The licensing agreement, which requires Dr. Arnold to cooperate fully with Knoll
Pharmaceuticals in any litigation concerning the patent’s validity, gives Plaintiffs the legal right
to obtain the documents. Because the documents have also been requested from a non-party does
not permit Plaintiffs to ignore their discovery obligations. See Wilson, 2003 WL 21961359, at
*9, Accordingly, jurisdiction to compel production is proper in this Court.

The party seeking to assert the attorney-client privilege has the burden to prove:

“(1) Where legal advice of any kind is sought (2) from a professional legal advisor in his capacity
as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client,
(6) are at his instance permanently protected (7) from disclosure by himself or by the legal
advisor, (8) except the protection be waived.” United States v. Evans, 113 F.3d 1457, 1461 (7th
Cir. 1997) (Evans).

Here, the documents describing communications between the attorney and third-parties
KCSI and Brighton are not protected under the privilege merely because they were found in Dr.
Arold’s files.

Plaintiffs and Dr. Arnold argue that the privilege has not been waived because the
communications shared with KCSI and Brighton are covered under the “joint interest doctrine,”
which protects the documents from disclosure. “When the same attorney represents the interest
of two or more entities on the same matter, those represented are viewed as joint clients for the
purposes of the [attorney-client] privilege.” Jn re the Regents of the Univ. of California, 101
F.3d 1386, 1389 (Fed. Cir. 1996) (interpreting Seventh Circuit law). Two requirements must be
met to satisfy this doctrine: (1) Dr. Arnold must have believed that he was consulting the attorney

in a professional capacity with the intent to seek professional legal advice; and (2) the legal


The communications, though, were made before the change in Japanese law. However,
in VLT Corp, the court also protected communications under the Japanese privilege law that were
made before the change in the privilege law and are, therefore, privileged. See VLT Corp.,

194 F.R.D. at 9, 17.

Dr. Arnold, the holder of these documents regarding the Japanese patent application, does
not object to in camera inspection of these documents to determine whether the privilege is
applicable. Accordingly, Dr. Arnold is required to provide these documents to the Court within
two weeks of the date of this opinion for in camera review to determine if the other requirements
necessary to establish the attorney-client privilege are satisfied.

CONCLUSION

For the foregoing reasons, Defendant’s Motion for Ruling on Teva’s Prior Motions to
Compel Production of Documents is granted in part and denied in part. Plaintiffs are ordered to
produce all the requested documents, except the documents protected under Japanese privilege
law. The documents protected under Japanese privilege law must be provided to the Court

within two weeks of the date of this opinion for in camera review.

} () /

\
a (92004 r .
if olin W. Darrah, Judge

J
_ fied States District Court



client privilege. Finally, Dr. Amold seeks to protect documents relating to a Japanese patent
application under the privilege law of Japan.

With respect to the proper method of seeking production of the documents, Plaintiffs and
Dr. Amold argue this Court lacks jurisdiction under Federal Rule of Civil Procedure 45(c)(2)(B).
“If objection is made [to the request in the subpoena], the party serving the subpoena shall not be
entitled to inspect and copy the materials or inspect the premises except pursuant to an order of
the court by which the subpoena was issued.” Plaintiffs and Dr. Arnold also find support under
Federal Rule of Civil Procedure 37(a)(1), which provides “{a]n application for an order to a
person who is not a party shall be made to the court in the district where the discovery is
being, or is to be, taken” (emphasis added). Plaintiffs and Dr. Arnold thus argue that the only
court that can compel production of these documents is the court that issued the subpoena. £.g.,
In re Sealed Case, 141 F.3d 337, 341 (D.C. Cir. 1998).

Defendant contends that it does not seek the documents under Rule 45 but, rather, seeks
production of the documents under Federal Rule of Civil Procedure 34(a). Rule 34(a) permits
discovery of documents “which are in the possession, custody, or control of the party upon whom
the request is served.” Defendant further argues that because Dr. Amold agreed to cooperate in
any litigation concerning the validity of the patent, Plaintiffs have “the legal right to obtain the
documents requested upon demand.” Wilson v. Sunstrand, Nos. 99 C 6944 & 99 C 6946, 2003
WL 21961359 (N.D. Ill. Aug. 18, 2003) (Wilson). Therefore, Defendant asserts that Plaintiffs
had contro! of the documents and should have produced the documents pursuant to the Rule 34

request.


interest between Dr. Arnold and the parties represented by the attorney, KCS] and Brighton, must
have been substantially identical. Jn re the Regents of the Univ. of California, 101 F.3d at 1390.
The party asserting the privilege has the burden of establishing all elements of the privilege.

E.g., United States v. Hamilton, 19 F.3d 350, 354 (7th Cir. 1994).

Regarding the first element, Plaintiffs and Dr. Arnold submit a power of attorney signed
by Dr. Arnold permitting the attorney to prosecute Dr. Arnold’s invention. While the power of
attorney form does not conclusively demonstrate that the attorney represented Dr. Arnold, Sun
Studs, Inc. v. Applied Theory Assoc., Inc., 772 F.2d 1557, 1568 (Fed. Cir. 1985), Plaintiffs and
Dr. Arnold also submit an affidavit from the attorney which states that the attorney acted in a
professional relationship as an attorney in counseling Dr. Amold, Brighton, and KCSI concerning
legal advice over the patent. These documents, taken together, demonstrate that Dr. Amold
consulted with the attorney in a professional capacity on matters relating to the ‘252 patent
application.

Regarding the second element, Plaintiffs and Dr. Amold argue that KCSI, Brighton, and
Dr. Atnold has the same interest in obtaining a strong and enforceable patent. Specifically,
Plaintiffs and Dr. Arnold contend that all parties shared an interest in obtaining patent protection
because: (1) Dr. Amold assigned the patent to Brighton, and (2) Dr. Amold and KCSI formed
Brighton.

Plaintiffs and Dr. Arnold argue that an assignment of rights demonstrates that the
inventor and the other party have the same interest in obtaining patent protection and cite /n re
Regents of the Univ. of California, 101 F.3d at {388-90, in support of this proposition. In

Regents, however, an exclusive license agreement existed between the inventor and the other


Minute Order Form (06/97)

United States District Court, Northern District of Mlinois

MF

Name of Assigned Judge Sitting Judge if Other
or Magistrate Judge John W. Darrah than Assigned Judge
CASE NUMBER 01 C 1646 DATE 11/19/2004
CASE Knoll Pharmaceuticals vs. Teva Pharmaceuticals
TITLE
{ln the following box (a) indicate the party filing the motion, ¢.., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.]
DOCKET ENTRY:
(1) a Filed motion of [ use listing in “Motion” box above.]
(2) Qa Brief in support of motion due
(3) Qa Answer brief to motion due . Reply to answer brief due.
(4) o Ruling/Hearing on set for at
(5) oO Status hearing[held/continued to] [set for/re-set for] on set for at
(6) Oo Pretrial conference[held/continued to] [set for/re-set for] on set for at :
(7) Qa Trial[set for/re-set for] on at
(8) im} {Bench/Jury trial] [Hearing] held/continued to _ at.
(9) im} This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to}
CFRCP4(m) ClLocal Rule 41.1 CIFRCP41(ay(1) 1 FRCP4i(a)(2).
ao {Other docket entry] For the reasons stated in the attached memorandum opinion and order,
defendant’s motion for ruling on Teva’s prior motions to compel production of documents is granted in
part and denied in part. Plaintiffs’ are ordered to produce all the requested documents, except the
documents protected under Japanese privilege law. The documents protected under Japanese privilege
law must be provided to the Court within two weeks of the date of this opinion for in camera review.
Enter Memorandum Opinion and Order.
di) [For further detail see order attached to the original minute order.]
No notices required, advised in open court
No notices required. umber once
Notices mailed by judge’s staff,
NOV 22 2004
Notified counsel by telephone. Tote docketed
v | Docketing to mail notices.
Mail AO 450 form. asp 's" docketng dary Vials wl b a)
Copy to judge/magistrate judge. is 4

aut date mailed notice
courtroom aver thE Ft

deputy's aan

initials

Date/time seceived in

‘mailing deputy initials

central Clerk's Office



party. In contrast, Dr. Amold had assigned away his rights to the patent to Brighton at the time
the application was filed. At that point, Dr. Arnold no longer had any legal interest in obtaining
patent protection. Plaintiffs and Dr. Arnold also argue that Dr. Arnold and KCSI formed
Brighton; and, therefore, Dr. Arnold had an interest in seeing Brighton obtain patent protection.
This theory is premised on statements made by Dr. Arnold’s wife in a deposition. However,
Plaintiffs and Dr. Arnold have not presented any other evidence to support their assertion that
Dr. Arnold retained some legal interest in Brighton. Therefore, Plaintiffs have failed to meet
their burden to demonstrate that the interest of Dr. Ammold and the entities represented by the
attomey, Brighton and KCSI, were substantially identical.

Based on the above, the joint interest doctrine is inapplicable and the documents are not
protected under the attorney-client privilege.

Dr. Amold also seeks to protect documents relating to a Japanese patent application,
specifically, documents 18, 19, and 123 listed on the privilege log. This privilege applies if,
under Japanese law, communications with Japanese patent agents that relate to Japanese patent
activities are protected. McCook Metals, LLC v. Alcoa, Inc., 192 F.R.D. 242, 256 (N.D. Ill.
2000). Under Japanese law, documents reflecting communications between patent agents and
clients are exempt from production. YLT Corp. v. Unitrode Corp., 194 F.R.D. 8, 17 (E.D. Ma.
2000) (YLT Corp). Defendant argues this case reflects the minority position but relies on cases

which were decided before a change in Japanese law. See VLT Corp., 194 F.R.D. at 17.


THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

KNOLL PHARMACEUTICALS
COMPANY, INC.; and THE JOHN
AND LOIS ARNOLD FAMILY
LIMITED LIABILITY PARTNERSHIP,

Plaintiffs,
v.
Honorable John W, Darrah

TEVA PHARMACEUTICALS

)
)
)
)
)
)
) Case No. 01 C 1646
)
)
)
USA, INC., )
)
)

Defendant.

MEMORANDUM OPINION AND ORDER

Plaintiffs, Knoll Pharmaceuticals Company, Inc. and The John and Lois Amold Family
Partnership, filed suit against Defendant, Teva Pharmaceuticals USA, Inc., for allegedly
infringing United States Patent No. 4,587,252 (“the ‘252 patent”). Thereafter, Defendant sought
production of certain documents from Plaintiffs and a non-party, Dr. John D. Arnold; Plaintiffs
and Dr. Arnold claim these documents are privileged. Presently before the Court is Defendant’s
Motion for Ruling on Teva’s Prior Motions to Compel Production of Documents.

BACKGROUND

The facts, for the purposes of this motion, are as follows. Dr. Arnold sought to obtain
patent protection for an invention; and another entity, Brighton Pharmaceuticals, was the
assignee of this invention; Brighton held these rights at time the patent application was filed.
When the patent application was filed, Dr. Arnold also executed a power of attorney appointing

an attorney to prosecute this matter. Both Brighton and Kansas City Southern Industries


(“KCSI”) were clients of this attorney.

Brighton eventually reassigned the rights to the patent back to Dr. Amold. Dr Amold
then licensed the rights to the patent to Knoll Pharmaceuticals. In Article Six of the licensing
agreement between Dr. Amold and Knoll Pharmaceuticals concerning the ‘252 patent, “both
parties agree[d] to cooperate fully with each other” in any litigation challenging the validity of
the patent.

After this litigation commenced, Defendant served Dr. Arnold with a subpoena issued
under Federal Rule of Civil Procedure 45 by a district court in another state. In response,

Dr. Arnold produced documents and a privilege log detailing documents withheld on attorney-
client privilege grounds. Defendant then filed a motion to compel production of the privileged
documents in this court, which was mooted by a summary judgment ruling in favor of Defendant.
Defendant also sought to compel the documents in the court issuing the subpoena, but that
motion was denied without prejudice because discovery was stayed pending an appeal by
Plaintiffs of the summary judgment ruling.

The decision granting summary judgment to Defendant was reversed on appeal.
Defendant now seeks production of a number of items on Dr. Arnold’s privilege logs. Many of
the documents describe communications between the attorney and representatives of Brighton
and KCSI. Other documents relate to a Japanese patent application.

ANALYSIS

Dr. Arnold and Plaintiffs argue that the proper method for Defendant to seek production

of the documents is to file a motion to compel in the district where the Rule 45 subpoena was

issued. Plaintiffs and Dr. Arnold also seek to protect most of the documents under the attorney-