AIPPI Congress Report 6: The big privilege problem

Unlike the AmeriKat's photo of Toronto, lawyers can only
wish that the issue of privilege was so black and white

"When in Rome" the AmeriKat's colleague said as she drizzled some Canadian maple syrup over a small stack of pancakes during their morning catch-up breakfast.  The phrase attributed to Ambrose advises that a person, when in a different environment or location, should behave as those around them.  It is generally easy to "do as the Romans do" when you are in fact in Rome or in London or in Delhi.   You know you are there and you act accordingly.  In this case "when in Rome" demanded that we devour a stack of pancakes.   However, it is harder to know how to act when you could find yourself simultaneously in Rome and London and Delhi.  Sound impossible?  Not really - us lawyers and our clients have to do so all the time when facing tricky issues of privilege.  That's why, while the AmeriKat was busy immersing herself in the biosimilars Pharma Day session on Tuesday morning, her colleague Lorraine Neale (A&O) was, along with the rest of the workshop on "Client Attorney privilege – issues for harmonisation”, trying to figure out what the Romans should do when it comes to legal privilege.  Lorraine reports:

"After several cups of coffee and cake, practitioners and academics alike piled into the conference room keen to discuss the crucial issue of the protection from forced global disclosure afforded to confidential client-IP adviser communications.  Whilst IP law is progressively more harmonised internationally, and IP practice is increasingly global (with multi-jurisdictional parallel actions and a growth in parallel filings), there is a troubling lack of international harmonisation in respect of the protection granted to the confidential communications between non-lawyer IP advisors and their clients.  Many countries do not afford this communication the protection from forced disclosure during litigation. The workshop set out to focus the underlying substantive issues which may impede harmonisation in this area and discuss ways to overcome them.  

Steven Garland (Smart & Biggar, Canada and Chair of the AIPPI Standing Committee on Privilege), who moderated the workshop, launched the debate by highlighting the fact that this lack of harmonisation often led to conflicts in cross-border scenarios, where even though the communication might have been considered privileged in the jurisdiction where it was created, it might not be considered privileged in the jurisdiction where the litigation is taking place. Steven gave an example of the Canadian Federal Court case of Lilly Icos v Pfizer Ireland Pharmaceuticals (2006) FC 1465, where communications between Pfizer and a UK patent attorney was held not to be privileged.  It was subsequently ordered to be produced in the Canadian litigation, despite the UK privilege position. 

Steven questioned whether there was a solution to this troublesome state of events. At the international level, WIPO’s Standing Committee on the Law of Patents (SCP) had been considering the issues of confidentiality of client-IP adviser communications since June 2008. However despite significant work on identifying the problems that exist globally, there was no resolution or solution. Steven was pleased to note, however, that there was now a renewed interest from the WIPO Group B (industrialised countries) Governments, led by the Swiss, Swedish and UK delegations, who had announced their intention to consider the issue separately from WIPO/SCP. In June 2013 a Colloquium organised by AIPPI, FICPI and AIPLA, was held in Paris to assist the latter to develop a model framework for the international protection of confidentiality in IP professional advice. Steven was glad to announce that this has resulted in a joint proposal for a multilateral agreement, with the operative clause stating that: 

“…A communication made for the purpose of, or in relation to, an intellectual property advisor providing professional advice on or relating to intellectual property rights to a client, shall be confidential to the client and shall be protected from disclosure to third parties, unless it is or has been made public with the authority of that client” 

The Group B countries will now discuss this at the Group BWIPO Plenary Session on the 23 September 2014. 

Pravin Anand (Anand and Anand, India) gave an overview of the common law doctrine of privilege, focusing his presentation primarily on India. Noting that the client-attorney privilege is the oldest privilege known to the common law (arguably deriving from 16th Century England), Pravin briefly outlined some well-established features of this species of privilege: that it belonged to the client and not to the attorney (although the latter can claim privilege on behalf of his client), could only be waived by the client and that it survived the client’s death.  The grant of privilege was not discretionary (Three Rivers District Council and Others v The Governor and Company of the Bank of England [2004] UKHL 48), and confidentiality in itself was not sufficient to render a communication privileged.  In India “legal professional advisers” were covered by privilege, with the term being very narrowly construed as extending to practicing advocates, possibly to in-house attorneys (there was conflicting supporting case law), but probably not to Government law officers (as a result of governmental officials being subject to the Right to Information Act 2005). It did not extend to chartered accountants (although the Indian Chartered Accountant Act rendered a disclosure by a chartered accountant a misconduct), to domestic or foreign patent agents, nor to technical witnesses. There was no case law as to whether foreign lawyers were covered. Included within the definition of “Client” were the employees of a corporation authorised to deal with external lawyers ( see the Three Rivers case), and arguably law firms, although there was as yet no case law supporting the latter. 

Pravin emphasised, as his co-speakers would do in turn, the need for privilege to extend to all IP advisers. Patent litigation was getting increasingly specialised.  As a consequence, there was a greater requirement for technical adviser.  Pravin expressed the concern that frank discussions between clients and patent agents would not be possible unless afforded the protection of privilege. Pravin also reiterated the problems arising from the lack of harmonisation of privilege in multi-jurisdictional litigation, stating that this had given rise to “privilege forum shopping” with clients filing proceedings in other jurisdictions with the sole aim of destroying privilege. 

Professor John Cross (University of Louisville, USA) pointed out that in the US, unlike in India, the problem was not a lack of privilege protection.  The US has both an attorney-client privilege, as well as the more limited “work product” (litigation privilege). Furthermore, the US currently applied the stricter attorney-client privilege to communications with non-attorney patent agents, as well. The difficulties with the US system instead stemmed from two practical phenomena: a large number of parallel filings and the very broad scope of discovery. With respect to discovery, Professor Cross briefly reminded the audience that US litigation permits a significant amount of information gathering after a case is commenced, with the basic determinant/standard being whether the information is “relevant” to the litigation. Professor Cross noted that the Courts routinely find information involving even foreign patents to be relevant (as long as they relate to the same invention). In relation to patent agents, a US patent agent always has privilege, whilst in relation to foreign agents the courts differ: if the foreign agent is dealing with a US patent application there is no privilege, but if the foreign agent is dealing with a foreign application, most US courts will recognise privileges available under foreign law. However Professor Cross pointed out that in reality matters are not so clear cut.  For any given invention an agent may be involved in both a US and foreign filing. In these cases courts tended to apply a “touch base” standard; that is, if the agent’s work has a significant connection with the US patent then US privilege law applies. 

Dr. Michael Kompter (Senior Patent Counsel, IP Awareness and Enforcement, Boehringer Ingelheim, Germany) considered the issue of privilege from the standpoint of a civil law jurisdiction, as well as providing an in-house counsel’s perspective. Dr. Kompter started off by outlining a potential IP Owner’s “wish list” with regards to privileged communications.  Such a wish list would include an ability to talk openly and frankly about his IP with his adviser secure in the knowledge that this advice will not be discoverable in litigation, criminal proceedings, or in relation to regulatory action.  IP owners would also wish that privilege be waivable only by the IP owner.  IP “advisers” would include any professional who gives advice in IP matters.  Privilege should also extend to in-house lawyers as well as those in private practice. 

Dr Kompter noted that in Germany, a civil law jurisdiction, there is no tradition of discovery and hence privilege in IP matters. However, with the increasing globalisation of litigation, Dr Kompter said that there is an increasing need for a formal recognition of privilege in order to prevent the scenario outlined by Steven. In practice, the German Federal Regulations concerning both lawyers (s. 43a BRAO) and Patent Attorneys (s.39a PAO) afforded a reasonable level of protection, obliging both to uphold a duty of professional secrecy, bolstered by the possibility of the imposition of monetary and penal sanctions under the German Criminal Code for violation of professional secrecy. 

Furthermore under the Civil Code there existed the right to a “refusal to testify” in cases where the interest of the client is put in jeopardy. In relation to European Patent Attorneys, Dr. Kompter pointed out that following Rule 153 (1) EPC, all communications with the latter were protected as “permanently privileged from disclosure in proceedings before the EPO, unless such privilege is expressly waived by the client”. Dr. Kompter noted that the reason for this rule was clearly to give the profession protection against discovery in US proceedings, as the US authorities, and in particular the USPTO, would likely respect the profession’s privilege before their European counterpart. Although this rule currently only protects proceedings in front of the EPO, and not national European courts, Dr. Kompter noted that there is “some light at the end of the tunnel” in the form of the future Unified Patent Court system. Dr Kompter was happy to note that under the current draft Rules of Procedure for the Unified Patent Court, Rule 287 provides “everything that is needed” - granting inter alia, protection to both external and in-house “lawyers” and their work product.  The term “lawyer” is defined to include all registered UPC lawyers as well as any other lawyers qualified to act in their country in the same way as under the UPC and patent attorneys including both national and European patent attorneys. 

However turning back to current situation in Germany in relation to in-house IP Advisers, Dr Kompter noted that this was unfortunately far from satisfactory, with no duty of professional secrecy or the deterrence of criminal sanctions. Furthermore the case law of the CJEU (albeit in the field of competition law) appeared to support this national position, with the case of Akzo Nobel Chemicals & Akcros Chemicals (2011) rendering it clear that professional privilege is available to independent lawyers, who are not bound to the client by a relationship of employment, and that the privilege must relate to the client’s right of defence. 

In the light of the above, Dr Kompter concluded his excellent and informative presentation with a series of practical and important tips for the in house adviser, the “In-house adviser’s privilege “DO’s and DON’T’s”: 

• DO ask external lawyer for a management summary instead
• DO provide legal advise in-house verbally in meetings, or via telecons or videocons only
• DO advise all employees that anything in writing is potentially discoverable
• DO keep privileged documents in separate files marked –“Legally Privileged & Confidential” or even better externally.• DO NOT summarize or comment on external advise"