a writ of mandamus in In re Queen’s Univ. at Kingston, in which the Federal Circuit recognized a patent-agent privilege extending to non-attorney patent agents relating to their authorized practice before the US Patent & Trademark Office (PTO or Office). In granting the petition, the Federal Circuit reversed an order from the US District Court for the Eastern District of Texas compelling Queen’s University to produce employee communications with its non-attorney patent agents.
The discovery dispute began when Queen’s University (which had filed a complaint alleging patent infringement against Samsung) refused to produce certain documents it contended contained privileged communications, including some between Queen’s University’s employees and non-lawyer patent agents registered to practice before the PTO discussing the prosecution of the patents-in-suit. Samsung filed a motion to compel, which the magistrate judge granted on the basis that the communications were not subject to the attorney-client privilege and that a separate patent-agent privilege did not exist. Queen’s University ultimately filed its petition for writ of mandamus, and the district court stayed production of the subject documents pending the petition.
In deciding that mandamus review of the discovery order was appropriate, the court noted that whether a patent-agent privilege exists is an issue of first impression for the Federal Circuit, and district courts had been split on the issue. The Federal Circuit began its analysis with Federal Rule of Evidence 501, which authorizes federal courts to define new privileges by interpreting common law principles “in light of reason and experience.” While the Federal Circuit acknowledged that there is a presumption against the recognition of new privileges, and that courts have refused to recognize a privilege applicable to communications with other non-attorney client advocates (such as accountants), the court found that “the unique roles of patent agents, the congressional recognition of their authority to act, the Supreme Court’s characterization of their activities as the practice of law, and the current realities of patent litigation counsel in favor of recognizing an independent patent-agent privilege.”
In support of its finding, the Federal Circuit cited Sperry v. State of Florida ex rel. Florida Bar, 373 U.S. 379 (1963), in which the Supreme Court found that a patent agent’s actions involving the preparation and prosecution of patent applications for others constitutes the practice of law, that Congress is the body that authorizes such practice, and that Congress expressly permitted the Commissioner of the PTO to promulgate regulations that allow patent agents to practice before the PTO. Because Sperry confirmed that patent agents engage in the practice of law itself—as opposed to merely engaging in law-like activity—the Federal Circuit stated that the need for candor between a client and his or her attorney that justifies the attorney-client privilege applies equally to communications between a client and his or her patent agent in relation to prosecution of a patent. The Federal Circuit further noted that Congress had endorsed a system in which patent applicants can choose between patent agents and patent attorneys when prosecuting patents before the PTO and that such a purpose would be frustrated if the client were not afforded the expectation that all communications relating to “obtaining legal advice on patentability and legal services in preparing a patent application” would be kept privileged, regardless of whether such communications were with a patent attorney or agent registered to practice before the PTO.
Having found that recognition of a patent-agent privilege was appropriate, the Federal Circuit considered the proper scope of the privilege, noting that a party asserting the patent-agent privilege must take care to distinguish between communications that are within the scope of activities authorized by Congress and those that are not. The Federal Circuit pointed to the PTO’s promulgated regulations for help defining the scope of covered communications, holding that “[c]ommunications 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 participate,’ receive the benefit of the patent-agent privilege.” Conversely, the Federal Circuit stated that communications such as those “with a 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 are not ‘reasonably necessary and incident to the preparation and prosecution of patent applications or other proceeding before the Office’” and therefore fall outside the scope of the patent-agent privilege.
In summary, the Federal Circuit concluded that, in light of reason and experience and consistent with Rule 501 of the Federal Rules of Evidence, a patent-agent privilege exists extending to communications with non-attorney patent agents when those agents are acting within the agents’ authorized practice of law before the PTO.
In his dissent, Judge Reyna argued inter alia that, considering the fundamental “openness” contemplated by the federal justice system, the presumption against the creation of new privileges had not been overcome by any showing that the public interest would be served or that there is a real need for the patent-agent privilege.
This decision has important implications to parties in the contexts of both patent prosecution before the PTO and patent litigation in the United States. While it should provide some degree of comfort that certain communications with non-lawyer patent agents practicing before the PTO will be protected, the decision should be carefully considered, particularly in view of the limitations it places on the scope of the communications falling within the privilege.