Courts recognizing the common interest doctrine limit its non-waiver effect to participants’ common legal rather than financial interests. It can be difficult to apply this abstract principle to communications between a patent owner and another company that will earn royalties from the patent’s use. The latter has an obvious interest in the patent’s enforceability, but is that a legal or merely a financial interest?
In Rembrandt Patent Innovations, LLC v. Apple Inc., the court dealt with the common interest doctrine’s applicability to communications between patents’ inventors and their employer (the University of Pennsylvania), which had retained royalty rights but not ownership rights. Nos. C 14-05094 & -05093 WHA, 2016 U.S. Dist. LEXIS 13749 (N.D. Cal. Feb. 4, 2016). The court acknowledged that the Ninth Circuit had not addressed “the scope of a common legal interest with regard to transactions between the inventors of a patent and partners or potential partners in business ventures seeking to monetize that patent.” Id. at *14. The court ultimately held that the common interest doctrine protected the communications — because the inventors and Penn had a common legal interest “in licensing and enforcement opportunities, perfecting title in the patent, and defending the patent’s validity.”Id. at *16. About three weeks later, the District of Delaware reached the opposite conclusion. In Delaware Display Group LLC v. Lenovo Group Ltd., the court assessed a privilege claim for files belonging to non-party Rambus — which had similarly retained patent royalty rights but not ownership rights. Civ. A. Nos. 13-2108-, -2109- & -2112-RGA, 2016 U.S. Dist. LEXIS 21461 (D. Del. Feb. 23, 2016). The court rejected the patent owner’s argument that it shared a common interest with Rambus in assuring the patents’ strength and enforceability. As the court put it, “[p]laintiffs’ logic would find that any seller with rights to royalty payments is engaged in a common legal cause with its buyer. The only interest Rambus retained in the patents is a commercial one.” Id. at *17.
Distinguishing between a legal and financial interest can be very difficult. Courts’ disagreement about the common interest doctrine’s applicability in the patent setting highlights the risk of relying on the common interest doctrine in seeking to avoid waiver of privilege protection.