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Using the 'Common Interest Doctrine' in litigation patent cases

Updated: 2009-10-26 08:31
(China Daily)

High-stakes patent litigation, whether initiated by a competitor seeking to establish market positioning through the offensive use of its proprietary inventions or involving a non-practicing entity attempting to monetize its patent portfolio by suing product manufacturers, is rarely limited to a single defendant.

Using the 'Common Interest Doctrine' in litigation patent cases

More often, the plaintiff will file one action that names a variety of companies participating in a particular market segment and seek to extract concessions from each in turn.

Frequently, when the defendants are also competitors outside of the courthouse, each will retain their own counsel.

However, as they also share the similar goal of maximizing the possibility of defending against the plaintiff's claims, the defendants must cooperate to some extent within the courthouse.

Since all of the defendants need to investigate the same factual and legal issues, and have a common purpose in limiting the plaintiff's right to recover damages or other relief, their best interests are served in avoiding unnecessary duplication of effort and expense.

By acting together where appropriate, they can increase their effectiveness over what could be achieved should they all act independently.

To increase their chances of achieving similar goals, however, the defendants must be able to communicate effectively and without the risk that they will be compelled to disclose their respective work products to the plaintiff.

This is facilitated by application of the "Common Interest Doctrine". This is a concept that recognizes situations in which defendants can claim a privilege from compelled disclosure of communications among their counsel regarding matters that bear on their common economic interests.

As a general matter, courts in the United States recognize certain protections against compelled disclosure of an attorney's work product, even when shared among different parties to a lawsuit.

An attorney's work product is generally considered to include the results from his individual investigation into the facts underlying the client's case, as well as his research and thoughts in the preparation of his client's defense.

It includes the results of the attorney's own work, theories and strategies. It includes the work of those employed by him in investigating the favorable and unfavorable aspects of the case as reflected in interviews, statements, memoranda, correspondence or other writing that reflect the attorneys' impressions, conclusions or opinions.

While the protections against compelled disclosure for this type of information can be waived if the information is voluntarily disclosed to unnecessary third parties, for a court to conclude that the protections are lost, the disclosure must be seen as being wholly inconsistent with the purpose of the privilege - to safeguard an attorney's work product and preparation for trial.

By contrast, when the court concludes that the Common Interest Doctrine applies, the protections against compelled disclosure will not have been found to have been waived.

For the Common Interest Doctrine to apply, the defendants sharing the information need not have identical interests in the litigation.

Their joint communications will be protected from compelled disclosure to the plaintiff as long as the defendants also have sufficient common interests in the context of the litigation that make it reasonably necessary for them to cooperate in a joint defense effort.

To meet the criteria for application of the Common Interest Doctrine between multiple defendants, the disclosure must thus relate to a matter that bears in common between the defendants.

The disclosing attorney must have a reasonable expectation that the receiving attorney will preserve confidentiality, and the disclosure must have been reasonably necessary for the purpose for which the disclosing attorney was consulted.

The protection for information disclosed under the common interest doctrine is so significant that, when these criteria are present, a disclosing party can obtain judicial assistance to prevent improper use or disclosure by an attorney for a receiving party.

Experienced attorneys in multi-defendant patent cases generally find it appropriate to enter into written agreements that memorialize the decision to engage in a joint defense.

These "Joint Defense Agreements" confirm the existence of the common interest of the signatories and expressly state the purpose for the agreement.

Typically, the terms of these agreements will touch on the following points, among others:

1.A description of the types of materials that may be exchanged, whether orally or in writing, such as factual analysis, mental impressions, legal memorandum, joint witness interviews and reports of witness interviews, and drafts, briefs and other pleadings.

2.A confirmation that each party retains the right to determine which information it will disclose to the other parties, and the statement that the Joint Defense Agreement should not be construed to obligate the parties to exchange, share or otherwise provide one another with information or documents.

3.A confirmation that the parties do not intend to waive any privileges, an affirmation of the obligation to take reasonable steps to preserve the privileges against compelled disclosure, and a statement that restricts the authority of any party to waive the privilege on behalf of any other party.

4.A limitation on the manner in which any of the materials disclosed under the Joint Defense Agreement or the Common Interest Doctrine can be used or disclosed.

This limitation should specify that the materials will only be used in the defense of the action and for no other purpose, with a further proviso that a party who receives a demand to produce materials obtained under the Joint Defense Agreement must immediately notify the other parties and refrain from producing the requested materials in advance of any ordered deadline so the producing parties can oppose the demand.

5.A specification of what each party must do upon withdrawing from the Joint Defense Agreement, including the obligation to continue to maintain the information as confidential, and to cease to use or retain any of the materials as soon as the claims pending against the withdrawing party have been resolved.

Chris Scott Graham is a managing partner, Silicon Valley, for the American law firm Dechert LLP, based in Mountain View, California.

(China Daily 10/26/2009 page9)

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