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A few months ago, in In re Spalding Sports Worldwide Inc., Misc. Doc. No. 595 (Feb. 11, 2000), the U.S. Court of Appeals for the Federal Circuit provided a road map for companies to legally withhold invention disclosures from discovery. Because invention disclosures often contain representations that conflict with a company’s litigation posture, corporations should review their internal procedures and strategic plans to take advantage of protections available from the Spaldingdecision. Most companies require their R&D people to fill out invention disclosure forms when an inventor has an idea he or she thinks is worth patenting. The form usually contains a description and characterizations of the invention, and representations about the closest known prior art. In addition to early characterizations of the invention, the form also typically reveals the date when the inventor believes the invention was first publicly disclosed and offered for sale, together with the inventor’s beliefs about competitors’ similar activities. Unfortunately, invention disclosure forms are often filled out hastily by technical staff untrained in the nuances of patent law. Their perceptions of when an invention is “on sale” or publicly disclosed do not necessarily jibe with the legal standards. In addition, invention disclosures sometimes mischaracterize the closest prior art and make statements that could constitute an “admission” on the issues of obviousness or anticipation, which goes to the validity of the patent. As a result, plaintiffs’ patent counsel would often prefer not to reveal invention reports to litigation opponents. The problem is that until now, the trend in U.S. courts has been to treat invention disclosures as primarily technical in nature, and not shielded by the attorney-client privilege. The most widely accepted view was that attorneys act as mere “conduits” between the inventors and the Patent Office. But according to the Federal Circuit in Spalding, “these cases did not deal specifically with invention records, and moreover, they are not binding on this court.” Without a doubt, the rules have now changed in light of Spalding. Invention disclosures can now be shielded from discovery. A company may, however, have to redesign its internal patent procedures to avail itself of the shield. THE SPALDINGCASE In Spalding, the inventors of a new kind of basketball had delivered their invention reports to the Spalding legal department. After the patent issued, Spalding sued Wilson Sporting Goods for patent infringement. During discovery, the court ordered Spalding to turn over its invention records. According to the district court, the invention reports were technical in nature, not legal, and thus not entitled to protection by the attorney-client privilege. Spalding appealed, and in its opinion reversing the district court, the Federal Circuit provided a recipe for how others can avail themselves of the attorney-client protection. In the Federal Circuit’s view, “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.” According to evidence in the record, the inventors at Spalding had submitted the invention reports to the “patent committee,” a part of the legal department at Spalding. Spalding’s patent counsel described corporate policy like this: “It was, and is, the policy at Spalding for Spalding’s patent counsel, and/or outside patent counsel to whom the invention is delegated for evaluation, to refer to the invention record for the purpose of making patentability determinations.” This seemed to be enough to convince the Federal Circuit, for it held “that an invention record constitutes a privileged communication, as long as it is provided to an attorney for the purpose of securing primarily legal opinion, or legal services, or assistance in a legal proceeding.” It is important to note that the Federal Circuit rejected Wilson’s fall-back request that the invention report be parsed into discoverable and nondiscoverable portions. In this regard, Wilson had argued that the part of the invention report containing listings of prior art should be discoverable because that part of the report did not seek legal advice. But the Federal Circuit rejected this view out of hand: “[W]e do not consider that it is necessary to dissect the document to separately evaluate each of its components. It is enough that the overall tenor of the document indicates that it is a request for legal advice or services. Moreover, it is not necessary to expressly request confidential legal assistance when that request is implied.” Further, the mere fact that the invention report contained technical information did not render the document discoverable. “[T]he inclusion of such information does not render the document discoverable, because requests for legal advice on patentability or for legal services in preparing a patent application necessarily require the evaluation of technical information such as prior art.” IMPLICATIONS FOR PATENT STRATEGY The Federal Circuit suggests that depending on the circumstances, attorney-client privilege may impliedly extend to invention disclosure records, without any express language in the record itself. But why risk the chance that an implication will not be found, especially now that the Federal Circuit has made clear what needs to be done to erect a more certain shield? “[T]he central inquiry,” according to the Federal Circuit, “is whether the communication is one that was made by a client to an attorney for the purpose of obtaining legal advice or services.” If a company uses a procedure whereby inventors submit their invention disclosures to a technical supervisor, it may be more prudent, in view of the Spaldingdecision, for invention disclosures to be submitted directly to the legal department. Supervisors can certainly be copied on the submission should there be a concern about cutting them out of the loop. Invention disclosure forms should also be revised to reflect an express request for legal advice. Such language may be built directly into a company’s standard invention disclosure form. For example, invention submission records may be revised to take the form of a confidential memorandum to patent counsel. The subject line of the memorandum may expressly reflect a request for legal advice on the patentability of the invention. Such measures should strengthen a company’s overall patent portfolio by shielding invention disclosures from discovery, thereby removing a common source of attack by accused infringers. Gerson S. Panitch specializes in strategic IP planning and patent litigation. He is a partner in the Washington, D.C., office of Finnegan, Henderson, Farabow, Garrett & Dunner, LLP.He may be contacted at [email protected]

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