Finjan LLC v. Sonicwall, Inc.

Background

Finjan asserted that SonicWall infringed ten Finjan patents. SonicWall challenged Finjan’s claims of attorney-client privilege and attorney work-product protection over portions of four witness depositions and eight deposition exhibits from an earlier patent-infringement action between Finjan and Cisco Systems, Inc. SonicWall moved to compel production of those materials. Finjan argued that the materials were protected and not relevant.

The disputed materials concerned information Finjan had provided to Cisco in 2005, 2006, and, for one document, apparently 2008. Cisco was an investor in Finjan and had a contractual right to observe Finjan’s board meetings; Yoav Samet, then a Cisco employee, served as Cisco’s board observer. The parties disputed whether a confidentiality agreement protected the disclosures. The court noted that the materials were being used or proposed for use as evidence in the Cisco litigation.

Legal standards

Under Federal Rule of Civil Procedure 26(b)(1), discovery generally covers relevant, nonprivileged information that is proportional to the needs of the case. Attorney-client privilege protects confidential communications made to obtain or provide legal advice when they are intended to remain confidential. The work-product doctrine provides qualified protection for materials prepared by or for a party or its representative in anticipation of litigation. Finjan, as the party asserting these protections, had the burden of showing that they applied.

The court also discussed the common-interest doctrine. That doctrine can prevent waiver when separately represented parties share confidential communications to advance a common legal interest, but it does not itself create a privilege.

Relevance

The court reviewed the eight disputed exhibits in private and could not say they were clearly irrelevant. It found that the materials were likely responsive to SonicWall’s discovery requests and that Finjan had not shown that they should be withheld as irrelevant. The court also stated that irrelevant portions of otherwise responsive documents generally may not be unilaterally redacted or withheld merely because they are nonresponsive.

Attorney-client privilege

Finjan argued that the materials contained legal advice from its outside counsel and that sharing them with Samet and Cisco did not waive privilege because Finjan and Cisco had a common legal interest in the validity and enforcement of Finjan’s patents. SonicWall argued that Cisco was a third party and that the parties shared only a commercial, not legal, interest.

The court agreed with SonicWall. It held that Cisco’s investment in Finjan and its board-observer status did not create a common legal interest. Cisco did not own an interest in the patents, and the court found that the parties did not anticipate joint litigation. Finjan’s voluntary disclosure of the materials to Cisco therefore waived any attorney-client privilege that otherwise applied.

Attorney work product

The court agreed with Finjan that the disputed materials included discussion of litigation enforcement against specific targets and therefore included attorney work product. But work-product protection can be waived when disclosure to a third party enables an adversary to obtain the information.

The court noted that Finjan had not shown that it entered into a confidentiality agreement with Samet or Cisco covering the materials. It did not decide all consequences of that circumstance because it found that Finjan’s later conduct in the Cisco action clearly waived work-product protection. Finjan and SonicWall agreed that the materials would be used as evidence in that action, and Finjan had not tried to shield them from use or disclosure there. The court held that using the materials as evidence against an adversary was fundamentally inconsistent with continuing to claim work-product protection, and that the waiver could not be undone.

Disposition

Judge Virginia K. DeMarchi granted SonicWall’s motion to compel production of the disputed materials. Unless the parties stipulated otherwise, the order required Finjan to produce them no later than seven days after July 7, 2020.