Joint defense agreements in patent infringement cases 2029568 2
1. JOINT DEFENSE AGREEMENTS IN PATENT
INFRINGEMENT CASES
Jerry R. Selinger
November 11, 2011
California Texas New Jersey North Carolina
2. Terminology
“Joint Defense” and “Common Interest” are the
most commonly used terms and usually are
used interchangeably
Can describe various assemblies of attorneys
and clients
Multiple clients with the same attorney
Multiple clients with different attorneys
Some combination of the two
2
3. Background
Joint defenses in patent litigation have become
common
Increase of multiple-defendant lawsuits filed by non-
practicing entities (NPEs)
Mandated need to cooperate with co-defendants
Economics of many NPE cases (settlement value vs.
cost through trial)
Pressure on in-house counsel to lower costs
3
4. Background
New Joinder Rules (America Invents Act)
Will reduce number of multiple defendant lawsuits
Need/desirability of joint defense arrangements may
remain when a plaintiff files multiple lawsuits
asserting same patent(s) against multiple defendants
Claim construction
Invalidity
Some multiple-defendant cases always will be proper,
e.g., defendants in privity such as manufacturers,
distributors, & retailers
4
5. Joint Defense Privilege
An exception to the rule that disclosure of
privileged information to third parties waives
privilege
Establishing the privilege
Generally, lawsuit must have been threatened or filed
Group members claiming privilege are parties or
potential parties with expectation of confidentiality
Sharing of privileged information furthers the common
legal interest
No previous waiver of privilege
5
6. Joint Defense Agreements
Joint Defense agreements may be implied or
exist without a writing
but written agreements are best
Oral agreements can be enforced, but are more
susceptible to competing interpretations
And inevitably leave open nuance issues
Written agreements leave less room for later
disputes about terms, scope, and effect
6
7. Joint Defense Agreements
Primary goal of joint defense groups
Share information and strategy without waiving
privileges
Share costs/reduce expenses of defense
Primary goal of joint defense agreements (JDAs)
Define the relationship
Preserve privileges
Avoid future conflicts issues
Avoid antitrust issues
Preserve ability to act independently when necessary
Anticipate and avoid logistical problems
7
8. Define the Relationship
Describe the common interest(s)
Disclaim attorney-client relationship between
attorneys and other defendants
Define cost-sharing arrangements
e.g., do five related defendants represented by the
same attorney count as one or five for cost-sharing?
Define permitted/prohibited uses of shared
information
Methods for adding and removal/withdrawal of
group members
8
9. Preserve Privileges
Agree that group members will maintain
confidentiality
But that sharing confidential information cannot create
future conflict
Agree that sharing of information among group
does not waive attorney-client, work product, or
other privileges/immunities
Agree that group members facing outside legal
obligation/order to disclose will provide others
with notice and opportunity to protect information
9
10. Preserve Privileges
Agree there can be no unilateral waiver of group
privileges
Agree joint defense material will not be
disclosed to opinion counsel and “reliance”
witnesses, without express agreement
Make sure parties added to the group later are
bound by the same terms and obligations
10
11. Avoid Conflicts/Disqualification Issues
Provision stating attorneys have performed all
necessary conflicts checks
Disclaimer of attorney-client relationships
Use express prospective waivers
Each group member waives right to use participation
in joint defense group as basis for disqualification in
future cases
Return or destroy confidential materials shared
by other parties at end of litigation and no use
outside the specific litigation
11
12. Avoid Conflicts/Disqualification Issues
In re Shared Memory Graphics LLC, Fed. Cir.,
Misc. No. 978, 9/22/11 (2-1)
Reversed district court and held waiver provision
in JDA overrode conflict-of-interest concerns
“Nothing in this agreement . . . shall be used as a
basis to seek to disqualify the respective counsel . . .
In future litigation”
12
13. Avoid Conflicts/Disqualification Issues
National Medical Enterprises, Inc. v. Godbey,
924 S.W.2d 123 (Tex. 1996)(orig. proceeding)
Shared confidences under written JDA with NME
Obligation to preserve confidences
Lawyer moved to another firm, withdrew from case
17 months later, others in lawfirm sued NME
Firm disqualified – lawyer could not honor his
obligation of confidentiality under JDA and prosecute
pending claims, so firm was disqualified
13
14. Avoid Antitrust Problems
State group members have right to act
independently in negotiating and settling
There should be no agreement regarding terms
under which license would be acceptable to
group members
Agreement should allow voluntary withdrawal
from group
Limit use/access of competitvely sensitive
information
14
15. Preserve Independence
Agreement should state that group participation
does not limit members’ autonomy in defending
the action
Maintain right to initiate PTO review
independently (often limited to independently
discovered prior art)
15
16. Preserve Independence
But make sure experts are retained by group or
all group members (if key group member
withdraws, the expert is still available)
Include terms governing obligations of
withdrawing parties that have taken the lead in
particular joint defense projects
Make sure remaining group members are entitled to
retain or take possession of all necessary materials
16
17. Other Logistical Issues
Cost-sharing rules
Case management – Some large groups use
steering committees (I will never agree)
Accommodations for non-U.S. parties
Potential effects of foreign law if non-U.S.
parties/counsel are involved
17
18. Beyond the Agreement
Be a team player, but not at the expense of your
client
Be prepared to negotiate within the group
Avoid unnecessary disagreements that destroy
the “common interest”
Consider who your co-defendants are in
negotiating protective orders and information-
sharing requirements
18