16 March 2014

Australian Federal Court Considers Patent Attorney Privilege

Australian Mud Company Pty Ltd v Coretell Pty Ltd [2014] FCA 200 (13 March 2014)

Legal ParaphenaliaIt was only last month that I wrote about the changes to ‘patent attorney privilege’ introduced by last year’s Raising the Bar law reforms, and now we have the first decision of the Federal Court of Australia to consider the new provisions.

Just to recap quickly, the ‘privilege’ I am referring to is the legal professional privilege which protects communications between legal professionals and their clients, along with related records and documents, from compulsory disclosure by order of a court, or under a provision of statutory law.  Patent attorneys are not lawyers, and communications between patent attorneys and clients are therefore not automatically protected under common law, or by relevant provisions of the Evidence Act 1995.  Instead, express provision is made for patent attorney privilege in section 200 of the Patents Act 1990.

Interestingly, although I have speculated that the enhanced patent attorney privilege may apply only to communications, records and documents made on or after 15 April 2013, it appears to have been accepted by the parties to the dispute in this case, and by the court, that the current provisions apply to communications that took place between patent attorney and client back in 2004.  However, I do not think that this can be regarded as settled law, considering that a judge of the same court previously expressed doubts as to the retroactive effect of an earlier change to the law in relation to patent attorney privilege (Wundowie Foundry Pty Ltd and Clarewood Pty Ltd v Milson Foundry Ltd and David Wallace [1993] FCA 422).

More importantly, for patent attorneys and their clients, the court has confirmed that the current patent attorney privilege provisions protect a broad range of communications, records and documents made for the ‘dominant purpose’ of providing patent attorney services, including technical documents and communications made in the course of preparing a patent application.  Furthermore, the court found that neither public use of an invention, nor the ‘lodgement and subsequent publication of a patent application’ results in a waiver of privilege.

Background – Documents in Which Privilege Was Asserted

Privilege was claimed by the patentee, Australian Mud Company Pty Ltd (‘AMC’) in respect of certain communications described in an affidavit of Mr Christopher Bradford.  In 2004, Mr Bradford was an employee of AMC’s parent company Imdex Limited.

In the course of preparing a patent application in respect of the invention subsequently protected by certain AMC patents, certain communications took place, and documents were created – including design drawings prepared by external consultants – to assist the patent attorneys in preparing a patent specification.  It should be noted that none of these communications or documents constituted advice, but it would probably be reasonable to conclude that they were made for the dominant purpose of enabling the patent attorneys to prepare the patent specification and associated advice on patentability.

As the decision makes clear (at [5]) there was no dispute in this case that the relevant discussions were between officers or employees of either Imdex or AMC and patent attorneys acting for one or more of those companies in connection with a proposed patent application

Patent Attorney Privilege = Legal Professional Privilege

The court first confirmed (at [12]) that the current version of s 200 of the Patents Act protects communications between patent attorney and client made for the dominant purpose of providing intellectual property advice to the client to the same extent as such communications would be protected if they were between legal practitioner and client.  This includes the protections available under the common law, and under sections 118 and 122 of the Evidence Act.

Furthermore, the expression ‘intellectual property advice’ is broadly defined in subsection 200(2C) of the Patents Act.

Coretell argued that the contested content of Mr Bradford’s affidavit did not disclose any advice given by the patent attorneys.  The court reviewed the authorities relating to legal professional privilege, and concluded that this argument was based on an unduly narrow view of the scope of the privilege.  In particular:
  1. ‘the privilege extends beyond a communication that constitutes advice, or a request for advice, in any narrow sense’: at [15]
  2. ‘the expression “legal advice” in this context is to be broadly construed to encompass communications including some that might not, at first glance, constitute legal advice per se, but which are nevertheless protected because they are sufficiently connected with the giving or obtaining of such legal advice’: at [15]
  3. ‘legal advice’, in this context, encompasses other forms of ‘legal assistance’ (e.g. litigation): at [16]
  4. ‘legal advice’ goes beyond formal advice as to the law, and includes ‘professional legal advice as to what should prudently and sensibly be done in the relevant legal context’: at [17]
  5. ‘the legal advice privilege extends to a confidential communication made between a lawyer and a client for the dominant purpose of providing legal advice to the client’: at [18], and
  6. privileged ‘communications include, but are not limited to, communications that constitute or record the advice given or the request for that advice’: at [18].

Waiver of Privilege?

AMC argued that Mr Bradford’s evidence relating to communications in 2004 between its parent company Imdex and its patent attorneys was inadmissible, because the communications were privileged, and privilege had not been waived. 

Interestingly, AMC had submitted that none of the relevant documents was privileged, and it had provided these to Coretell in the course of discovery.  The court was of the opinion that the documents were subject to privilege because they each appeared to ‘have been created by its author for the dominant purpose of enabling the party who authorised its creation to obtain the professional advice and assistance of the patent attorneys in relation to the proposed patent application’, and that it was therefore appropriate to approach the matter on the basis that AMC had ‘not sought to assert privilege over such documents even though it was open to it to do so’ (at [28]).

Significantly, the court considered that it is not inconsistent to file a patent application application (and to allow it to be published, or have a patent granted) and ‘later maintain a claim for privilege in relation to confidential communications he or she had with a patent attorney in connection with the preparation of such an application’ (at [21]).

The question was therefore whether AMC’s apparent waiver of privilege in the documents constituted conduct inconsistent with its claim to privilege in relation to the associated communications.

The court concluded (at [29]) that Mr Bradford’s evidence would be admissible to the extent that the relevant paragraphs of his affidavit ‘relate directly to the communication to the patent attorneys of the information’ contained in the documents.’  As a result, some parts of the contested content of Mr Bradford’s evidence was found to be admissible, while other parts were not (at [30]).

Does the Current Version of Section 200 Apply?

As I have already noted, the parties and the court all appear to have assumed that the current incarnation of the patent attorney privilege provided by section 200 applied in this case, even though the communications in question took place in 2004.  Certainly the court’s analysis is based on the current wording.

In 2004, the patent attorney privilege in s 200(2) was expressed as follows:

A communication between a registered patent attorney and the attorney’s client in intellectual property matters, and any record or document made for the purposes of such communication, are privileged to the same extent, as a communication between a solicitor and his or her client.

This provision excludes the ‘dominant purpose’ language of the current version (which mirrors the language of the Evidence Act), omits reference to communications being privileged ‘in the same way’ as well as ‘to the same extent’, and refers only to a solicitor rather than to a legal practitioner.

Nonetheless, it seems likely that in this particular case the outcome would most probably have been the same, even if the earlier version of the statute had been applied.

But, since the question did not actually arise for direct consideration here, I do not believe that the court’s application of the current s 200 in this case should be regarded as a settled position.  The doubts about retroactive application expressed by the court in the earlier Wundowie Foundry case will continue to be relevant until a situation arises in which the outcome clearly depends upon deciding which version of the patent attorney privilege applies.

Conclusion – Good News for Patent Attorneys and Clients

To my mind, the most important practical outcome of this decision is the court’s confirmation that confidential information prepared and exchanged by patent attorney and client, resulting in the filing of a patent application, is subject to the patent attorney privilege in s 200.

This is important because, while much of that information may end up being reflected in the final patent specification, and thus being published around 18 months after filing of an application, it is not unusual for a client to provide additional technical and commercial information beyond that which is required to prepare a patent application.  It is also not uncommon for the patent attorney to provide comments and advice, regarding patentability and other issues, in these early stages of the process.

It is therefore good to know that these kinds of communications, and associated records and documents, are subject to the patent attorney privilege, and that privilege is not waived merely as a result of the filing of a patent application, publication of the application, or the grant of a patent.

Given that this is the case, however, it is also important for attorneys and clients to keep in mind that privilege can only be asserted later if it is not expressly or implicitly waived as a result of some other action.

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