Gorzegno v. Maguire

62 F.R.D. 617, 180 U.S.P.Q. (BNA) 24, 1973 U.S. Dist. LEXIS 12022
CourtDistrict Court, S.D. New York
DecidedSeptember 6, 1973
DocketCiv. A. No. M-8-85
StatusPublished
Cited by2 cases

This text of 62 F.R.D. 617 (Gorzegno v. Maguire) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gorzegno v. Maguire, 62 F.R.D. 617, 180 U.S.P.Q. (BNA) 24, 1973 U.S. Dist. LEXIS 12022 (S.D.N.Y. 1973).

Opinion

PALMIERI, District Judge.

This is a proceeding in aid of discovery pursuant to 35 U.S.C. § 24 for use in a contested case in the United States Patent Office. A Special Master, Honorable George B. Finnegan, Jr., was appointed by this Court to preside at the taking of discovery by order dated May 16, 1973. A number of hearings have taken place before him and while some discovery has taken place there is much apparently that remains to be done. The hearings have been suspended pending the motion of the defendants, presently before this Court, for legal instructions to the Special Master for the purpose of reviewing and overruling rulings made by him denying defendants’ claims to non-disclosure based upon assertions of privileged communications between attorney and client.

The essence of the controversy before the Patent Office stems from charges of fraudulent conduct made against the plaintiffs, Gorzegno and Foster-Wheeler Corporation, by the defendants in connection with the filing by plaintiffs of U. S. Patent Application No. 613,632 and the prosecution of that application in Interference No. 96,476. The defendant Babcock & Wilcox Company had listed Gorzegno as a co-inventor in its pending Patent Application No. 470,819 (the ’819 application); and Foster Wheeler Corporation had listed Gorzegno as a co-inventor on its similar pending application 613,632. The Patent Office found that these facts permitted it to come to the conclusion, albeit a rebuttable one, that Foster Wheeler Corporation and its counsel were seeking to support a fraudulent claim of inventorship. Babcock & Wilcox Corporation has relied upon the ’819 application signed by Gorzegno, and his subsequent affidavit under Rule 131 of the Rules of Practice in Patent Cases (1970), as its principal proof of the alleged fraud. The defendant Joseph M. Maguire, as patent counsel for Babcock & Wilcox Corporation, was privy to the relationships between Gorzegno and the corporation and was an important actor in this factual context.

The Commissioner of Patents has made it abundantly clear that there should be full inquiry into the circumstances of the preparation, filing and in-ventorship of the ’819 application upon which the defendants’ charges of fraud are based and that such inquiry must necessarily entail the full testimony of Mr. Maguire. There can be no doubt that Mr. Maguire is a crucial witness. The suspension of his testimony and of the hearings before the Special Master because of the assertions of the lawyer-client protection against disclosure is unfortunate. The plaintiffs, confronted [620]*620by time limitations imposed by the Patent Office, have sought diligently to adduce evidence in rebuttal of the claim of fraud levelled against them by the defendants. But the plaintiffs have been delayed in their search for relevant evidence by procedural tactics of defendants which have had the effect of frustrating disclosure despite sweeping protective orders entered by this Court on May 16, 1973, for defendants’ benefit.

The defendants cannot both affirm their reliance on the ’819 application as the basis for their charges of fraud against plaintiffs, and deny access to all the facts relating to it.

The Special Master’s rulings set forth on pages 975 through 988 of the transcript and communicated orally to the parties on July 12, 1973, are adopted as correct and are in all respects affirmed. What follows is a more detailed analysis of this conclusion.

I. Application of the privilege.

The threshold question arises as to whether the attorney-client privilege attaches to the preparation of patent applications. While there is authority to the effect that patent application activities are not, per se, privileged, U. S. Industries v. Norton Co., 174 U.S.P.Q. 513, 515 (N.D.N.Y.1972); Technographic, Inc. v. Texas Instruments, Inc., 43 F.R. D. 416, 419 (S.D.N.Y.1967); Zenith Radio Corp. v. Radio Corp. of America, 121 F.Supp. 792 (D.Del.1954), those cases can generally be limited to communications “dealing exclusively with the solicitation or giving of business advice, or with the technical engineering aspects of patent procurement or with any other matters which may as easily be handled by laymen. . . .” Georgia-Pacific Plywood Co. v. United States Plywood Corp., 18 F.R.D. 463, 464 (S.D.N.Y. 1956). But the mere fact that the attorney in question is “house-counsel” or that the activities are in connection with a patent application does not deny the availability of an otherwise properly invoked attorney-client privilege. Id. ; United States v. United Shoe Machinery Corp., 89 F.Supp. 357, 360 (D.C.Mass. 1950) (Wyzanski, J.); 4 Moore, Federal Practice ¶ 26.60 [2] n.l (1972); see also Sperry Rand Corp. v. International Business Machine Corp., 45 F.R.D. 287, 291 (D.Del.1968).

II. Are the documents subject to the privilege ?

Defendants argue that the documents in question are properly within the scope of the attorney-client privilege as deliberations of a corporate client control group with the in-house patent attorney. While the “control group” doctrine extends the penumbra of the privilege beyond the immediate parties to a given communication, City of Philadelphia v. Westinghouse Electric Corp., 210 F.Supp. 483, 485-486 (E.D. Pa.1962), mandamus and prohibition denied, sub nom., General Electric Co. v. Kirkpatrick, 312 F.2d 742 (3d Cir. 1963), cert. denied, 372 U.S. 943, 83 S. Ct. 937, 9 L.Ed.2d 969 (1963); Natta v. Hogan, 392 F.2d 686, 692 (10th Cir. 1968); but see Harper & Row Publishers, Inc. v. Decker, 423 F.2d 487 (7th Cir. 1970), aff’d by an equally divided court, 400 U.S. 348, 91 S.Ct. 479, 27 L. Ed.2d 433 (1971), rehearing denied, 401 U.S. 950, 91 S.Ct. 917, 28 L.Ed.2d 234 (1971), the premises underlying the privilege that the communication consist of legal advice passing from an attorney to his client, United States v. United Shoe Machinery Corp., supra, 89 F.Supp. at 358, and that it be regarded and in fact be treated as confidential still pertain. 8 Wigmore, Evidence § 2311 (McNaughton rev. 1961). Consequently, where the confidentiality of the documents is illusory or is abrogated or compromised, the privilege ceases to apply. Mr. Maguire’s deposition testimony with respect to certain of the documents withheld on the basis of privilege clearly indicates no knowledge on his part as to confidential treatment of those documents by his co-defendant, The Babcock [621]*621& Wilcox Company. The parties invoking the privilege assume the burden of demonstrating its existence, Honeywell, Inc. v. Piper Aircraft Corp., 50 F.R.D. 117, 120 (M.D.Pa.1970), yet the defendants here have made no attempt to explain Mr. Maguire’s testimony nor have they attempted to show that these documents were in fact regarded and treated as confidential. Thus, without ever defining the “control group” membership, we can only conclude either that the documents were never confidential and the privilege never attached, or that at the very least they were not actually treated as such and the privilege was lost. Natta v. Hogan, supra, 392 F.2d at 693; United States v. Kelsey-Hayes Wheel Co., 15 F.R.D. 461, 465 (E.D.Mich.1954).

III.

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62 F.R.D. 617, 180 U.S.P.Q. (BNA) 24, 1973 U.S. Dist. LEXIS 12022, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gorzegno-v-maguire-nysd-1973.