Opinion ID: 211823
Heading Depth: 2
Heading Rank: 4

Heading: Scope of Fort James's Privilege Waiver

Text: 25 Solo Cup argues that the district court committed clear error in determining that Document 99, an invention disclosure statement, was not within the ambit of the privilege waiver created by Fort James's production of JR0028487. Solo Cup ascribes error to the district court's description of the subject matter of the waiver by reference only to JR0028487. Solo Cup also asserts that even applying the district court's limited definition of Fort James's waiver, Document 99 properly falls within that scope and must be produced. 26 The widely applied standard for determining the scope of a waiver of attorney-client privilege is that the waiver applies to all other communications relating 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 (6th Cir.1996); In re Cont'l Ill. Sec. Litig., 732 F.2d 1302, 1314 n. 18 (7th Cir.1984). The waiver extends beyond the document initially produced out of concern for fairness, so that a party is prevented from disclosing communications that 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, Evidence § 2291, at 636 (McNaughton rev.1961) for the proposition that fairness dictates that a privilege holder cannot be allowed, after disclosing as much as he pleases, to withhold the remainder); Abbott Labs. v. Baxter Travenol Labs., Inc., 676 F.Supp. 831, 832 (N.D.Ill.1987). There is no bright line test for determining what constitutes the subject matter of a waiver, rather courts weigh the circumstances of the disclosure, the nature of the legal advice sought and the prejudice to the parties of permitting or prohibiting further disclosures. See In re Keeper of the Records XYZ Corp., 348 F.3d 16, 23 (1st Cir.2003) (stating that case law is of limited assistance in determining the scope of a waiver because of the fact-intensive nature of the issues presented); Eco Mfg. LLC v. Honeywell Int'l, Inc., No. 1:03-cv-0170, 2003 WL 1888988, at , 2003 U.S. Dist. LEXIS 7257, at  (S.D.Ind. Apr. 11, 2003) (citing U.S. v. Skeddle, 989 F.Supp. 917, 919 (N.D.Ohio 1997)). 27 The district court here determined that the scope of Fort James's waiver should be defined by reference only to its initial disclosure of JR0028487. Because the extent of the privileged material contained in JR0028487 was a two-line reference to counsel's conclusion that Fort James's pre-filing activities did not raise a bar to patentability, the court concluded that only communications specifically referencing commercial sales or public disclosures of the invention were within the subject matter of the waiver. In reaching this conclusion, the court expressly refused to consider the content of the material Fort James voluntarily produced in acknowledgment of its initial waiver. The court excluded 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 to practice of the claimed invention as well as Fort James's pre-critical date activities. 28 The district court committed two errors in denying Solo Cup's motion to compel production of Document 99. First, it failed to recognize the import of Fort James's knowing disclosure of privileged documents to a third party, conduct which acts as a surrender of the privilege protection. Burden-Meeks v. Welch, 319 F.3d 897, 899 (7th Cir.2003). If the additional documents produced by Fort James involved subject matter beyond the applicability of the on-sale bar mentioned in JR0028487, then Fort James should have redacted those portions of the documents produced. A party's failure to protect its privilege can result in a loss of that privilege. Dellwood Farms, Inc. v. Cargill, Inc., 128 F.3d 1122, 1126 (7th Cir.1997). Although admirable, Fort James's stated desire to avoid court intervention in the discovery process would not entitle it to dodge the consequences of any careless disclosures. The court erred in concluding that the additional documents produced by Fort James were not relevant to its determination of the scope of Fort James's privilege waiver. 29 The impact of this initial error is minimal because the court properly defined the subject matter of the waiver as the application of the bars to patentability found in 35 U.S.C. § 102(b). Reversible error occurred, however, when the court determined that only documents containing information on Fort James's commercial activities were within the scope of that waiver. 30 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 must be ready for patenting. Pfaff v. Wells Elec. Inc., 525 U.S. 55, 67, 119 S.Ct. 304, 142 L.Ed.2d 261 (1998). The second prong of this test necessarily implicates the conception and reduction to practice or enablement of the invention. Id. at 67-68, 119 S.Ct. 304. Accordingly, Fort James's waiver encompassed not only communications involving commercial sales of the claimed invention, but also communications concerning the inventor's recognition and development of the invention. It would be unfair to permit Fort James to rely on favorable legal opinions, but protect the communications on which those opinions depend. See In re Martin Marietta Corp., 856 F.2d 619, 623 (4th Cir.1988) (stating that if a client communicates information to his attorney with the understanding that the information will be revealed to others, that information as well as `the details underlying the data which was to be published' will not enjoy the privilege (quoting United States v. (Under Seal), 748 F.2d 871, 875 (4th Cir.1984)); United States v. Woodall, 438 F.2d 1317, 1324 (5th Cir.1970) (a client's offer of his 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 production 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 concerning a patent's validity and enforceability to waive privilege on communications regarding claim construction on which the validity and enforceability opinions necessarily 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 rely on counsel's opinions regarding validity requires it to disclose all pre-suit communications of counsel that include construction of the same patents). Document 99 was drafted well before the filing of the patent application and concerns the conception and reduction to practice of the claimed invention, matters that are directly related to the on sale bar to patentability. We hold that the district court committed clear error in determining that Fort James's waiver of privilege did not encompass Document 99.