## United States Court of Appeals for the Federal Circuit

04-1365

FORT JAMES CORPORATION, Plaintiff-Appellee,

v.
SOLO CUP COMPANY, Defendant-Appellant.

Russell E. Levine , Kirkland & Ellis LLP, of Chica go, Illinois, argued for plaintiffappellee. With him on the brief was Christopher R. Liro

. Bradley F. Rademaker , Wallenstein Wagner & Rockey, Ltd., of Chicago, Illinois, argued for defendant-appellant. With him on the brief were Linda A. Kuczma and Jeffrey R. Gargano

. Appealed from: United States District Cour t for the Eastern District of Wisconsin Chief Judge Rudolph T. Randa

## United States Court of Appeals for the Federal Circuit

04-1365

FORT JAMES CORPORATION, Plaintiff-Appellee,

v. SOLO CUP COMPANY, Defendant-Appellant.

_______________________

DECIDED: June 22, 2005

_______________________

Before RADER, SCHALL, and GAJARSA, Circuit Judges

. Opinion for the court filed by Circuit Judge GAJARSA. Dissenti ng opinion filed by Circuit Judge SCHALL. GAJARSA, Circuit Judge

. Solo Cup Company appeals fr om a post-trial order of the district court that dismissed for lack of jurisdiction its counterclaim for a declaration of unenforceablity of a patent owned by Fort James Co rporation ("Fort James"). Fort James Corp. v. Solo Cup Co. , No. 99-C-0827 (E.D. Wis. Jan. 15, 2003) (o rder dismissing counter claim as moot). Solo Cup also appeals the cour t's pre-trial evidentiary decisi on holding that an invention disclosure form was protected by attorney-client privilege. Fort James Corp. v. Solo Cup Co. , No. 99-C-0827 (E.D. Wis. Nov. 6, 2002) (order denying motion to compel).Because the district c ourt erred in concluding that a post-trial covenant not to sue filed by Fort James divested it of jurisdiction to hear Solo Cup's counterclaim, we reverse for further proceedings consistent with this opinion. We also reverse the court' s determination that the c ontested disclos ure form is protected by attorney-client privilege. I. BACKGROUND In 1999, F o rt James brought suit against So lo Cup alleging infringement of three patents related to dis posable pressed paperboard containers ( e.g. , paper plates) and their methods of manufacture: U.S. Pa tent Nos. 4,609,140 ("the '140 patent"); 4,606,496 ("the '496 patent") 1 ; and 4,721,499 ("the '499 patent"). Solo Cup denied the infringement allegations and counterclaimed for declarations t hat the patents were invalid, unenforceable, and not infringed. In addition to s eeking injunctive r e lief on its counterclaims, Solo Cup also sought an aw ard of its reasonable attorney fees. Solo Cu p's allegatio ns of inva lidit y and unen forceability were d i rected at the '1 40 patent and grounded in Fort James's conduct during the time period in which th e patented invention was dev eloped. The '140 patent claims a high rigidity paper plate and its method of manufacture, which the in ventors discovered "by accident" in the course of evaluating produc tion processes used by Fort James between 1980 and 1981. In August and September 1980, com m ercial producti on studies were conducted at Fort James's plants in Fo rt Smith, Arkansas and Darli ngton, South Caro lina. Both subject plants used die A-87, which produc ed pl ates with more rigidity than those Fort James manufactured on other dies. The in ventors studied die A-87 and determined that it exerted greater pressure on the rim portion of the plate than other die sets, a

1 The '496 patent was dropped from the lawsuit prior to trial.

04-1365 2discovery that resulted in the '140 pat ent. While Fort James was studying its commercial production methods, plates manufa ctured using die A- 87 were sold to the public along with other paper plat es. Based on this c h ronol ogy, Solo Cup alleged that commercial sales of the inv ention claimed in the '140 patent occ u rred more than one year prior to the patent's app lic ation date of April 13, 1982. A ccordingly, Solo Cup claimed that the '140 patent was invalid bas ed on the on- sale bar to patentability found in 35 U.S.C. § 102(b). Solo Cup also claimed that Fort James had knowin gly failed t o disclose to the Patent and Trademark Office ("PTO") info rmation regarding its pre-critical date commercial activities. During prosecution, Fort James submitted to the PTO a written declaration signed by Patrick Wnek, one of the inventor s named on the '140 patent, that described t he process by whic h Fort James discover e d the claimed invent ion. The Wnek Declaration that was submitted to t he PTO indic a ted that "paper plates produced on the presses used in the test runs starting in August 1980 were batched together wit h other paper plates produced at the plant, warehoused, and ultimately sold to customers." In contrast to this broad stat ement regarding the initia l commercial s a les of the invention, an early draft of the Wnek Declaration included a specific dat e on which the claimed plates were sent to consumers. According to Solo Cup, Fort James's deliberate deletion of the specific dates of its initia l commercial sa les c onstituted inequitable conduct such that the '140 Pa tent should be declar ed unenfor ceable and Solo Cup should be entitled to attorney fees pursuant to 35 U.S.C. § 285. In the cour se of conducting disc overy on it s counterclaims, Solo Cup identified a Fort James document referred to as JR 0028487. It is a product development

04-1365 3engineering report dated Februar y 2, 1982, whic h includes the statement "[l]egal counsel has advised a bar was not established during experimental trials at Darlington and Fort Smith." Solo Cup requested the under lying opinion of counsel referenced in JR0028487 and all related docum ents. Because Fort James had produced the sam e document during prev ious litigat ion concerning the patents in su it, it determined that i t could not claim that the document had been pr oduced inadvertently. Accordingly, Fort James produced the requested opi nion of counsel and at l east four other documents previously withheld as pr ivileged. Included among the produced documents were additional opinions of counsel regarding the app licability of the on-sa le bar to the Fort James patents and c o rrespondence with c ounsel indicating how the cla i med invention was discov e red and estimating when customers would have seen or used the product. On Decem ber 8, 2000, Solo Cup fil ed a motion to compel production of a document that it believed prop erly fell within the sc ope of the Fort James waiv er. Specifically , Solo Cup sought the production of Docu ment 99 identified on F o rt James's Schedule of Withheld Docume nts as an "[i]nvention disclosure statement discussing invention of pressed p aperboard plates to m a ximize plate rigidity." Document 99, whic h was dated March 20, 1981, was aut hored by Patrick Wnek and sent to Fort James's inhouse counsel. Solo Cup argued that Docu ment 99 concerned the same subject matter as the other previously privileged docum ents produced by Fort James, namely the conception and commercialization of the claim ed inv ention, and t herefore Fort James could not continue to assert t hat the document was privileged. The district court reviewed Document 99 in camera to resolve Solo Cup's motion to compel. On November 6, 2002, the cour t issued an o r der denying Solo Cup's motion

04-1365 4to compel reasoning that the scope of Fort James's waiver should be construed narrowly by reference only to JR0028487, t he document that constituted the initial waiver. In so holding, the di strict court rejected Solo Cup' s argument that the scope of Fort James's waiver should be defined by reference to a ll the previously privileged documents Fort James produced in ack nowl edgement of JR0028487. Accordingly, the court determined that the subject matter of Fo rt James's waiver was "whether the work carried out by Fort James resear ch personnel prior to J une 1, 1981, specifically the sal e of plates produced during test runs of die A-87 constitu ted a 'public use' or a 'commercial offer of sale' under 35 U.S.C. § 102(b)." After examin ing Docum ent 99, the court found that it "does not contain any info r m ation concerning" the bars to patentability found in § 102(b). The court ex pressly f ound that "[t]he document contains dates surrounding the conception of the invention and a description of it," but that "[t]he spaces on the form that specifically ask fo r information concerning the dates on which the invention was 'first offered for sale in commerce' have been left blank." Based on it s narrow definition of the scope of Fort James's waiver, the court refused to compel Fort James to produce Doc u ment 99. Approximately one month before tr ial, Fort James filed a motion in limin e to preclude Solo Cup from pres enting evidence to the jury on inequitable conduct and unclean hands, the issues under lying Solo Cup's unenforceability counterclaim and its request for attorney fees pursuant to 35 U.S.C. § 285. Because the iss ues were to be tried to the bench and out of concern that Fort James would be prejudiced by Solo Cup's " parade of horribles" before the jury , the district court granted Fort James's motion and effectively bifurcated the trial.

04-1365 5A ten-day jury trial was held in November 2002. After the close of evidence, but before the case was submitted to the jury, Solo Cup filed several written motions for judgment as a matter of law, including a motion for judgment as a matter of la w on patent invalid ity. The district court deferred ruling on Solo Cup' s JMOL motions and submitted the case to the jury. On Nove mber 25, 2002, the jury returned a verdict finding that the '140 patent was not invalid and that Solo Cup did not infringe any of the patents in suit. Immediately after the jury was dismissed, Solo Cup as ked the court to schedule a hearing on the issues bifurcat ed from the jury trial. Fort James opposed Solo Cup ' s request on the ground that the jury verdic t negated the controversy underlying the counterclaim of unenforceability. The parties submitted briefs r egarding whether the district court had jurisdiction to hear Solo Cup's counterclaim and claim for attorney fees. As an exhibit to its post-trial brief, Fo rt James attached a decl aration of its general counsel st ating that Fort James covenanted not to sue Solo Cu p on the three patents originally at issue and that it would not seek to overtu rn the ju ry's verdict (the "PostVerdict Covenant"). On Januar y 16, 2003, the distri ct cour t dismissed as moot Solo Cup's unenforceability counterclaim on the ground that there was no outstanding cas e or controversy between the parties in light of the Post-Verdict Covenant. On June 26, 2003, Solo Cup filed a pleadin g entitled " M otion to Withdraw Certain Pending M o tions for Judgment as a Matter of Law" (" Motion to Withdraw"). The Motion to Withdraw referenced by nam e and doc ket number the five JMOL motions filed by Solo Cup on November 25, 2002 , none of which had been resolv ed by the district court. Solo Cup specifically withdr ew four of its motions, but maintained and requested

04-1365 6consideration of its motion for judgment as a matter of law regarding the inv a lidity of the '140 patent. Fort James responded by argui ng that the Motion to Withdraw was untimely because it was not filed within ten da ys of the entry of judgment as required by Federal Rule of Civi l Procedure ("FRCP") 50(b). Fort James argued in the alternative that the Motion to Withdraw was moot and the court lack ed jurisdiction t o hear it because there was no longer a justiciable c ontroversy between the parties. On March 26, 2004, the district court reiterated t he reasoning of its January 2003 Order and denied as moot the Motion to Withdraw. Fort James Corp. v. Solo Cup Co. , No. 99-C0827 (E.D. Wis. Mar. 26, 2004) (order dismi ssing motion for JMOL). Final judgment in the case was entered on March 30, 2004. Solo Cup f iled its Notice of Appeal on April 29, 2004, challenging the dist rict court's dis m issal of it s unenforc eability counterc laim and its request for attorney fees as well as the court's failure to compel producti on of Document 99. Fo rt James then filed a motion to dismiss Solo Cup's app eal on the ground that it was untimely filed. In support of its motion, Fort James argued that final judgment in this case was entered on June 16, 2003, pursuant to FRCP 58(b )(2). FRCP 58(b)(2) provi des that judgment is entered upon the earlier of the filing of a separate document in th e doc ket or "150 days from entry in the civil dock e t." According to Fort James, the cour t's January 16, 2003 Order dismissing Solo Cup's counterclaim finally r e solved all issues in th e case and therefore acted as a judgment. Bec ause no separate document was entered on the docket, Fort James asserted that final judgment was ente red by operation of law on June 16, 2003, 150 days from the entry of t he January 16, 2003 Order. Under this theory, Solo Cup was requir ed to file its notice of appeal by July 15, 2003, which it failed to do.

04-1365 7On July 15, 2004, Fort James's motion to dismiss was denied by a single judge of this court. Fort James's argument was rejected on the ground that Solo Cup had timely renewed its motion for judgment as a matter of law concerning invalidit y pursuant to FRCP 50(b). Solo Cup filed its renew ed motion for JMOL on June 26, 2 003, within 10 days of the date on whic h Fort James a lleged that judgment was entered. As a motion under FRCP 50(b), Solo Cup's filing tolled the time to appeal until it s renewed motion for JMOL was resolved. See Fed. R. App. Proc. 4(A)(i). B e cause Solo Cup filed its notice of appeal within thirty days of the district court' s order denying its Rule 50(b) motion, its appeal was deemed timely. II. DISCUSSI ON
A. Standard of Review A district court's determination of whether an actual controversy exists to support jurisdiction is a question of law subject to pl enary appe llate review. BP Chems. Ltd

. v. Unio n Car b ide Corp. , 4 F.3d 975, 978 (F ed. Cir. 1993). The district court's factual determinations made in the process of resolv ing questions of law are reviewed for clear

error. Vanguard Res earch, Inc. v. Peat, Inc. , 304 F.3d 1249, 1254 (F ed. Cir. 2002). This court applies the law of the regi onal circuit, here the Sevent h Circuit, with respect to questions of attorney-client privil ege and waiver of attor ney-client privilege. GFI, Inc

. v. Franklin Corp. , 265 F.3d 1268, 1272 (F ed. Cir . 2001). In the Seve nth Circuit, ap plica b ility of privil ege is a factual question su bject to a clearly erroneou s standard of review. Rehling v. City of Chicago , 207 F.3d 1009, 1019 (7th Cir. 2000).

04-1365 8B. Jurisdiction of Solo Cup's Appeal Fort James reasserts its claim pr evious ly resolved by t he order of a s i ngle judge of this cour t, namely that Solo Cup's notice of appeal was not ti mely file d. As an initial matter, we note that Fort James should properly have renewed its jurisdictional challenge b y filing a motion to reconsider the single judg e's order within fourteen days of its issuanc e as required by Federal Circuit Rule 27( l )

. Fort Ja mes's failure to comp ly with Ru le 2 7 ( l ) is not fatal, howev er, because this court has held t hat the merits panel is not bound by the action of a single judge. Typeright Keyboard Corp. v. Microsoft Corp. , 374 F.3d 1151, 1157 n.5 (Fed. Cir. 2004); Fieldturf, Inc. v. Southwest Recreational Indus., Inc. , 357 F.3d 1266, 1268 (Fed. Cir. 2004); Nils sen v. Motorola, Inc. , 203 F.3d 782, 785 n.2 (Fed. Cir. 2000). Although the appellee in Nilss e n filed a motion for reconsider ation, 203 F.3d at 783, there is no indicat i on t hat the appellees in either Typeright or Fieldturf complied with the procedural requirement of Rule 27( l ). Accordingly, Typeright and F i eldturf support Fort James's assertio n that it is entitled to have its jurisdictional claim heard by the merits panel notwiths t anding its failure to comply wit h Rule 27( l ). Without acknowledging t he existence of Rule 27( l ), Fieldturf states that because a motion to dismiss deni ed by a single judge does not become law of the case, the panel is "therefore free, i ndeed o b ligated" to determine whether jurisdiction is appropriate. 357 F

. 3d at 1268. In contr a st, no precedential opinion has strictly adhered to the provisions of Rule 27( l ) to resolve an appellee's challenge to this court's jurisdiction. Given the precedent of Typeright and F i eldturf and the court's responsibility to police the exerc i s e of its jurisdiction, we conclude that it is bes t to reach

04-1365 9the merits of Fort James's jurisdictional argument despi te its limited procedur al deficienc ies. Fort James argues that its motion to dis m iss was improperly denied bec a use Solo Cup's purported Rule 50( b) motion wa s legally inadequate to toll the appeal deadline. Fort James claims that the Mo tion to Withdraw, whereby Solo Cup renewed its request for a JMOL on inv a lidit y , failed to comply wit h the particula rity requirement of FRCP 7. Because t he sufficiency of post-judgment motions is a procedural matter not unique to patent law, the law of the Seventh Circuit sets the standard by whic h we judge the adequacy of Solo Cup's M o tion to W i thdraw. Registration Contro l Sys., Inc. v

. Compusystems, Inc. , 922 F.2d 805, 807 (Fed. Cir. 1990). FRCP 7(b)(1) requires that motions "shall state with partic u larity the grounds therefor." The Seventh Circuit has determined that the rule's st andard for particularity means "reas onable specification." Martinez v. Trainor , 556 F.2d 818, 819-20 (7th Cir. 1977). In the process of applying Seventh Circuit law, this cour t has previous ly indicated that the particularity requirement should be applied flexibly in re cognition of the peculiar circumstances of the case

. Registration Control , 922 F.2d at 808. T he key iss ue to be resolved is whether the document filed affords "notice of the grounds and prayer of the motion to both the court and to the opposing party, provid ing that par ty with a m e aningf ul opportunity to respond and the court with enough infor m ation to process the motion correctly." Id. at 807. Here, there is no ques tion t hat Solo Cup's Motion to Wit hdraw – by itself – did not explain the grounds f o r its renewed motion fo r JMOL. Instead, Solo Cup specifica l l y referenced its pending "Motion for Judgment As a Matter of Law That Claim 1 of U.S.

04-1365 10Patent No. 4,609,140 is Invalid Under 35 U. S.C. § 102( b)" and requested "consideration of the foregoing pending motion (Court's Docket No. 374)." The motion that Solo Cup cited by name and docket number included five pages of factual and legal arguments in support of Solo Cup's claim for JMOL. When the Motion to Withdraw is read in conjunction with the document s pecifically referenced therei n, there is no question regarding the grounds for the re lief demanded. In such circumstances, it is appropriat e to consider previously filed documents out side the four corners of the motion in determining whether the particularity requi rement of FRCP 7 has been satis f ied. Lac Du Blambeau Band of Lake Superi or Chippewa Indians v. Wis. , 957 F.2d 5 15, 516-17 (7th Cir. 1992) (holding that a brief filed contemporaneous ly with a motion fulfills t h e requirement of FRCP 7(b)(1)); Andreas v. Volkswagen of Am., Inc. , 336 F.3d 789, 794 (8th Cir. 2003) (appr oving a di strict court's reference to a F R CP 50(a) pleading in determining the sufficiency of a FRCP 50(b) motion); Cambridge Plating Co., Inc. v. NAPCO, Inc. , 85 F.3d 752, 761 (1st Cir. 1996) (rejecting as "overly technical" the district court's premise that the sufficiency of a post-judgment motion should be determined by reference only to the four corners of the moti on). When put in cont ext of this particular case, the Motion to Withdraw s u fficiently alerted Fort James and the court to the issues Solo Cup was raising. The Motion to Withdraw satisfied the particularity req u irement of FRCP 7(b)(1) and constituted a valid Rule 50( b) motion such that Solo Cu p's time to appeal did not start running until the motion wa s finally resolved by the dis t rict court. Solo Cup's Notice of Appeal was timely fil ed and this court has jurisdiction to hear its appeal pursuant to 28 U.S.C. § 1295(a).

04-1365 11C. Jurisdiction of the District Cour t to Hear Solo Cup's Co u n terclaim The district court dis m issed Solo Cup's counterclaim for a declaration that the '140 patent is unenforceable on t he ground that the Post-Verdi ct Covenant mooted the controversy between the parties. Pursuant to 28 U.S.C. § 2201(a), a declaratory judgment counterclaim may only be br ought to resolve an "actual controversy." Intellectual Prop. Dev., Inc. v. TCI Cablev ision of Cal., Inc. , 248 F.3d 1333, 1340 (Fed. Cir. 2001). In holding that no actual controve rsy existed here, the district court relied primarily on this cour t's jurisprudence in Super Sac k Manufacturing Corp. v. Chase Packaging Corp. , 57 F.3d 1054, 1058 (Fed. Cir. 1995).
In Super Sack , this court stated that "a patentee defending agains t an action for a declaratory judgment of invalidity can divest the trial c ourt of juri sdiction ov er the case by filin g a covenant n o t to assert the patent at issue a gainst the putative inf r inger with respect to any of its past, presen t, or futu re acts." Id. at 1058. The rationale applied b y the court in Super Sac k was that the patentee's covenant not to sue resolved the actual controversy between the parties, i.e. , the question of infringem ent of the subject patent, such that the court no longer had Article I II jurisdiction to hear a declaratory judgment action regarding the v a lidity or en forceability of that patent. Id. ; Spectronics Corp. v. H.B. Fuller Co. , 940 F.2d 631, 635-36 (Fed. Cir. 1991). Here, the district court concluded that in light of the Post-Verdict Co venant there was no actual controversy between th e parties c apable of resolutio n b y a hearin g on the u nenforceab ility of the '140 Patent and therefore Solo Cup's counterclaim was moot. The district court's literal application of t he holding of Super Sack fails to comprehend the unique procedural postu re of the instant case. In Super Sack and its

04-1365 12progeny, the patentee' s covenant not to sue was f iled pr ior to consideration or resolution of the underlying infringement claim. In su ch circumstances, the promise not to sue obviated any reasonable appre hension that the declaratory judgment plaintiff might have of being held liable for its acts of infringement. Super Sack , 57 F.3d at 1059 (as a result of the patentee' s promise not to sue, the declaratory judgment plaintiff "has no cause for concern that it can be held liable for any infringing acts"); Spec tronics , 940 F.2d at 636 (the patentee's stat ement of non-liability made the declaratory judgment plaintiff immune to suit under the claims of the contested patent); see als o Intellectual Prop. Dev. , 248 F.3d at 1341; Amana Refrigeration, Inc. v. Quadlux, Inc. , 172 F.3d 852, 855 (Fed. Cir. 1999). Here, however, the P o st -Verdict Covenant had no effect on Fort James's claim for infringement, because that controversy had already been r e solved by the jury's verdict. The question t hen becom es whether the court retained jurisdiction to hear Solo Cup's dec laratory judgment counter claim after the jury determined that Sol o Cup's products do not infr inge Fort James's patents. As the Supreme Court has explained, a case or controversy adequate to support jurisdiction of a declaratory judgment count erclaim necessarily exists if a party has actually been charged with in fringement of a patent. Cardinal Chem. Co. v. Morton Int'l , Inc. , 508 U.S. 83, 95 (1993). Furthermore, a counterclaim ques tioning the validity or enforceability of a patent raises issues beyond the initial cl aim for infringement that are not dispos ed of by a decis ion of non-infringement. Id. at 96; Altvater v. Freeman , 319 U.S. 359, 364 (1943) . Accordingly, the jury verdict hold i ng t hat Solo Cup did not infringe Fort James's patents di d not moot Solo Cup's counte rclaim for unenforceability nor did it act to divest t he district court of juri sdic tion to hear that unlitigate d

04-1365 13counterclaim. See Fin Control Sys. Pty, L t d. v. OAM, Inc. , 265 F.3d 1311, 1321 (Fed. Cir. 2001) (holding that despite the district court's determination of no infringement, it was obligated to consider and rule on defendant 's c ounterclaims of inv a lidity and unenforceability prior t o entering judgment); Gen. Elec. Co. v. Nintendo Co., Ltd. , 179 F.3d 1350, 1356 (Fed. Cir. 1999) (stating that " our affirmance of a dis t rict court's judgment of noninfringement does not, by itself, moot the dec laratory judgment claim o f invalidity"). 2 The district court erred as a m a tter of law in holding t hat it did not have jurisdiction to hear Solo Cup's counterclaim. The case is remanded for resolution of the issues properly before the cour t prior to its order to bifurc ate, namely Solo Cup's claims of unenforceability on t he basis of inequitable conduct and its request for attorney fees pursuant to 35 U.S.C. § 285. 3
D. Scope of Fort James's Privilege Waiver Solo Cup argues that the dist rict court committed clear error in determining that Document 99, an invention dis c losure st atement, was not within the ambit of the privilege waiver created by Fo rt James's production of JR0028 487. Solo Cup ascribes

2 Paragon Podiatry Lab., Inc. v. K L M Lab., Inc. , 984 F.2d 1182, 1 1 88 n.6 (Fed. Cir. 1993); Buildex Inc. v. Kason Indus., Inc. , 849 F.2d 1461, 1466 (Fed. Cir

. 1988). 3 Fort James argues that Solo Cup failed to preserve its claim for attorney fees under § 285 by not raisin g the issue properly before t he district court. This argument ignores the fact that Solo Cup expressly request ed attorney fees as a remedy for its counterclaim and that the parties' pre-trial briefings identified as an iss ue for trial the question of whether Solo Cup was entit led to suc h an awar d pursuant to § 285. Section 285 grants the district court the power to award attorney fees in exceptiona l cases, but it places no proc ed ural limitations on the court's ability to make such an award prov ided that it has jurisdiction over t he case. Sun-tek Indus., Inc. v. Kennedy Sky Lites, Inc. , 929 F.2d 676, 678 (Fed. Cir. 1991) (deem ing a grant of attorney fees under 35 U.S.C. § 285 made "l ong after final judgment was entere d " to be " a nullity"); cf. Fed. R. Civ . P. 54(d)(2) (requiring that motions for attorney fees be filed no later than 14 days after entry of judgment). U nder the circumstances, we see no reason to deny t he district court the power to consider Solo Cup' s claim for attorney fees pursuant to § 285.

04-1365 14error to the district court's description of th e subject matter of the waiver by reference only to JR0028487. Solo Cup als o asserts that even applying the district court's limited definition of Fort James's wa iver, Document 99 properly falls within that scope and must be produced. The widely applied st andard for determining the scope of a waiver of attorneyclient priv ilege is that the waiver applies t o all other communic a tions relat i ng to the same subject matter. Genentech, Inc. v. U

. S. Int'l Trade Comm'n , 122 F.3d 1409, 1416 (Fed. Cir. 1997); In re Grand Jury Proceedings , 78 F.3d 251, 255 ( 6 th Cir. 1996); In re Cont'l Ill. Sec. Litig. , 732 F.2d 1302, 1314 n.18 (7th Cir. 1984). The waiv er extend s beyond the document initially pr oduced out of c oncern for fairness, so that a party is prevented from disclosing communications th at support its position while simultaneously concealing communications that do not. Weil v. Inv./Indicators , Research & Mgmt., Inc. , 647 F.2d 18, 24 (9th Cir. 1981) (quoting VIII J. Wigmore, Evidenc e § 2291, at 636 (McNaughton rev. 1961) for the proposition t hat fairnes s dictates that a priv ilege holder "cannot be allowed, after disclos ing as much as he pleases, to withhold the remainder"); Abbott Labs. v. Baxter Travenol Labs., Inc. , 676 F. Supp. 831, 832 (E.D. Ill. 1987). There is no bright line test for determining what c o nstitutes the subject matter of a waiver, rather courts weigh t he circumstances of the disclos ur e, the nature of the legal advice sought and the prejudic e to the par ties of permitting or prohibiting further disclos ures. See In r e Keeper of the Rec o rds XYZ Corp. , 348 F.3d 16, 23 (1st Cir

. 2003) (stating that cas e law is of limited a ssistance in determining the scope of a waiver because of the fact-intensive natur e of the issues presented); Eco Mfg. LLC v.

04-1365 15Honey well Int'l, Inc. , No. 1:03-cv-0170, 2003 U.S. Dist. LEXI S 7257, at *5 (S.D. Ind. Apr. 11, 2003) (citing U.S. v. Skeddle , 989 F. Supp. 917, 919 (N.D. Ohio 1997)). The district court here determined that t he scope of F o rt Jame s's waiver s h ould be defined by reference only to it s initial dis c losure of JR 0028487. Becaus e the extent of the privileged material c ontained in J R 0028487 was a two-line refe rence to counsel' s conclus i on that Fort James's pr e-filing activities did not raise a bar to patentability, the court concluded that only communications spec ifically referencing commercial sales or public disclosures of the inv ention were wit hin the subject matter of the waiver. In reaching this conclusion, the court expressly refused to co nsider the content of the material F o rt James voluntarily produced in acknowledgment of its initial waiver. T h e court exc l uded the additional documents from its definition in order to avoid exponentially expanding the scope of the waiver through a never-ending "snowball effect." The formerly withheld documents produced by Fort James directly addressed the conception and reduction t o practice of the cl aimed inv ention as well as Fort James's pre-critical date activities. The district court committed two errors in denying Solo Cup's motion to compel production of Document 99. First, it fail ed to recognize the import of Fort James's knowing disclosure of privil eged document s to a third party, conduct whic h acts as a surrender of the priv ilege protection. Burden-Meeks v. Welch , 319 F.3d 897, 899 (7th Cir. 2003). If the additional doc uments produced by Fort James involved subj ect matter beyond the applicability of t he on-sale bar mentioned in JR0028487, then Fort Jame s should hav e redacted those port i ons of the document s produced. A party's failure to protect its privilege can result in a loss of t hat privilege. Dellwoo d Farms, Inc. v. Cargill,

04-1365 16Inc. , 128 F

. 3d 1122, 1126 (7th Cir. 1997). Although admirable, Fort James's stated desire to avoid court intervention in the disc overy process would not entitle it to dodge the consequences of any careless disclos ures. The court erred in concluding that the additional documents produced by Fo rt James were not relevant to its determination o f the scope of Fort James's privilege waiver. The impact of this initial error is mini mal because the court properly defined the subject matter of the waiver as t he applicat ion of the bars to patentability found in 35 U.S.C. § 102(b). Reversible error occurre d, however, when the court determined that only doc uments containing inf o rmation on Fort James's commercial activities wer e within the scope of that waiver. The Supreme Court has articulated a two-prong test for determining whether § 102(b) bars patentability: 1) the product must be the subject of a commercial offer for sale; and 2) the invention mu st be ready for patenting. Pfaff v. Wells Elec. Inc. , 52 5 U.S. 55, 67 (1998). The second prong of this test necessarily implicates the c onception and reduction to practice or enabl ement of the invention. Id. at 67-68. Accordingly, Fort James's waiver encompassed not only communi cations involving commercial sales of the claimed invention, but al so communications conc erning the inventor's recognition and dev elopment of the inv entio n. It would be unfair to pe rmit Fort James to rely on favorable legal opinions, but protect the communications on which thos e opinio ns depend. See In re Ma rtin Marietta Corp. , 856 F.2d 619, 623 (4th Cir. 1988) (stating that "if a client communicates information to hi s attorney with the understanding that the information will be rev ealed to ot hers, that in formation as well as ' t he details underlying the data which was t o be publis hed' will no t enjoy the privilege" ( quoting Un ited States

04-1365 17v. (Under Seal) , 748 F.2d 871, 875 (4 th Cir. 1984)); United States v. Woodall , 438 F.2d 1317, 1324 (5th Cir. 1970) ("a client's offer of hi s own or his attorney's testimony as to a specific communication constitutes a waiver as to all other communications on the same subject matter"); BASF Aktiengesellschaft v. Reilly Indus., Inc. , 283 F. Supp. 2d 1000, 1003 (S.D. Ind. 2003) (requiring the producti on of all documents exchanged regarding the subject matter of the produced legal opinion); Blackhawk Molding Co., Inc. v. Portola Packaging, Inc. , No. 03-C-6060, 2004 U.S. Dist. LEXIS 19850 (N. D . Ill. Sept. 30, 2004) (construing production of legal opinions c oncer ning a patent's validity and enforceability to waiv e privilege on communi catio n s regarding claim cons truction on which the valid ity an d enforceability opinions necess a rily rely); Motorola, Inc. v. Vosi Techs., Inc

. , No. 01-C-4182, 2002 U.S. Dist. LEXIS 15655 (N.D. Ill. Aug. 19, 2002) (holding that a party's desire to r e ly on c o unse l's opinions regarding va lidity r e quires it to disclos e all pre-suit communications of couns el that include construction of the same patents). Document 99 was dr afted well before the fi ling of the patent application and concerns the concept ion and reduction to practi ce of the claimed invention, matters that are directly related to the on sale bar to pat entability. We hold that the district court committed clear error in determining that Fo rt James's waiver of privile ge did not
encompass Document 99. III. CONCLUS ION For the foregoing reasons, we r e verse the di strict court's determi nation that it did not have jurisdiction to hear Solo Cup's co unterclaim and its holding that Document 99 was not encompassed within Fort James's waiv er of the attorney-client privilege. We remand for further proceedings c onsistent with this opinion.

04-1365 18IV. COSTS No costs.

REVERSED and REMANDED

04-1365 19

## United States Court of Appeals for the Federal Circuit

04-1365 FORT JAMES CORPORATION, Plaintiff-Appellee,

v. SOLO CUP COMPANY, Defendant-Appellant.

SCHALL, Circuit Judge , dissenting. The court holds that the dist rict court erred in ruling that Fort James’s covenant not to sue Solo Cup for patent infringement divested the court of subject matter jurisdiction over Solo Cup’s counterclaim for a declaration that the ’140 patent was unenforceable. In my view, however, Fort James’s covenant not to sue eliminated any live case or controversy between the part ies and thereby rendered Solo Cup’s unenforceability counterclaim moot. I thus would affirm the judgment of the district court. I therefore respectfully dissent.
I. The Declaratory Judgment Ac t states that “any court of the United States, upon the filing of an appropriate plead ing, may declare the rights and other legal relations of any interested party seeking such declaration,” provided there exists “a case of actual controversy within its jurisdiction.” 28 U.S. C. § 2201(a) (2000). The statute requires a court to determine whether “t here is a substantial contro versy, between parties having adverse legal interests, of sufficient imm ediacy and reality to warrant the issuance ofdeclaratory judgment.” Md. Cas. Co. v. Pac. Coal & Oil Co. , 312 U.S. 270, 273 (1941). In determi ning whether such a controversy ex ists with respect to claims for patentbased declaratory relief, we have devel oped a two-part test under which: [t]here must be both (1) an explicit threat or other action by the patentee, which creates a reasonable apprehens ion on the part of the declaratory plaintiff that it will fa ce an infringement suit, and (2) present activity whic h could constitute infringement or c oncrete steps taken with the intent to conduct such activity. BP Chems. Ltd. v. Union Carbide Corp. , 4 F.3d 975, 978 (Fed. Cir. 1993); see also Teva Pharm. USA, Inc. v. Pfizer, Inc. , 395 F.3d 1 3 24, 1332 (Fed. Cir. 2005). “Th e element of threat or reasonable apprehension of s u it turns on the conduct of the patentee, while the infringem ent element depends on the conduct of the asserted infringer.” BP Chems. , 4 F.3d at 978. A party seeking a declaratory judgment bears the burden of establish i ng the existence of an act ual controversy. Sierra Applied Scis. v. Advanced Energy Indus., Inc. , 363 F.3d 1361, 1373 (F ed. Cir. 2004). Moreover, the “a ctual controversy must be extant at all stages of revi ew, not merely at the time the complaint is filed.” Preiser v. Newk irk , 422 U.S. 395, 401 (1975). Accor d ingly, the declaratory-judgment plaintiff has the burden of establis hi ng that “jurisdiction over its de claratory judgment action existed at, and has continued sinc e, the time the [counterclaim] was filed.” Super Sack Mfg. Corp. v. Chase Packaging Corp. , 57 F.3d 1054, 1058 (Fed. Cir. 1 995) (citation omitted); Sierra Applied Scis. , 363 F.3d at 1373. We have ther efore held that a patentee may divest a court of subject matter jurisdicti on over an accused infringer’s declaratory judgment action by c o venanting not to sue t he accus e d infringer for past or present acts

04-1365 2of infringement. Amana Refrigeration, In c. v. Quadlux, Inc. , 172 F.3d 852, 855-56 (Fed. Cir. 1999); Super Sac k , 57 F.3d at 1059-60.
In Super Sack , for example, Super Sac k M anufacturing Corporation (“Super Sack”) sued Chase Packaging Corporation (“C hase”) for infringement of two of its patents. 57 F.3d at 1055. Chase deni ed infringement and c ounterclaimed for declaratory judgment of non-in fringement and invalidity. Id. After co mpletion of discovery, Super Sac k moved for summary judgment, which the trial court denied. Id. at 1055-56. Chase subsequently moved for su mmary judgment of non-infringement and invalidity. The c our t did not, how ever, rule on Chase’s motion. Id. at 1056. Subsequently, Chase requested that the court consider its summary judgment motion. In addition, Chase s ought leav e to amend it s pleadings to incl ude an inequitable conduct counterclaim. Id. Super Sack then filed a motion to dismiss the case for lack of jurisdiction based on it s promise “not to sue Chase for infringement as to any claim of the patents-in-suit bas ed upon t he products currently manufactu red and so ld by Chase.” Id. The district court granted Super Sa ck’s motion and dismissed the case. On appeal, we affirmed the dist rict court’s decision to dismiss the case for lack of jurisdiction. We reas oned that, in view of Super Sac k ’s covenant not to sue, “Chase can have n o reasonab le apprehe nsion that it will face an infringe ment suit on the ’79 6 and ’652 patents with respect to past and present products,” and that Chase’s counterclaims therefore “fail[] to satisfy the first part of our two-part test of justiciab ility [of claims for decla ratory judgment].” Id. at 1059. At the same time, we rejected Chase’s ar gument that a case or controver sy persisted because Super Sack ’s covenant did not apply to products develop ed in the future. In doing so, we pointed out that “the

04-1365 3second par t of our test of declaratory justic iability respecting patent rights requires that the putative infringer’s “ present activity” place it at risk of infringement liability. Id. (quoting BP Chems. , 4 F.3d at 978) (em phasis in original).
II. In this case, I understand the court to recognize that, under the holding of Super Sack , “a patentee defending against an ac tion for a declaratory judgment of invalidity can div e st the trial court of jurisdiction over the case by filing a covenant not to assert the patent at issue against the putative infri nger with r e spect to any of its pa st, present, or future acts.” 1 57 F.3d at 1058. The court holds, howev er, that Fort James’s covenant did not dives t the trial court of subjec t-matter jurisdiction in this particular case. According to the court, that is bec ause “the Post-Verdict Cov enant had no effect on Fort James’s claim for infringement, because that controversy had already been resolved b y the jury’s verdict.” In other words, the court reasons that the rationale of Super Sac k does not apply if the patentee issues a cov enant not to sue after a finding of noninfringement. The court states that the Supreme Court decided in Cardinal Chemica l Co. v. Morton International, Inc. , 508 U.S. 83, 95 (1993), that “a case or controversy adequate to support jurisdiction of a declaratory judgm ent counterclaim necessarily exists if a party has actually been c harged with infringement of a patent.” Relying on Cardin a l Chemical , 508 U.S. at 96, Altvater v. Freeman , 319 U.S. 359, 364 (1943) , Fin Control Systems Pty, Ltd

. v. OAM, Inc. , 265 F.3d 1311, 1321 (Fed. Cir. 2001), and General

1 As discuss ed, the actual holding of Super Sack was that a covenant not to sue for past or present acts of infringement is sufficient to divest the court of subjectmatter jurisdiction. 57 F.3d at 1059.

04-1365 4Electric Co. v. Nintendo Co., Ltd. , 179 F.3d 1350, 1356 ( F ed. Cir. 1999), the court states that the jury verdict of non-infringement did not moot the case because claims o f unenforceability and invalidity raise issues beyond those present ed by the infringement claim.
III. I agree wit h the court that “a case or c ontroversy adequate to sup p ort jurisdiction of a declaratory judgment counterclaim necessa rily exists if a party has actually b e en charged with infringement of a patent.” Car d ina l Ch em. , 508 U.S. at 95. I further agree that a finding of non-infringement does not, by itself, moot a c ounterclaim of invalidity or unenforceability. Where I part company with the court is in my view that Fort James’s covenant had the effect of e liminating any real and immediate contro versy between the parties and, therefor e, mooted Solo C up’s counterclaim. The covenant was submitted by James F. Kelley, Executive Vice President and General Counsel of Geor gia-Pacific Corporation (the entity that owns Fort J a mes). Mr. Kelley stated: I hereby declare that Fort James unconditionally covenants not to assert any claim of patent infringement against Solo Cup Company (“Solo”) under any claim of United States Patent Nos. 4,609,140 (“the ’140 patent”), 4,606,496 (“the ’496 patent ”), and 4,721,499 (“the ’499 patent”) with respect to any product currently adverti sed, manufactured, marketed or sold by Solo, or any product which was advertised, manufactured or sold by Solo prior to December 13, 2002. It is not dis puted that Mr. Kelle y had authority to speak for Fort James. Ther efore, once Fort James issued the covenant, Solo Cup no longer faced the risk of liability for infringement of the ’140 patent based on past or present acts. That is to s a y , Solo Cup no longer faced the prospect of Fort Jame s pursuing its original infringement claim—

04-1365 5through, say, an appeal to this court—or the ri sk of being sued for other present or past acts of perceived infringement. Under thes e circumstances, I do not see how Solo Cup’s counterclaim continues to satisfy the first prong of our juri sdictional test. It is true th at this case differs fro m Super Sack in that Fort James did not issue its covenant until after the jury’s finding of no n-infringement, but I do not think that fact creates or, rather, sustains, the c ontroversy between the parties. That is bec ause, while the timing of the covenant may s eem unfair to Solo Cup, the fact remains that Solo Cup is no longer at risk of l i ability for infringement of the ’140 paten t. Indeed, the situation in Super Sac k actually presented more of a controver sy than this case becaus e, there, the defendant still faced the risk of infri ngemen t based on future acti vity, see Super Sack , 57 F.3d at 1059 (acknowledging that the defendant “may have s o me cause t o fear an infringement suit” based on products to be dev eloped in the future), whereas in this case, the ’140 patent has expired. Solo C up therefore faces no risk of liab i lity for infringement of the ’140 patent. A decis ion as to the enforceability of the ’140 patent would consequently have no effect on the legal relat i onship of the parties, i.e., Solo Cup’s c l aim of unenforceability is moot. See DeF unis v. Odegaard , 416 U.S. 312, 316- 17 (1974) (holding that the ca se was moot because the Cour t could no longer provide meaningful relief); No rth Carolin a v. Rice , 404 U.S. 244, 246 (1971) (“[F]ederal courts are without power to decide que stions that cannot aff e ct t he rights of litigants in the case before them.”); Powe ll v. McCormack , 395 U.S. 486, 496 ( 1969) (“A case is moot

04-1365 6when the issues pres ent ed are no longer ‘live’ or the parties lac k a legally cognizable interest in the outcome.”). 2 My view that there is no l onger a live controversy in th is cas e is also unaff e cted by the fact that it was Fort James t hat requested the trial court bifurcate the unenforceability claim from the infringement and invalidity claims . I acknowledge that it may seem unfair to allow a pa tentee to first proceed with its infringement claim a n d then, if the result is not favorable, elimi nate the court’s jurisdiction over the accused infringer’s counterclaim by co venanting not to sue the accused inf r inger. Fairness is not part of the jurisdiction al inquiry, however. See Hercules Inc. v. United Stat es , 516 U.S. 417, 430 (1996) (“[W]e are constrained by our limited jurisdiction and may not entertain claims ‘bas ed merely on equitabl e considerations.’” (citation omitted)). Rather, federal courts must determine whether there is an actual case or controversy, i.e., whether “there is a substantial controver sy, between parties having adverse lega l in terests, of sufficient immediacy and reality to warrant t he issuance of declaratory judgment.” Md.

2 Claims for attorney’s fees are collat eral to the underlyin g la wsuit fo r whic h the fees are sought. Budinich v. Becton Dickinson & Co. , 486 U.S. 196, 200-01 (1988) (holding that an attorney’s fee award is s eparate from a trial c ourt’s decision on th e merits for purposes of the time limits set for appeals under Fed. R. App. P. 4); S p rague v. Ticonic Nat’l Bank , 307 U.S. 161, 170 ( 1939) (indicating that motions for attorney’s fees are “independent proceeding[s] supplement al to the original proceeding and not a request for a modification of the original decr ee”). The issue of attorney’s fees is consequently distinct from, and has no effect on, the question of whether a case has become moot. See Zucker v. Occidental Petroleum Corp. , 192 F.3d 1323, 1329 (9th Cir. 1999) (“No Article III case or controvers y is needed with regard to attorney’s fees

. . . because they are but an ancillary matte r over which the district court retains equitable jurisdiction even when the underlying case is moot .” (emphasis added)).

04-1365 7Cas. Co. , 312 U.S. at 273. If a case is found to lack such a controversy, then the court’s only choice is to dismiss the case. 3 In short, although an actual cont roversy may have existed at the time the jury issued its v e rdict of non-in fringement, that controversy be came moot when Fort James issued its covenant not to sue. Accordingly, I would affirm the judgment of the district court dismissing Solo Cup’s c ounterclaim seeking a declar atory judgment that the ’140 patent is unenforceable. I ther efore respectfully dissent.

3 This is not to say that Fort Jame s’s overall lit igation c o nduct could not be used by Solo Cup in tr ying to establis h the existence of an “e xceptional c a se” in a timely motion for attorney’s fees under 35 U.S.C. § 285. See Zuck er , 192 F.3d at 1329 (holdin g that a trial court still has jurisdiction to entertain motions for attorney’s fees after the underly ing action has becom e moot); see also Gator.com Corp. v. L.L. Bean, Inc. , 398 F.3d 1125, 1133 n.1 (9th Cir. 2005) ( en banc ) (Tashima, J., concurring).

04-1365 8