Court Picks an Effective Date for a Common Interest Agreement

April 4, 2007

Common interest agreements allow separate clients with their own lawyers to avoid waiving the attorney-client privilege when sharing privileged communications. Because the participants cannot themselves automatically create the protection simply by signing an agreement, courts must sometimes analyze the context to determine the protection.

In Intex Recreation Corp. v. Team Worldwide Corp., Civ. A. No. 04-1785 PLF/DAR, 2007 U.S. Dist. LEXIS 2122 (D.D.C. Jan. 5, 2007), plaintiff Intex filed a declaratory judgment action seeking a judgment that it did not infringe defendant patent-holder’s (Worldwide) patent. Intex argued that the common interest doctrine could not protect communications between Worldwide and its exclusive distributor occurring before the August 2005 execution of a common interest agreement. Worldwide argued that it had followed a “coordinated legal strategy” with its exclusive distributor ever since the companies executed an exclusive distribution agreement in 2000. Id. at *6-7. The court rejected both of these arguments, finding that Worldwide and its exclusive distributor “entered into a coordinated legal strategy on or about October 8, 2004, when both companies sent letters to Intex demanding that it cease manufacturing products which allegedly infringed [Worldwide’s patent].” Id. at *12.

Companies should not delude themselves into thinking that signing a common interest agreement guarantees common interest doctrine protection — courts can either reject the protection altogether, or pick a different date.