Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc. et al

Filing 36

Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc. et al

Doc. 36

Case 3:05-cv-04158-MHP

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1 QUINN EMANUEL URQUHART OLIVER & HEDGES, LLP Adrian M. Pruetz (Bar No. 118215) 2 Jeffrey N. Boozell (Bar No. 199507) 865 South Figueroa Street, 10th Floor 3 Los Angeles, California 90017-2543 Telephone: [phone] Facsimile: [phone] E-Mail: [e-mail] 5 [e-mail] m 6 7 8 9 10 Robert W. Stone (Bar No. 163513) Brian C. Cannon (Bar No. 193071) TJ Chiang (Bar No. 235165) 555 Twin Dolphin Drive, Suite 560 Redwood Shores, California 94065 Telephone: [phone] Facsimile: [phone] E-Mail: [e-mail] m [e-mail] m

11 Attorneys for Defendants and Counterclaimants Roche Molecular Systems, Inc.; Roche 12 Diagnostics Corporation; and Roche Diagnostics Operations, Inc. 13 UNITED STATES DISTRICT COURT 14 NORTHERN DISTRICT OF CALIFORNIA 15 THE BOARD OF TRUSTEES OF THE LELAND CASE NO. C-05-04158 MHP 16 STANFORD JUNIOR UNIVERSITY, 17 18 vs. Plaint iff, DEFENDANTS' BRIEF ON STANFORD'S WAIVER OF THE ATTORNEY-CLIENT PRIVILEGE AND WORK PRODUCT PROTECTION CONCERNING INVENTORSHIP

19 ROCHE MOLECULAR SYSTEMS, INC.; ROCHE DIAGNOSTICS CORPORATION; ROCHE 20 DIAGNOSTICS OPERATIONS, INC., 21 Defendants.

22 ROCHE MOLECULAR SYSTEMS, INC. ROCHE DIAGNOSTICS CORPORATION; ROCHE 23 DIAGNOSTICS OPERATIONS, INC., 24 25 vs. Counterclaimants,

26 THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY; AND 27 THOMAS MERIGAN. 28 Counterclaim Defendants.
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PRELIMINARY STATEMENT In order to convince the United States Patent and Trademark Office to correct inventorship

3 and approve its patent applications, Stanford deliberately disclosed communications between the 4 alleged inventors and Stanford's lawyers. Now that the patents have issued, Stanford seeks to 5 prevent discovery concerning communications between the named inventors and their lawyers 6 concerning inventorship. Stanford's efforts to raise this shield are improper. Stanford's waiver 7 was knowing and complete. Since the issues here are related to ownership, Roche will be severely 8 prejudiced by Stanford's waiving that which it deems helpful and withholding that which it deems 9 not. Accordingly, Defendants now seek the production of all documents concerning inventorship, 10 without temporal limitat ion. 11 12 STATEMENT OF FACTS On May 14, 1992, Stanford's lawyers, Pennie & Edmonds, filed United States Patent

13 Application No. 07/883,327 (the "'327 Application") in the United States Patent and Trademark 14 Office ("PTO") on behalf of Drs. Michael J. Kozal and Thomas C. Merigan. The '327 Application 15 is the common ancestor of all of the patents-in-suit . As originally filed, it listed only Drs. Merigan 16 and Kozal as inventors. 17 On December 7, 1992, while the '327 Application was pending in the PTO, Pennie &

18 Edmonds filed a petition to change the inventorship of the '327 Application. The petition sought 19 to add Drs. Mark Holodniy and David A. Katzenstein as inventors. The applicants submitted 20 several declarations to support the petition to correct inventorship, including those by Dr. Merigan 21 and attorney Barry Elledge of Pennie & Edmonds. The explanation presented to the PTO was that 22 the error in failing to name Drs. Holodniy and Kozal principally occurred because the application 23 was filed under extreme time pressure. See Declaration of T.J. Chiang ("Chiang Decl."), Ex. B, ¶ 24 11. 25 Dr. Merigan submitted a declarat ion to show that he had "never attempted to mislead or

26 deceive the law firm of Pennie & Edmonds, the PTO, Stanford University or the scientific 27 community . . . ." Chiang Decl., Ex. A, ¶ 10. In support of that contention, Dr. Merigan detailed 28
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1 numerous communications he had with the attorneys at Pennie & Edmonds and the legal advice he 2 received fro m them. See generally id. In particular, Dr. Merigan declared: 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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"I supplied to Pennie & Edmonds a copy o f an unpublished manuscript that was to be used as a source of information for the application." Id., Ex. A, ¶ 2. "A copy of the Invention Disclosure and an abstract by Dr. Kozal and me were provided to Pennie & Edmonds in late April, 1992, for use in preparing the above referenced patent application." Id., Ex. A, ¶ 4. "I contacted attorney Laura Coruzzi at Pennie & Edmonds about inventorship. At her suggestion, I requested Drs. Katzenstein and Holodniy to review the patent application and determine whether in their opinions they should be included as inventors." Id., Ex. A, ¶ 8. "Drs. Katzenstein and Holodniy communicated to me their opinions that their contributions should entitle them to be named as coinventors. I informed attorney Laura Coruzzi of these opinions, and requested Pennie & Edmonds to pursue whatever action needed to be done to name the proper coinventors." Id., Ex. A, ¶ 9.

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Chiang Decl., Ex. A, ¶¶ 2­9. Attorney Barry Elledge of Pennie & Edmonds also submitted a declaration in support of the petition. In that declaration, Elledge stated his belief that the error in inventorship in the original applicat ion occurred principally because of extreme time pressure. Chiang Decl., Ex. B, ¶ 11. In addition, Elledge provided a detailed account of his conversations with Drs. Merigan, Holodniy, Katzenstein and Kozal regarding their inventive contributions, his state of mind concerning inventorship as well as the states of mind of his colleagues, and his own beliefs and opinions as to the inventive contributions of the named inventors. See Id., Ex. B, ¶¶ 5, 7­9. Specifically, Elledge declared: · "I am an associate attorney at the law firm of Pennie & Edmonds. In September 1992, attorney Laura A. Coruzzi at Pennie & Edmonds requested that I investigate the inventorship issue . . . ." Id., Ex. B, ¶ 1. "Dr. Kole [of Pennie & Edmonds] stated that, to the best of her recollection, Dr. Merigan and Kozal were listed as inventors of the above-referenced application because they were the persons named on the Information Disclosure statement, and with whom she had discussed the invention." Id., Ex. B, ¶ 3. "Dr. Holodniy stated that he was until the summer of 1991 a research fellow in the Division of Infectious Disease at Stanford University. His inventive contribut ion to the

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subject matter of the present application occured [sic] during this period, and principally concerns quantitation of HIV RNA in plasma of AIDS patients." Id., Ex. B, ¶ 7. "Dr. Katzenstein has indicated that his inventive contribution principally concerns the relationship between the quantity of HIV RNA in plasma of AIDS patients and disease progression." Id., Ex. B, ¶ 8. "On the basis of the above materials and conversations, I believe that both Dr. Holodniy and Dr. Katzenstein have made an inventive contribution to the subject matter of one or more claims of the above-referenced application." Id., Ex. B, ¶ 10.

Chiang Decl., Ex. B, ¶¶ 1­10. The PTO accepted the affidavits, and, after finding "the error in inventorship occurred without deceptive intent," granted the petition for correction of inventorship on May 10, 1994. See Chiang Decl., Ex. C. ARGUMENT STANFORD'S ATTORNEY-CLIENT PRIVILEGE AND WORK PRODUCT IMMUNITY HAVE BEEN WAIVED BY ITS DISCLOSURES TO THE PTO. A. Federal Circuit Law Governs.

"Federal Circuit law applies when deciding whether particular written or other materials

16 are discoverable in a patent case, because they relate to an issue of substantive patent law." In re 17 Spalding Sports Worldwide, Inc., 203 F.3d 800, 803-04 (Fed. Cir. 2000) ("[A] determinat ion of 18 the applicability of the attorney-client privilege to Spalding's invention record clearly implicates, 19 at the very least, the substantive patent issue of inequitable conduct."). In the Federal Circuit, the 20 "attorney-client privilege evaporates upon any voluntary disclosure of confident ial information to 21 a third party." Carter v. Gibbs, 909 F.2d 1450, 1451 (Fed. Cir. 1990) (en banc). Similarly, when a 22 party disclo ses attorney work product, "the criteria for waiver of the work product and attorney 23 client privileges are equivalent." Id. 24 Once the privilege is waived, "the privilege is generally lost for all purposes and in all

25 forums." Genentech, Inc. v. U.S. Intern. Trade Comm'n, 122 F.3d 1409, 1416 (Fed. Cir. 1997). 26 This applies to waiver before government agencies, outside of litigation, as it is nonetheless a 27 waiver of the privilege. See In re Pioneer Hi-Bred Intern., Inc., 238 F.3d 1370, 1374-75 (Fed. Cir. 28
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1 2001) (disclosure to Securities and Exchange Commission of counsel's tax advice waived 2 privilege "with respect to all documents which formed the basis for the advice, all documents 3 considered by counsel in rendering that advice, and all reasonably contemporaneous documents 4 reflecting discussions by counsel or others concerning that advice"). Particularly for the purposes 5 of this case, waiver before the PTO is waiver for all other forums. Winbond Elecs. Corp. v. Int'l 6 Trade Comm'n, 262 F.3d 1363, 1376 (Fed. Cir. 2001) ("This court has held that a patentee's 7 inadvertent waiver of attorney-client privilege in a patent infringement litigation is a general 8 waiver `for all purposes.'") (quoting Genentech). 9 10 11 B. Stanford waived all privileges and immunities by voluntarily disclosing and putting "at issue" the substance of attorney-client communications, attorney advice, attorney work product and mental impressions, and attorney legal conclusions. In this case, Stanford knowingly and voluntarily disclosed both confident ial attorney-client

12 communications and attorney work product concerning inventorship to the PTO. Thus, a finding 13 of waiver is warranted. 14 In his declaration, Dr. Merigan disclosed the contents of confidential attorney-client

15 communications to the PTO. In particular, he recounted discussions and communications with his 16 counsel relating to the details of his inventive contributions as well as the inventive contributions 17 of Drs. Katzenstein and Holodniy. See Chiang Decl., Ex. A, ¶¶ 2­4, 9. He also recounted legal 18 advice provided to him by his counsel. Id., Ex. A, ¶ 8 (counsel requested that Dr. Merigan contact 19 Drs. Holodniy and Katzenstein as part of an effort to determine if they should be named as 20 inventors). 21 Similarly, attorney Barry Elledge revealed the substance of confidential communications

22 with his clients regarding inventorship and inventive contribution. See Chiang Decl., Ex. A, ¶¶ 7­ 23 9 (describing alleged inventive contributions of Holodniy, Katzenstein and Kozal). In addition, he 24 also revealed the substance of confidential communications with his co lleagues involved in 25 preparing the application. Id., Ex. B, ¶¶ 1­4 (describing communications with attorney Coruzzi 26 and law clerk Kole). Furthermore, he also disclosed the mental processes of the attorneys and 27 staff who prepared the application. Id., Ex. B, ¶¶ 3­4 (the listing of inventors in the initial 28
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1 applicat ion was based on the persons named in the Information Disclosure). Finally, Elledge 2 disclosed his opinion regarding inventorship based on his investigation and the discussions 3 disclosed above: "On the basis of the above materials and conversations, I believe that both Dr. 4 Holodniy and Dr. Katzenstein have made an inventive contribution to the subject matter of one or 5 more claims of the above-referenced application." Chiang Decl., Ex. B, ¶ 10. 6 The Federal Circuit has consistently held that disclosures, like those above, waive

7 privilege. For example, in GFI, Inc. v. Franklin Corp., 265 F.3d 1268 (Fed. Cir. 2001), the court 8 held: 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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The district court properly found that GFI waived privilege when its patent attorney testified in [a prior] lit igat ion about his state of mind, knowledge of prior art, and communications with his client. On cross-examination, he discussed his conversations with Sproule regarding the duty of disclosure, discussions they had prior to an interview with the PTO, and various items of prior art Sproule had or had not told him about. We see no error in the district court's order to GFI to release the allegedly privileged information. Id. at 1273; Fort James Corp. v. Solo Cup Co., 412 F.3d 1340 (Fed. Cir. 2005) (document stating "legal counsel has advised a bar was not established during experimental trials" waived privilege); In re Pioneer, 238 F.3d at 1374 (statement that discussion of tax consequences "is the opinion of Skadden, Arps, Slate, Meagher & Flom LLP" waived privilege); Winbond, 262 F.3d at 1376. Accordingly, controlling precedent establishes that Stanford's actions in this lawsuit are improper. C. Winbond Elecs. Corp. v. Int'l Trade Comm'n is directly on point.

The present dispute is virtually identical to that resolved by the Federal Circuit in Winbo nd, 262 F.3d 1363 (Fed. Cir. 2001); if anything, the waiver here is more extensive. In Winbond, the patentee At mel init ially petitioned the ITC for enforcement of its patent, but then discovered that the patent had improper inventorship. inventorship by adding Anil Gupta as an inventor. Atmel petit ioned the PTO to correct In support of Atmel's petition, Gupta

submitted a declaration stating: "The standard of inventorship as it relates to the '903 patent has been explained to me. Based on my understanding of that standard, I hereby state that I have made an inventive contribution to the subject matter claimed in the '903 patent . . . ." Id. at 1373.

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1 In a subsequent enforcement action, the ITC found that the attorney-client privilege and work 2 product protections were waived, and the Federal Circuit affirmed, holding: 3 4 5 6 7 8 9 10 11 In affirming the administrative law judge's determination that Atmel waived its attorney-client privilege and work product protection for documents and communications relating to inventorship of the '903 patent, the Commission stated: "By expressly relying on Mr. Gupta's statement as a central part of its effort to obtain a certificate of correction and then using that certificate to convince the Commission to reconsider the enforceability of the '903 patent, Atmel explicitly placed the legal advice to Mr. Gupta--and the fact that Mr. Gupta had obtained that advice--"at issue" in these proceedings." ... Atmel continued by explaining that Mr. Gupta understood that he was an inventor upon receiving an explanation of the law enunciated by this court's Ethicon opinio n. Thus, the Commission correctly found that Atmel put at issue Mr. Gupta's, and thus its attorneys', understanding of inventorship law both before and after the Commission's initial decision.

12 Id. at 1375-76. 13 The statement by Gupta in Winbond ("The standard of inventorship as it relates to the '903

14 patent has been explained to me. Based on my understanding of that standard, I hereby state that I 15 have made an inventive contribution . . .") and the statement by Elledge in this case ("On the basis 16 of the above materials and conversations, I believe that both Dr. Holodniy and Dr. Katzenstein 17 have made an inventive contribution . . .") are functionally equivalent. Both statements were 18 presented to the PTO in support of a petition to correct inventorship; both state that a certain 19 inventor made an inventive contribution; both rely on attorney opinion in supporting that assertion 20 and avo iding a finding of deceptive intent; both patentees successfully obtained the correction of 21 inventorship; and both now rely on the corrected inventorship to assert the patent in subsequent 22 proceedings. The Federal Circuit in Winbond held that the patentee waived its "attorney-client 23 privilege and work product protection for documents and communications relating to 24 inventorship." Id. at 1375. The same conclusion and finding is justified here. 25 26 27 28
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Stanford's improper actions prejudice Roche.

After disclosing some attorney-client communications to the PTO to successfully obtain its patents, Stanford now seeks to shield all other communications on the same subject matter. A

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1 finding of waiver of both the attorney-client privilege and work product protection is essential 2 under these circumstances to prevent prejudice to Defendants. If Stanford is permitted to assert 3 attorney-client privilege or work product protection, Roche would be unfairly disadvantaged in 4 attempting to challenge the accuracy of the declarations submitted by Stanford. To prepare its 5 case, Roche needs to be able to question the named inventors and Stanford's lawyers about all the 6 conversations they had concerning inventorship. Stanford cannot selectively disclose the portions 7 of the conversations it deems helpful but shield those it does not. How can Roche challenge 8 Elledge's assertion, "I believe that both Dr. Holodniy and Dr. Katzenstein have made an inventive 9 contribution," without access to related notes, memos, and other work product of those involved 10 attorneys and named inventors that reflect the basis of that belief? In this case, Roche asserts an 11 ownership interest in the patents based on Drs. Holodniy's and Merigan's contracts with Cetus 12 (Roche's predecessor-in-interest) and their interactions with Cetus scientists. The information 13 sought by Roche is directly related to this issue; for example, to determine whether the alleged 14 inventive contribution falls within the terms of the contracts with Cetus. 15 II. 16 17 18 THE SCOPE OF THE WAIVER EXTENDS TO ALL INFORMATION RELATING TO INVENTORSHIP, WITHOUT TEMPORAL LIMITATION. A. The waiver extends to all information related to inventorship.

"The widely applied standard for determining the scope of a waiver of attorney-client

19 privilege is that the waiver applies to all other communications relating to the same subject matter. 20 . . . It would be unfair to permit Fort James to rely on favorable legal opinions, but protect the 21 communications on which those opinions depend." Fort James, 412 F.3d at 1349. On its face, the 22 Elledge declaration discloses that he consulted all four named inventors regarding the 23 "inventorship question," and opines on the nature of their invent ive contribution. See Chiang 24 Decl., Ex. B, ¶¶ 5, 7-9. Thus the subject matter plainly encompasses at least the inventorship of 25 the '327 Application and the inventive contributions of each of the named inventors. More 26 directly, in Winbond, with virtually ident ical facts, the scope of the waiver was determined to be: 27 "attorney-client privilege and work product protection for documents and communications relating 28 to inventorship." Id. at 1375.
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1

Accordingly, Defendants request and order that Stanford has waived the attorney-client

2 privilege and work product protection for documents and communications relating to the 3 inventorship of each of the patents and applications that derive from the '327 application, 4 including, for example, the invention disclosure for each of those patents and applications.1 5 6 B. The temporal scope extends to the present day.

At the very least, the temporal scope of the waiver of privilege extended from the first

7 contact between the named inventors with Pennie & Edmonds regarding the '327 application 8 (according to Dr. Merigan's declaration, in March 1992) up until the PTO granted the petition for 9 correction of inventorship on May 10, 1994. However, in Defendants' view, the waiver extends 10 well beyond that to the present day. Stanford continues to place the communications with counsel 11 and its attorneys' opinions regarding inventorship of the '327 Application before the PTO. 12 The issue of the inventorship of the '327 Application remains before the PTO because

13 Stanford continues to file continuation and divisional applications that trace their parentage 14 directly to the '327 Application, most recently on Jan. 23, 2006. In those continuation and 15 divisio nal applications, Stanford asserts not only that Drs. Holidniy and Katzenstein are inventors, 16 it continues to rely on the Merigan and Elledge declarations to prove that fact. Those declarations 17 thus form part of the PTO file for those subsequent applications. See, e.g., Chiang Decl., Ex. A & 18 B (the Merigan and Elledge Declarations, from the file history for the '705 patent, filed on Feb. 19 13, 2001, with a date stamp showing that it was resubmitted to the PTO in 1995). Because 20 Stanford continues to place attorney-client communications and attorney work product and 21 opinion at issue before the PTO, Roche is entitled to discover whether subsequent attorney-client 22 communications or attorney work product undermine the veracity of the Merigan and Elledge 23 declarations when they are presented again in the later proceedings. 24 This Court has held unequivocally that, once a waiver has occurred, "it is not appropriate

25 thereafter for the waiving parties or judge to limit the waiver on a temporal basis." McCormick26 27 28 The invention disclosure is but the clearest example, given that Dr. Merigan referenced it in his declaration, and it was relied upon by Lisa Kole to determine the original inventors.
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1 Morgan, Inc. v. Teledyne Indus., Inc., 765 F. Supp. 611, 613 (N.D. Cal. 1991); see Starsight 2 Telecast, Inc. v. Gemstar Development Corp., 158 F.R.D. 650, 655 n.5 (N.D. Cal. 1994) (holding 3 that although certain "documents post-date the issuance of the '713 patent, they are within the 4 scope of the subject matter waiver" and ordering their production); accord Smit h v. Alyeska 5 Pipeline Serv. Co., 538 F. Supp. 977, 982 (D. Del. 1982), aff'd, 758 F.2d 668 (Fed. Cir. 1984), 6 cert. denied, 471 U.S. 1066 (1985) (reject ing temporal limitation on waiver of privilege). 7 Federal Circuit jurisprudence is fully in accord with this Court's rejection of temporal

8 limits on privilege waiver. In Winbond, the patentee argued that its waiver of privilege should be 9 limited to "the period when Atmel's counsel explained inventorship law to Mr. Gupta," contending 10 that "only this time period is relevant to the attorney-client communication put `in issue' by Mr. 11 Gupta's statement to the PTO." Winbond, 262 F.3d at 1376. The Federal Circuit rejected this 12 contention, holding: "the Commission correctly found that Atmel put at issue Mr. Gupta's, and 13 thus its attorneys', understanding of inventorship law both before and after the Commission's 14 initial decision." Id. 15 16 CONCLUSION For the foregoing reasons, Defendants request that the Court order Stanford to produce all

17 documents related to inventorship and inventive contribution for each of the patents and 18 applications claiming priority to the '327 Application, without temporal limitation, and permit the 19 examination of witnesses concerning inventorship without limitation by the attorney-client 20 privilege or attorney work product protection. 21 DATED: May 30, 2006 22 23 24 25 26 27 28
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QUINN EMANUEL URQUHART OLIVER & HEDGES, LLP

By

/s/ Robert W. Stone Robert W. Stone Attorneys for Defendants and Counterclaimants Roche Molecular Systems, Inc.; Roche Diagnostics Corporation; and Roche Diagnostics Operations, Inc.