Court Opinion

ID: 2719824
Source: CourtListenerOpinion
Date Created: 2014-08-21 16:01:05.039044+00
Date Added: 2024-06-11T10:41:13.039079
License: Public Domain

In the United States Court of Federal Claims
                                          No. 13-232C

                                    (Filed: August 21, 2014)

*************************************   )               Patent case; motion to compel
                                        )               production of documents claimed
CAMERON LANNING CORMACK,                )               to be protected against disclosure
                                        )               by attorney-client privilege
                  Plaintiff,            )
                                        )
      v.                                )
                                        )
UNITED STATES,                          )
                                        )
                  Defendant,            )
      and                               )
                                        )
NORTHROP GRUMMAN SYS. CORP.,            )
                                        )
                  Defendant-Intervenor. )
                                        )
*************************************

        Rodney R. Sweetland, Duane Morris LLP, Washington, D.C., for plaintiff. With him on
the brief were James L. Beausoleil, Jr. and Jeffrey S. Pollack, Duane Morris LLP, Philadelphia,
Pennsylvania, Anthony J. Fitzpatrick, Duane Morris LLP, Boston, Massachusetts, and
Christopher J. Tyson, Duane Morris LLP, Washington, D.C.

       Scott D. Bolden, Attorney, Commercial Litigation Branch, Civil Division, United States
Department of Justice, Washington, D.C., for defendant. With him were Stuart F. Delery,
Assistant Attorney General, Civil Division, and John Fargo, Director, Commercial Litigation
Branch, Civil Division, United States Department of Justice, Washington, D.C. Of counsel was
Michael F. Kiely, United States Postal Service, Washington, D.C.

       Gregory H. Lantier, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C., for
defendant-intervenor.

                                  OPINION AND ORDER

LETTOW, Judge.

       In this patent case, defendant-intervenor, Northrop Grumman Systems Corporation
(“Northrop Grumman Systems” or “Systems”) seeks from plaintiff, Mr. Cameron Lanning
Cormack, production in discovery of a set of documents comprising correspondence and
communications related to the patent prosecution of U.S. Patent No. 7,781,693 (“the ‘693
                                               1
patent”), the patent at issue. 1 Mr. Cormack contends that the documents are protected against
disclosure by the attorney-client privilege. Northrop Grumman Systems asserts that the
documents are properly discoverable because Mr. Cormack waived the attorney-client privilege
to these documents when he earlier produced correspondence and communications related to the
same subject matter. Mr. Cormack concedes that he waived his attorney-client privilege to the
earlier set of documents but argues that attorney-client privilege has not been waived for the
documents attendant to patent prosecution.

                                        BACKGROUND

        Mr. Cormack filed his complaint in this court on April 3, 2013, alleging that the ‘693
patent, issued to him on August 24, 2010, was being infringed by the United States Postal
Service (“Postal Service”). See Cormack v. United States, __ Fed. Cl. __, __, 2014 WL
3555255, at *1 (July 18, 2014) (addressing earlier discovery disputes). In particular,
Mr. Cormack alleges that mail sorting devices called Flats Sequencing Systems, manufactured
by Northrop Grumman Systems and delivered to the Postal Service, infringe this patent. Id. Due
to an indemnity clause in the Postal Service’s contract with Northrop Grumman Systems, the
court granted Systems’s motion to intervene as a defendant-intervenor. Id., at *2.

        On November 14, 2013, the court held a preliminary scheduling conference during which
the parties and the court developed an agreed schedule regarding discovery. See Scheduling
Order, Nov. 14, 2013, ECF No. 33. Under this schedule, the government would produce source
code to Mr. Cormack by November 27, 2013. Id. By February 14, 2014, Mr. Cormack would
submit to the defendants his infringement contentions. Id. Six weeks later, by March 28, 2014,
the defendants would submit their contentions of non-infringement, unenforceability, and
invalidity, along with an accompanying production of documents. Id. On April 30, 2014,
Mr. Comack’s response to any invalidity contentions were due. Id. Following these deadlines,
the court specified additional deadlines for a joint claim-construction statement and briefing on
claim construction. Id. 2

       During discovery, Northrop Grumman Systems made document requests to
Mr. Cormack. See Def.-Intervenor Northrop Grumman Systems Corporation’s Mem. of Law in
Support of Mot. to Compel Discovery of Documents from Pl. (“Def.-Intervenor’s Mot. to
Compel”) at 2 & Ex. 1, ECF No. 54. In response, Mr. Cormack produced documents and
submitted three privilege logs, dated October 31, 2013 (“First Privilege Log”), January 21, 2014
(“Second Privilege Log”), and February 3, 2014 (“Third Privilege Log”), which provided a brief
description of documents withheld and the reasons they were withheld. Id. As part of his
discovery disclosures, Mr. Cormack indicated that he conceived of the inventions claimed in the

       1
        Because the patent application was filed and granted prior to the effective date of the
Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011), the court’s
consideration of issues in the case is based upon the law in force at the time of issuance. See
Tobinick v. Olmarker, 753 F.3d 1220, 1223 n.1 (Fed. Cir. 2014).
       2
        At this juncture, the parties have completed briefing claim-construction terms in
preparation for a Markman hearing to be held August 27, 2014.
                                                 2
‘693 patent at least as early as August 2004. Id. Ex. 6 (Pl.’s Resp. to Def.-Intervenor’s First Set
of Interrog.), at 7. On March 28, 2014, as required by the court’s scheduling order, Northrop
Grumman Systems served its invalidity contentions. Id. at 3. As part of its invalidity
contentions, Systems alleged that engineers at Lockheed Martin had conceived of the technology
claimed in the ‘693 patent by July 2004, prior to the filing date of the application that resulted in
the ‘693 patent, May 23, 2006, and prior to Mr. Cormack’s date of conception. Id. at 3 & n.2.
Thereafter, on April 28, 2014, Mr. Cormack supplemented his interrogatory response regarding
the date of conception, changing it from August 2004 to November 2003. Id. at 3, Ex. 7, at 7. In
support of his amendment, Mr. Cormack produced 57 documents previously withheld and listed
on his privilege logs, which, according to his counsel, are all related to the dates of conception,
reduction to practice, and diligence. Id. at 3; Pl.’s Resp. in Opp’n to Def.-Intervenor Northrop
Grumman Systems Corporation’s Mot. to Compel (“Pl.’s Opp’n”) at 3, ECF No. 58. The
documents produced on April 28, 2014 reportedly predate the filing of the ‘693 patent
application. Id.

        By its motion to compel, Northrop Grumman Systems seeks production of Document
Nos. 2, 17, 38-54, 59-73, 75-83, and 94-130 from the Second Privilege Log and Document Nos.
4-8 from the Third Privilege Log. Def.-Intervenor’s Mot. to Compel at 1 & n.1. These
documents are described in the privilege logs as related to patent prosecution, and they all post-
date the filing of the ‘693 patent application. Id. at 1, 4-5. Northrop Grumman Systems argues
that Mr. Cormack waived the attorney-client privilege as to these documents through his
disclosure on April 28, 2014 of documents covering the same subject matter. Id. at 5.
Mr. Cormack has resisted the motion by arguing that the documents sought by Northrop
Grumman Systems do not cover the same subject matter as the documents he previously
disclosed. Pl.’s Opp’n at 5-6. After Northrop Grumman Systems filed its reply, Def.-
Intervenor’s Reply in Support of Mot. to Compel (“Def.-Intervenor’s Reply”), ECF No. 61, a
hearing on the motion to compel was held August 5, 2014.

                                STANDARDS FOR DECISION

        Rule 26(b) of the Rules of the Court of Federal Claims (“RCFC”) defines the scope of
discovery to include “any nonprivileged matter that is relevant to any party’s claim or defense.”
RCFC 26(b)(1). “For good cause, the court may order discovery of any matter relevant to the
subject matter involved in the action.” Id. Discovery is limited by relevant privileges, including
the attorney-client privilege. See RCFC 26(b)(1), (b)(3)(A). Federal Rule of Evidence 501
provides that the “‘common law – as interpreted by the United States courts in the light of reason
and experience’” – shall govern claims of privilege in federal courts. In re Kellogg Brown &
Root, Inc., __ F.3d __, __, 2014 WL 2895939, at *2 (D.C. Cir. June 27, 2014) (quoting Fed. R.
Evid. 501). “The attorney-client privilege protects the confidentiality of communications
between attorney and client made for the purpose of obtaining legal advice.” Genentech, Inc. v.
United States Int’l Trade Comm’n, 122 F.3d 1409, 1415 (Fed. Cir. 1997). “Its purpose is to
encourage full and frank communication between attorneys and their clients and thereby promote
broader public interests in the observance of law and administration of justice.” Upjohn Co. v.
United States, 449 U.S. 383, 389 (1981). Whether this privilege applies depends on the
particular circumstances at hand. Id. at 396-97; Confidential Informant 59-05071 v. United
States, 108 Fed. Cl. 121, 129-30 (2012).

                                                  3
        A party may assert this privilege by withholding otherwise discoverable information,
expressly claiming the privilege, and “describ[ing] the nature of the documents . . . not produced
or disclosed – and do[ing] so in a manner that . . . will enable other parties to assess the claim.”
RCFC 26(b)(5)(A). A party who discloses communications subject to the privilege, however,
waives the privilege with respect to the materials disclosed. See Genentech, 122 F.3d at 1415.
Such a waiver of attorney-client privilege applies to “all other communications relating to the
same subject matter.” Fort James Corp. v. Solo Cup Co., 412 F.3d 1340, 1349 (Fed. Cir. 2005)
(citing Genentech, 122 F.3d at 1416 (“When the attorney-client privilege has been waived,
whatever the subject matter of the waiver, the privilege is gone.” (internal citation omitted)); see
also In re Grand Jury Proceedings Oct. 12, 1995, 78 F.3d 251, 255 (6th Cir. 1996) (specifying
that a waiver of attorney-client privilege applies to all communications within the same subject
matter); In re Continental Ill. Sec. Litig., 732 F.2d 1302, 1314-15 & n.18, 20 (7th Cir. 1984)
(same, commenting on precedents in circuit courts). 3

        The scope of the subject matter of a waiver is not defined by a bright line test; rather,
courts must weigh (1) “the circumstances of the disclosure,” (2) “the nature of the legal advice
sought,” and (3) “the prejudice to the parties of permitting or prohibiting further disclosures.”
Fort James, 412 F.3d at 1349-50. In particular, courts are concerned with basic notions of
fairness, aiming to prevent a party from disclosing communications supporting its position while
simultaneously withholding communications that do not. Id. at 1349; see also Wi-LAN, Inc. v.
LG Elecs., Inc., 684 F.3d 1364, 1369 (Fed. Cir. 2012) (“Enacted in 2008, [Fed. R. Evid. 502(a)]
limited the effect of waiver by strongly endorsing fairness balancing.”); In re EchoStar
Commc’ns Corp., 448 F.3d 1294, 1301 (Fed. Cir. 2006) (“[S]elective waiver of [attorney-client]
privilege may lead to the inequitable result that the waiving party could waive its privilege for
favorable advice while asserting its privilege on unfavorable advice. . . . In such a case, the party
uses the attorney-client privilege as both a sword and a shield.” (internal citations omitted)).
When a party knowingly produces a document in unredacted form, a court will find that
disclosure is sufficient to waive privilege regarding all of the subject matters addressed. Fort
James, 412 F.3d at 1350 (“[Plaintiff] 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.”).

                                            ANALYSIS

        The crux of the parties’ disagreement is how to define the scope of Mr. Cormack’s
waiver. Northrop Grumman Systems seeks to define the waiver broadly, reaching from the pre-
filing disclosures that have been made to encompass also all communications with patent
prosecution counsel during the prosecution of the ‘693 patent. Def.-Intervenor’s Mot. to Compel
at 7. Mr. Cormack argues that his waiver was limited, only covering communications that pre-
dated the patent application and concerned the date of conception, date of reduction to practice,
and diligence in reduction to practice. Pl.’s Opp’n at 3. Systems responds that the documents
produced on April 28, 2014 covered more topics than the three listed by Mr. Cormack, see Def.-

       3
        Privilege can be waived explicitly, through knowing disclosure of privileged documents,
or implicitly, by placing privileged matters in controversy. See Gomez v. Vernon, 255 F.3d
1118, 1131 (9th Cir. 2001).
                                                 4
Intervenor’s Reply at 3-5, and argues that a temporal limitation based upon the date of the patent
application is artificial, id. at 7-9.

                        A. Delineating the Subject Matter of the Waiver

        In delineating the subject matter of the waiver, courts have sought to balance the interests
of each party. Courts will not define the subject matter so narrowly as to permit a party to “rely
on favorable legal opinions, but protect the communications on which those opinions depend.”
Fort James, 412 F.3d at 1351. Courts in patent cases have defined subject matter to require
disclosure of all communications specific to certain statutory requirements for patentability. For
example, in Buyer’s Direct Inc. v. Belk, Inc., No. 12-00370-DOC, 2012 WL 1416639 (C.D. Cal.
Apr. 24, 2012), a third party produced documents related to the first public disclosure or offer to
sell and first shipment, which are governed by 35 U.S.C. § 102(b) (2006). See 2012 WL
1416639, at *5-*6. 4 The defendant argued that this disclosure waived all claims of privilege not
only to documents regarding first offer for sale and first shipment, but also to materials relevant
to different aspects of patentability found in other subsections of Section 102 as it existed prior to
the Leahy-Smith America Invents Act, e.g., date of conception, reduction to practice, and other
similar issues. Id. The court determined that because the party had produced documentation
under 35 U.S.C. § 102(b) (2006), its waiver applied to all other communications related to first
public disclosure or offer to sell and first shipment. Id. This waiver, however, did not extend to
topics addressed in other subsections of 35 U.S.C. § 102 (2006). Id. In a similar vein, the court
in Lear Automotive Dearborn, Inc. v. Johnson Controls, Inc., No. 04-73461, 2006 WL 800740
(E.D. Mich. Mar. 28, 2006), limited the waiver of privilege to the specific subject matters
addressed by the disclosed documents. 2006 WL 800740, at *1 (finding that a waiver as to the
date and content of conception did not extend to all matters regarding validity or prosecution of
the patent). Correspondingly, when a party discloses communications discussing specific prior-
art references, as happened in Phoenix Solutions, Inc. v. Wells Fargo Bank, N.A., 254 F.R.D. 568
(N.D. Cal. 2008), the court will not permit the party then to withhold additional communications
related to those references. 254 F.R.D. at 578. Yet, the court in Phoenix Solutions limited the
waiver to only those specific prior-art references covered by the disclosure and did not extend
the waiver to communication about additional prior art references not addressed in disclosed
documents. Id.

        The parties agree that Mr. Cormack’s waiver extends to documents related to the date of
conception, date of reduction to practice, and due diligence. Northrop Grumman Systems asserts
that these issues “indisputably concern [issues of general] patent prosecution, making them
indistinguishable from the communications [Mr. Cormack] refuses to produce.” Def.-
Intervenor’s Mot. at 8. This misstates the law regarding patent prosecution. Congress had set
these three issues apart from other issues of patent prosecution in 35 U.S.C. § 102(g) (2006), and
it can be appropriate to limit the subject matter of a privilege waiver based upon the specific

       4
         Section 102 was substantially revised by the Leahy-Smith America Invents Act in 2011.
The pre-2011 version of Section 102 addressed discrete issues of patentability in specific
subsections. Decisions citing to the preexisting Section frequently used the subsections as a
shorthand to define concepts and issues in their analysis. Similarly, here, the court will provide
citations to specific subsections of the prior version of Section 102 where appropriate.
                                                  5
statutory subsection references. See Buyer’s Direct, 2012 WL 1416639, at *5-*6. In short, there
is no basis to extend a pre-filing waiver respecting these three issues to the entirety of patent
prosecution. For example, the court in Lear Automotive concluded that questions involving the
date and content of conception were sufficiently independent to limit the scope of a waiver to
only those issues. 2006 WL 800740, at *1. 5

                                  B. Temporal Considerations

         Northrop Grumman Systems also objects to Mr. Cormack’s contention that the filing date
of the ‘693 patent is an appropriate cut-off for his waiver. Def.-Intervenor’s Reply at 7-9.
Contrary to Northrop Grumman Systems’s assertions, temporal considerations can come into
play. In a number of patent cases, courts have determined that the filing date of the patent
application denotes “a fundamental divide between patent drafting and patent prosecution that
cannot reasonably be bridged by the extension of a waiver,” absent additional facts. Phoenix
Solutions, 254 F.R.D. at 578; see also Lear Automotive, 2006 WL 800740, at *1 (declining to
extend waiver regarding date of conception to documents related to validity and generally to
patent prosecution, i.e., documents created after the application was filed). Nonetheless, factual
circumstances can exist where the court will require disclosure of documents regardless of
timing. In Phoenix Solutions, the court did not generally require disclosure of documents after
the filing date of the patent application, but because the party already disclosed documents
addressing specific prior-art references, any additional documents pertaining to those same
references needed to be produced, even if they were created after the filing date. 254 F.R.D. at
578. Similarly, in Verinata Health, Inc. v. Sequenom, Inc., No. C 12-00865 SI, 2014 WL
4076319 (N.D. Cal. Aug. 18, 2014), because a disclosed communication from an inventor to his
counsel “d[id] not contain any post-filing legal analysis or theories regarding the application, the
invention, or prior art,” the court “conclude[d] that the appropriate subject[-]matter waiver
should not include any post-filing communications.” 2014 WL 4076319, at *4 (citing and
adopting the reasoning of Phoenix Solutions). Additionally, in Pacing Techs., LLC v. Garmin
Int’l, Inc., No. 12-cv-1067 BEN, 2013 WL 4774765 (S.D. Cal. Sept. 5, 2013), it became
apparent that the plaintiff produced only documents generated after a certain draft application
had been prepared, to create a tactical advantage. 2013 WL 4774765, at *5 (“[I]t is clear from
the briefing that [plaintiff] intended to use the . . . draft application and communications
discussing that draft as a sword to establish a priority date predating the filing date of [the
defendant’s] patent. Thus, fairness dictates that documents showing the preparation and
finalization of the . . . draft patent application must be produced . . . .”). The court required
production of documents that were created in relation to preparation of the draft application, the

       5
         A court did find a relatively broad waiver in Theranos, Inc. v. Fuisz Techs., Ltd., No. C
11-5236 PSG, 2013 WL 2153276 (N.D. Cal. May 16, 2013), but the partial disclosures of
attorney-client communications in that case had a bearing on an overarching issue that concerned
use of confidential information. That usage vel non permeated the entire case, and, by ordering
full disclosure of e-mails and communications on the same subjects as those covered by the
voluntary production, the court endeavored to prevent the disclosing party from “cherry-picking
selective communications that are favorable to him.” 2013 WL 2153276, at *4.
          In contrast to Theranos, there is no evidence of selective disclosure in this instance.
                                                 6
first of which appeared about a month before the draft, but did not extend the waiver to
documents created after the draft. Id.

         As a general matter, the court agrees with the analyses in Phoenix Solutions and Verinata
Health that activities prior to filing a patent application, e.g., patent drafting, are fundamentally
different from activities after the application is filed, i.e., patent prosecution. See Phoenix
Solutions, 254 F.R.D. at 578; Verinata Health, 2014 WL 4076319, at *4. In arguing that courts
disfavor limiting privilege waivers based upon temporal considerations, Systems cites decisions
by courts that are factually distinguishable. See Def.-Intervenor’s Reply at 7-8. In the decisions
cited, courts disfavored artificial cut-off dates created by the disclosing party because they
increased the likelihood that the party was seeking an unfair tactical advantage. See, e.g.,
McCormick-Morgan, Inc. v. Teledyne Indus., Inc., 765 F. Supp. 611, 613-14 (N.D. Cal. 1991)
(rejecting a temporal limitation on a waiver that arose from an advice-of-counsel defense); Smith
v. Alyeska Pipeline Serv. Co, 538 F. Supp. 977, 981-82 (D. Del. 1982) (declining to limit a
privilege waiver to documents created before plaintiff’s counsel intentionally sent a letter
originally prepared for the client to opposing counsel). The unsuccessfully attempted temporal
divisions in these cases do not equal or even approach the “fundamental divide” between drafting
a patent application and prosecution after a patent application has been filed. Because preparing
a patent application for filing and subsequently defending a patent application after filing are
such divergent activities, there is minimal concern that Mr. Cormack is asserting an artificial
deadline for tactical reasons. 6 Specifically, the court finds Mr. Cormack’s privilege waiver to
apply to communications related to the date of conception, date of reduction to practice, and due
diligence, generated both before and after the filing of the patent application. In other respects,
the filing of the application limits Mr. Cormack’s waiver, and he has no obligation to produce
documents and communications attendant to patent prosecution regarding other topics, subject to
the analysis in the next section.

                               C. Additional Subject Matter

        In his pre-filing disclosure, Mr. Cormack released documents that arguably covered
topics beyond date of conception, date of reduction to practice, and due diligence. At the
hearing, Northrup Grumman Systems provided three documents disclosed by Mr. Cormack as
examples. Hr’g Tr. 9:6-12; see Hr’g Exs. 1-3. The first was a memorandum prepared September
13, 2004 by Mr. Cormack’s Canadian patent attorney regarding potential prior art relevant to the
invention later described in the ‘693 patent. Hr’g Ex. 1. The memorandum listed eleven patents

       6
         In related vein, Northrop Grumman Systems also argues that at least some of the
documents it seeks tangentially bear on the three waived subjects. Hr’g Tr. 14:13 to 15:4 (Aug.
5, 2014). (Additional citations to the hearing transcript will omit the date.) In essence, Systems
argues that after the Patent and Trademark Office initially rejected the patent application on
grounds of novelty and obviousness, Mr. Cormack could have responded by asserting the earlier
date of conception. Hr’g Tr. 14:14-24, 44:16-22. In Systems’s view, Mr. Cormack’s choice to
distinguish the application from prior art is indicative that the earlier date of the conception is not
sustainable. Hr’g Tr. 15:20 to 16:4. This inference is unsupported and unsupportable. There is
no evidence in the prosecution history that date of conception was at issue before the patent
examiner.
                                                  7
identified by the searcher and provided detailed descriptions for seven of the references,
concluding that none of them “teach, alone or in combination” the then-potential invention, but
cautioning that similarities may create “difficulty [in] pursuing a patent.” Id. at 2-3. Systems
argues that this disclosed memorandum acts as a waiver not only to communications containing
discussions about these particular prior-art references, but also to communications regarding any
additional prior-art references that were addressed during patent prosecution. Hr’g Tr. 13:7-11.
Mr. Cormack resists any extension of waiver to communications about other prior art. Hr’g Tr.
27:19 to 28:7. Dealing with a comparable issue, the court in Phoenix Solutions found that a
disclosed document served as a waiver regarding the particular references discussed, but not
others. See 254 F.R.D. at 578. In like vein, Mr. Cormack could not reasonably expect that later
communications regarding the specifically identified prior-art references would remain
privileged. Mr. Cormack must produce any additional communications regarding these
particular references, whether or not they occurred after the patent filing date, but the waiver
does not extend beyond those references.

        The remaining two exemplars consist of e-mail communications between Mr. Cormack
and counsel composed in the months leading up to filing. See Hr’g Exs. 2 & 3. In these e-mails,
Mr. Cormack and his counsel examined, considered, and revised particular aspects of the draft
application, refining and adding to the claim language and drawings in the proposed
specifications. Northrop Grumman Systems argues that these e-mails disclose patent prosecution
strategy, indicating how Mr. Cormack and counsel would respond to the patent examiner’s
potential objections and rejections. Hr’g Tr. 46:17-22. In particular, Systems points to a
statement by counsel that the application should encompass “all possible embodiments [of the
patent] that would cover what an infringer might do to try and design around the claims.” Hr’g
Ex. 2, at 1. These e-mails reflect ordinary, expected efforts by patent counsel. Nothing in the
e-mails provides grounds for an all-encompassing waiver of privilege regarding attorney-client
communications during patent prosecution.

                                        CONCLUSION

        For the reasons stated, Northrop Grumman Systems’s motion to compel is GRANTED
IN PART, insofar as communications, regardless of creation date, relate to the prior-art
references disclosed in a memorandum by prosecution counsel, dated September 13, 2004, Hr’g
Ex. 1, but it is DENIED IN PART, as to documents sought which were generated after the filing
date of the of the patent application, May 23, 2006, that do not relate to the issues of date of
conception, date of reduction to practice, and due diligence.

       It is so ORDERED.

                                             s/ Charles F. Lettow
                                             Charles F. Lettow
                                             Judge

                                                8