On February 23, 2018 the Supreme Court of Texas concluded 1 that the definition of a “lawyer” – for purposes of the lawyer-client privilege under the Texas Rules of Evidence 2 – is sufficiently broad to encompass some communications between a patent agent and their client. The impact of this decision may reach beyond the Lone Star State, particularly since Texas’s Rule 503 is modeled after a version of proposed Federal Rule of Evidence 503.3 While most other states’ courts have not addressed whether such communications are privileged, many states 4 have adopted rules similar to Texas’s Rule 503 and thus may also reach a similar conclusion. Because many patent agents do not work under the supervision of an attorney, this development may significantly impact the privilege protection available when using such agents for patent prosecution.5
This decision was a reversal of both of the lower courts’ rulings 6 that Texas did not recognize a common law patent agent privilege other than where a patent agent acts under the supervision of an attorney. Unlike the lower courts, the Supreme Court of Texas framed the issue not as the creation of a new patent agent privilege, but instead as the determination that the existing lawyer-client privilege extends to patent agents.7 Because the Supreme Court of Texas agreed that patent agents “are independently providing professional legal services to a client” rather than “just working in the legal field,” they must be recognized as “authorized” to “practice law” within the definition of a “lawyer” as set out in the Rules of Evidence.8 The Court suggested that to hold otherwise could be found to be an unconstitutional violation of the Supremacy Clause.9 Ultimately, the highest court of Texas returned the case to the trial court with directions to conduct an in camera review of the underlying communications.10
In re Silver arose from a contract dispute related to two patents directed to a tablet device marketed as the “Ziosk.” This stand-alone device allows restaurant-goers to order meals, play games, and pay their checks at their table without interacting with a server. The inventor, Andrew Silver, sold the rights to the invention under a patent purchase agreement (“PPA”) to Tabletop Media, LLC for the purpose of commercializing the Ziosk. The PPA contained a provision for the payment of royalties within a period of time after the patents had been granted. Tabletop successfully commercialized the Ziosk – placing the units in many popular restaurants including Chili’s, TGI Fridays, Red Robin, and Outback Steakhouse; however, they allegedly failed to make the first royalty payment under the PPA.
Silver had worked with a U.S. patent agent since March of 2010, and together they had successfully obtained more than 30 patents from the United States Patent and Trademark Office (“USPTO”). As related to the Ziosk, Silver consulted with his patent agent while prosecuting the patents, and after realizing litigation with Tabletop was imminent, further sought his patent agent’s legal opinion regarding the strengths of his case. Notably, Silver’s patent agent did not work under the supervision of a licensed attorney. For this reason, the trial court concluded that the three hundred e-mails between Silver and his patent agent were not protected from discovery by the lawyer-client privilege and ordered their production. Silver then filed a petition for mandamus relief.
The decision by the Texas Supreme Court to find a limited lawyer-client privilege extending to non-attorney practitioners continues a recent trend from other jurisdictions that have found a privilege to exist between clients and patent agents.11 In the past, lower courts have not been consistent when deciding the issue: some outright rejecting the privilege,12 some finding privilege only when the agent is working under the supervision of an attorney,13 and still others simply recognizing the privilege.14 The USPTO conducted a round table event in early 2015 where a number of organizations strongly favored a clear recognition of a privilege for communications with a patent agent.15 In 2016 the Federal Circuit held in In re Queen’s University at Kingston that confidential communications with patent agents are afforded a privilege commensurate with the scope of a patent agent’s ability to practice before the USPTO.16 The Federal Circuit attempted to distinguish the scope of this privilege as applicable only to communications related to those activities of patent agents authorized by Congress.17 To this end, the Federal Circuit considered the regulations promulgated by the USPTO for guidance.18 Specifically, the Federal Circuit found that privileged communications should include those that are “in furtherance of the performance of these tasks . . . ‘which are reasonably necessary and incident to the preparation and prosecution of patent applications or other proceedings before’” the USPTO.19
But what exactly does this now-recognized privilege include? There is still quite a bit of uncertainty left in the wake of these decisions. The Supreme Court of Texas did not provide a clear determination of what falls within the purview of patent agents’ authorized activities, electing to avoid any bright line rule.20 The Federal Circuit in Queen’s attempted to center the scope of the patent agent privilege around the nonexclusive list of USPTO matters in which a patent agent may participate.21 The Federal Circuit made an effort to further elucidate the privilege by listing a couple of examples that may fall outside the scope.22 In his dissent in In re Silver, Justice Evans of the Court of Appeals of Texas favored an approach similar to that of the Federal Circuit, offering his opinion that the privilege should be found where a patent agent is “authorized to practice law to the extent of applications and prosecutions of patents.”23 Under this analysis, Justice Evans would apply the lawyer-client privilege to the category of documents falling under “patent prosecution documents” but deny the privilege as to “litigation consultation documents.”24
These approaches may be helpful with facts that fit neatly within prosecution or litigation but appear less precise as the permissible activities of a patent agent border on or overlap with those of litigation. For instance, the regulations of the USPTO that the Federal Circuit employed when delineating the scope of a patent agent’s scope of privilege include advising a client on “alternative forms of protection which may be available under state law.”25 Likewise, even a patent agent’s authority to prepare assignments and other contracts related to patents may not be totally outside the scope of a patent agent’s authority as viewed by the USPTO.26 In the context of reexamination or inter partes review – activities where a patent agent may certainly participate and represent a client – a patent agent is authorized to issue a validity opinion to a client.27 Curiously, advising a client on the scope of privilege afforded to communications with a patent agent may be one of the few activities impermissible for patent agents according to these guidelines.28
The Supreme Court of Texas’s opinion in In re Silver merely posits that “matters outside the agent’s authorized practice area might not be protected” and does little to clear up any of these outstanding questions.29 The mechanics of this privilege will likely be left to the lower courts to craft, and a bright line rule may be difficult to construct. If such a patent agent privilege is to exist, patent agents – and more importantly their clients – need certainty in the understanding of this privilege. Certainty will ensure that sensitive communications are made with the full knowledge of potential discovery repercussions. For now, those who consult patent agents without attorney supervision should do so cautiously in the presence of this uncertainty.