Wisk Aero LLC v. Archer Aviation Inc.

Background

Wisk sued Archer alleging misappropriation of trade secrets under federal and California law and infringement of six patents. Wisk alleged that Archer hired ten Wisk engineers and later released an electric vertical takeoff and landing aircraft design that resembled a confidential design Wisk had included in a January 2020 provisional patent application. Wisk also alleged that one former engineer, Jing Xue, downloaded thousands of files containing Wisk’s trade secrets and confidential aircraft-development information.

The parties filed a joint letter concerning two discovery disputes. They withdrew the first dispute and asked the court to decide the second: whether Wisk could use a categorical privilege log for pre-complaint communications involving its in-house counsel, Greg Bibbes, rather than individually describing each withheld document.

The parties’ positions

The court’s standing order required a privilege log to provide enough detail for the opposing party to evaluate a claim of privilege. Unless the parties agreed to another method, the log had to identify information such as the document’s description, subject matter, authors, recipients, dates, and specific basis for the privilege claim. Communications involving trial counsel after the complaint was filed did not need to be logged.

Wisk asked for an exception for Bibbes’s communications because Archer had identified Bibbes as a document custodian and test searches had produced more than 10,000 hits in his pre-complaint emails. Wisk argued that individually reviewing and logging the communications would be burdensome and that any burden outweighed their likely value.

Archer argued that Bibbes was a critical fact witness. According to Archer, Bibbes signed a document submitted to the Santa Clara District Attorney concerning Xue and signed the January 2020 patent application that Wisk placed at the center of its trade-secret allegations. Archer relied on these events in support of counterclaims involving tortious interference, defamation, and unfair business practices, and defenses involving bad faith and unclean hands.

Court’s analysis

The court agreed that Archer had the better argument. It found that Bibbes’s conduct was at issue because the document he signed concerning the criminal investigation supported factual allegations underlying Archer’s counterclaims. The court also found that Archer’s allegations about the provisional patent application supported its bad-faith and unclean-hands defenses. Because Bibbes’s conduct was relevant, his communications were relevant as well, and the timing of those communications could potentially provide evidence concerning the events at issue.

The court rejected Wisk’s burden argument. It found Wisk’s estimate based on search-result hits speculative because the number of hits might be much higher than the number of privileged, responsive documents that would actually need to be logged. The court also noted that additional search terms could reduce the number of documents requiring review. Wisk had not made a serious effort to quantify the likely burden of complying with the standing order.

The court distinguished Wisk’s cited authority because, in that case, the logging party had not adequately described the volume of documents or proposed categorical scheme. Given Bibbes’s undisputed relevance and Wisk’s failure to provide a clear picture of the burden, the court found no basis for an exception.

Ruling

Magistrate Judge William Orrick denied Wisk’s motion for an exception to the court’s standing order regarding privilege logs. The court expressly stated that it was not deciding how extensively the attorney-client privilege might apply to Bibbes’s communications, including communications involving both legal and nonlegal analysis. The order therefore resolved the logging method but not the ultimate privilege status of particular communications.