Now we have news of another cautionary tale, courtesy of Wilmington, Del., federal district court judge Joseph Farnan in a patent infringement case against Facebook. Last month, Judge Farnan affirmed a pre-trial order by federal magistrate judge Leonard Stark compelling the patent plaintiff, Leader Technologies, to give Facebook’s lawyers certain documents Leader shared with third-party financing companies.
Much of the briefing on the issue was filed under seal or is redacted, but it’s clear that Facebook’s lawyers at Cooley Godward Kronish and Blank Rome claimed the materials were not protected by any privilege because the financing companies had seen them. Leader’s lawyers at King & Spalding and Potter Anderson & Corroon argued that there was, in fact, a common-interest privilege between the law firms and the litigation financing companies. In the March order, Magistrate Judge Stark concluded there was no common legal interest because Leader didn’t make a deal with the financing companies. Leader’s lawyers then protested to Judge Farnan that the common interest was established when the companies showed an interest in financing the litigation.
