HOFFMANN-LA ROCHE INC. v. ROXANE LABORATORIES, INC. et al

Filing 77

OPINION regarding attorney-client privilege. Signed by Magistrate Judge Mark Falk on 5/11/11. (LM, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

HOFFMANN-LA ROCHE, INC.,

Civil Action No. 09-6335 (WJM)

Plaintiff,
v.
ROXANE LABORATORIES, INC.,
OPINION
Defendant.

FALK, U.S.M.J.
Before the Court is Defendant‟s motion to compel the production of documents
Plaintiff claims are privileged. [CM/ECF No. 49.] The motion is opposed. No oral
argument was heard. Fed. R. Civ. P. 78(b). Based upon the following, Defendant‟s motion
is granted.
INTRODUCTION
This is a Hatch-Waxman patent case. Plaintiff, Hoffmann-La Roche, Inc. (“Roche”),
is alleged to own United States Patent No. 5,472,949 (“the „949 patent”). The „949 patent
covers the drug capecitabine, which is used to treat breast and colon cancer. Roche
manufactures its capecitabine drug under the trade name Xeloda®. Defendant Roxane
Laboratories, Inc. (“Roxane”) filed an Abbreviated New Drug Application with the FDA to
market and sell a generic version of Xeloda®.
The issue to be decided is whether twenty-one (21) documents (“the Disputed

Documents”) are protected by the attorney-client privilege. The Disputed Documents are
owned and were produced in this case by a non-party, Chugai Pharmaceuticals, Inc.
(“Chugai”), who has never claimed they are privileged. Nevertheless, Roche has opposed
their production on attorney-client privilege grounds. Roxane has objected to Roche‟s
standing to assert the privilege, and has also sought production of the documents under
various theories, including that they do not qualify as privileged communications, and that
any privilege has been waived.
This Court holds that Roche lacks standing to assert attorney-client privilege over the
Disputed Documents; that Roche has failed to establish that certain of the Disputed
Documents are privileged; and that, whatever privilege may have existed has been waived.
BACKGROUND
A.

The Relevant Parties
Capecitabine was allegedly discovered in the early 1990s by scientists employed by

Nippon Roche K.K., a Japanese company (“Nippon Roche”). At that time, Nippon Roche
was a wholly owned subsidiary of a large Swiss conglomerate, Roche Holding Ltd. (“Roche
Holding”). (Pl‟s Br. 3; Declaration of Irene E. Hudson, Esq. (“Hudson Decl.”) Ex. 5.) The
plaintiff in this case, Hoffmann La-Roche, Inc., is a New Jersey company that is also a
wholly owned subsidiary of Roche Holding. (Id.) A third subsidiary under Roche Holding‟s
umbrella is F. Hoffmann-La Roche, Ltd., a Swiss company (“Roche Basel”). The application
for the „949 patent apparently came to be through a collaboration between the three then-

2

subsidiaries of Roche Holding; i.e., Plaintiff Roche, Roche Basel, and Nippon Roche.
In 2001, Nippon Roche merged with another Japanese company, Chugai, in a
transaction described as an “alliance.” (Declaration of Darryl H. Steensma, Esq., (“Steensma
Decl.”) Ex. 2.) Following the merger, Nippon Roche ceased to exist, and Chugai became the
sole surviving entity. Chugai is not wholly owned by Roche Holding or any other Roche
entity, although an additional Roche Holding subsidiary does own a percentage of the
company. (Hudson Decl., Ex. 5.)
B.

History of the Disputed Documents
The Disputed Documents have been the subject of prior proceedings before this Court,

and some procedural history helps place the motion in context.
The 21 Disputed Documents belong to Chugai, the non-party entity that survived the
merger with Nippon Roche. Since the merger in 2001, the documents have been stored in
Chugai‟s facilities in Japan. (Steensma Decl., Ex. 3 at 6.) Indeed, in discovery, Roche has
repeatedly emphasized that the companies are separate, and that Chugai‟s documents and are
not within Roche‟s control. (See Steensma Decl., Ex. 4 (“Plaintiff Hoffmann La-Roche Inc.
has zero ownership interest in Chugai, and therefore, cannot compel Chugai to produce
documents.”); id, Ex. 5 (“Plaintiff Hoffmann La Roche, Inc. restates that it has no ownership
interest in Chugai and cannot compel Chugai to produce its documents.” (emphases added));
id., Ex. 7 (“Roche has no control over the named inventors . . . and, therefore, Roche cannot
compel the inventors to appear for deposition.”).)

3

Substantively, the Disputed Documents were all created between 1992 and 1995.
Roche claims they relate to the preparation and prosecution of the „949 patent application
filed with the United States Patent and Trademark Office (USPTO). Roche contends that the
“attorney,” for purposes of applying the attorney-client privilege to these documents, is
Robert A. Silverman, Esq., an in-house patent attorney at Roche.
In June 2010, Chugai voluntarily produced the Disputed Documents in discovery in
this case. They were provided to Roche as an intermediary, who accepted the documents and
transferred them, en masse and without a privilege review, to Roxane. (See Steensma Decl.,
Ex. 8; Def.‟s Br. 4.) Prior to production, Chugai alone collected the documents; Roche
played no role, did not review the documents, and did not claim any were privileged before
delivering them to Roxane. (Id.) Thus, beginning in June
2010, Roxane had unfettered access to the Disputed Documents.
On September 20, 2010, Teva Pharmaceuticals, Inc., a defendant in another
capecitabine ANDA case that has been consolidated with this one for discovery purposes,
Roche v. Teva, 09-5283 (WJM), noticed that certain documents, the eventual Disputed
Documents, appeared on a privilege log provided to Teva but had in fact been produced to
Roxane. (Def.‟s Br. 4; Steensma Decl., Ex. 9.) Teva notified Roche of the discrepancy, but
Roche did not contact Roxane nor did it seek a return of the documents at that time. (Def.‟s
Br. 4.)
On November 23, 2010, five months after the Disputed Documents were produced to

4

Roxane and two months after the discrepancy was raised by Teva, Roche sent
correspondence to Roxane asking whether certain allegedly privileged documents had been
included in the Chugai production. (Steensma Decl., Ex. 12.) Roche‟s letter was not specific
and conveyed that it was unsure what documents had even been produced; indeed, Roche
simply provided Roxane with a log of approximately 100 documents and asked it to
determine precisely what documents on that list had been received, and to return or destroy
any that were produced pursuant to a provision contained in the Discovery Confidentiality
Order entered in this case. (Id.)
On December 30, 2010, Roxane filed a letter and exhibits totaling 120 pages, seeking
an order permitting use of the allegedly privileged Disputed Documents and challenging
Roche‟s ability to claim privilege over non-party Chugai‟s documents. (Steensma Decl., Ex.
13; CM/ECF No. 34.)
Roche responded on January 20, 2011, stating that it had withdrawn its privilege
claims as to approximately 80 of the 100 documents. Roche also provided a new and
amplified privilege log that included, for the first time, a U.S. licensed attorney, Robert
Silverman, Esq., as an author or recipient of various communications. Based on the new
privilege log, Roche continued to maintain its privilege claim over the 21 Disputed
Documents. (Steensma Decl., Ex. 6.)
Roxane submitted a second 100 page submission on January 31, 2011, objecting to the
new privilege log and continuing to claim that Roche lacked standing to assert privilege, that

5

the documents were not privileged at all, and that any privilege had been waived. (Steensma
Decl., Ex. 14; CM/ECF No. 41.)
The next day, February 1, 2011, the Court held a conference in an effort to resolve the
dispute.1 This Court questioned whether Roche had standing to assert the privilege, given its
continued insistence that it had no control over the documents, and also opined that it seemed
doubtful that the documents, based on the descriptions in the privilege logs, would ultimately
be held protected. (See Tr. at 18:22-19:17.)

However, in light of the inconsistent,

complicated and prolix letter submissions, the Court denied Roxane‟s application without
prejudice to renewing the request in a formal way.2 The Court also temporarily enforced the
“claw-back” provision in the Discovery Confidentiality Order, effectively taking the
Disputed Documents out of Roxane‟s control, solely to preclude use of the Disputed
Documents in Japan. (Tr. at 18:11-21.)

1

Despite receiving the 100 page submission addressing new arguments and a new privilege
log the night before, the Court proceeded with the conference because the parties were
preparing to travel to Japan for depositions, and the Court was attempting to help resolve this
and other discovery disputes, including requests to compel the attendance of witnesses in
Japan. (See Transcript of February 1, 2011 Telephone Conference (“Tr.”) 7:9-14; 8:2-16;
21:4-8 (“[W]e have to have some common sense and reasonableness. . . .”); 21:22-25 (“I‟m
really sort of reaching out to you folks and urging that you reconsider your positions and
decide what‟s important and decide what you want to litigate.”)).
2

See Tr. 20:3-5 (“[Y]ou have not given this to me in a way – you wanted me to decide this
quickly before your trip to Japan. And you have not given it to me in a way that I can do
that.”); Tr. 20:6-12 (“If you want to raise the privilege issue with me, then what I want you to
do is I want to get one privilege log that we can work from . . . Two, you can file briefs,
which will be in the form of a regular brief, not these single spaced letters; double-spaced
briefs with page limitations. [And] [t]he documents will be submitted for in camera
6

On March 8, 2011, Roxane filed a formal brief supported by a dense appendix
renewing its request for formal production of the Disputed Documents. Roche responded on
March 25, 2011, with a brief, as well as declaration prepared by renowned, retained expert
Professor of Law Stephen A. Saltzburg.3 On May 4, 2011, the Disputed Documents were
submitted for in camera review.
DISCUSSION
Roxane advances a panoply of arguments as to why the Disputed Documents should
be produced: (1) Roche lacks standing to assert privilege over Chugai‟s documents; (2)
Roche waived any privilege when the documents where left in Chugai‟s control following the
merger in 2001; (3) Chugai waived any privilege it may have had over the documents by
producing them to Roche and/or Roxane; (4) Roche has not established that the actual
documents are privileged communications; (5) Roche waived any privilege through their
tardy and ineffective attempts to rectify the inadvertent disclosure to Roxane; (6) Roche
waived any privilege that could attach during Mr. Silverman‟s deposition; and (7) the crimefraud exception to the attorney client privilege.

review.”); see also Order dated February 2, 2011; CM/ECF No. 44.
3

Roxane has filed a brief seeking to strike the Saltzburg Declaration for containing improper
expert testimony regarding the governing law and offering legal opinions and conclusions.
[CM/ECF No. 64.] The declaration is probably improper because it is largely comprised of
statements of governing law and legal conclusions. Much of what is contained there could
have (and perhaps should have) been included in a brief. Thus, it would be within the
Court‟s discretion to strike the declaration. See, e.g., United States v. Leo, 941 F.2d 181, 196
(3d Cir. 1991). Nevertheless, the Court declines to strike the declaration at this time, as it is
7

A.

Attorney-Client Privilege
The attorney-client privilege is the client‟s right to refuse to disclose “confidential

communications between attorney and client made for the purpose of obtaining legal advice.”
Genetech, Inc. v. U.S. Int‟l Trade Comm‟n, 122 F.3d 1409, 1415 (Fed. Cir. 1997). It exists
to promote the public interest in “the observance of law and the administration of justice,”
Westinghouse Elec. Corp. v. Republic of the Philippines, 951 F.2d 1414, 1423 (3d Cir.
1991), which is accomplished by encouraging “full and frank communications between
attorneys and their clients.” Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). The
privilege is an exception to the rule of full disclosure and obstructs the truth finding process,
thus it is narrowly construed. See Westinghouse Elec. Corp., 951 F.2d at 1423. It protects
only those communications that would not have been made but for the privilege. See Fisher
v. United States, 425 U.S. 391, 403 (1976); Shearing v. Iolab Corp., 975 F.2d 1541, 1546
(Fed. Cir. 1992). It belongs to the client, not the attorney. American Standard, Inc. v. Pfizer,
828 F.2d 734, 745 (Fed. Cir. 1987). Application of the privilege is decided on a case-by-case
basis with the party asserting privilege bearing the burden to show it applies. See In re
Bevill, Bressler & Schulman Asset Mgmt. Corp., 805 F.2d 120, 124 (3d Cir. 1986). In
determining whether the privilege applies in a given case, the ultimate question is whether a
“communication is one . . . made. . . for the purpose of obtaining legal advice or services.” In

ultimately beside the point, see footnote 7, infra.
8

re Spalding Sports Worldwide, Inc., 203 F.3d 800, 805 (Fed. Cir. 2000).4
B.

Analysis
1.

Roche Lacks Standing to Assert the Privilege

Roxane contends that Roche has repeatedly maintained that the disputed documents
are Chugai‟s, that it could not produce the documents, and that Chugai is a separate company
that is not under its control. (Def.‟s Br. 6-7.) Thus, Roxane claims that it is impossible and
inequitable for Roche to now claim that it nevertheless possesses the right to assert a personal
privilege over the same documents. (Id.) In addition, Roxane argues that Roche has failed to
establish a common interest, or community of interest, with Chugai. (Id.)
It is true that during the course of this litigation, Roche has repeatedly and expressly
taken the position that it and Chugai are different companies, and that Chugai‟s documents
are not in their control:
“Plaintiff Hoffmann-La Roche, Inc. has zero ownership interest in Chugai, and
therefore, cannot compel Chugai to produce documents.” (Steensma Decl., Ex.
4);
“Plaintiff Hoffmann-La Roche, Inc. restates that it has no ownership interest in
Chugai and cannot compel Chugai to produce its documents.” (Steensma
Decl., Ex. 5) (emphasis added);
“Roche has no control over the named inventors . . . and, therefore, Roche
cannot compel them to appear for deposition.” (Steensma Decl., Ex. 7).
4

The parties have not briefed choice of law in this patent case. In general, in patent cases,
regional circuit law applies “to questions of attorney-client privilege and waiver of attorneyclient privilege.” Fort James Corp. v. Solo Cup Co., 412 F.3d 1340, 1346 (Fed. Cir. 2005);
In re Resmed, Ltd., 106 F.3d 424 (Fed. Cir. 1996) (table) (applying Third Circuit law).
However, Federal Circuit law controls when the dispute implicates substantive issues of
patent law. See In re Spalding, 203 F.3d at 803-04.
9

It is inconsistent for Roche to forcefully disclaim the ability to produce the very
documents at issue in this dispute, but then (after they are voluntarily produced by Chugai)
argue that it has standing to assert a privilege to prevent their disclosure.5 Yet, Roche argues
it should be permitted to assert privilege for two reasons: (1) the “common-interest doctrine”
confers standing on Roche to assert the privilege; and (2) in the corporate context, the
“client” for purposes of the attorney-client privilege extends among and between a parent
company and all of its affiliates; i.e., here, beyond Chaugi to, apparently, include Roche and
all other related Roche entities. (Pl.‟s Br. 19-20.)
The common-interest, or community-of-interest, doctrine allows “attorneys
representing different clients with similar legal interests to share information without having
to disclose it to others.” In re Teleglobe Commc‟ns Corp., 493 F.3d 345, 364 (3d Cir. 2007)
(emphasis added). If applicable, the doctrine protects communications “made between
attorneys when all members of the community share a „common legal interest‟ in the shared
communication.” Id. at 364 (emphasis added). The common-interest doctrine is not an
independent privilege, but rather, an exception to the general rule that disclosure of a
privileged communication to a third-party waives the privilege. See, e.g., Cavallaro v.

5

This Court has previously expressed its grievance with the practice in patent litigation of
taking shifting and inconsistent approaches to corporate affiliations and relationships when
foreign companies and discovery are involved. See Sanofi-Aventis v. Sandoz, Inc., --F.R.D.---, 2011 WL 322396, at *6 (D.N.J. Jan. 28, 2011). Here, Roche has stated that it
“cannot compel Chugai to produce its documents,” Steensma Decl., Ex. 5, but now argues
that “[o]wnership of the withheld documents never transferred from Roche to Chugai.” (Pl.‟s
Br. 21.)
10

United States, 284 F.3d 236, 250 (1st Cir. 2002) (“The common interest doctrine . . . is not an
independent basis for privilege, but an exception to the general rule that the attorney-client
privilege is waived when privileged information is disclosed to a third-party.” (quotation
omitted)). The degree of common legal interest required to qualify under the doctrine is the
subject of some debate, ranging from “substantially similar” to “identical.” See, e.g., La.
Mun. Police Empl. Ret. Sys. v. Sealed Air, 253 F.R.D. 300, 309-10 (D.N.J. 2008)
(substantially similar legal interests sufficient); Duplan Corp. v. Deering Milliken, Inc., 397
F. Supp. 1146, 1172 (D.S.C. 1974) (identical interests required). The burden to show the
privilege has not been waived, and thus, that the doctrine applies, rests with the party
resisting disclosure. See Greene, Tweed of Del., Inc. v. DuPont Dow Elastomers, LLC, 202
F.R.D. 418, 423 (E.D. Pa. 2001).
The common-interest doctrine does not apply in this case for a very simple reason:
there is only a single attorney, Mr. Silverman, alleged to be involved in the Disputed
Documents. The common-interest doctrine only applies to communications between
attorneys. In re Teleglobe, 493 F.3d at 364-65; see also Restatement (Third) of the Law
Governing Lawyers, § 76 (2000) (“Restatement”) (“If two or more clients with a common
interest . . . are represented by separate lawyers . . .” (emphasis added)). Thus, in order for
the common interest doctrine to apply, there must be, at a minimum, two attorneys. The
Third Circuit‟s opinion in Teleglobe has clearly explained this requirement and why the
doctrine does not apply here:

11

“First, to be eligible for continued protection, the communication must be
shared with the attorney of the member of community of interest. Sharing the
communication directly with a member of the community may destroy the
privilege,” 493 F.3d at 364 (emphasis in original);
“The attorney sharing requirement helps prevent abuse by ensuring that the
common-interest privilege only supplants the disclosure rule when attorneys,
not clients, decide to share information in order to coordinate legal strategies,”
id. at 365 (emphasis added);
“We conclude with two points of caution. First, the privilege only applies
when clients are represented by separate counsel. Thus, it is largely
inapplicable to disputes like this one that revolve around corporate family
members’ use of common attorneys (namely, centralized in-house counsel),”
id. (emphases added).
Teleglobe ends the inquiry. Since Roche has never argued that more than one attorney,
Mr. Silverman, was involved in any of the communications at issue, the common-interest
doctrine does not apply in this case. See id. at 365, 372.6 Thus, Roche‟s first standing

6

Plaintiff‟s brief only devotes a paragraph to the common interest argument, leaving the
heavy lifting to Professor Saltzburg, who has submitted a declaration in support of Plaintiff‟s
position. (See Pl.‟s Br. 19, citing to Declaration of Stephen A. Saltzburg, Esq. (“Saltzburg
Decl.”) ¶¶ 12-15.) While the declaration is certainly comprehensive, learned and scholarly, it
is ultimately unhelpful to Plaintiff‟s case because there is no second attorney to pair with Mr.
Silverman, which is necessary in order to properly invoke the common-interest doctrine. See
Teleglobe, 493 F.3d at 365; Restatement § 76. The declaration‟s only mention of the fatal
absence of a second attorney is a footnote that essentially concludes that Teleglobe is a nonbinding opinion and cites to other non-binding opinions that could be read to omit the
requirement. (See Saltzburg Decl., ¶12 n.9.) While the Court appreciates that it may not be
constrained to follow Teleglobe in this federal patent case, the Court certainly is not
compelled to follow the other non-binding opinions in the declaration.
Moreover, this Court believes the declaration short-changes Teleglobe by emphasizing
it is a Delaware law case and implying it has limited import beyond its facts. While Teleglobe
was a case applying Delaware law, its discussion of the common-interest doctrine was not so
limited. The Third Circuit engaged in a contemplative analysis of the purpose, history, and
requirements of the common-interest doctrine, without much reference to Delaware law at
12

argument fails.7
Roche‟s second standing argument is that, in the corporate context, the “client” for
purposes of the attorney-client privilege is not only the corporation in suit, but the party‟s
parent corporation, its subsidiaries, and its sister companies. Thus, Roche claims that it is the
client for purposes of the attorney-client privilege just as much as Chugai.8 Back to

all. And the opinion has not been narrowly construed by other courts. In fact, Teleglobe has
been cited by courts around the country as a leading opinion on the common-interest
doctrine. It is not an outlier decision interpreting a finite point of Delaware law. Rather,
Teleglobe has been recognized by other courts as a proper statement of the common-interest
doctrine‟s requirements. See, e.g., United States v. Okun, 281 Fed. Appx. 228, 231-32 (4th
Cir. 2008) (citing Teleglobe and refusing to apply common interest doctrine when defendant
“failed to establish that he and [co-defendant] were represented by separate legal counsel . .
.”); Cooper Health Sys. v. Viruta Health, Inc., 259 F.R.D. 208, 214-15 (D.N.J. 2009) (citing
Teleglobe and rejecting common interest doctrine when only single attorney was involved).
Thus, this Court follows Teleglobe in this case.
7

As Teleglobe explains, the presence of a single attorney could augur in favor of arguing the
separate doctrine of “co-client” or “joint-client” privilege. Roche has not done so here,
repeatedly invoking by name only the common-interest doctrine. See, e.g., Saltzburg Decl., ¶
8 (“[The] Disputed Documents qualify as attorney-client privilege because of the commoninterest doctrine.”); ¶ 11 (“the common-interest doctrine is an exception to the general rule
that the attorney-client privilege is waived . . .”); ¶ 12 (“the common-interest doctrine will
only apply where . . .”). Teleglobe makes plain the difference between the two doctrines and
their requirements, as do other authorities. See, e.g., Restatement § 76 cmt. a (“This section
states the common-interest attorney client privilege. The rule differs from the co-client rule. .
. .”); see also Munich Reinsurance Am. v. Am. Nat‟l, Ins. Co., No. 09-6435, 2011 WL
1466369, at *21 (D.N.J. Apr. 18, 2011) (“The common interest doctrine only applies when
clients are represented by separate counsel and is not identical to the co-client situation . . . .”
(quotation omitted)). Having failed to argue the joint or co-client doctrine, Roche has not,
and cannot, meet its burden of showing that it applies and that its requirements have been
met. See In re Bevill, Bressler & Schulman, 805 F.2d at 126.
8

Parenthetically, this ignores that Roche is essentially taking the position that it is somehow
the client, but apparently not a client that can produce what would then be its own documents
13

Teleglobe. There, the Third Circuit noted that “[b]ecause parent companies often centralize
the provision of legal services to the entire corporate group in one in-house legal department,
it is important to consider how the disclosure rule affects the sharing of information among
corporate affiliates.” Id. at 369. In considering various alternatives, the Court specifically
rejected the position advanced by Roche here, i.e., that varied members of a corporate family
are a “single client” for purposes of the privilege:
[T]reating members of a corporate family as one client fails to
respect the corporate form. It is a bedrock principle of corporate
law in Delaware and elsewhere that courts must respect entity
separateness unless doing so would work an inordinate equity. . .
.[B]y structuring its various activities by forming separate
corporations, a parent company realizes numerous benefits, not
the least of which are the liability shields. With that structure
comes the responsibility to treat the various corporations as
separate entities.
Id. at 371.
Further:
[A]bsent some compelling reason to disregard entity
separateness, in the typical case courts should treat the various
members of the corporate group as the separate corporations
they are and not as one client.
Id. at 372.
There is no reason to treat Roche and Chugai as one entity for purposes of the attorney
client privilege, especially when Roche has been so insistent that they are separate entities.
Thus, Roche is not the “client” for purposes of raising the attorney-client privilege associated

or witnesses in discovery, see page 10, supra.
14

with Chugai‟s Disputed Documents.
For the above reasons, Roche does not have standing to assert attorney-client privilege
over the Disputed Documents. Thus, there is no reason to proceed further. Nevertheless, for
the sake of completeness, the Court will proceed and assume, arguendo, that Roche has
standing. Were that to be the case, the application would still be granted for the following
reasons.
2.

It is Unclear Whether the Disputed Documents are Privileged
The parties have broken the 21 disputed documents down into two categories. The first

6 documents are described as documents prepared prior to Mr. Silverman‟s employment.
(Def.‟s Br. 11.) Documents 7-21 are described as documents that were created at Mr.
Silverman‟s request or for his benefit in prosecuting the „949 patent. (Pl.‟s Br. 12; Def‟s Br.
12.) The Court has reviewed the documents in camera. As explained below, Disputed
Documents 1-6 are not privileged and must be produced. Documents 7-21 appear to be
privileged, but, as is discussed in section 3, infra, must nevertheless be produced.
Application of the attorney-client privilege is considered on a case-by-case basis. See
In re Spalding, 203 F.3d at 805. The burden of establishing privilege is on the party resisting
disclosure. See In re Grand Jury Investigation, 599 F.2d 1224, 1235 (3d Cir. 1979); In re
Diagnostic Sys. Corp., 328 Fed. Appx. 621, 623 (Fed. Cir. 2008).
In the context of communications involving foreign patent agents or patent
professionals, the basic rules follow. If a communication with a foreign patent agent

15

involves a United States patent application, then the communications are not privileged,
unless the patent agent was acting under the direct control and authority of a U.S. licensed
attorney; i.e., the foreign professional was acting as the attorney‟s agent. See Bristol Myers
Squibb Co. v. Rhone-Poulenc Rorer, Inc., No. 95-8833, 1998 WL 158958, at *1 (S.D.N.Y.
Apr. 2, 1998). If, however, the communications involve a foreign patent application, then the
laws of the foreign jurisdiction would apply. See id.9 To qualify as an “agent,” the foreign
patent professional would have to qualify under the derivative extension of the attorneyclient privilege endorsed by the Second Circuit in United States v. Kovel, 296 F.2d 918 (2d
Cir. 1961). See La. Mun. Pol. Ret. Sys., 253 F.R.D. at 311-15 (describing requirements of
Kovel doctrine).
i.

Disputed Documents 1-610

The six documents in this category were created in 1992. They are communications

9

Roche takes the position that in order for foreign law to apply, a document must relate to
matters soley involving a foreign entity. (Pl.‟s Br. 11.) In other words, if the
communications are mixed and relate to both United States and foreign patent applications,
U.S. law, not foreign law would apply. There is authority supporting that position. See
Golden Trade, S.R.L. v. Lee Apparel Co., 143 F.R.D. 514 (S.D.N.Y. 1992). However, the
law is not uniform, and even cases cited by Roche employ a lesser standard that considers
foreign law when a document‟s reference to a U.S. patent is “incidential.” See VLT Corp. v.
Unitrode Corp., 194 F.R.D. 8, 15 (D. Mass. 2000) (“If, as the parties appear to agree, a
communication has nothing to do with the United States or, in the court's view, only an
incidental connection to this country, the privilege issue will be determined by the law of the
foreign nation.”). Some of these disputed communications involve both the U.S. and foreign
patent applications. However, no foreign law has been briefed.
10

These are: CHUGAI000011961-995; CHUGAI000011930-960; CHUGAI00011865-911;
CHUGAI000011843-846; CHUGAI 000011847-862; CHUGAI000011819-841.
16

between foreign patent professionals reflecting discussion over draft patent applications and
claims. No licensed U.S. attorney authored or received the communications at the time they
were made. Indeed, Mr. Silverman was not hired by Roche until late 1993. (Steensma Decl.,
Ex. 21 (Deposition of Robert A. Silverman, Esq. 6/9/10 at 15:8-15).) Since Mr. Silverman
was not employed by Roche at the time the documents were created, Roxane argues the
documents must be produced because they could not be communications between an attorney
and client, and additionally could not have been undertaken at his direction and under his
control.
In response, Roche argues that company protocols related to the filing of patent
applications in both Europe and the United States contemplate that certain documents will be
created when preparing patent applications, and those documents will, even if not requested
by an attorney, ultimately make their way into a patent application filed in the United States
or to an in-house attorney for review. (Pl.‟s Br. 7; 10 “[E]ven though a specific request for a
draft patent application was not made by a U.S. attorney such as Mr. Silverman, who at the
time was not yet employed by [Roche], the Roche standard procedure necessarily takes into
account that the [application] . . . would be filed in the USPTO.”). Thus, they contend, there
is essentially a universal implied request for legal advice built into their corporate protocols
that supports application of the privilege under the Federal Circuit‟s opinion in In re
Spalding. The Court disagrees.
Draft patent applications and communications associated with those applications are

17

generally privileged communications, even if technical or other business information is
included. See In re Spalding, 203 F.3d at 805-06; In re Gabapentin Patent Litig., 214 F.R.D.
178, 182 (D.N.J. 2003). However, in order for those communications to be privileged, there
still has to be an attorney involved. See In re Spalding, 203 F.3d at 803 (“the central inquiry
is whether the communication is one that was made by a client to an attorney for the purpose
of obtaining legal advice or services.”). In other words, “[t]o be privileged, a draft patent
application, like any other document, must be a communication between an attorney and a
client . . . .” In re Rivastigmine Patent Litg., 237 F.R.D. 69, 86 (S.D.N.Y. 2006) (emphasis
added). A basic tenant of the attorney-client privilege is that the communication is made to
or from an attorney for purposes of securing legal advice and would not have been made but
for the need for such advice. See Fisher v. United States, 425 U.S. 391, 403 (1976).
Documents are not privileged simply because they end up with a lawyer or eventually prove
useful to the lawyer‟s provision of legal services.

See, e.g., 1 Edna Selan Epstein, The

Attorney-Client Privilege and the Work Product Doctrine, at 126 (5th Ed. 2007) (“Epstein”)
(“Few abuses of privilege claims are more common that [sic: than] the attempt to invest with
privilege documents which, standing alone, are not privileged merely by virtue of the fact
that they have been transmitted to an attorney.”).
In re Spalding, relied upon by Roche, does not hold differently. Spalding involved a
claim of privilege made by the patentee over an invention record submitted by the inventors
of the patent directly to the company‟s legal department. See 203 F.3d at 802. The court

18

described the invention record at issue as a “standard form[] . . . used . . . as a means for
inventors to disclose to the corporation‟s patent attorneys that an invention has been made
and to initiate a patent action.” Id. at 802 n.2. Production of the record was granted by the
district court based upon arguments that the record was not primarily legal in nature but was
also created for business purposes, and that it contained discoverable business and technical
information, not solely attorney-client communications. See id. at 803.
The Federal Circuit disagreed. Id. at 802. The court noted that the relevant inquiry
was still “whether the communication was made by a client to an attorney for the purpose of
obtaining legal advice.” Id. at 805. It found that the invention record was privileged because
it was “a communication to an attorney,” that was “submitted by the inventors” to
“Spalding‟s legal department,” id. (emphasis in original), “for the purpose of securing
primarily legal opinion, or legal services, or assistance in a legal proceeding.” Id. (quotation
omitted). It further held that even if the record contained business or technical information,
it would remain protected because the “overall tenor of the document indicates that it is a
request for legal advice or services.” Id. at 806. Thus, Spalding stands for the basic principle
that a communication between a lawyer and client relating to patent prosecution is not
ineligible for protection under the attorney-client privilege simply because it contains
technical information. Id. Contrary to Roche‟s argument, Spalding actually emphasizes the
fact that an attorney must be involved. Id. at 805.
Here, unlike in Spalding, Disputed Documents 1-6 are not communications to or from

19

an attorney.11 Nor are they communications made to or among individuals acting under Mr.
Silverman‟s direction or control.

Rather, the documents are simply drafts and

communications12 exchanged between employees of foreign Roche entities without any
attorney involved.
Finally, the Court disagrees with Roche‟s suggestion that there can be some type of
standing request for implied legal advice that eliminates the need for an attorney to be
involved in a communication. Such a position finds no support in Spalding, nor does it make
practical sense. If Roche‟s position was adopted, it essentially would allow Roche to pick
and choose, after the fact, what constitute privileged communications, even though no
attorney requested or was involved in the communication in the first place. This cannot be

11

Plaintiff cites Technologies General IP PTE Ltd. v. Elan Microelectronics Corp., No. 2006
WL 3290400 (N.D. Cal. Nov. 13, 2006), to support its argument that that the
communications are privileged simply because, at some future date, a final draft patent
application would be submitted to in-house counsel. (Pl.‟s Br. 10-11.) Technologies General
does not eliminate the requirement that an attorney be involved in a given communication,
including in draft patent applications. See In re Rivastigmine Patent Litig., 237 F.R.D. at 86.
Moreover, Technologies General simply cites to Advanced Cardiovascular Sys. Inc. v. C.R.
Bard, 144 F.R.D. 372, 378 (N.D. Cal. 1992), which stands for the non-controversial premise
that “inventors and their patent lawyers often engage in quite substantial private dialogue as
part of the process of shaping and focusing a patent application.” Id. at 378 (emphasis
added). Of course, the private dialogue referred to in Advanced Cardiovascular necessarily
requires that a lawyer be part of the conversation. Id. at 378 (“inventors and their patent
lawyers often engage in quite substantial private dialogue”). Again, this is missing here.
12

Of note, these communications seem focused heavily, if not exclusively, on the European
application. The connection to the United States application is secondary at best. Thus, there
is a real question as to whether foreign law could apply. See VLT Corp. 194 F.R.D. at 15.
Roche clearly has not shown the Disputed Documents to be protected under foreign law, as it
has not briefed the issue.
20

squared with the requirement that the privilege protect only those communications that would
not have been made but for the existence of the privilege. See Fisher, 425 U.S. at 403.
Thus, Documents 1-6 are not are not privileged.
ii.

Documents 7-21

Documents 7-21 reflect communications between: (1) Mr. Silverman and various
employees at Roche Basel and Nippon Roche; and (2) communications between and among
employees at the Roche entities. The communications all involve Mr. Silverman‟s response
to an Office Action taken by the USPTO and his efforts to respond to the Office Action and
further prosecute the „949 patent. Following an in camera review, the Court is satisfied that
the documents reflect communications involving foreign patent agents operating under the
direction and control of a U.S. licensed attorney. It appears that Mr. Silverman was involved
in responding to the Office Action in a substantive way; he was not merely a passive actor.
Thus, under the applicable law, these documents would appear to be privileged. See Bristol
Myers Squibb Co., 1998 WL 158958, at *1.
3.

Any privilege has been waived through the Silverman Deposition
It is well established that the attorney-client privilege cannot be used as a proverbial

sword and shield – to waive when it benefits the client and wield when it does not. See, e.g.,
In re Human Tissue Prod. Liability Litg., 255 F.R.D. 151, 158 (D.N.J. 2008); In re Seagate
Technology, LLC, 497 F.3d 1360, 1372 (Fed. Cir. 2007). Thus, courts have found an
implied waiver of the attorney-client privilege where a party affirmatively places otherwise

21

privileged information at issue in the case. See, e.g., id.; In re Nat‟l Smelting of N.J., Inc.
Bondholders Litig., No. 84-3199, 1989 U.S. Dist. LEXIS 16962, at *28-34 (D.N.J. June 29,
1989); 1 Edna Selan Epstein, The Attorney-Client Privilege and the Work Product Doctrine,
at 508 (5th ed. 2007). Indeed, “disclosure of, or even merely an assertion about, the
communication may effect waiver of the privilege not only as to that communication, but also
as to other communications made during the same consultation and communications made at
other times about the same subject.” United States v. Aronoff, 466 F. Supp. 855, 862
(S.D.N.Y. 1979). Ultimately, the “at issue” waiver of privilege is grounded in fundamental
fairness. See, e.g., 8 Wigmore, Evidence § 2327 at 636 (“[W]hen [the] conduct touches a
certain point of disclosure, fairness requires that his privilege shall cease whether he intended
that result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold
the remainder.”). The party resisting disclosure that must show the privilege has not been
waived. See In re Grand Jury Investigation, 599 F.2d at 1233.
Mr. Silverman sat for deposition on February 24, 2011. (Steensma Decl., Ex. 22.)
Roxane contends that he testified at length regarding his communications during the
prosecution of the patent application, which is the same subject matter covered in Disputed
Documents 7-21. (Def.‟s Br. 18-20.) It also claimed that he specifically referred to
communications with individuals listed on Roche‟s privilege log about the same subjects in
the withheld documents. Roche tries to explain away Mr. Silverman‟s deposition testimony
by arguing that “to the extent Mr. Silverman testified about allegedly privileged

22

communications, he testified about them only generally and provided the type of information
that would be found on a privilege log.” (Pl.‟s Br. 24.) The Court does not entirely accept
Roche‟s characterization of Mr. Silverman‟s testimony.
For instance, Mr. Silverman testified to the substance of his communications with
inventors following the USPTO Office Action, stating, “I probably -- I think I was pretty
specific, that we wanted to compare data against . . . the most closely analogous compounds
in the prior art.” (Steensma Decl., Ex. 22 (Silverman Dep. Transcript 2/24/11 (“Silverman
Dep.”) 95:3-10)). He further testified about why certain information generated by one of the
named inventors allegedly was not included in a declaration filed with the PTO: “my
recollection was we focused on, after having a discussion back and forth, we focused more
on the pharmacokinetic profiles [than these] mouse models showing antitumor effects. So
that was my recollection, was that we went in different directions in terms of what we felt
was the proper showing . . . .” (Id. at 203:3-17.)
Mr. Silverman also testified about the substance of conversations he had with the
inventors about comparative animal data that allegedly was inconsistent with material
submitted to the PTO: “[s]o my recollection was we had a discussion as to the data, the data
that was available. And I believe we settled on, in terms of patentability, focusing on the
pharmacokinetic profile of the compound,” (id. at 189:2-9); and “I think we focused on the
pharmacokinetic.” (Id. at 189:15-18.)
Finally, when asked if he was provided with certain data that was alleged to show no

23

difference between certain prior art and the claimed compound, he testified: “I don‟t recall
if I was or not, but if I was I certainly would have asked some questions about it . . . So, there
would have been written communications . . . between myself, as an attorney, and the various
people who were involved in helping us establish patentability.” (Id. at 182:25-183:4.)
Mr. Silverman‟s testimony includes express references to communications with the
same individuals listed on the privilege logs about the same issues contained in the in camera
documents. Indeed, the Disputed Documents contain discussions regarding the same subjects
disclosed in Mr. Silverman‟s testimony, including, among other things, preparation of a
declaration submitted to the USPTO (e.g., CHUGAI000013173); discussions relating to
comparative data and certain prior art (e.g., CHUGAI000013133, CHUGAI 000013135,
CHUGAI000013139); and the decision to focus on pharmacokinetic compounds rather than
mouse models (e.g., CHUGAI000013093, CHUGAI000013117, CHUGAI 000013128).
Moreover, on more than one occasion, Mr. Silverman refers directly to written
communications and his testimony speculates as to what they might contain. These written
communications appear to be the same written communications being withheld.
Accordingly, it may be strongly argued that Mr. Silverman‟s testimony places at issue
the substance of the Disputed Documents. See In re Human Tissue, 255 F.R.D. at 158;
Aronoff, 466 F. Supp. at 862. Fundamental fairness requires that Mr. Silverman not be
permitted to offer unchecked testimony on such allegedly privileged issues, while at the same
time Roche fights to keep written communications on the same issues private. To do so

24

would prevent Roxane from effectively responding to assertions or implications about the
substance of privileged communications, and would have the result of presenting only
Roche‟s side of the story. To effectively even the playing field, Roxane should have the
opportunity to examine the Disputed Documents.
4.

Additional Basis for Waiver
Roxane has also argued that Chugai waived the privilege through the voluntary

production of the Disputed Documents. (Def.‟s Br. 9.) It is correct.
The Disputed Documents are Chugai‟s. Chugai gathered the documents and, thus,
must have been aware of what it was producing. Moreover, Chugai voluntarily produced its
documents without claiming privilege -- either then or now. Thus, Chugai‟s production to
Roxane constitutes an additional basis of waiver. 13
5.

Inadvertent Waiver
Roxane argues that Roche waived any privilege that could have existed when it

inadvertently produced Chugai‟s documents in this case. (Def.‟s Br. 14-16.) This is a
credible argument. Yet, Roche has not responded to the argument in its brief, apparently
based upon a mistaken assumption that by enforcing the claw-back provision during the
February 1, 2011 conference, the Court ruled that no waiver occurred as a consequence of its
“inadvertent” disclosure. (Pl.‟s Br. 22-23.) Thus, rather than respond, Roche requests
permission to brief the issue later if the Court wishes to “revisit this issue.” (Pl.‟s Br. 23 n.7.)

13

Were there standing under the common-interest doctrine, it is possible that other arguments
25

During the February conference, saddled with eleventh hour boundless submissions,
the Court decided to enforce the claw-back provision on a temporary basis. (Tr. 18:11-21
“[G]iven what was shown to me, given my interpretation of claw-back provisions . . . it’s my
decision at the moment that I . . . will enforce the clawback . . . I‟m not going to order that the
documents . . . be produced now prior to your trip to Japan.” (emphasis added)). This is
consistent with the Undersigned‟s view that generous enforcement of “claw-back” provisions
is to be favored in our intertangled electronic discovery world, especially in cases involving
large numbers of documents. However, the ultimate issue of privilege and waiver was not
decided. And, even if it had been decided, this Court would be free to reach a different
conclusion based upon a more complete record. Christiansen v. Colt Indus. Operating Corp.,
486 U.S. 800, 817 (1988). As the party bearing the burden to show the privilege has not been
waived, Roche should have responded to Roxane‟s argument -- if it deemed it important.
When an inadvertent disclosure has occurred, privilege may be maintained if a balance
of certain factors -- including reasonableness in precautions taken to prevent the disclosure in
the first instance and the delay in rectifying a disclosure -- counsel against waiver. See CibaGeigny Corp. v. Sandoz, 916 F. Supp. 404, 411 (D.N.J. 1996); see also Eden Isle Marina,
Inc. v. United States, 89 Fed. Cl. 480, 501-02 & n.18 (2009). Here, it appears that Roche
obtained documents from Chugai and turned them over to Roxane without any privilege
review at all. At no time has the Court has been advised of any precautions that were taken

could be made.
26

to prevent inadvertent disclosure. Also, Roche waited more than two months after the issue
of disclosure was raised by Teva before they sought a return of the documents.14

TheCourt

declines to formally rule on this issue. Yet, in the future, the parties are advised to address
any substantive arguments they deem important.
*

*

*

This Court finds that Roche lacks standing to assert privilege over third-party Chugai
documents it has repeatedly stated are not in their control. In addition, even assuming there
is standing, the Court finds that Roche has failed to establish that at least six (6) of the
documents are privileged at all, and that any privilege that had attached to any of the
documents has been waived. However, due to the closeness and complexity of these issues,
the parties should be aware that the Court deliberately took another step to make sure that the
decision was fair and appropriate in the context of this case. Specifically, the Court
endeavored to step back from the esoteric points of law cited herein and observe the big
picture. In doing so, the Court notes that the Disputed Documents were in the public domain
for five months. Moreover, the particular relevance or importance of the documents has not
been made clear to this Court. In sum, the Court is satisfied that the totality of the

14

Even though Roche did not brief the issue, it did address the issue in its January 20, 2011
letter submission, which was submitted when the issue was being handled informally,
arguing that the Discovery Confidentiality Order would operate to preclude waiver. (See
Steensma Decl., Ex. 6, at 14.) Roxane responded, taking the position that in order to
preclude waiver, Roche was not permitted to simply rely upon the Discovery Confidentiality
Order, but also obligated to address the requirements of Federal Rule of Evidence 502 and
the applicable case law. (Steensma Decl., Ex. 14 at 3-4.) The issue is subject to debate. See
27

circumstances, together with precedent, support production of the documents.
CONCLUSION
For the above stated reasons, Defendant‟s motion to compel is granted, and the
Disputed Documents shall be produced.
An appropriate Order will be entered.
s/Mark Falk
MARK FALK
United States Magistrate Judge

Dated: May 11, 2011

U.S. v. Sensient Colors, No. 07-1275, 2009 WL 2905474, at *2-3 (D.N.J. Sept. 9, 2009).
28