Do Companies Need a Common Interest Agreement to Avoid Waiving Work Product Protection?

January 12, 2011

Given the fragility of the attorney-client privilege, companies hoping to avoid waiving that protection by sharing privileged communications with third parties must meet the fairly exacting standards of the “common interest” doctrine. However, work product can be much more easily shared with non-adversarial third parties – because that doctrine offers hardier protection than the privilege.

In Wi-Lan, Inc. v. Acer, Inc., Case No. 2:07-CV-473-TJW c/w 2:07-CV-474-TJW, 2010 U.S. Dist. LEXIS 110351 (E.D. Tex. Oct. 18, 2010), the seller of patent assets disclosed work product to potential purchaser Broadcom during its due diligence. When there was a later falling-out, Broadcom claimed that the disclosure waived any available protections. The court noted that “[b]oth sides spend the bulk of their arguments discussing whether the [work product] was subject to the common interest doctrine at the time of its disclosure to Broadcom.” Id. at *27. The court ultimately concluded that “the Court need not reach that issue because it finds that [the seller’s] disclosure of the [work product] to Broadcom in the Data Room during the purchase due diligence does not constitute a waiver of the work product immunity, regardless of whether or not the common interest doctrine applies.” Id. The court explained that “Broadcom cannot be seen as an adversary at the time of the purchase due diligence such that [the seller’s] disclosure of the [work product] constituted a waiver of the work product privilege.” Id. at *29.

Decisions like this highlight the wisdom of analyzing both the attorney-client privilege and the work product doctrine. The work product doctrine might not provide the absolute protection of the attorney-client privilege, but usually survives disclosure to non-adversarial third parties.