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Carl Zeiss Vision International GmbH v. Signet Armorlite Inc.

December 1, 2009

CARL ZEISS VISION INTERNATIONAL GMBH; CARL ZEISS VISION INC, PLAINTIFFS,
v.
SIGNET ARMORLITE INC., DEFENDANT.



The opinion of the court was delivered by: Louisa S Porter United States Magistrate Judge

ORDER GRANTING IN PART AND DENYING IN PART JOINT DISCOVERY MOTION [Doc. 403]

On October 2, 2009, the parties submitted a Joint Discovery Conference Statement ("JDCS") and separate Memoranda of Points and Authorities addressing whether Carl Zeiss Vision ("Zeiss") must produce the following categories of documents:

(1) patent clearance opinions regarding the patents in suit;

(2) monthly memoranda from Plaintiffs' patent review committee meetings;

(3) documents on privilege log that do not identify the involvement of an attorney; and

(4) documents on privilege log that list third-party recipients.

Pursuant to Court order [Doc. 402], the JDCS has been filed under seal and construed as a Discovery Motion [Doc. 403]. Upon thorough review of the parties' papers, the Court addresses below whether each category of documents is discoverable.*fn1

DISCUSSION

I. Patent Clearance Opinions

Signet Armorlite ("Signet") seeks production of the clearance opinions that attorney Samuel C. Miller provided to Sola International, Inc., between 2000 and 2004, relating to the '713 patent in suit and the '470 Seiko patent. Furthermore, Signet wants all documents related to the same subject matter.

A. Relevance

Signet argues that the documents are relevant, stating that attorney Miller's clearance opinions on the patents' validity likely contradict claims asserted by Zeiss and prove defenses and counterclaims set forth by Signet. Aside from characterizing Signet's argument as "pure speculation," Zeiss does not brief the issue of relevance.

Federal Rule of Civil Procedure 26(b)(1) provides that "[p]arties may obtain discovery regarding any non-privileged matter that is relevant to any party's claim or defense...." Relevant evidence is defined as that which is "reasonably calculated to lead to the discovery of admissible evidence." Fed.R.Civ.P. 26(b)(1). Furthermore, in patent cases, the scope of discovery "should be liberally construed" under Federal Rule of Civil Procedure 26(b)(1). See Bd. of Trs. of Leland Stanford Jr. Univ. v. Roche Molecular Sys.. Inc., 237 F.R.D. 618, 621 (N.D.Cal.2006) (compelling production of documents under Rule 26 in patent infringement action).

The clearance opinions are relevant. According to Signet, "Zeiss cannot plead that Signet Armorlite behaved in an objectively unreasonable manner if Zeiss' trial counsel gave Sola a green light to proceed in view of the '713 patent... or if the opinion states that the technology Signet licensed from Seiko under the '470 patent is also within the prior art." (Sig. Br. at 5.) Rule 26 does not require certainty that the document request will yield admissible evidence, but rather, the request need only be "reasonably calculated" to produce admissible evidence. Although Signet has not seen the contents of the clearance opinions, it is reasonable to believe that the opinions contain an evaluation of the patents' validity. Thus, at a minimum, an evaluation of the patents' validity would be probative of whether "the [alleged] infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent." In re Seagate Technology, LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007)(stating what plaintiff must show in order to establish a willful infringement claim)(emphasis added). Accordingly, the clearance opinions are relevant within the meaning of Rule 26(b)(1).

B. Privilege

Next, the Court must address whether the attorney-client privilege protects the clearance opinions from disclosure. As a threshold matter, the Court must "apply Federal Circuit law in determining whether the attorney-client privilege applies," because the clearance opinions implicate a "substantive patent issue." In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 803-04 (Fed. Cir. 2000); see also In re EchoStar Commc'ns Corp., 448 F.3d 1294, 1298 (Fed. Cir. 2006). Under Federal Circuit precedent, the "attorney-client privilege protects the confidentiality of communications between attorney and client made for the purpose of obtaining legal advice." Genentech, Inc. v. U.S. Intern. Trade Comm'n, 122 F.3d 1409, 1415 (Fed. Cir. 1997). The deposition testimony of Karen Roberts, Zeiss's Rule 30(b)(6) witness, demonstrates that: (1) around 2002, Sola became aware of the patents at issue; (2) Sola then contacted its attorneys for legal advice on the patents; and (3) Sola received the legal advice from its attorneys, including the clearance opinions authored by Samuel Miller, Esq. (JDCS at 3.) These facts, not contradicted by Signet, indicate that Sola's clearance opinions derived from an attorney-client relationship and involved confidential communications "made for the purpose of obtaining legal advice." Genentech, 122 F.3d at 1415. Thus, Sola has a right to assert the attorney-client privilege over the clearance opinions.*fn2 Furthermore, the subsequent merger between Sola and Zeiss transferred this attorney-client privilege to the surviving corporation, Zeiss. City of Rialto v. U.S. Dept. of Defense, 492 F. Supp. 2d 1193, 1201 (C.D.Cal. 2007); O'Leary v. Purcell Co., Inc., 108 F.R.D. 641, 644 (M.D.N.C. 1985). As a result, the central issue becomes whether Zeiss has waived this privilege.

C. Waiver

The issue is whether Zeiss waived the attorney-client privilege by failing to identify the clearance opinions in its privilege logs.*fn3 Under Federal Rule of Civil Procedure 26(b)(5):

When a party withholds information otherwise discoverable by claiming that the information is privileged or subject to protection as trial-preparation material, the party must: (i) expressly make the claim; and (ii) describe the nature of the documents, communications, or tangible things not produced or disclosed-and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim.

More specifically, in the present case, the Court ordered Zeiss to produce a privilege log, which "shall describe the nature of the withheld documents, without disclosing their contents, with sufficient particularity that Defendant can challenge, and the Court can assess, the claim of privilege if there be such a need." (Order, Nov. 14, 2007 [Doc. 40])(emphasis added).

Zeiss's identification of the clearance opinions in its privilege log is vague. Zeiss's Fourth Supplemental Privilege Log, served May 15, 2009, contains multiple listings that identify Samuel Miller as "Author" and describe the Subject Matter as "Document [or Email] including confidential client information reflecting legal advice of counsel re: Group I [or II] patents." (JDCS, Ex. C.) However, "Group I" represents numerous patents in addition to the '713 and '470 patents at issue in this case. Furthermore, the privilege logs fail to identify Samuel Miller as Sola's outside I.P. counsel. These vague listings prevent an effective identification of the clearance opinions. For example, even though Zeiss's Rule 30(b)(6) witness testified from memory to the author, recipient, and timing of the clearance opinions, the witness was unable to locate an entry for the clearance opinions anywhere in Zeiss's privilege logs. Thus, the privilege logs fail to identify the clearance opinions with "sufficient particularity."

Even if the identification of the clearance opinions in the privilege logs was sufficiently particular, the identification was untimely. On July 23, 2008, the Court ordered that "[t]he parties shall produce privilege logs relating to all documents which have been withheld from discovery in this case on or before August 1, 2008." [Doc. 107.] The Fourth Supplemental Privilege Log was the first privilege log to associate attorney Miller with correspondence during the time period of the clearance opinions, but Zeiss did not serve this privilege log to Signet until May 15, 2009. Moreover, Zeiss makes no claim that it was unaware of the clearance opinions prior to that date. Thus, Zeiss did not assert privilege over Miller's clearance opinions until more than 9 months after the deadline ordered by the Court.

Despite the deficiencies in the content and timing of Zeiss's privilege logs, however, Zeiss has not automatically waived the attorney-client privilege. Burlington N. & Santa Fe Ry. Co. v. U.S. Dist. Court for Dist. of Mont., 408 F.3d 1142, 1147 (9th Cir. 2005)("reject[ing] the per se waiver rule" for privileges, as applied to deficient privilege logs). Instead, the Ninth Circuit has instructed the ...


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