In a significant decision providing certainty to an issue that has divided district courts and confounded patent owners and practitioners, a split panel of the United States Court of Appeals for the Federal Circuit recognized, for the first time, that certain communications between patent applicants and non-lawyer patent agents are privileged and, therefore, immune from discovery. The case, In re Queen’s University at Kingston, concerned a patent infringement case, in which Queen’s University alleged that Samsung’s smartphones infringed its patents related to attentive user interfaces that allow devices to modify their behavior based on the attentiveness of a user, for example pausing a video when a user looks away from the screen. Throughout discovery, Queen’s University refused to produce certain documents including communications between its employees and registered non-lawyer patent agents discussing the prosecution of the patents-in-suit on the basis of its assertion of a privilege relating to communications with its patent agents. Ruling that a separate patent-agent privilege does not exist, the magistrate judge granted Samsung’s motion to compel the production of the withheld documents. The district court, however, agreed to stay production of the documents pending a petition for writ of mandamus to the Federal Circuit.

On appeal, the Federal Circuit first noted that, in determining whether a patent-agent privilege is appropriate, it must proceed with “caution” in view of the “presumption against the recognition of new privileges. The court was also mindful of the Supreme Court’s warning that evidentiary privileges “are not lightly created nor expansively construed, for they are in derogation of the search for truth.” Nevertheless, the court found that “the unique roles of patent agents, the congressional recognition of their authority to act, the Supreme Court’s characterization of their activities as the practice of law, and the current realities of patent litigation counsel in favor of recognizing an independent patent-agent privilege.” The court observed that patent agents engage in “the practice of law when representing clients before the Patent Office,” and reasoned that “the lack of a patent-agent privilege would hinder communications between patent agents and their clients, undermining the real choice Congress and the Commissioner [for Patents] have concluded clients should have between hiring patent attorneys and hiring non-attorney patent agents.” Accordingly, the court ordered the district court to withdraw its order compelling discovery of the withheld documents.

While recognizing the appropriateness of an independent patent-agent privilege, the Federal Circuit cautioned that the application of this privilege “must be carefully construed.” Specifically, the court ruled that “[c]ommunications that are not reasonably necessary and incident to the prosecution of patents before the Patent Office fall outside the scope of the patent-agent privilege.” The court provided examples of outside-the-scope communications “not reasonably necessary and incident to the preparation and prosecution of patent applications or other proceeding before the Office,” such as opinions on the sale or purchase of a patent, on the validity of another party’s patent in contemplation of litigation, or on issues relating to infringement.

Prior to the Federal Circuit’s decision creating a nationwide patent-agent privilege, the split in authority among district courts on this issue made hiring less-expensive and technology-savvy patent agents for patent-related work less appealing than engaging patent attorneys, as the risk that communications with a patent agent might be discoverable was a significant drawback. Indeed, in its opinion, the court observed that “many parties, in order to accommodate the long-standing ambiguity in the law . . . include a licensed attorney on any and all communications to ensure that at least some privilege is maintained” thereby driving up the cost of preparing and prosecuting patent applications. The decision obviates the need for this work-around. The decision also benefits law firms and in-house law departments as it allows for more flexibility and efficiency in staffing patent prosecution matters using patent agents without the privilege-maintaining supervision of a patent attorney.

The limited scope of the privilege, however, means that clients and patent agents (and their law firm employers) must remain cautious and vigilant over sensitive patent-related communications. During litigation, parties challenging a patent often seek information regarding the patent drafting and prosecution process to shore up claim construction positions and establish invalidity and inequitable conduct defenses. And, communications with patent agents (as well as with patent attorneys) potentially are relevant to these issues. Therefore, patent agents and clients must remember that communications and activities unrelated to patent prosecution or other proceeding before the Patent Office likely will be subject to discovery. Indeed, while providing much needed certainty in this area, the Federal Circuit’s decision might also lead to new litigation disputes over whether a patent agent’s communications at issue are related solely to patent prosecution and Patent Office matters and fall within the scope of the privilege.