Legal professional privilege (also called ‘client legal privilege’ in Australia, to reflect the fact that the privilege is actually held by the client) is a rule of law 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. The rationale for protecting such communications has been explained in various ways, including to encourage full disclosure of information by a client to a lawyer, and to enable the lawyer to give full and considered advice without fear of subsequent adverse consequences to the client. The privilege that exists between a client and a lawyer is established under the common law, by the Commonwealth Evidence Act 1995, and by similar provisions of state legislation in some states.In Australia, patent attorneys are generally not also lawyers, however section 200 of the Patents Act 1990 provides that communications, records or documents made for the dominant purpose of a registered patent attorney providing intellectual property advice enjoys the same privilege as if it were made by a legal practitioner providing legal advice. These provisions were strengthened as of 15 April 2013, on commencement of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012, which also extended the privilege to individuals authorised to do patents work under the laws of other countries or regions, i.e. to foreign patent attorneys and patent agents. Prior to this change, advice provided by foreign practitioners was not protected by patent attorney privilege (Eli Lilly & Company v Pfizer Ireland Pharmaceuticals (No 2) [2004] FCA 850: ‘The language of s 200(2) is clear. The privilege is confined to communications with patent attorneys registered as such in Australia.’)
In a recent decision, a judge of the Federal Court of Australia has upheld the claims of a patentee, Neurim Pharmaceuticals (1991) Ltd, for legal professional privilege and patent attorney privilege in relation to documents prepared by Israeli, US, and UK/European patent attorneys in respect of US and European patent applications corresponding to an Australian patent that is now the subject of litigation: Neurim Pharmaceuticals (1991) Ltd v Generic Partners Pty Ltd [2018] FCA 1082.
Interestingly, a number of the documents were originally produced and communicated in 2008 and 2011, i.e. prior to the commencement of the Raising the Bar reforms that extended privilege to the work of foreign practitioners. It seems that it was common ground between the parties that the amendments to section 200 have retrospective effect, in the sense that they apply to communications, records, and documents made prior to their commencement. A similar concession was made in a earlier case relating to privilege in communications that took place in 2004, but were assumed to be subject to the post-Raising the Bar provisions, although in that case it was less clear that the changes in the law would have materially altered the outcome.
Accordingly, the court was not asked to consider whether patent attorney privilege actually applied to the foreign-practitioner documents. Rather, the dispute between the parties was as to whether the privilege had been waived by the patentee as result of its decision to make amendments to its Australian patent, upon commencing litigation in 2017, that were similar to earlier amendments made to its corresponding US and European patent applications. The court found that, in the circumstances, privilege was not waived, and Neurim was therefore not required to produce the documents.
Amendments as a Preliminary Litigation Step
It is not unusual in Australia for a patent-owner to consider amending its patent prior to, or upon commencement of, litigation. This can be beneficial not only to the patentee, but also to the respondent, and to the overall efficiency of the court proceedings. Amendments to a granted patent must generally be narrowing in scope, and thus the effect is usually to limit the range of issues in dispute. For example, narrower claims can be more-precisely targeted to the alleged infringing acts, potentially leaving less area for dispute over the meaning of claim language and/or whether the claims actually cover the accused infringement.However, from the patentee’s perspective the main advantage of amendment is usually to make the claims less vulnerable to invalidation.
There are two main options for amending a patent in these circumstances. Firstly, prior to commencing litigation, it is possible to request amendment through the Patent Office. If the amendment is allowable, i.e. does not broaden the scope of the patent, or introduce new subject matter, then the Commissioner of Patents has no discretion, and must allow the amendment. On the other hand, prompt processing of an amendment request can be frustrated by a third party – such as a potential litigation target – filing an opposition to the amendment, which is quite likely only to complicate and delay the inevitable court proceedings.
It is therefore common for litigants to take the second option, which is to commence litigation, and then request that the court order an amendment in an initial stage of the proceedings. The potential drawback of this approach, however, is that the court has a discretion as to whether or not to permit an otherwise allowable amendment. In exercising this discretion, the focus of the court is on the conduct of the patentee, including such matters as whether it knew earlier on that there was a need to amend, and had delayed unduly in taking action to do so.
This explains why the respondent in the Neurim case is so interested in the professional correspondence relating to the prior amendments in the US and Europe – it is hoping that there may be something there that reveals that the Australian patent was also potentially in need of amendment, perhaps as early as 2008. Evidence of this type would assist it in persuading the court to exercise its discretion to refuse Neurim’s request to amend, thereby (perhaps) leaving the patent more vulnerable to attack and potential invalidation.
Did Neurim Waive Privilege in Foreign Attorney Communications?
The respondents argued that Neurim waived privilege in the foreign-practitioner documents through its conduct in seeking to amend its Australian patent. In particular, they contended that Neurim’s purpose was formulated when similar amendments were made overseas, informed by the advice that it received in in relation to the US and European applications. It is therefore inconsistent, the respondents submitted, for Neurim to rely on the fact that the amendments being proposed in Australia reflect those made in the foreign applications, but to withhold the advice that informed those amendments.However, the court was not persuaded that the documents at issue constituted communications that were likely to have affected Neurim’s ‘state of mind’ in a manner that would give rise to a waiver of privilege. In reaching this conclusion, the judge was influenced by ‘the well-known fact that at all relevant times the patent laws, both substantive and procedural, of the Europe Union and the United States were materially different from those of Australia particularly in situations where relevant amendments made to the Act by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) do not apply’ (at [47]). There is, it will be appreciated, some irony in this, considering that it was those same reforms that also extended patent attorney privilege to include foreign practitioners.
Conclusion – Are Changes to Privilege Really Retrospective?
I have to say that I am a little surprised that the respondents in the Neurim case were apparently willing to concede that the amendments to section 200, extending privilege to foreign practitioners, have retrospective effect in relation to communications, records, and documents made prior to commencement of the Raising the Bar reforms. There is no question that prior to 15 April 2013 such communications were not privileged, and would therefore have been required to be produced. I am unaware of any authority clearly supporting such retrospective effect.On the contrary, there is at least one case (Wundowie Foundry Pty Ltd and Clarewood Pty Ltd v Milson Foundry Ltd and David Wallace [1993] FCA 422, at [9]) in which a judge of the Federal Court of Australia (albeit in obiter dicta) expressed doubt that a change in the law relating to patent attorney privilege (in that case, between the 1952 and 1990 Acts) should apply to documents that came into existence before commencement.
I therefore do not think that it can be considered settled law that the most recent extensions to the scope of patent attorney privilege automatically apply to documents, records, and communications made prior to 15 April 2013, and we may yet see a case in which this presumption is challenged.
On the other hand, it should give some comfort to Australian patent attorneys (and their clients) that privilege in foreign-practitioner communications is not waived merely because they may contain advice in relation to applications overseas that may inform decisions subsequently taken in relation to an Australian patent or application.
What may perhaps be more important, however, is any advice that Neurim received – or did not receive – from its Australian patent attorneys. In at least one earlier case, the court was influenced in exercising its discretion to refuse an amendment by an absence of evidence that the patentee had sought professional advice on the most appropriate course of action to take in Australia, in light of developments in a corresponding European patent application (CSL Limited v Novo Nordisk Pharmaceuticals Pty Ltd (No 2) [2010] FCA 1251, at [87]). This may yet arise as an issue when the court comes to consider whether or not to allow Neurim’s amendment request.
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