Holley v. Gilead Sciences, Inc.

Background

The plaintiffs brought state-law claims alleging that Gilead delayed developing safer TAF drugs for treating HIV to avoid losses associated with the expiration of patents for TDF drugs and the entry of generic TDF drugs into the market. In this discovery dispute, the plaintiffs sought information redacted from Development Committee and Project Team documents. Gilead asserted that the redactions contained legal advice from in-house counsel concerning patent expiration dates, patent applications, patent portfolios, patent exclusivity, and related intellectual-property issues.

Choice of Law

The court held that California law governed the attorney-client privilege issue. The plaintiffs argued that federal law should apply because the information could relate to Gilead’s federal affirmative defenses, but the court found that they had not explained how the requested information was directed to those defenses. Applying California choice-of-law principles, the court also found no sufficient showing of a true conflict among the laws of the potentially connected states.

Privilege Standards

Under California law, the attorney-client privilege protects confidential communications between a client and lawyer, including legal opinions and advice. The court explained that the privilege can remain intact when information is shared with people whose participation is reasonably necessary to accomplish the purpose of the legal consultation. But business advice or business strategy is not protected merely because an in-house lawyer was involved or because the subject concerned intellectual property.

Gilead, as the party resisting discovery, had the burden to provide enough factual information to support each privilege claim. The court conducted an in-camera review, meaning it reviewed the redacted information privately.

In-Camera Review

The court found that revised redactions in Exhibits A through F, Q, U through X, Y, Z, portions of BB, CC, portions of EE, FF, and portions of KK contained protected legal advice or legal judgments. These included advice about likely patent-application success, patent terms, exclusivity periods, freedom to operate, and patent portfolios.

The court found that Gilead had not established privilege for various other materials. These included portions of Exhibit G and duplicates, the corresponding portions of Exhibits M and N, the first sentence of Exhibit O, Exhibit R, portions of Exhibit EE, certain dates and other redactions in Exhibits GG, HH, II, and KK, and business-strategy statements or financial assumptions that did not themselves reflect legal advice. For several dates, the court stated that the record did not show that the information was not publicly known. The court specifically noted that a non-lawyer’s request for a patent expiration date from a lawyer did not, by itself, make the date privileged.

Exhibit KK and Waiver

The plaintiffs argued that Gilead waived privilege over Exhibit KK by producing it without redactions in August 2020 and by filing it with, and quoting from it in, a September 2020 opposition to a sanctions motion. Gilead did not attempt to claw back the document on privilege grounds until December 23, 2020.

The court agreed that Gilead waived privilege for the information at issue. Federal law governed waiver, and the court found that Gilead had not promptly taken reasonable steps to correct the disclosure after the information had been publicly filed and quoted. The court therefore treated the relevant material as produced in unredacted form.

Disposition

The court GRANTED IN PART and DENIED IN PART the plaintiffs’ motion to compel production of the purportedly privileged information. It GRANTED the associated administrative motion to seal. Because the court had raised whether some information had become public, it permitted Gilead to make a supplemental submission addressing the redactions for which Gilead had not shown that the information was not public. The order stated that any supplemental submission was due June 17, 2021, and any plaintiffs’ response was due June 24, 2021. The order disposed of Docket Nos. 626 and 627.