Hercules Inc. v. Exxon Corp.

• Decision Date: 26 May 1977
• Docket Number: Civ. A. No. 3439.
• Citation: 434 F. Supp. 136
• Parties: HERCULES INCORPORATED, Plaintiff, v. EXXON CORPORATION, Defendant.
• Court: U.S. District Court — District of Delaware

434 F. Supp. 136

HERCULES INCORPORATED, Plaintiff, v. EXXON CORPORATION, Defendant.

Civ. A. No. 3439.

United States District Court, D. Delaware.

May 26, 1977.

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David F. Anderson and William S. Potter, of Potter, Anderson & Corroon, Wilmington, Del., of counsel, Caspar C. Schneider, Jr., of Davis, Hoxie, Faithful & Hapgood, New York City, for plaintiff.

Arthur G. Connolly, Jr., of Connolly, Bove & Lodge, Wilmington, Del., of counsel, Thomas F. Reddy, Jr., Berj A. Terzian, Jonathan A. Marshall, Vincent J. Vasta, Jr. and Ronald A. Bleeker, of Pennie & Edmonds, New York City, and Lee Chasan, Linden, N.J., for defendant.

CALEB M. WRIGHT, Senior District Judge.

Presently before the Court are two discovery motions filed by defendant, Exxon Corp., to compel production of plaintiff's withheld documents and to compel answers to interrogatories. The motions arise out of an action charging defendant with patent infringement. Defendant has counterclaimed for invalidity, unenforceability and non-infringement. The patent in suit, U.S. Patent No. 3,211,709 to Adamek, et al. (the "Adamek patent"), discloses a type of artificial rubber which is readily sulfur-vulcanizable according to commonly used methods. The claims cover an elastomeric copolymer consisting of at least two alpha-olefins¹ together with an unsaturated bridged-ring diene² as a third monomer. The claims are limited by the requirement that the bridged-ring hydrocarbon contain at least two double bonds, one of which must be in the bridged-ring structure. The location of the second double bond, or of any other double bond, is unspecified. Plaintiff contends that the claims are broad enough to cover the use, as the third monomer, both of bridged-ring hydrocarbons with double bonds inside a ring structure.³ and of bridged-ring hydrocarbons with one double bond inside the ring structure and a second double bond in a linear side-chain substituent. The allegedly infringing products of defendant are both of the latter variety, with one double bond exocyclic to the ring structure.⁴

The U.S. application for the Adamek patent was filed in 1958 by Dunlop Co., Ltd., a British corporation, claiming the priority of two 1957 British applications. Rights to the application were assigned to Hercules in November, 1961. During the prosecution of the application, an interference was declared between the Adamek application and a U.S. Patent No. 3,000,866 issued to Tarney which disclosed and claimed an EPT sulfur-vulcanizable rubber with DCP as the third diene. Adamek was awarded priority on the basis of the British filing dates. The patent issued on October 12, 1965.

I. Motion to Compel Production.

Since filing of the complaint in this action, both parties have engaged in substantial discovery through interrogatories, depositions and requests for production of documents.⁵ The present motion to compel production concerns 255 documents which plaintiff claims are protected by attorney-client privilege or work product immunity. Defendant alleges that any protection which might attach to the documents in question is vitiated by fraud or waiver. In support of its allegations of fraud, defendant has presented to this Court a large number of documentary exhibits. The withheld documents were produced to the Court for in camera inspection, together with a copy of the file wrapper of the Adamek application and copies of certain produced documents which defendant claims constitute a waiver of privilege.

For the most part, the disputed documents are communications between Hercules patent department attorneys and members of the Hercules operating divisions or research department or between patent department attorneys and outside counsel, Davis, Hoxie, Faithful and Hapgood.⁶ Some communications were also sent to house counsel in Hercules Legal Department. Claims of attorney-client privilege or work product are also made as to certain internal memoranda, drafts and communications of the Patent Department attorneys or of outside counsel. As the documents embrace a wide range of subject matter, they have been classified into the following categories:

I. Documents relating to the prosecution of the application for the patent in suit.

II. Documents relating to Adamek, et al. v. Tarney, Interference No. 93,018.

III. Documents relating to Hercules v. Copolymer, Civil Action No. 76-25, in the Eastern District of Louisiana.

IV. Documents relating to the present action.

V. Licenses and agreements relating to the patent in suit.

VI. Documents relating to the scope of the Adamek application.

VII. Documents relating to infringement of the Adamek patent.

VIII. Miscellaneous withheld documents.

Plaintiff has submitted a schedule listing the identification of each document and its recipients, and the grounds supporting the claims of attorney-client privilege or work product immunity.

As with any claim of privilege made in connection with patent matters, the problem of classification into protected and non-protected communications is troublesome. Jack Winter, Inc. v. Koratron Company, Inc., 54 F.R.D. 44 (N.D.Cal.1971). Patent attorneys, particularly those employed in corporate patent departments, often serve dual functions — as legal advisers and as business advisers. Communications between those attorneys and members of operating or research departments often concern technical information which may or may not be relevant to particular legal advice requested from the attorney. As to much of that information, the attorney may be acting merely as a conduit, to relay the data to the Patent Office as part of an ex parte patent application. There is a legitimate public interest in insuring that the applicant is not able to circumvent his duty of full disclosure to the Patent Office merely by channeling information into the hands of an attorney. In re Natta, 410 F.2d 187 (3rd Cir. 1969). Defendant's allegations of fraud and waiver add further complications. Documents which otherwise satisfy the criteria for attorney-client or work product protection may be discoverable if made in furtherance of a fraud on the Patent Office or if the protection has been waived. The Court has, therefore, examined the documents individually at two levels: to determine first whether the document falls within the scope of the claimed protection; and, second, whether that protection has been vitiated by fraud or waived.

Although defendant attempts to resuscitate the question of the applicability of attorney-client and work product protection to patent matters, that dispute appears now to be well settled. Almost every court which has considered the problem in recent years, including the Third Circuit, has found that communications with respect to patent prosecution or litigation matters may be protected, regardless of whether the attorney is outside counsel, "house" counsel or patent department counsel.

"The court is not impressed with defendant's argument to the effect that those privileges attorney-client privilege and work product immunity, if existing at all, are deprived of real significance where patents are the subject of the communication. The argument is based in the main upon Judge Fechy's (sic) order in Zenith Radio Corp. v. Radio Corp. of America, 121 F.Supp. 792 (D.Del.1954) and Georgia-Pacific Plywood Co. v. United States Plywood Corp., 18 F.R.D. 463 (S.D.N.Y.1956). The rationale of those cases seems to be that the information which patent attorneys utilize in preparing their opinions or advising their clients is in the public domain, not confidential, so no privilege can attach. A second basis for these decisions is that in evaluating the merits of the patent, the attorney acts, not as an attorney, but as a technician.

More recent cases convince this court that those cases have lost much of their vitality. Work product and attorney-client privileges exist in the field of patent law and must be respected by the court in regulating discovery."

Collins and Aikman Corp. v. J. P. Stevens & Co., 51 F.R.D. 219, 220 (D.S.C.1971).

"We hold that in a particular situation both attorney-client and work product immunity may be available to the solicitation of a party's own patent. We reject the absolute rule urged by appellant. We deem it wise that flexibility be maintained and that sound judicial discretion be exercised on a case by case basis."

In re Natta, 410 F.2d 187 (3rd Cir. 1969).

See, also, Natta v. Hogan, 392 F.2d 686 (10th Cir. 1968); Jack Winter, Inc. v. Koratron Co., Inc., supra; Collins & Aikman Corp. v. J. P. Stevens & Co., 51 F.R.D. 219 (D.S.C.1971); In re Natta, 163 U.S.P.Q. 680 (D.Del.1969); Sperti Products, Inc. v. Coca-Cola Co., 262 F.Supp. 148 (D.Del.1966); Comment, "The Patent Practitioner Attains Majority: An Examination of the Attorney-Client Privilege and Work Product Rule as They Pertain to the Patent Attorney and Agent", 4 Seton Hall Law Review 531 (1973); but see, Underwater Storage, Inc. v. United States Rubber Co., 314 F.Supp. 546 (D.D.C.1970).

Not all communications relevant to patent matters between attorney and client or between attorneys are protected under attorney-client privilege or work product immunity. The scope of protection can be determined only on a case-by-case basis, bearing in mind the purposes of the protection and the need for "flexibility and sound judicial discretion". The desire to protect the confidentiality of the attorney-client relationship and to preserve the integrity of the adversarial process must be balanced against the public interest in full and frank disclosure to the Patent Office and the liberal spirit of the discovery rules. See, "Developments in the Law — Discovery", 74 Harvard Law Review 940 (1961). Defendant's request for disclosure and plaintiff's claim of privilege as to each document can only be assessed in light of those competing considerations....