Eolas Technologies Incorporated v. Amazon.com, Inc.

Background

Eolas alleged that Amazon, Google, and Walmart infringed United States Patent No. 9,195,507. The Patent and Trademark Office had granted that patent a 1,042-day patent-term adjustment. The defendants asserted that the adjustment was invalid because Eolas had unreasonably delayed prosecution of the patent application.

In earlier litigation involving Eolas, Amazon, and Google, a protective order imposed a patent-prosecution bar. After the later case was transferred to the Northern District of California, Judge Jon Tigar ruled that the bar had expired in October 2014 and ordered further proceedings concerning documents and possible review by the court. Eolas eventually produced certain pre-July 22, 2014 communications for limited purposes: resolving the prosecution-bar motion and addressing the patent-adjustment invalidity theory as it related to that motion. The documents were produced under an attorneys’-eyes-only restriction.

Judge Tigar later ruled that McKool Smith had not violated the earlier protective order in a way warranting sanctions. The patent-infringement litigation then resumed, including litigation of the defendants’ affirmative defense that the patent-term adjustment was invalid because of Eolas’s unreasonable delay.

The privilege dispute

Amazon and Google argued that Eolas had expressly or impliedly waived attorney-client privilege over the communications. They contended that the documents therefore could be used beyond the limited prosecution-bar dispute to prove the patent-adjustment invalidity defense.

The court rejected the argument that voluntary production automatically made the communications available for every issue in the case. It found that the production occurred in a specific context and under explicit limits, including limits that Amazon had initially proposed.

The court also rejected the argument that the limited waiver extended to the patent-adjustment issue independently of the prosecution-bar dispute. Although some transcripts referred to the patent-adjustment invalidity issue, the court read the record as showing that the issue was discussed as part of the theory that the alleged delay violated the prosecution bar. Because Judge Tigar had found no violation of that bar, the court found no basis for using the communications to prove the separate affirmative defense.

Implied waiver

The defendants also relied on the implied-waiver test described in Hearn v. Rhay and adopted by the Ninth Circuit. Under that test, implied waiver may occur when a party takes an affirmative action, places privileged information at issue through that action, and prevents the opposing party from obtaining information vital to its defense by asserting privilege. The court also considered whether protecting the information would be manifestly unfair.

The court concluded that the defendants had not satisfied this test. Even assuming that filing the patent-infringement lawsuit was the required affirmative action, the defendants did not show that Eolas placed its privileged communications at issue merely by receiving a patent-term adjustment and defending against the delay accusation. The court noted that the result could differ if Eolas claimed that its prosecution delay was reasonable because it relied on advice from its attorneys, but the record did not show that Eolas had made such a defense.

Disposition

The court held that Eolas had not expressly or implicitly waived attorney-client privilege in a way that allowed the defendants to use the limited-production documents to prove the patent-adjustment invalidity defense. The court denied Defendants’ motion and granted Eolas’s request that the defendants return or destroy the privileged materials. The order disposed of Docket Nos. 671, 672, and 676.