Onyx v. Cipla: Companies Beware - What Your Patent Agent Tells You May Not Be Privileged

In an order last month, the Delaware district court ruled that some communications involving Onyx’s patent agent were not privileged and must be produced to Cipla. The court’s order highlights potential pitfalls when relying upon advice solely from patent agents. 

By way of background, the attorney-client privilege protects communications between attorneys and clients from compelled disclosure during litigation. For a communication to be privileged, there must be (1) a communication (2) made between privileged persons (3) in confidence (4) for the purpose of obtaining or providing legal assistance for the client. The Federal Circuit has recognized a privilege between non-attorney patent agents and their clients.  See In re Queen 's U at Kingston (Fed. Cir. 2016) (“In re Queens”).

The Delaware court noted that the privilege between patent agents and their clients is narrow, covering only communications “reasonably necessary and incident to” prosecuting patents at the United States Patent and Trademark Office (“USPTO”). The court provided examples of patent agent communications not covered by the privilege, stating that “communications with a patent agent who is offering an opinion on the validity of another party's patent in contemplation of litigation or for the sale or purchase of a patent, or on infringement" are not covered.

In Onyx, the court addressed communications involving “scientists who identified potential

alternative formulations and - before finalizing a research plan, before undertaking testing or viability studies, before reducing their ultimate invention to practice, and well before they committed to having claims drafted so a patent application could be prosecuted - consulted a patent agent for guidance, evidently for assistance in understanding the patent landscape in order to direct their efforts toward results that were not already the subject of prior art claims.” The court determined that such communications were not “reasonably necessary and incident to” patent prosecution and, thus, not privileged because the communications were “part of a plan to develop new chemical formulations, not to seek patent protection for already-developed formulations.”

Did the Delaware court apply the privilege too narrowly? 

As noted in In re Queens, the U.S. Supreme Court (in its 1963 Sperry v. Florida decision) expressly found that the preparation and prosecution of patent applications by patent agents constitutes the practice of law, which “inevitably requires the practitioner to consider and advise his clients as to the patentability of their inventions under the statutory criteria of 35 U.S.C.…”

Further, the Federal Circuit in In re Queens noted that the scope of a patent agent’s ability to practice before the USPTO is at least partially defined by 37 C.F.R. § 11.5(b) which provides that such practice “includes, but is not limited to, preparing and prosecuting any patent application, consulting with or giving advice to a client in contemplation of filing a patent application or other document with the Office…”

So, according to the Supreme Court and Federal regulations, a patent agent’s communications relating to patentability of an invention, including communications made “in contemplation of” filing a patent application, should be privileged. 

But this is arguably not what happened in Onyx. The Delaware court ruled that communications which were “part of a plan to develop new chemical formulations, not to seek patent protection for already-developed formulations” were not privileged. But why is a patent landscape analysis (presumably to determine patentability of future research) not covered by the privilege? Wouldn’t such an analysis be performed “in contemplation of” filing a patent application? Wouldn’t it make sense in certain circumstances to perform a patentability study prior to conducting research so that time, money and effort were not wasted on research that would not be subject to patent protection? Why would a formulation have to be “already-developed” to render patent agent communications about the formulation privileged?

Admittedly, we do not know exactly what the non-privileged communications in Onyx were, so particular language in Onyx’s documents may have led to the Delware court’s decision. But what we do know is that the privilege for a patent agent’s communications is narrow, and the Delaware court’s decision highlights potential problems with relying solely upon advice from a patent agent.