Patent Agent Privilege Exists, But Is Limited

Queen's University and PARTEQ sued Samsung on Jan. 31, 2014, alleging that Samsung's Smart Pause feature infringed the '665, '660, and '856 patents. During fact discovery, Queen's University refused to produce certain documents reflecting communications with patent agents, claiming that the documents were privileged. Samsung moved to compel production. The magistrate judge granted the action, finding that there was no separate “patent agent privilege.” Queen's University objected and ultimately petitioned the Federal Circuit for a writ of mandamus ordering the withdrawal of the court's order, in effect requesting that the Federal Circuit recognize a “patent agent privilege.”

The Existence of a Patent Agent Privilege

After determining that mandamus review was appropriate, the Federal Circuit decided that a patent agent privilege exists.

Federal Rule of Evidence 501 provides that “[t]he common law ' as interpreted by United States courts in the light of reason and experience ' governs a claim of privilege unless any of the following provides otherwise: the United States Constitution; a federal statute; or rules prescribed by the Supreme Court.” Fed. R. Evid. 501. Noting that none of those enumerated sources foreclosed the possibility of patent agent privilege, the Federal Circuit elected to rely on “reason and experience” to find that the “patent agent privilege” exists.

Much of In re Queen's University revolved around whether patent agents were more similar to attorneys or non-attorney counselors, such as accountants. As the court noted, the common law generally rejects the assertion of privilege over communications with non-attorneys. Courts have, for example, rejected assertions of privilege over communications between clients and accountants. See, Couch v. United States , 409 U.S. 322, 335 (1973), “jailhouse lawyers,” Velasquez v. Borg, No. 93-15566, 1994 WL 327328, at 1 (9th Cir. June 8, 1994), professional engineers, and Mattson v. Cuyuna Ore Co., 178 F. Supp. 653, 654 (D. Minn. 1959). Conversely, policy reasons generally advise against courts making exceptions to the attorney-client privilege, given the gravity of the public interest at stake. See, Metro. Life Ins. Co. v. Aetna Cas. & Sur. Co., 249 Conn. 36, 52, 730 A.2d 51, 60 (1999).

The Supreme Court's decision in Sperry v. State of Florida ex rel. Florida Bar, 373 U.S. 379 (1963), guided the Federal Circuit's decision that patent agents were more like attorneys than non-attorneys. In Sperry, the Supreme Court held that “the preparation and prosecution of patent applications for others constitutes the practice of law.” 373 U.S. at 383. The Court made this decision partly because patent agents advise their clients as to patentability according to statutory criteria, advise clients regarding alternative forms of intellectual property protection, and draft patent specifications and claims (“one of the most difficult legal instruments to draw with accuracy”). Id. (citing Topliff v. Topliff, 145 U.S. 156, 171 (1892)). Sperry further noted that, while attorneys are licensed to practice law by states, patent agents are uniquely authorized to practice a limited subset of the law by Congress through the Patent Office. Id. at 386-87.

The Federal Circuit declined to defer more broadly to the Patent Office. In a footnote, the court rejected a 1928 comment by the Commissioner of Patents asserting that there was no patent agent privilege, noting that the Commissioner had no authority to create or destroy privileges, that the comment was unrelated to the question before the court, and that, in any event, patent litigation has drastically changed since 1928. In re Queen's University, at 17 fn. 2.

Beyond Sperry, the Federal Circuit's opinion also relied on the reasonable expectation of clients working with patent agents. According to the court:

A client has a reasonable expectation that all communications relating to “obtaining legal advice on patentability and legal services in preparing a patent application” will be kept privileged ' [w]hether those communications are directed to an attorney or his or her legally equivalent patent agent should be of no moment.

Id. at 18-19 (citations omitted).

This sentiment was echoed by a number of companies and trade groups in response to a Request for Comments issued by the Patent Office on the topic. See, USPTO, “Roundtable on Domestic and International Issues Related to Privileged Communications between Patent Practitioners and Their Clients.”'

The Scope of the Patent Agent Privilege

Nonetheless, the Federal Circuit carefully limited the patent agent privilege. Noting that application of the privilege “must be carefully construed,” the Federal Circuit emphasized that “litigants must take care to distinguish communications that are within the scope of activities authorized by Congress from those that are not.” In re Queen's University , at 23-24. That burden of making such distinction is on the party asserting the privilege. Id . at 24.

The Federal Circuit drew a careful line between privileged and non-privileged communications. In discussing which activities are protected by patent agent privilege, the Federal Circuit cited 37 C.F.R. '11.5(b)(1), which defines “Practice before the Office” to include “preparing and prosecuting any patent application” and “consulting with or giving advice to a client in contemplation of filing a patent application or other document with the Office.” 37 C.F.R. '11.5(b)(1). In contrast, according to the majority opinion, non-privileged communications include offering an opinion of infringement or validity of another party's patent in contemplation of litigation or purchase/sale of a patent. In re Queen's University, at 25.

Reyna's Dissent

Judge Reyna, dissenting, argued that the presumption against creating new privileges had not been overcome. In so doing, Reyna illustrated the limited nature of the majority's ruling.

Judge Reyna's analysis explored the few situations in which communications may be protected by the patent agent privilege. Because patent agents and clients have a duty of candor to the Patent Office, Reyna argued, the patent agent privilege is effective “only to encourage the disclosure of information that the client does not believe is material to whether the invention is patentable.” In re Queen's University, Reyna, J., dissenting, at 4. Moreover, because patent agent communications are usually found privileged when an agent is working under the supervision of an attorney (such as when working at a law firm), the privilege only applies where a patent agent works independently and without an attorney. Id. at 5. Perhaps most critically, patent agents are free to destroy correspondence before litigation is contemplated, so the scope of potentially discoverable documents could be quite small. Id. at 6.

Reyna's dissent also illustrated the blurriness inherent in the scope of the patent agent privilege. For example, though the majority opinion asserts that patent agent communications regarding the validity of other patentees' patents is outside the scope of the privilege, Changes to the Representation of Others Before the United States Patent and Trademark Office, 73 Fed. Reg. 47,650 (Aug. 14, 2008), arguably provides that those opinions are properly within the scope of the patent agent's practice. Similarly, because some patent agent legal powers (e.g., the agent's power to draft a contract selling a patent) rely on whether state law defines such activity as the practice of law, the patent agent privilege may vary based upon jurisdiction.

Ramifications of the Majority Holding

Given the lack of clarity in the Federal Circuit's ruling, patent agents and their clients should be cautious in relying on the existence of the patent agent privilege. If anything, In re Queen's University emphasizes the importance of protecting communications through already well-established mechanisms: working through attorneys where possible, defining the scope of patent agent representation carefully, and maintaining communication discipline. Potential litigants should also carefully analyze communications between a patent agent and the inventor; while some communications may be privileged or innocuous, others may be damaging and subject to discovery. It will likely take more court opinions to flesh out the nature of the patent agent privilege so that it can be safely relied on by patent agents, their clients, and potential litigants.

Kirk Sigmon is an associate in Morrison & Foerster LLP's Washington, DC office. His practice focuses on patent litigation in federal district courts.