United States District Court, N.D. Illinois, Eastern Division
November 19, 2004.
KNOLL PHARMACEUTICALS COMPANY, INC.; and THE JOHN AND Versuslaw ARNOLD FAMILY LIMITED LIABILITY PARTNERSHIP, Plaintiffs,
TEVA PHARMACEUTICALS USA, INC., Defendant.
The opinion of the court was delivered by: JOHN W. DARRAH, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiffs, Knoll Pharmaceuticals Company, Inc. and The John
and Lois Arnold Family Partnership, filed suit against Defendant,
Teva Pharmaceuticals USA, Inc., for allegedly infringing United
States Patent No. 4,587,252 ("the '252 patent"). Thereafter,
Defendant sought production of certain documents from Plaintiffs
and a non-party, Dr. John D. Arnold; Plaintiffs and Dr. Arnold
claim these documents are privileged. Presently before the Court
is Defendant's Motion for Ruling on Teva's Prior Motions to
Compel Production of Documents.
The facts, for the purposes of this motion, are as follows. Dr.
Arnold sought to obtain patent protection for an invention; and
another entity, Brighton Pharmaceuticals, was the assignee of
this invention; Brighton held these rights at time the patent
application was filed. When the patent application was filed, Dr.
Arnold also executed a power of attorney appointing an attorney
to prosecute this matter. Both Brighton and Kansas City Southern
Industries ("KCSI") were clients of this attorney.
Brighton eventually reassigned the rights to the patent back to
Dr. Arnold. Dr Arnold then licensed the rights to the patent to
Knoll Pharmaceuticals. In Article Six of the licensing agreement
between Dr. Arnold and Knoll Pharmaceuticals concerning the '252
patent, "both parties agree[d] to cooperate fully with each
other" in any litigation challenging the validity of the patent.
After this litigation commenced, Defendant served Dr. Arnold
with a subpoena issued under Federal Rule of Civil Procedure 45
by a district court in another state. In response, Dr. Arnold
produced documents and a privilege log detailing documents
withheld on attorney-client privilege grounds. Defendant then
filed a motion to compel production of the privileged documents
in this court, which was mooted by a summary judgment ruling in
favor of Defendant. Defendant also sought to compel the documents
in the court issuing the subpoena, but that motion was denied
without prejudice because discovery was stayed pending an appeal
by Plaintiffs of the summary judgment ruling.
The decision granting summary judgment to Defendant was
reversed on appeal. Defendant now seeks production of a number of
items on Dr. Arnold's privilege logs. Many of the documents
describe communications between the attorney and representatives
of Brighton and KCSI. Other documents relate to a Japanese patent
Dr. Arnold and Plaintiffs argue that the proper method for
Defendant to seek production of the documents is to file a motion
to compel in the district where the Rule 45 subpoena was issued.
Plaintiffs and Dr. Arnold also seek to protect most of the
documents under the attorney-client privilege. Finally, Dr. Arnold seeks to protect documents
relating to a Japanese patent application under the privilege law
With respect to the proper method of seeking production of the
documents, Plaintiffs and Dr. Arnold argue this Court lacks
jurisdiction under Federal Rule of Civil Procedure 45(c)(2)(B).
"If objection is made [to the request in the subpoena], the party
serving the subpoena shall not be entitled to inspect and copy
the materials or inspect the premises except pursuant to an order
of the court by which the subpoena was issued." Plaintiffs and
Dr. Arnold also find support under Federal Rule of Civil
Procedure 37(a)(1), which provides "[a]n application for an order
to a person who is not a party shall be made to the court in the
district where the discovery is being, or is to be, taken"
(emphasis added). Plaintiffs and Dr. Arnold thus argue that the
only court that can compel production of these documents is the
court that issued the subpoena. E.g., In re Sealed Case,
141 F.3d 337, 341 (D.C. Cir. 1998).
Defendant contends that it does not seek the documents under
Rule 45 but, rather, seeks production of the documents under
Federal Rule of Civil Procedure 34(a). Rule 34(a) permits
discovery of documents "which are in the possession, custody, or
control of the party upon whom the request is served." Defendant
further argues that because Dr. Arnold agreed to cooperate in any
litigation concerning the validity of the patent, Plaintiffs have
"the legal right to obtain the documents requested upon demand."
Wilson v. Sunstrand, Nos. 99 C 6944 & 99 C 6946, 2003 WL
21961359 (N.D. Ill. Aug. 18, 2003) (Wilson). Therefore,
Defendant asserts that Plaintiffs had control of the documents
and should have produced the documents pursuant to the Rule 34
request. The licensing agreement, which requires Dr. Arnold to cooperate
fully with Knoll Pharmaceuticals in any litigation concerning the
patent's validity, gives Plaintiffs the legal right to obtain the
documents. Because the documents have also been requested from a
non-party does not permit Plaintiffs to ignore their discovery
obligations. See Wilson, 2003 WL 21961359, at *9. Accordingly,
jurisdiction to compel production is proper in this Court.
The party seeking to assert the attorney-client privilege has
the burden to prove: "(1) Where legal advice of any kind is
sought (2) from a professional legal advisor in his capacity as
such, (3) the communications relating to that purpose, (4) made
in confidence (5) by the client, (6) are at his instance
permanently protected (7) from disclosure by himself or by the
legal advisor, (8) except the protection be waived." United
States v. Evans, 113 F.3d 1457, 1461 (7th Cir. 1997) (Evans).
Here, the documents describing communications between the
attorney and third-parties KCSI and Brighton are not protected
under the privilege merely because they were found in Dr.
Plaintiffs and Dr. Arnold argue that the privilege has not been
waived because the communications shared with KCSI and Brighton
are covered under the "joint interest doctrine," which protects
the documents from disclosure. "When the same attorney represents
the interest of two or more entities on the same matter, those
represented are viewed as joint clients for the purposes of the
[attorney-client] privilege." In re the Regents of the Univ. of
California, 101 F.3d 1386, 1389 (Fed. Cir. 1996) (interpreting
Seventh Circuit law). Two requirements must be met to satisfy
this doctrine: (1) Dr. Arnold must have believed that he was
consulting the attorney in a professional capacity with the
intent to seek professional legal advice; and (2) the legal interest between Dr. Arnold and the parties represented by the
attorney, KCSI and Brighton, must have been substantially
identical. In re the Regents of the Univ. of California,
101 F.3d at 1390. The party asserting the privilege has the burden of
establishing all elements of the privilege. E.g., United States
v. Hamilton, 19 F.3d 350, 354 (7th Cir. 1994).
Regarding the first element, Plaintiffs and Dr. Arnold submit a
power of attorney signed by Dr. Arnold permitting the attorney to
prosecute Dr. Arnold's invention. While the power of attorney
form does not conclusively demonstrate that the attorney
represented Dr. Arnold, Sun Studs, Inc. v. Applied Theory
Assoc., Inc., 772 F.2d 1557, 1568 (Fed. Cir. 1985), Plaintiffs
and Dr. Arnold also submit an affidavit from the attorney which
states that the attorney acted in a professional relationship as
an attorney in counseling Dr. Arnold, Brighton, and KCSI
concerning legal advice over the patent. These documents, taken
together, demonstrate that Dr. Arnold consulted with the attorney
in a professional capacity on matters relating to the '252 patent
Regarding the second element, Plaintiffs and Dr. Arnold argue
that KCSI, Brighton, and Dr. Arnold has the same interest in
obtaining a strong and enforceable patent. Specifically,
Plaintiffs and Dr. Arnold contend that all parties shared an
interest in obtaining patent protection because: (1) Dr. Arnold
assigned the patent to Brighton, and (2) Dr. Arnold and KCSI
Plaintiffs and Dr. Arnold argue that an assignment of rights
demonstrates that the inventor and the other party have the same
interest in obtaining patent protection and cite In re Regents
of the Univ. of California, 101 F.3d at 1388-90, in support of
this proposition. In Regents, however, an exclusive license
agreement existed between the inventor and the other party. In contrast, Dr. Arnold had assigned away his rights to
the patent to Brighton at the time the application was filed. At
that point, Dr. Arnold no longer had any legal interest in
obtaining patent protection. Plaintiffs and Dr. Arnold also argue
that Dr. Arnold and KCSI formed Brighton; and, therefore, Dr.
Arnold had an interest in seeing Brighton obtain patent
protection. This theory is premised on statements made by Dr.
Arnold's wife in a deposition. However, Plaintiffs and Dr. Arnold
have not presented any other evidence to support their assertion
that Dr. Arnold retained some legal interest in Brighton.
Therefore, Plaintiffs have failed to meet their burden to
demonstrate that the interest of Dr. Arnold and the entities
represented by the attorney, Brighton and KCSI, were
Based on the above, the joint interest doctrine is inapplicable
and the documents are not protected under the attorney-client
Dr. Arnold also seeks to protect documents relating to a
Japanese patent application, specifically, documents 18, 19, and
123 listed on the privilege log. This privilege applies if, under
Japanese law, communications with Japanese patent agents that
relate to Japanese patent activities are protected. McCook
Metals, LLC v. Alcoa, Inc., 192 F.R.D. 242, 256 (N.D. Ill.
2000). Under Japanese law, documents reflecting communications
between patent agents and clients are exempt from production.
VLT Corp. v. Unitrode Corp., 194 F.R.D. 8, 17 (E.D. Ma. 2000)
(VLT Corp). Defendant argues this case reflects the minority
position but relies on cases which were decided before a change
in Japanese law. See VLT Corp., 194 F.R.D. at 17. The communications, though, were made before the change in
Japanese law. However, in VLT Corp, the court also protected
communications under the Japanese privilege law that were made
before the change in the privilege law and are, therefore,
privileged. See VLT Corp., 194 F.R.D. at 9, 17.
Dr. Arnold, the holder of these documents regarding the
Japanese patent application, does not object to in camera
inspection of these documents to determine whether the privilege
is applicable. Accordingly, Dr. Arnold is required to provide
these documents to the Court within two weeks of the date of this
opinion for in camera review to determine if the other
requirements necessary to establish the attorney-client privilege
For the foregoing reasons, Defendant's Motion for Ruling on
Teva's Prior Motions to Compel Production of Documents is granted
in part and denied in part. Plaintiffs are ordered to produce all
the requested documents, except the documents protected under
Japanese privilege law. The documents protected under Japanese
privilege law must be provided to the Court within two weeks of
the date of this opinion for in camera review.
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