In re Natta

• Decision Date: 18 April 1969
• Docket Number: No. 17524.,17524.
• Citation: 410 F.2d 187
• Parties: In re NATTA et al., Movant, In the United States Patent Office Before the Examiner of Interferences, Interference No. 89634. HOGAN et al. v. ZLETZ v. BAXTER et al. v. NATTA et al. Natta et al., Movant, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

410 F.2d 187 (1969)

In re NATTA et al., Movant, In the United States Patent Office Before the Examiner of Interferences, Interference No. 89634.

HOGAN et al. v. ZLETZ v. BAXTER et al. v. NATTA et al.

Natta et al., Movant, Appellant.

No. 17524.

United States Court of Appeals Third Circuit.

Argued January 20, 1969.

Decided April 18, 1969.

Edward S. Irons, Irons, Birch, Swindler & McKie, Washington, D. C. (Edmund D. Lyons, Morris, James, Hitchens & Williams, Wilmington, Del., Mary Helen Sears, Washington, D. C., on the brief), for appellant.

James M. Tunnell, Jr., Morris, Nichols, Arsht & Tunnell, Wilmington, Del. (David A. Drexler, Lewis S. Black, Jr., Wilmington, Del., on the brief), for appellee; Louis F. Reed, Fish, Richardson & Neave, New York City, Roger A. Hines, Wilmington, Del., of counsel.

Before HASTIE, Chief Judge, and McLAUGHLIN and STAHL, Circuit Judges.

OPINION OF THE COURT

McLAUGHLIN, Circuit Judge.

This is a proceeding under 35 U.S.C. § 24 (1952) ancillary to Interference 89634 pending before the Board of Patent Interferences of the United States Patent Office.¹ Appellants, Natta, et al., and their assignee, Montecatini Edison S.p.a. (hereinafter Montecatini) appeal from that part of the final order of the District Court (August 23, 1968) which denies appellants the right to inspect certain documents of appellee, duPont.² That order which amended an earlier District Court order (July 3, 1968) stated, in relevant part, "* * * that documents numbered 1, 3, 6 and 8, may be withheld as attorney work product * * *." Montecatini seeks reversal of that finding and production of the said documents.

A brief review of the background of this protracted litigation will be helpful for a clear understanding of the issues before us. Montecatini, senior party in the Interference proceeding, endeavored to obtain discovery of certain of duPont's documents pursuant to Rule 34 of the Federal Rules of Civil Procedure. This Court, in an earlier appeal (In Re Natta, 388 F.2d 215) held that the discovery standards of the Federal Rules of Civil Procedure were applicable in Patent Office Interference proceedings.³

The order of the District Court, implementing an earlier opinion of the Court provided inter alia:

"That as to any claim of privilege or trade secret, all such documents shall be made the subject of an appropriate Motion to be filed with the Court * * *."

DuPont thereafter filed a "List of Documents With Respect to Which the Party Baxter, et. al. Asserts a Claim of Privilege." Eleven documents were listed designated by numerals 1 to 11 inclusive accompanied by a brief statement of the nature of the privilege asserted as to each. The controversy was subsequently reduced to the six documents numbered 1, 3, 6, 8, 9 and 10. On July 3, 1968, after inspection of the documents⁴ the District Court entered an order which read, in relevant part, as follows:

"* * * the six documents submitted will be protected from discovery as privileged and so, outside the scope of Rule 34."

After a rehearing and complete review of his ruling regarding the six documents the trial judge entered the amendatory final order of August 23, 1968 which is the subject of this appeal and which reduced the questioned documents to numbers 1, 3, 6 and 8.⁵

The general nature of those documents was set forth by duPont's counsel in a letter dated June 18, 1968 addressed to the District Court. That correspondence was at the request of the trial court and was added to the docket for purposes of this appeal by stipulation and order. The express purpose of the correspondence was "to set forth the relevant facts upon which the respective claims of privilege are asserted." It is sufficient to note that documents 1, 3 and 6 are reports from duPont attorneys to duPont management personnel analyzing the nature of the duPont case in Interference 89,634 and evaluating its prospects for success. Document 8, written by a duPont attorney, was addressed to the outside counsel representing duPont in this Interference proceeding. That letter in essence is an analysis of the position of duPont in the pending Interference.

Montecatini, in requesting production of these documents, alleges, inter alia, that:

"The courts generally have failed to `mediate between\' (1) the paramount public policy considerations peculiar to the field of corporate patent solicitation which foreclose the work product and privilege immunities of the type here asserted by duPont and (2) the competing social policies by which those immunities are sometimes justified in ordinary litigation." (Emphasis in original).

Montecatini claims substantially that the paramount federal patent policy of full disclosure precludes use of privilege and work product immunities to deny access to information concerning the solicitation of a party's own patent. That argument is not premised on a challenge to these immunities in any form in patent proceedings but is concerned only as to the allowance of the attorney-client and work product immunities in connection with the solicitation of a party's own patent. Montecatini argues that the "modern trend of the law rejects unconditionally any idea that material relevant to a pending patent application may be withheld by either the applicant or his attorney." (Emphasis in original). We do not think that this constitutes the trend of the recent decisions and deem it unwise to foster such an inflexible, absolute rule in complex patent problems. We fully recognize in such situations the public interest in full disclosure and high standards of candor and good faith expected of all parties. We cannot conclude, however, that the proper application of work product and attorney-client privilege will be detrimental to the public interest or offend paramount federal patent policy whenever a patent solicitation is involved.⁶ Our position finds support in the recent opinion in Natta v. Hogan, 393 F.2d 686 (10 Cir. 1968). Specifically we cite with approval the language of Judge Breitenstein therein at pp. 691, 692:

"Montecatini says that there is no justification for the claim of privilege because of the `full disclosure\' provisions of the patent laws. (footnote omitted). We recognize that in patent proceedings the applicant must observe the highest degree of candor, honesty, and good faith. In our opinion this does not foreclose the assertion of a claim of privilege in a patent proceeding. The attorney-client privilege is designed `to facilitate the administration of justice\', (footnote omitted) in order `to promote freedom of consultation of legal advisors by clients.\' (footnote omitted). We see no reason why this long-established principle should not be applied to patent cases. The public interest is in the development of the truth, both in patent proceedings and in ordinary litigation. The duty of full disclosure differs from the freedom of consultation with lawyers.

"* * * We agree with Phillips that an automatic waiver of the privilege does not occur when a patent controversy is presented."

Although Judge Breitenstein was referring to attorney-client privilege, we are of the opinion that the same sound reasoning should be adopted with respect to attorney work product doctrine. As early as 1954 in Zenith Radio Corp. v. Radio Corp. of America, 121 F.Supp. 792 (D.Del.1954) Judge Leahy recognized the need for judicial discretion in this field. Speaking specifically about work product exemption he said at p. 793:

"Hereinafter, criteria for non-production are established which resolve the greater part of the conflict, but sufficient elasticity has been provided to encompass the exceptional patent department document. With so many documents written under varying circumstances and times, one blanket ruling on their production would unnecessarily risk inaccuracies of generalization."

We have carefully examined appellant's attempts to show the absence of justification for the application of attorney-client privilege and the work product doctrine where patent procurements by corporations are involved. 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. The opinion in Hogan v. Zletz, 43 F.R.D. 308, 315 (N.D. Okl.1967) affirmed in part Natta v. Hogan, supra, is to the point and illustrates our thought:

"The public interest is not an absolute unyielding mandate, but rather a discretionary function of the Court to be weighed along with other factors in determining the applicability of the privilege and the `work product\' rule."

See also: Sperry-Rand Corp. v. International Business Mach. Corp., 45 F.R.D. 287 (D.Del.1968); Natta v. Hogan, supra.

Appellant further contends that "Rejection of attorney-client privilege and work product claims for patent solicitation documents follows as a matter of course from routine application of the principle of federal supremacy consistently applied by the Supreme Court in analogous circumstances to preserve the public policy of the patent system from compromise by antithetical state law." That attitude necessarily implies that the acceptance of attorney-client privilege and the work product doctrine in any circumstances constitutes an encroachment upon federal patent policies. We are satisfied that recognition of the attorney-client privilege and the work product doctrine does not compromise the public interest in patent problems. As we have indicated this is an area calling for the exercise of sound judicial discretion with respect to each separate situation that may be advanced.

The District Court order dated August 23, 1968 (set out in full, footnote 5) exempted documents 1, 3, 6 and 8 as "attorney work product."⁷ Preliminarily the problem arises whether the work...