Sperry Rand Corp. v. International Business Machines Corp.

45 F.R.D. 287, 12 Fed. R. Serv. 2d 893, 159 U.S.P.Q. (BNA) 86, 1968 U.S. Dist. LEXIS 8816
CourtDistrict Court, D. Delaware
DecidedJuly 29, 1968
DocketMisc. No. 45
StatusPublished
Cited by13 cases

This text of 45 F.R.D. 287 (Sperry Rand Corp. v. International Business Machines Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sperry Rand Corp. v. International Business Machines Corp., 45 F.R.D. 287, 12 Fed. R. Serv. 2d 893, 159 U.S.P.Q. (BNA) 86, 1968 U.S. Dist. LEXIS 8816 (D. Del. 1968).

Opinion

OPINION

LAYTON, District Judge.

On June 4, 1968, this Court directed International Business Machines Corporation (I.B.M.), the Senior Party in Patent Interference No. 93,544, to produce certain categories of documents requested by Sperry Rand Corporation (Sperry), the Junior Party in the Interference, pursuant to Rule 34 of the Federal Rules of Civil Procedure and 35 U.S.C. § 24. Production was ordered subject to the following proviso:

“IBM will be required to produce the documents in all of the categories listed except for those which it deems protected by the privilege. As to those documents, it may, in lieu of production, fully identify such documents in writing to Sperry, and if Sperry disagrees with IBM’s contention, the matter may be submitted to this Court for its determination.”

By letters all dated June 19, 1968, I.B.M. advised Sperry that it was withholding approximately ninety documents1 which it contended were either privileged as confidential communications between attorney and client or not subject to production as attorney work-product.

At oral argument, Sperry took the position that no privilege can attach to any communication between attorney and client where the communication relates to a patent interference in the Patent Office. Similarly, Sperry urged that there is no work-product exception with respect to material prepared for the prosecution of a patent interference in the Patent Office. Sperry's view is based upon a part of Judge Leahy’s opinion in Zenith Radio Corp. v. Radio Corporation of America, 121 F.Supp. 792, 794 (Del., 1954), which was re-affirmed by this Court in In re Natta, 264 F.Supp. 734 (Del., 1967) and by Chief Judge Wright in American Cyanamid v. Hercules Powder Co., 211 F.Supp. 85 (Del., 1962) and Minnesota Mining and Manufacturing v. Gentex, 153 U.S.P.Q. 110 (Del., 1967), rehearing denied, 153 U.S.P.Q. 334 (Del., 1967).

I.B.M. contends that the rationale of that portion of Zenith here under consideration was seriously undercut by the United States Supreme Court’s opinion in Sperry v. State of Florida, 373 U.S. 379, 83 S.Ct. 1322, 10 L.Ed.2d 428 (1963), as Judge Steel ruled in Sperti v. Coca Cola, 262 F.Supp. 148 (Del., 1966). Moreover, I.B.M. suggests that the rule of Zenith, insofar as it intimates that the prosecution of a patent interference is not among the “hallmark activities [289]*289of lawyers”, does not take a realistic view of patent interference proceedings.

The questions now before the Court are narrow. Simply put, they are:

(a) Whether the attorney-client privilege can be claimed as to communications, Otherwise privileged,2 made to an attorney for the purpose of securing legal advice or services in the prosecution of a patent interference in the Patent Office.
(b) Whether the work-product of an attorney relating to the prosecution of a patent interference in the Patent Office can be protected from discovery under the work-product doctrine of Hickman v. Taylor, 329 U.S. 495, 67 S.Ct. 385, 91 L.Ed. 451 (1947). Because, as will hereafter be seen, the

documents which are being withheld must be examined one by one and page by page for any earmarks which would tend to indicate that they are not within the attorney-client privilege or are not work-product, this opinion will address itself only to the legal questions set forth, leaving the application of the law to any given document to a supplemental memorandum.

ATTORNEY-CLIENT PRIVILEGE Sperry’s contention that there is no attorney-client privilege in interference proceedings arises from the following language in the Zenith opinion:

“ ‘Acting as a lawyer’ encompasses the whole orbit of legal functions. [Attorney-employees of patent departments] do not ‘act as lawyers’ * * * when handling interference proceedings in the Patent Office concerning patent applications.” 121 F.Supp. at page 794.

In reading this language, it is important to note that it was not intended as an express holding; but rather, as an illustration of a number of activities falling outside the “orbit of legal functions”. And, even more significantly, the language was directed to the “attorney-employees of patent departments” as opposed to “house counsel”. The distinction apparently in Judge Leahy’s mind was that articulated by Judge Wyzanski in United States v. United Shoe Machinery Corporation, 89 F.Supp. 357 (Mass., 1950). In United Shoe, Judge Wyzanski wrote that for the purposes of the privilege, “house counsel” are not to be distinguished from “outside counsel” in that both act as attorneys giving legal advice as opposed to acting as business advisers or officers of the corporation. Members of the patent department, on the other hand, “function less as detailed legal advisers than as a branch of an enterprise founded on patents.” “They are comparable”, the Judge wrote, “to the employees with legal training who serve in the mortgage or trust departments of a bank or in the claims department of an insurance company.” “Grist which comes to their mill has a higher percentage of business content than legal content.” 3

Eight years after Zenith, Judge Wright was faced with a claim of attorney-client privilege as to communications prepared by an attorney-employee of a patent department. American Cyanamid v. Hercules, supra. After re-affirming Judge Leahy’s Zenith opinion, Judge Wright observed that the distinction between “house counsel” and “attorney-employees”, for the purposes of the privilege, should not be determinative.

“It is admitted in United Shoe that such employees as house counsel and members of the patent department both serve dual functions. Since de[290]*290gree is the only difference between the two classes it does not seem justifiable to extend the privilege in blanket form to house counsel and totally deny it to members of patent departments. Each case should turn on its own facts.” At page 89.

Thus, after American Cyanamid, even though Judge Wright was not faced with the precise question posed here,4 the status of the “house-counsel” versus “attorney-employee” rule as applied to interference proceedings was, at least, in question.

Following American Cyanamid in this District was Judge Steel’s opinion in Sperti v. Coca Cola, supra, where he apparently departed from Judge Leahy’s view in Zenith, by deciding that for the purposes of the attorney-client privilege:

“ * * * activities by a person duly qualified to practice in [the Patent Office], constitutes one type of practicing law.” At page 151.

Shortly after Sperti, however, Judge Wright, in Minnesota Mining and Manufacturing v. Gentex, 153 U.S.P.Q. 334 (Del., 1967), excepted to the breadth of Judge Steel’s discussion, apparently fearful that it could be read to give blanket protection to virtually all material prepared in connection with any matter in the Patent Office.

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45 F.R.D. 287, 12 Fed. R. Serv. 2d 893, 159 U.S.P.Q. (BNA) 86, 1968 U.S. Dist. LEXIS 8816, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sperry-rand-corp-v-international-business-machines-corp-ded-1968.