In re Spalding Sports Worldwide, Inc.

Decision Date11 February 2000
Parties(Fed. Cir. 2000) IN RE SPALDING SPORTS WORLDWIDE, INC. MISCELLANEOUS DOCKET NO. 595
CourtU.S. Court of Appeals — Federal Circuit

Matthew G. McAndrews, McAndrews, Held & Malloy, Ltd., of Chicago, Illinois, argued for petitioner. With him on the petition was George P. McAndrews.

John W. Chestnut, Tilton, Fallon, Lungmus & Chestnut, of Chicago, Illinois, argued for respondent.

Lourie, Rader, and Bryson, Circuit Judges.

ORDER

Spalding Sports Worldwide, Inc. petitions this court for a writ of mandamus directing the United States District Court for the District of Massachusetts to vacate the magistrate judge's June 9, 1999 order requiring Spalding to produce the invention record for its U.S. Patent 5,310,178, in discovery in a patent infringement suit against Wilson Sporting Goods, Co. ("Wilson"). See Spalding & Evenflo Cos. 1 v. Wilson Sporting Goods Co., No. 97-30275-MAP (D. Mass. June 9, 1999) (order granting defendant's motion to compel). Because we conclude that the invention record of the '178 patent is protected by the attorney-client privilege, and the denial of that privilege by the district court is properly remedied by mandamus, we grant Spalding's petition for a writ of mandamus.

BACKGROUND

Spalding is the assignee of the '178 patent, which issued on May 10, 1994 and is directed to a basketball with a polyurethane cover. The issues raised in this petition do not involve the claims or any other aspect of the patent's subject matter, but rather center on the applicability of the attorney-client privilege to the invention record submitted to Spalding's corporate legal department on February 28, 1992 by Alan Walker and Joseph Baltronis, the two inventors named on the '178 patent.

Spalding sued Wilson for infringement of the '178 patent in the United States District Court for the District of Massachusetts. During discovery, Wilson filed a motion to compel the production of the invention record. 2 Spalding asserted that the invention record was not discoverable because it was protected by the attorney-client privilege. In response, Wilson argued that the invention record should be produced because Spalding committed "fraud on the patent office." Id. at 5. On June 9, 1999, the magistrate judge granted Wilson's motion, holding that: (1) Spalding had not met its burden of demonstrating the applicability of the attorney-client privilege, and (2)even if the attorney-client privilege were to apply, Wilson was nonetheless entitled to discovery of the inventionrecord because it had made a prima facie showing of inequitable conduct. See id. at 5-6. With respect to the applicability of the attorney-client privilege, the magistrate judge observed that Spalding's invention record did not appear to be primarily legal in nature, and that it revealed discoverable technical information, not an attorney-client communication. See id. at 4. The magistrate judge further noted:

[I]t does not appear that Spalding's legal department addressed the product's patentability at a patent committee meeting or took any action on the information contained in the document itself. For all the court knows, the document was meant primarily as an aid in completing the patent application rendering the attorney a mere "conduit" to the patent office.

Id.

With respect to Wilson's allegation of inequitable conduct, the magistrate judge concluded that Spalding's invention record was discoverable, apparently based on the rationale that any attorney-client privilege was abrogated by the crime-fraud exception, and because Wilson had "shown that a material misrepresentation may have been made to the PTO, which resulted in the issuance of the patent at issue." Id. at 6. Further concluding that the different fraud standards proposed by the parties were essentially the same, the magistrate judge rejected Spalding's argument that Wilson had to demonstrate common law fraud, as opposed to inequitable conduct, in order to pierce the attorney-client privilege. See id. The district court then denied Spalding's motion for reconsideration, holding that the magistrate judge's ruling was neither clearly erroneous, nor contrary to law.

Spalding petitioned this court for a writ of mandamus directing the district court to vacate the magistrate judge's order requiring Spalding to produce the invention record. We have authority to issue all necessary or appropriate writs pursuant to 28 U.S.C. 1651(a) (1994).

DISCUSSION
A. Choice of Law

Before determining whether Spalding's invention record is protected by the attorney-client privilege, we must first decide whether to apply our own law or that of the First Circuit. Spalding argues that we should apply Federal Circuit law, because the issue whether the attorney-client privilege applies to communications between inventors and patent attorneys is one of substantive patent law and should be subject to a uniform national standard. Wilson responds that this issue does not implicate substantive patent law, and that we should apply the law of the First Circuit.

We agree with Spalding that our own law applies to the issue whether the attorney-client privilege applies to an invention record prepared and submitted to house counsel relating to a litigated patent. In reviewing district court judgments, we apply the law of the circuit in which the district court sits with respect to nonpatent issues, but we apply our own law to issues of substantive patent law. See Institut Pasteur v. Cambridge Biotech Corp. (In re Cambridge Biotech Corp.), 186 F.3d 1356, 1358, 51 USPQ2d 1321, 1329 (Fed. Cir. 1999). Furthermore, we have held that "a procedural issue that is not itself a substantive patent law issue is nonetheless governed by Federal Circuit law if the issue pertains to patent law, if it bears an essential relationship to matters committed to our exclusive [jurisdiction] by statute, or if it clearly implicates the jurisprudential responsibilities of this court in a field within its exclusive jurisdiction." Midwest Indus., Inc. v. Karavan, 175 F.3d 1356, 1359, 50 USPQ2d 1672, 1675 (Fed. Cir. 1999) (en banc in relevant part) (internal citations and quotation marks omitted).

Applying these standards, we have held, for example, that Federal Circuit law applies when deciding whether particular written or other materials are discoverable in a patent case, because they relate to an issue of substantive patent law. See id. (citing Truswal Sys. Corp. v. Hydro-Air Eng'g, Inc., 813 F.2d 1207, 1212, 2 USPQ2d 1034, 1038 (Fed. Cir. 1987) ("[A] determination of relevance implicates the substantive law of patent validity and infringement. Hence, we look to Federal Circuit law.")). Similarly, in the present case, a determination of the applicability of the attorney-client privilege to Spalding's invention record clearly implicates, at the very least, the substantive patent issue of inequitable conduct. We therefore apply Federal Circuit law in determining whether the attorney-client privilege applies.

In In re Regents of the University of California, 101 F.3d 1386, 40 USPQ2d 1784 (Fed. Cir. 1996) (hereinafter "UC Regents"), this court granted a writ of mandamus after concluding that, under Seventh Circuit law, communications between a licensor and the attorneys of its licensee were protected by the attorney-client privilege. We applied the law of the regional circuit because the issue in that case, whether a licensor and a licensee are joint clients for purposes of privilege under the community of interest doctrine, was not unique to patent law. See id. at 1390 n.2, 40 USPQ2d at 1787 n.2 ("[F]or procedural matters that are not unique to patent issues, we apply the perceived law of the regional circuit."). That issue concerned parties to a contract; any patent involved was irrelevant to the question of privilege. However, the issue in the present case, whether the invention record is protected by the attorney-client privilege, is unique to patent law because the invention record relates to an invention submitted for consideration for possible patent protection; it clearly implicates substantive patent law. We thus conclude that the court's choice of law in the UC Regents case is inapplicable here.

B. Writ of Mandamus

We next address the parties' arguments concerning the appropriateness of mandamus as a remedy. Spalding argues that mandamus is appropriate, given the importance of protecting the attorney-client privilege. Wilson responds that mandamus is not appropriate in this case, because there is no important issue of first impression, and Spalding has failed to show that there was an abuse of discretion or usurpation of authority.

We agree with Spalding that the remedy of mandamus is appropriate in this case. A writ of mandamus may be granted to overturn a district court order "only when there has been a clear abuse of discretion or usurpation of judicial authority in the grant or denial of the order." Connaught Lab., Inc. v. SmithKline Beecham P.L.C., 165 F.3d 1368, 1370, 49 USPQ2d 1540, 1541 (Fed. Cir. 1999); see also Schlagnehauf v. Holder, 379 U.S. 104, 110 (1964). The petitioner has the burden of establishing "that its right to issuance of the writ is clear and indisputable, . . . and that it lacks adequate alternative means to obtain the relief sought." UC Regents, 101 F.3d at 1387, 40 USPQ2d at 1785 (citing Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 35 (1980); Mallard v. United States Dist. Court, 490 U.S. 296, 309 (1989)). Mandamus is an appropriate remedy when a petition is based on a substantial allegation of usurpation of power, and raises an issue of first impression. See Schlagnehauf, 379 U.S. at 111. Furthermore, "[a] writ of mandamus may be sought to prevent the wrongful exposure of...

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