Park v. CAS Enterprises, Inc., No. 3:2008cv00385 - Document 120 (S.D. Cal. 2009)
Court Description: ORDER re Objections to Magistrate Judge's Order granting in part and denying in part Plaintiff's Motion to Compel production of documents. Defendant's objections are overruled and Defendant is ordered to produce documents listed in Gro ups 2(a) and (b). Plaintiff's objections are overruled, except that Defendant is ordered to produce the following Group 2(c) documents: 189, 193-94, 205, and 239. Signed by Judge Dana M. Sabraw on 10/27/09. (All non-registered users served via U.S. Mail Service)(lao) (jrl).
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Park v. CAS Enterprises, Inc. Doc. 120 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JOON PARK, 12 13 CASE NO. 08-cv-0385 DMS (NLS) Plaintiff, ORDER RE OBJECTIONS TO MAGISTRATE JUDGE’S ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO COMPEL PRODUCTION OF DOCUMENTS vs. 14 15 16 CAS ENTERPRISES, INC dba KREG TOOL COMPANY, 17 Defendant. ____________________________________ 18 AND ALL RELATED COUNTERCLAIMS. 19 20 This matter comes before the Court on the parties’ objections to Magistrate Judge Nita L. 21 Stormes’ Order granting in part and denying in part Plaintiff’s motion to compel production of 22 documents withheld by Kreg Tool on attorney-client privilege grounds. (Docs. 79, 86, 92.) 23 I. 24 BACKGROUND 25 Plaintiff’s motion to compel sought production of four groups of documents. Group 1 26 documents consist of communications between employees of Kreg Tool. Group 2 documents were 27 split into three subsets: Group 2(a) comprises communications between patent agent Shawn Dempster 28 and Kreg Tool; 2(b) comprises communications about patent matters that do not include a patent agent -1- 08-CV-0385 Dockets.Justia.com 1 or attorney; and 2(c) comprises communications between Shawn Dempster, Kreg Tool, and attorney 2 Frank Farrel. Group 3 documents consist of communications between Shawn Dempster and Kreg Tool 3 with copies of the same to an attorney. Group 4 documents consist of communications between a 4 patent attorney and client regarding ex parte patent prosecution matters. 5 In chambers on July 17, 2009, the Magistrate Judge denied Plaintiff’s motion to compel as to 6 Groups 1 and 4, but reserved on Groups 2 and 3. (Doc. 79.) On July 31, 2009, the Magistrate Judge 7 granted the motion to compel as to Groups 2(a) and 2(b), but reserved on 2(c) and 3 pending a 8 declaration from Defendant’s attorney that the communications were made for the purpose of 9 obtaining legal advice. (Doc. 86.) At that time, the Magistrate Judge also clarified her ruling on Group 10 1 and 4 documents. On August 7, 2009, defense counsel submitted a declaration regarding Groups 11 2(c) and 3. (Doc. 87.) On August 17, 2009, the Magistrate Judge ruled that those documents are 12 privileged and denied the remainder of Plaintiff’s motion to compel. (Doc. 92.) 13 On August 10, 2009, prior to the Magistrate Judge’s rulings on Groups 2(c) and 3, Defendant 14 filed objections to the Magistrate Judge’s July 31 order. (Doc. 88.) Plaintiff did not respond to the 15 objections and Defendant filed a reply on August 21, 2009. (Doc. 94.) On August 24, 2009, Plaintiff 16 filed its own objections to the Magistrate Judge’s rulings and responded to Defendant’s objections. 17 (Doc. 95.) Defendant responded to Plaintiff’s objections on August 31, 2009, and Plaintiff replied 18 on September 8, 2009. (Docs. 97 & 98.) Given the complicated procedural history involved, the 19 Court will review all the objections, despite questions regarding the timeliness of Defendant’s original 20 objections and Plaintiff’s opposition to those objections. The Court, however, declines to review 21 objections raised for the first time in a reply brief. 22 II. 23 LEGAL STANDARD 24 A magistrate judge’s decision on a non-dispositive issue is reviewed by the district court under 25 the “clearly erroneous or contrary to law” standard. 28 U.S.C. § 636(b)(1)(A); United States v. 26 Raddatz, 447 U.S. 667, 673 (1980). “A finding is ‘clearly erroneous’ when although there is evidence 27 to support it, the reviewing court on the entire record is left with the definite and firm conviction that 28 a mistake has been committed.” United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948). -2- 08-CV-0385 1 In contrast, the “contrary to law” standard permits independent review of purely legal determinations 2 by a magistrate judge. See, e.g., Medical Imaging Centers of America, Inc. v. Lichtenstein, 917 F. 3 Supp. 717, 719 (S.D. Cal. 1996). Thus, the district court should exercise its independent judgment 4 with respect to a magistrate judge’s legal conclusions. Gandee v. Glaser, 785 F.Supp. 684, 686 (S.D. 5 Ohio 1992). 6 III. 7 DISCUSSION 8 The issues before the Court involve application of the attorney-client privilege. The attorney- 9 client privilege exists when: (1) legal advice of any kind is sought, (2) from a professional legal adviser 10 in his or her capacity as such, (3) the communications relate to that purpose, (4) are made in 11 confidence, (5) by the client, (6) are, at the client's instance, permanently protected, (7) from disclosure 12 by the client or by the legal adviser, (8) unless the protection is waived. United States v. Martin, 278 13 F.3d 988, 1000 (9th Cir. 2002) (citing 8 Wigmore, Evidence § 2292, at 554 (McNaughton rev. 1961)). 14 Confidentiality is not lost if a third party is privy to the communication, provided the third-party is the 15 client’s agent or representative and is present for the purpose of facilitating communications with the 16 attorney. See e.g., Upjohn Co. v. United States, 449 U.S. 383, 394 (1981). 17 A. 18 Defendant raises two objections to Judge Stormes’ order. First, Defendant argues that case law 19 and USPTO regulations recognize a patent agent-client privilege. Second, Defendant argues that such 20 a privilege applies on the facts of this case. Defendant’s Objections 21 The Magistrate Judge noted a split in authority in the lower courts as to the applicability of the 22 attorney-client privilege to patent agents. On the one hand, some courts have held that no privilege 23 attaches because patent agents are not attorneys, and the attorney-client privilege is rooted “both 24 historically and philosophically, in the special role that lawyers have, by dint of their qualifications and 25 license, to give legal advice.” See e.g., Agfa Corp. v. Creo Prods. Inc., 2002 U.S. Dist LEXIS 14269, 26 *5 (D. Mass.). On the other hand, some courts have held that (a) the privilege attaches because of the 27 function that patent agents perform before the USPTO, and (b) finding no privilege would frustrate 28 congressional intent. See, e.g., Polyvision v. Smart Techs., Inc., 2006 U.S. Dist. LEXIS 12688, *7-8 -3- 08-CV-0385 1 (E.D. Mich.). USPTO regulations forbid practicing patent attorneys and agents from “reveal[ing] a 2 confidence or secret of a client.” 37 C.F.R. § 10.1(r). “‘Confidence’ refers to information protected 3 by the attorney-client or agent-client privilege under applicable law.” Id., at § 10.57(a). 4 As the Magistrate Judge correctly noted, the starting point for determining whether the Group 5 2(a) and (b) documents are protected is In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 803 (Fed. 6 Cir. 2000) (Federal Circuit law controls issue of privilege if it pertains to patent law and will only arise 7 in context of patent case). In that case, the court decided whether the attorney-client privilege applied 8 to an invention record for the patent-in-suit. Id. at 805. It held that “an invention record constitutes 9 a privileged communication, as long as it is provided to an attorney ‘for the purpose of securing 10 primarily legal opinion, or legal services, or assistance in a legal proceeding.’” Id. (quoting Knogo 11 Corp. v. United States, 213 U.S.P.Q. 936, 940 (Ct. Cl. Trial Div. 1980). Because the invention record 12 was submitted to the corporate legal department for the purpose of obtaining legal advice, the court 13 found it was privileged. Id. at 806-07. 14 Spalding’s central inquiry “is whether the communication is one that was made by a client to 15 an attorney for the purpose of obtaining legal advice or services.” Id. at 805. Spalding does not equate 16 patent agents with attorneys. Under certain circumstances, however, non-attorneys may play a role 17 in such communications. For example, the communications are privileged if a patent agent is working 18 for an attorney. Baxter Healthcare Corp. v. Fresenius Med. Care Holding, Inc., 2009 U.S. Dist. 19 LEXIS 20467, *4 (N.D. Cal.) Similarly, communications by a client’s agent to an attorney made for 20 the purpose of securing legal advice or assistance for the client are privileged. Upjohn Co. v. United 21 States, 449 U.S. 383, 394 (1981). 22 The attorney client privilege does not apply here because the communications at issue were 23 made between a non-attorney patent agent and Defendant’s CEO. Defendant’s patent attorney was 24 not privy to the communications. The patent agent was not employed in Defendant’s legal department 25 or by Defendant’s patent attorney; rather, the patent agent was an independent contractor retained by 26 Defendant. Under these circumstances, the Court agrees with the Magistrate Judge’s Order requiring 27 production of those documents contained in Groups 2(a) and (b). Defendant’s objections are 28 overruled. -4- 08-CV-0385 1 B. Plaintiff’s Objections 1. 2 Group 1 3 Plaintiff argues the Group 1 documents are not privileged because they are communications 4 between lay persons, and the description of the documents is insufficient to make a proper evaluation 5 of the asserted attorney-client privilege. (Pl. Obj. at 3-4.) Specifically, Plaintiff argues that Frank 6 Farrell’s declaration is insufficient under AT&T Corp. v. Microsoft Corp., 2003 U.S. Dist. LEXIS 8710 7 (N.D. Cal. 2003), and that the Magistrate Judge must review the documents in camera or order 8 declarations from the participating corporate employees. (Pl. Reply at 4-5.) 9 Communications between employees are privileged if they are about matters for which “the 10 parties intend to seek legal advice.” AT&T, 2003 U.S. Dist. LEXIS 8710 at *7. The Magistrate Judge 11 found that the Group 1 documents were privileged because they were made at the direction of counsel 12 so that Kreg Tool could obtain legal advice about its patent applications and Park’s patents. (Doc. 86 13 at 9.) AT&T neither requires a certain level of specificity nor an in camera review of documents. 14 Rather, the court in AT&T was satisfied, like Magistrate Judge Stormes, that the communications were 15 about matters upon which the parties intended to seek legal advice. AT&T, 2003 U.S. Dist. LEXIS 16 8710 at *7-*8. Here, the record establishes that Group 1 documents were made at the direction of 17 counsel to obtain legal advice. (Doc. 69-2, Farrell Decl. ¶ 10.) Thus, the Magistrate Judge’s ruling 18 is not clearly erroneous and Plaintiff’s objections are overruled. 2. 19 Group 2(c) 20 Plaintiff argues the Group 2(c) documents are not privileged because Shawn Dempster was not 21 under the control and supervision of Frank Farrell. This argument appears to be made on Plaintiff’s 22 mistaken assumption that Frank Farrell was not involved in the communications. However, as 23 Plaintiff later acknowledges, attorney Farrell was part of those communications. However, review of 24 the privilege log for the Group 2(c) documents shows that several documents were filed with or came 25 from the USPTO. These documents are in the public domain and are not subject to the attorney-client 26 privilege. Therefore, documents 189, 193-94, 205, and 239 are subject to production. The remaining 27 documents were made for the purpose of giving legal advice and therefore are protected by the 28 privilege. -5- 08-CV-0385 1 3. Group 3 2 Plaintiff argues the Group 3 documents are not privileged because merely copying attorney 3 Farrell on the communication does not bring such communications within the privilege. Here, Farrell 4 was copied on the communications because the communications involved the giving of legal advice. 5 (Doc. 87, Farrell Dec. ¶ 5). While some cases have held that draft documents are not privileged, more 6 recent decisions have found that drafts generally are privileged. See In re Rivastigmine Patent Litig. 7 (MDL No. 1661), 237 F.R.D. 69, 85-86 (S.D.N.Y. 2006). This includes drafts of documents that 8 ultimately may be filed with the USPTO. Id. Thus, the Court adopts the Magistrate Judge’s ruling 9 that the draft documents are privileged. Plaintiff’s objections are overruled. 10 4. Group 4 11 Plaintiff argues the Group 4 documents are not privileged because they relate to ex parte patent 12 prosecutions. However, as discussed above, the central inquiry is whether the communication is made 13 for the purpose of obtaining legal advice. In re Spalding, 203 F.3d at 805. Here, the privilege log 14 indicates the documents are emails regarding patent prosecution. The Magistrate Judge found the 15 communications were made for the primary purpose of seeking legal advice. The Magistrate Judge’s 16 finding is not clearly erroneous. Plaintiff’s objections are therefore overruled. 17 IV. 18 CONCLUSION 19 For the reasons stated above, Defendant’s objections are overruled and Defendant is ordered 20 to produce documents listed in Groups 2(a) and (b). Plaintiff’s objections are overruled, except that 21 Defendant is ordered to produce the following Group 2(c) documents: 189, 193-94, 205, and 239. 22 IT IS SO ORDERED. 23 DATED: October 27, 2009 24 25 26 HON. DANA M. SABRAW United States District Judge 27 28 -6- 08-CV-0385
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