Milwaukee Electric Tool Corporation et al v. Chervon North America Inc

Filing 230

ORDER signed by Judge J.P. Stadtmueller on 7/10/2017 GRANTING 193 Defendant's Motion to Compel and ORDERING Plaintiffs to produce documents as indicated within 7 days. 192 , 208 and 213 Parties' Motions to Restrict Documents GRANTED. See Order. (cc: all counsel) (jm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
MILWAUKEE ELECTRIC TOOL CORPORATION,
METCO BATTERY TECHNOLOGIES LLC, AC
(MACAO COMMERCIAL OFFSHORE) LIMITED,
and TECHTRONIC INDUSTRIES CO. LTD.,

Case No. 14-CV-1289-JPS

Plaintiffs,
v.
CHERVON NORTH AMERICA INC.,
Defendant.

MILWAUKEE ELECTRIC TOOL CORPORATION,
METCO BATTERY TECHNOLOGIES LLC, AC
(MACAO COMMERCIAL OFFSHORE) LIMITED,
and TECHTRONIC INDUSTRIES CO. LTD.,

Case No. 14-CV-1296-JPS

Plaintiffs,
v.
SNAP-ON INCORPORATED,

ORDER

Defendant.

In these two related patent infringement actions, Defendants have
each filed identical motions to compel production of certain documents by
Plaintiffs.1 Defendants contend that one of Plaintiff Milwaukee Electric
Tool Corporation’s (“METCO”) counsel, Edward Lawson (“Lawson”),
filed a declaration in connection with the inter partes reviews (“IPRs”) of
Plaintiffs’ patents in which he averred as to matters covered by Plaintiffs’
attorney-client privilege. As such, Defendants believe that Plaintiffs
waived the privilege as to the subject matter of Lawson’s declaration, and
This same motion was filed in a third related patent case previously
pending before this Court, Milwaukee Electric Tool Corporation et al. v. Positec Tool
Corporation et al., Case No. 14-cv-1295-JPS (E.D. Wis.). The parties stipulated to
the dismissal of that action on June 29, 2017, before this Order was issued.
1

they seek an order compelling production of documents related to that
subject matter.
The attorney-client privilege protects confidential communications
between attorney and client made for the purpose of obtaining legal
advice. Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). The privilege
can be waived when, for instance, the client relies on such
communications during legal proceedings. When this occurs, the client
can be charged with waiving the privilege not only as to the particular
communication that was disclosed, but as to all attorney-client
communications concerning the same subject matter. Matter of Continental
Ill. Sec. Litig., 732 F.2d 1302, 1314 (7th Cir. 1984); Appleton Papers, Inc. v.
E.P.A., 702 F.3d 1018, 1021 (7th Cir. 2012).2 Put simply, “a privilege holder
‘cannot be allowed, after disclosing as much as he pleases, to withhold the
remainder.’” Fort James Corp. v. Solo Cup Co., 412 F.3d 1340, 1349 (Fed. Cir.
2005) (quoting VIII J. Wigmore, Evidence § 2291, at 636 (McNaughton rev.
1961)). In most cases, the question is not whether privileged
communications were disclosed, but how far the subject-matter waiver
should extend. Yet “[t]here is no bright line test for determining what
Because subject-matter waiver of the attorney-client privilege is not an
issue unique to patent law, it is the Seventh Circuit’s precedent, and not that of
the Federal Circuit, that controls here. In re VISX, Inc., 18 F. App’x 821, 823 (Fed.
Cir. 2001) (“We apply regional circuit law to the issue of waiver of the attorneyclient privilege.”). Here, the distinction does not matter, since only well-settled
general principles are in play. See Vardon Golf Co., Inc. v. Karsten Mfg. Corp., 213
F.R.D 528, 532–33 (N.D. Ill. 2003) (describing general principles of subject-matter
waiver in the Seventh Circuit). In any event, the parties do not mention the
choice-of-law issue, and the Court will not, in the absence of guidance from the
parties, independently consider whether reliance on Seventh Circuit or Federal
Circuit precedent changes the outcome in this instance.
2

Page 2 of 10

constitutes the subject matter of a waiver, rather courts weigh the
circumstances of the disclosure, the nature of the legal advice sought and
the prejudice to the parties of permitting or prohibiting further
disclosures.” Id. at 1349–50; see also Fed. R. Evid. 502(a). The scope of
waiver should generally be construed narrowly in patent cases, but it
should also be informed by notions of fairness and a concern with
stopping a party from deriving a tactical advantage through selective
disclosure. Vardon, 213 F.R.D at 533.
The basic facts pertinent to Defendants’ motion are not in dispute.
In its IPR petitions, Defendant Snap-on Incorporated (“Snap-On”)
challenged the validity of the claims of the patents-in-suit based on the
Fohr prior art reference, among others, which was published on December
18, 2002. The Patent Office’s Patent Trial and Appeal Board (“PTAB”)
instituted review in the Snap-on IPRs, finding that Fohr was in fact prior
art based on the preliminary record before it and that the patents-in-suit
were not entitled to claim priority to any of METCO’s provisional patent
applications filed before January 17, 2003, because those earlier
provisional applications do not mention the 20 Amp Limitation.3
Plaintiffs argued in the Snap-on IPRs that Fohr is not prior art and
attempted to establish an earlier priority date for the claimed invention,
asserting that the named inventors conceived of a battery pack embodying
the claimed invention—including the 20 Amp Limitation—as early as
November 21, 2002, actually reduced it to practice as early December 12,
The 20 Amp Limitation in the patents-in-suit requires that “the battery
cells [be] capable of producing an average discharge current greater than or
equal to approximately 20 amps.”
3

Page 3 of 10

2002, and constructively reduced it to practice in provisional applications
filed on January 17, 2003. To support this claim, Plaintiffs relied on a
declaration by Lawson, who was involved in the prosecution of the
patents-in-suit.
The parties’ views diverge when it comes to whether Lawson
disclosed privileged communications in this declaration and, if so, how
much. Lawson avers that he, Elizabeth Egasti (“Egasti”), a patent engineer
at his firm, and the named inventors had meetings on particular dates in
late 2002. He relates the subject matter of the meetings by quoting from his
firm’s invoices and time records as well as meeting minutes and other
notes. He also refers to invention disclosure forms which he attaches to his
declaration. One of them is undated, but he avers that it was prepared on
November 21, 2002. Further, he catalogs his and Egasti’s work on the
provisional patent applications, which he claims included the invention
described in his meetings and the invention disclosure forms.
Defendants

contend

that

Lawson

revealed

privileged

communications in his declaration. Defendants reason that Lawson, in
disclosing the subject matter of his discussions with inventors and the
invention disclosure forms, tried to leverage portions of privileged
communications for his client’s benefit—namely, to prove earlier dates for
conception and reduction to practice—while keeping the remainder of the
communications secret. Plaintiffs, by contrast, argue that Lawson’s
declaration was submitted only to establish a timeline for the conception
of the pertinent invention. For instance, Lawson tried, through recounting
his recollection of the relevant events, to date the undated invention

Page 4 of 10

disclosure form that he believed reflected conception. Thus, if any
disclosure occurred, the relevant subject matter should only be the dates
and times of conception, nothing more.
Yet according to Defendants, Lawson needed to establish not only a
timeline of his meetings and work, he also needed to connect
substantively the meetings, forms, and other documents to the issues of
conception and reduction to practice. Put differently, in order to be
effective at overcoming Fohr, Lawson had to show that those meetings
concerned the right topics. Defendants therefore request that the Court
find

waived

any

claim

of

attorney-client

privilege

as

to

all

communications that METCO’s patent counsel had (a) with individuals at
METCO, including the named inventors, (b) between November 21, 2002
(the alleged date of conception) and January 17, 2003 (the alleged date of
constructive reduction to practice), and (c) that relate to the preparation of
the patent applications directed to the alleged invention.
The Court finds Defendants’ position persuasive. First, Defendants
are correct that Plaintiffs waived their privilege by disclosing privileged
communications. Courts have widely held, and Plaintiffs do not
meaningfully dispute, that invention disclosure forms like the two
attached to Lawson’s declaration are protected by the attorney-client
privilege. See In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 805 (Fed.
Cir. 2000); Shukh v. Seagate Tech., LLC, 848 F. Supp. 2d 987, 990 (D. Minn.
2011). Thus, his disclosure of the forms worked to waive the privilege as
to those documents and related ones.

Page 5 of 10

Likewise, the Court finds that although Lawson’s declaration was
focused on dating certain meetings and documents, it was equally
important for Lawson to establish the legal conclusion that these matters
related to and/or constituted conception of the invention and its diligent
reduction to practice. Lawson did not merely date documents or inform
when meetings occurred; he affirmatively stated that “the inventors of the
Patents-at-Issue conceived of the invention at least as early as November
21, 2002, and were diligent in constructively reducing the invention to
practice by filing a patent application on January 17, 2003.” He then
discussed in detail the meetings, notes, forms, and other matters that lead
him to that conclusion, such as the undated invention disclosure form that
was so important to the conception issue. Similarly, Lawson described the
timeline of his work preparing the provisional patent applications to show
that reduction to practice was diligently pursued. On that point, he stated
that “in my experience, this provisional application was completed in a
more timely manner than a typical patent application matter.”
This level of detail distinguishes this case from In re Application for
Subpoena to Kroll, 224 F.R.D. 326, 329 (E.D.N.Y. 2004), which involved
simply reporting the date on which a meeting occurred. Describing the
contents of a meeting or document and how it related to patentability
standards like conception and reduction to practice is well beyond a
“collateral matte[r]” which avoids the substance of attorney-client
communications. See In re Dayco Corp. Derivative Sec. Litig., 102 F.R.D. 633,
635 (S.D. Ohio 1984).

Page 6 of 10

As the Federal Circuit explained in Fort James, “[i]t would be unfair
to permit [a party] to rely on favorable legal opinions, but protect the
communications on which those opinions depend.” Fort James, 412 F.3d at
1351; VISX, 18 F. App’x at 824 (party waived privilege by “making
representations about the contents of communications. . .for strategic
purposes”). Here, Lawson cannot draw the legal conclusion that his
conversations with his client and his other work constituted conception of
the invention and reduction to practice and yet withhold the substance of
those communications—that is, the facts that underlay his legal opinion.
See Bd. of Trustees of Leland Stanford Junior Univ. v. Roche Molecular Sys.,
Inc., 237 F.R.D. 618, 620–21 (N.D. Cal. 2006) (university counsel revealed
client communications and counsel’s advice about inventorship “to gain a
legal advantage by obtaining an enforceable patent”).
Viewed in this way, Lawson’s declaration goes farther than the
declaration at issue in Tax-Right, LLC v. SICPA Product Securities, LLC,
Civil Action No. 3:12cv657, 2013 WL 3791487, at *4 (E.D. Va. July 18, 2013),
which made only a passing comment that a term in a patent claim might
be ambiguous, or the declarations in For Your Ease Only, Inc. v. Calgon
Carbon Corp., No. 02 C 7345, 2003 WL 1989611, at *12 (N.D. Ill. Apr. 28,
2003), which included “mere denials” of knowledge of certain facts. In this
instance, Lawson’s purpose was to bolster his client’s chances of securing
an enforceable patent by linking the discussions he had with inventors
with conception and reduction to practice. Cormack v. United States, 118
Fed. Cl. 39, 43 (Ct. Cl. 2014) (in assessing the scope of waiver, “courts are
concerned with basic notions of fairness, aiming to prevent a party from

Page 7 of 10

disclosing communications supporting its position while simultaneously
withholding communications that do not”). Defendants need not take him
at his word on this, however. Having provided Lawson’s opinion as to the
legal import of his communications with his client, Plaintiffs cannot
withhold those communications from Defendants’ independent review.
VISX, 18 F. App’x at 824.
The real question becomes the scope of the resulting waiver.
Plaintiffs maintain that any waiver should relate only to issues of timing
of conception, but as explained above, Lawson’s declaration contemplates
much broader matters. See Katz v. AT&T Corp., 191 F.R.D. 433, 440 (E.D.
Pa. 2000) (“[T]he scope of the waiver is informed both by the purpose
served by the disclosure and the content of the disclosure.”). Because he
had to make substantive connections between the work being done, the
forms being prepared, and issues of conception and reduction to practice,
Lawson’s declaration covered more than timing. As such, the Court finds
Defendants’ proposed scope of waiver to be fair and reasonable under the
circumstances, particular considering its narrow temporal scope.
This case is similar to Pacing Technologies, LLC v. Garmin
International, Inc., No. 12–CV–1067 BEN (WMc), 2013 WL 4774765, at *5
(S.D. Cal. Sept. 5, 2013), where the court ordered production of documents
relating to preparation, finalization, and filing of a patent application
because the plaintiff intended to use a draft application and
communications surrounding it to establish its priority. Here, Lawson’s
declaration concerns both the undated invention disclosure form, which
related to conception, and the provisional patent applications, which

Page 8 of 10

related to diligent reduction to practice. Both were important to Lawson’s
disclosure, and that makes this case unlike Lear Automotive Dearborn, Inc.
v. Johnson Controls, Inc., No. 04-73461, 2006 WL 800740, at *1 (E.D. Mich.
Mar, 28, 2006), where the plaintiffs disclosed only an invention disclosure
form. There, the court rightly limited the resulting waiver to issues of
conception, rejecting the defendant’s suggestion that every document
related to patent prosecution should be produced. Id. at *1–2.
Although waivers of attorney-client privilege should be narrow,
focusing on avoiding unfair advantage, here the waiver is tethered to the
disclosure Plaintiffs actually made. Moreover, it is equally important to
recall that the attorney-client privilege itself should be narrowly
construed, as it reduces the amount of otherwise discoverable information
in a lawsuit. See id. at *1 (citing United States v. Collis, 128 F.3d 313, 320 (6th
Cir. 1997)). Consequently, the Court directs Plaintiffs to produce, within
seven (7) days of the date of this Order, documents within the set
identified in Defendants’ motion that contain or describe communications
METCO’s patent counsel had (a) with individuals at METCO, including
the named inventors, (b) between November 21, 2002 and January 17,
2003, and (c) that relate to the preparation of the patent applications
directed to the alleged invention. The Court will leave it to counsels’
cooperative efforts to identify which documents in Plaintiffs’ privilege log
are covered by this description.
Accordingly,
IT IS ORDERED that the following motions to compel production
of documents be and the same are hereby GRANTED:

Page 9 of 10

(1)

Case No. 14-cv-1289, Docket #193; and

(2)

Case No. 14-cv-1296, Docket #149; and

IT IS FURTHER ORDERED that the following motions for leave
to restrict documents filed in connection with the motions to compel be
and the same are hereby GRANTED:
(1)

Case No. 14-cv-1289, Docket #192, #208, and #213; and

(2)

Case No. 14-cv-1296, Docket #148, #164, and #171.

Dated at Milwaukee, Wisconsin, this 10th day of July, 2017.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

Page 10 of 10