Lead Creation Inc. v. The Partnerships and Unincorporated Associations…

Background

Lead Creation Inc. brought a patent-infringement action concerning a flashlight patent. The court later vacated temporary restraining and preliminary-injunction orders after defendants presented evidence raising substantial questions about the patent’s validity and Lead Creation’s conduct before the U.S. Patent and Trademark Office. Lead Creation then filed a notice of voluntary dismissal. The court found that the dismissal immediately ended the case but retained authority over collateral matters, including discovery connected to motions for recovery on the temporary-restraining-order bond, attorney’s fees, and possible sanctions.

The moving defendants—Shenzhen Sen Zhi Run Dian Zi Shang Wu Co., Ltd. and Haikoushi Lvxuan Trading Co., Ltd.—sought documents withheld by Michael Hurckes, Lead Creation’s former counsel, under the attorney-client privilege. They also sought to compel Hurckes to testify at his deposition without asserting that privilege on specified subjects. Hurckes was also a director of Lead Creation and a member of its Infringement Committee.

Legal standards

The attorney-client privilege protects confidential communications between a client and attorney made to obtain or provide legal advice. The party claiming the privilege must establish its required elements. Communications made for business purposes are not privileged. The court also explained that the work-product doctrine can protect materials prepared in anticipation of litigation, although Hurckes had not identified that doctrine in his privilege log.

Rulings on the documents

After reviewing the documents privately, the court ruled that documents numbered 004 through 012—Telegram messages between Hurckes and his clients requesting or providing legal advice—were privileged. Documents numbered 013 and 015 through 018—emails between Hurckes and Lead Creation personnel requesting or providing legal advice—were also privileged.

Document 014 contained three emails. The court found that the first email, sent by the U.S. Patent and Trademark Office to Hurckes’s office, was not privileged. A forwarded copy of that email also was not privileged. The third email, sent by Hurckes to Lead Creation at 4:03 p.m. on November 1, 2022, provided legal advice and was privileged. Hurckes therefore had to produce document 014 with only that email redacted.

The court also ordered production of these nonprivileged attachments: the attachment to document 013 titled Electronic Patent Application Fee Transmittal; the attachment to document 014 titled Patent Assignment Cover Sheet; and the three attachments to document 017 containing Patent Nos. US 6,866,401, US 7,147,343, and 5,560,705. Other attachments had already been produced, and the remaining attachments were properly withheld as privileged.

Rulings on the deposition

The court rejected the argument that Hurckes’s status as a director and Infringement Committee member made all of his communications discoverable. Because he also acted as Lead Creation’s counsel, communications concerning legal advice remained protected. His withdrawal as counsel did not eliminate the privilege for legal advice given during the representation.

Hurckes could decline to answer questions about legal advice he gave Lead Creation. However, he had to answer questions about his business activities as a director and Infringement Committee member, including his involvement in recording the patent assignment and filing the petition concerning delayed payment of a maintenance fee for an expired patent.

Disposition

The court granted in part and denied in part the moving defendants’ letter motion. It ordered Hurckes to produce to Lead Creation by noon on April 7, 2023, document 014 with only the specified legal-advice email redacted, the specified attachment to document 013, the specified attachment to document 014, and the three specified attachments to document 017.