If privileged information is disclosed to a third party who shares a “common legal interest” with the client and that person agrees to keep the information confidential, the privilege might not be waived.
Agreements to share privileged information with persons who share a “common legal interest” are generally upheld by courts. Such agreements are common in intellectual property and corporate law where they are often referred to as common interest agreements or joint defense agreements.
Nonetheless, despite the general acceptance of the so-called joint defense privilege or the common interest doctrine, the specific legal requirements for these agreements are far from clear.
For example, courts often require that the parties have “identical” not merely “common,” legal interests. Courts often find that the information was shared for “business” purposes and not “legal” purposes, and do not uphold the privilege.
Indeed, the law in this area has been described as a “quagmire,” “the Mother of all legal minefields” and “murkier than the boundaries of the Milky Way.”

New clarity under Massachusetts law

Recently, the Massachusetts Supreme Judicial Court in Hanover Ins. Co. v. Rapo & Jensen (449 Mass. 609) addressed the topic.
The court “formally recognize[d] the longstanding use and validity of joint defense agreements” and enunciated the law in Massachusetts by stating that “we adopt the principle of Restatement (Third) of the Law Governing Lawyers § 76(1) as the law of the Commonwealth.”
The Restatement states: “If two or more clients with a common interest in a litigated or nonlitigated matter are represented by separate lawyers and they agree to exchange information concerning the matter, a communication of any such client that otherwise qualifies as privileged under §§ 68-72 that relates to the matter is privileged as against third persons. Any such client may invoke the privilege, unless it has been waived by the client who made the communication.”
The court’s acceptance of the Restatement view means that common interest agreements may be valid regardless of whether a matter is litigated. Corporations, the court said, should be encouraged to seek legal advice in planning their affairs to avoid litigation.
In addition, the court loosened the standard of what constitutes a common legal interest by not requiring “identical” legal interests and rejected the requirement that such agreements be in writing.
Despite the clarity of this opinion, it may have only limited applicability to patent matters because most patent privilege questions are governed by Federal Circuit or regional federal circuit standards, not state law.

What law applies?

Procedural issues in patent cases, such as the law of attorney-client privilege, are governed by Federal Circuit law if an issue “bears an essential relationship” to patent law. This standard is almost impossible to apply. The rule seems to say that if the Federal Circuit thinks it’s important to apply its own law to an issue, then it will do so.
In recent years, the Federal Circuit has shown an increasing tendency to find questions of privilege in the patent context to be sufficiently important to warrant the application of Federal Circuit law, as opposed to regional circuit or state law.
For example, the court recently upheld the privilege for an invention disclosure record prepared by a non-attorney for the corporation’s “patent committee.” The court noted that its “own law” applied to the issue.
One court, observing the trend in the Federal Circuit, commented that “[i]t now appears the scope of the attorney-client privilege in patent cases is governed by Federal Circuit standards and not the standards ordinarily applied by the regional circuit.”
In 1996, prior to this recent trend of “Federal Circuit-izing” the law of privilege for patent matters, the Federal Circuit ruled that common interest agreements were governed by regional circuit law, not by the law of the Federal Circuit.
However, the court reached this conclusion in a brief footnote and did not extensively discuss the point. Based on the recent trend, this conclusion now appears suspect.
The Federal Circuit and Massachusetts courts accept the common interest doctrine, but the scope and contours of the law as applied to patent matters remains cloudy. Perhaps the Massachusetts Supreme Judicial Court’s decision might serve as a model for a future Federal Circuit decision on the common interest doctrine for patent matters.
Brian T. Moriarty is a principal with Hamilton, Brook, Smith & Reynolds, P.C. in Concord, Mass. (www.hbsr.com). Brian is an intellectual property litigator with expertise in the areas of biotechnology and pharmaceuticals. He is one of a few registered patent attorneys in the U.S. who also has served as an assistant U.S. Attorney. Brian can be reached at [email protected] or 978.341.0036.