Raytheon Company v. Cray, Inc.
MEMORANDUM AND ORDER. Signed by Magistrate Judge Roy S. Payne on 06/05/2017. (nkl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
C.A. NO. 2:15-CV-01554-JRG-RSP
MEMORANDUM AND ORDER
Cray, Inc. moves the Court to compel the production of certain documents from
Raytheon Company based on Raytheon’s purported waiver of attorney-client privilege.
Cray’s Motion [Dkt. # 108]. After considering the parties’ briefing and arguments of
counsel made during a February 2017 hearing, the Court DENIES the motion.
As part of its responses to Cray’s discovery requests, Raytheon produced three in-
vention disclosure questionnaires for the patents asserted in this litigation. Kohm Decl.
[Dkt. # 108-1] ¶ 2. According to Cray, Raytheon’s intentional production of the questionnaires waived privilege with respect to preparation and prosecution of the patents. Thus,
Cray asks the Court to order Raytheon to produce all documents and provide all previously withheld testimony concerning that subject matter.
To support its position that these questionnaires were privileged documents, Cray
relies on testimony from three witnesses. First, Gary Early, one of the inventors of the asserted patents, testified that Raytheon employees complete invention disclosure questionnaires for review by an invention review committee that includes attorneys. Early Depo.
[Dkt. # 108-2] at 13:5–14:6; 20:18–22:21. Early explained that if Raytheon proceeds with
prosecution after reviewing the questionnaires, the employees who submit such disclosures communicate with in-house and outside counsel during prosecution. Id. at 102:5–
Second, James Ballew, also an inventor, testified that he and other Raytheon employees completed the questionnaires for Raytheon’s attorneys’ use when preparing the
patent applications. Ballew Dep. [Dkt. # 108-4] at 170:24–171:6. Ballew described meeting with Raytheon’s outside counsel to provide further information about the inventions.
Id. at 172:1 to 174:1.
Third, Raytheon’s former outside prosecution counsel, Travis Thomas, testified it
was typical for counsel to meet with inventors and discuss the invention and prior art.
Thomas Dep. [Dkt. # 108-3] at 19:9–23; 22:22–23:10. Thomas also testified he treated
questionnaires as protected by attorney-client privilege. Id. at 20:10–22.
Raytheon responds that the questionnaires were never privileged, so there is no
waiver. According to Raytheon’s policies, the questionnaires are corporate forms reviewed by a “decision-making body [including technical specialists] which, as a primary
function reviews and evaluates the technical and economic (business) merits of an invention and determines whether patent, trade secret or other types of protection or courses of
action should be pursued.” Stringfield Decl. [Dkt. # 117-1] ¶¶ 3, 8 (quoting
RAY_CRAY00220516) (emphasis added). An “Invention Review Subcommittee” evaluates the questionnaires based on “[w]hether an invention . . . significantly benefits Raytheon’s competitive advantage in one or more relevant markets or furthers Raytheon’s
business interest by presenting licensing or business partnership opportunities with third
parties.” Id. ¶ 6 (quoting RAY_CRAY00220519) (emphasis added). Then, if the Invention Review Subcommittee “approves the invention on its technical merit, the invention
is submitted to [a] Patent Evaluation Committee for a broader review with increased focus on the business justification for filing a patent application or protecting the invention
as a trade secret.” Id. ¶ 7 (quoting RAY_CRAY00220519–520) (emphasis added). If the
relevant Raytheon business-decision committees find a business justification to pursue
patent protection, Raytheon submits the questionnaires to outside counsel for the purpose
of preparing a patent application. Id. ¶ 10 (citing White Tr. at 307:23–308:13).
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
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). 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 re Spalding Sports
Worldwide, Inc., 203 F.3d 800, 805 (Fed. Cir. 2000).
Relying heavily on In re Spalding, Cray argues the questionnaires were privileged
because (1) their purpose was to enable Raytheon, through counsel, to decide whether a
potential invention is patentable, and (2) Raytheon’s outside counsel confirmed he treated
such disclosures as privileged. Cray’s Motion [Dkt. # 108] at 4. In In re Spalding, the inventors submitted the invention record directly to Spalding’s corporate legal department
and the communication was made only for the purpose of obtaining legal advice. In re
Spalding, 203 F.3d at 803.
Here, unlike In re Spalding, Raytheon did not create the documents to obtain legal
advice. Rather, Raytheon employees completed the questionnaires for business purposes.
Only after the proposed inventions satisfied multiple levels of business and technical review did Raytheon provide the questionnaires to outside patent counsel. That Thomas
treated the questionnaires as privileged doesn’t alter their underlying business purpose.
CONCLUSION AND ORDER
The Court finds that Raytheon employees created the questionnaires for the pur-
pose of reviewing and evaluating the technical and business merits of inventions, and not
for the purpose of securing legal advice. Therefore, the Court finds the questionnaires are
not and never were privileged.
Accordingly, the Court DENIES Cray’s Motion to Compel [Dkt. # 108].
SIGNED this 3rd day of January, 2012.
SIGNED this 5th day of June, 2017.
ROY S. PAYNE
UNITED STATES MAGISTRATE JUDGE
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