Intellectual Property – Discovery

November 8, 2013

Publication| Intellectual Property

Judge Stark Grants in Part and Denies in Part a Motion for Protective Order

In Intellectual Ventures I LLC, et al. v. Altera Corp., et al., C.A. No. 10-1065-LPS (D. Del. July 12, 2013), Judge Stark granted in part and denied in part a motion for protective order. Specifically, Judge Stark barred defendants from taking supplemental depositions of certain witnesses who had been instructed not to answer questions on the basis of privilege and granted in part and denied in part the motion with respect to the assertion of privilege as to certain documents.

Plaintiffs are non-practicing entities. Judge Stark upheld plaintiffs’ assertion of privilege as to a consultant, holding that testimony related to the patent valuation process constituted legal communications protected by privilege. Notably, the Court stated that “patent valuation, while in this instance tied to business decisions of patent acquisition, may be intertwined with legal analysis, including considerations of claim scope, validity, and licensing power.” The Court also upheld plaintiffs’ assertion of privilege as to the testimony of a transactional attorney who provided legal advice related to patent acquisition deals. The Court held that the fact that his work and analyses also included business advice did not vitiate the privilege.

The parties also disputed the assertion of privilege as to two discrete categories of documents. With respect to the first category, plaintiffs argued that disclosure to a consultant did not vitiate the privilege. The Court concluded that plaintiffs failed to make the necessary showing to establish that the consultant was the functional equivalent of an employee and should be included within the protection of the privilege. The Court nevertheless concluded that plaintiffs provided sufficient evidentiary support to determine that the consultant shared a common interest with plaintiffs, and therefore, under Third Circuit law, his presence did not vitiate the attorney-client privilege. With respect to the final category of documents, the Court criticized the parties’ lack of communication as to the disputed issues, but determined that plaintiffs were on notice that these documents were at issue and failed to meet their burden of establishing privilege.

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