Justice Nicholas in the Federal Court has handed down the latest judgment, Commonwealth of Australia v Sanofi (No 2)  FCA 711, in the long-running dispute between the Commonwealth, Sanofi, and Apotex regarding Sanofi's invalid clopidogrel patent (see our previous posts here, here and here for more background on this damages dispute). In the context of the Commonwealth's claim to recover on Sanofi's undertaking as to damages, this decision concerned Sanofi's efforts to prevent the Commonwealth gaining access to certain documents produced by Sanofi pursuant to a notice to produce served by the Commonwealth on the basis of a claim for legal professional privilege.
Contextually, one of the grounds on which Sanofi is resisting the Commonwealth's claim on the undertaking is that Apotex would not have obtained PBS listing, as its drugs would have infringed the copyright in Sanofi's Product Information and Consumer Medical Information documents. This application proceeded only in relation to select document or parts of those documents, namely various emails and 2 PowerPoint presentations produced by Sanofi, which Sanofi produced in answer to the Commonwealth's notice to produce.
The Relevant Sanofi Documents
Sanofi produced two affidavits of Ms Rebecca Allsopp, the chief legal officer of Sanofi, in response to the Commonwealth's notice to produce. In these affidavits, Ms Allsopp disclosed several documents, including 2 PowerPoint presentations prepared by employees of Sanofi (including Ms Allsopp) for meetings with Medicines Australia, and a series of emails between Ms Allsopp and various other employees of Sanofi in preparation for the 21 April 2010 meetings.
Sanofi initially claimed legal professional privilege over the entire contents of these documents.
The Commonwealth sought access to the full unredacted version of the documents identified in Ms Allsopp's affidavits and brought this application when Sanofi maintained its position. At the hearing, Sanofi confined its claim to privilege to those documents as noted.
Sanofi claimed that all of these documents were prepared for the dominant purpose of providing legal advice on the question whether pharmaceutical originator companies (such as Sanofi) could rely on copyright in Product Information and Consumer Medical Information documents to prevent a generic pharmaceutical supplier using those documents in support of an application for PBS listing. The Commonwealth denied that the relevant documents were protected by privilege and also claimed that if any privilege existed, it had been waived by Sanofi.
The April 2010 Meetings
Notes of the meetings on 21 April 2010 between representatives of Sanofi and various representatives of the Commonwealth were recorded in a file note prepared by another Sanofi employee and annexed separately to Ms Allsopp's first affidavit. The meetings concerned the possibility of pharmaceutical originator companies (such as Sanofi) asserting copyright in their Product Information and Consumer Medical Information documents in order to prevent or delay generic pharmaceutical suppliers from entering the market with competing products. (In Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd  FCA 601, Apotex consented to an interlocutory injunction restraining it from engaging in acts alleged to constitute an infringement of copyright in Sanofi's Product Information and Consumer Medical Information documents).
The file note indicated that Sanofi felt it had persuaded the Commonwealth that this was not a realistic concern, referring to Sanofi's legal advice that "copyright could not be used to block generics", as generic manufacturers could simply amend any allegedly infringing Product Information or Consumer Medical Information document to avoid a copyright issue, a process which would only take a matter of weeks.
The Principles of Legal Professional Privilege and Waiver
The applicable principles of Legal Professional Privilege (LPP) were not in question in this case.
These were conveniently summarised by the Court as follows:
- LPP protects the confidentiality of certain communications made for the dominant purpose of obtaining or providing legal advice from a qualified lawyer. If a communication is made for two purposes of equal or roughly the same weight it will not have been made for the dominant purpose of providing legal advice.
- The question whether the dominant purpose requirement is satisfied in any particular case is a question of fact.
- The party asserting LPP has the onus of establishing the facts necessary to support a finding that the relevant communication was made for the dominant purpose of obtaining or providing legal advice.
- "Legal advice" is construed somewhat liberally. Legal advice is not confined to telling the client the law but includes professional legal advice as to what should prudently and sensibly be done in the relevant legal context. It does not however extent to "pure commercial advice".
- An implied (or imputed) waiver of LPP may be found to have arisen where there has been a disclosure of information protected by the LPP by the party in whose favour the privilege exists in a manner that is inconsistent with the maintenance of that protection. It is the inconsistency in both disclosing confidential legal advice and maintaining a claim for LPP in such advice, informed by considerations of fairness, that may result in an implied waiver.
- A disclosure of the gist or substance of legal advice may give rise to an implied waiver of the whole of it. Whether a limited disclosure of the existence and effect of legal advice in a given context is inconsistent with maintaining the privilege will depend upon the circumstances of the case and matters of fact and degree.
Justice Nicholas' Rulings on the Documents
In relation to the 2 PowerPoint presentations, Justice Nicholas found that certain sections were protected by legal professional privilege, as Ms Allsopp had "most likely" prepared these sections for the dominant purpose of providing legal advice to employees of Sanofi regarding copyright in Product Information and Consumer Medical Information documents. However, with limited exception, Sanofi had waived the privilege in the course of the 21 April 2010 meetings, particularly the statement that Sanofi's legal advice was that "copyright could not be used to block generics".
In relation to the emails, Justice Nicholas found that the emails where Ms Allsopp had merely corrected grammatical errors in draft documents prepared by another Sanofi employee were not protected by privilege. However, other emails included substantive comments regarding copyright in Product Information and Consumer medical Information documents inserted by Ms Allsopp, and Justice Nicholas found that these comments (but not the emails as a whole) were protected by legal professional privilege. However, his Honour found that privilege in those comments had been waived.
His Honour found that parts of other emails in question were not prepared for the dominant purpose of providing legal advice and so no privilege attached to these parts.
His Honour also noted that one of the grounds on which Sanofi is resisting the Commonwealth's claim on its undertaking is that Apotex would not have obtained PBS listing as its drugs would have infringed the copyright in Sanofi's Product Information documents. This is clearly inconsistent with Sanofi's legal advice disclosed in the emails and during the meetings with the Commonwealth. Justice Nicholas therefore found that it would be "unfair" to permit Sanofi to rely on privilege with regard to the emails. This concept of fairness seems to go beyond the notion of inconsistency which generally underpins waiver of privilege.
Justice Nicholas found that, while some of the documents in question were protected by legal professional privilege, Sanofi had in most instances impliedly waived privilege. The Commonwealth was therefore granted access to the majority of the documents, allowing Sanofi to redact only that material which the Court upheld as privileged and where privilege had not been waived. Sanofi was ordered to pay the Commonwealth's costs of the application given that it was "largely successful".
Lessons Concerning Legal Professional Privilege and Client Legal Privilege
- This case illustrates the impact and potential dangers of waiving legal professional privilege.
- Waiver of privilege can also arise by conduct of the lawyer on behalf of their client. For example, letters of demand or replies to letters of demand prepared by a client's lawyer.
- Parties who have obtained legal advice, whether in general or in the specific context of an existing, pending or anticipated Australian or overseas proceeding, must choose their words carefully when referring to that advice (e.g., in the context of commercial negotiations when sending or responding to letters of demand). How that advice is referred to can result in the loss of protection afforded by client legal privilege or legal professional privilege. The impact of any waiver is particularly significant where the party is compelled to disclose an advice contrary to their interest.
- In the context of legal advice protected by privilege, waiver can often be avoided simply by using words like "In our opinion" rather than "We have been advised by our lawyer that" or "We have advised our client that" – see for example Australian Wheat Board Ltd (AWB) v Cole (No. 5)  FCA 1234.