“It is not uncommon for intellectual property attorneys and their clients to have multi-year attorney-client relationships where first-hand knowledge of the development of the client’s intellectual property informs the context of representation.” – NYIPLA letter
The New York Intellectual Property Law Association (NYIPLA) filed an amicus brief with the US Supreme Court last Thursday Regarding the grand jury. The petition, filed in April this year, asked the Supreme Court whether communications containing both legal and non-legal advice should be protected by attorney-client privilege. The issue has far-reaching implications for attorney-client privileges, particularly for intellectual property attorneys, the NYIPLA letter said.
NYIPLA argues that the Supreme Court should “enact a rule that protects a dual-purpose communication when a substantial purpose of the communication is to obtain or provide legal advice.”
Currently, the Courts of Appeal are divided as to whether this rule should be adopted over a rule that protects the communication only when legal advice was the dominant purpose of the communication.
The Supreme Court granted the request and on November 10 set the hearing date for January 2023.
In its amicus brief, NYIPLA argues that the Supreme Court should clarify the law so that intellectual property attorneys and their clients can communicate more openly and better predict when their communications will reach the legal standard of attorney-client privilege.
confusion in the courts
The courts of the Seventh Circuit, Ninth Circuit and DC Circuit have all made different rulings on attorney-client privilege when discussing both legal and non-legal advice. The DC Circuit ruled that attorney-client privilege applied so long as “an essential purpose” of the communication was legal advice. The Ninth Circuit ruled that if a non-legal matter was of major importance in the communication, the privilege did not apply, while the Seventh Circuit ruled that a dual-purpose communication could never be considered privileged.
The NYIPLA wrote in its brief: “The chasm between the appellate courts as to the proper test to determine whether dual-purpose communications are privileged creates uncertainty.”
The association fears that this unpredictability “impairs open communication between attorney and client, impairs the ability to provide effective advice and drives up costs for clients”.
They argue that since intellectual property attorneys provide clients with both legal and non-legal advice due to their expertise in specialized scientific and technical areas, this dual-purpose communication should be covered by attorney-client privilege. Additionally, as IP regulation becomes “more complex,” the NYIPLA argues that IP attorneys advise clients on both legal and business matters.
The group believes that a ruling like that of the Seventh Federal Court, which ruled that all dual-purpose communications were unprivileged, would jeopardize clients’ IP rights and impair communications between IP attorneys and clients.
“It is not uncommon for IP attorneys and their clients to engage in multi-year attorney-client relationships, where first-hand knowledge of the development of the client’s intellectual property informs the context of representation and enables attorneys to provide the client with a… to provide effective legal advice. ‘ wrote NYIPLA.
NYIPLA is asking the Supreme Court for consistency so attorneys and clients can predict which communications are privileged and which are not:
“This Court should … find that while obtaining and providing legal advice is an essential purpose of the communication, it is protected by attorney-client privilege. Because clients can predictably apply this rule, they can fully disclose all relevant facts to their attorney. Your lawyers can then advise you on the legal and business aspects of the IP activity or commercial transaction.”
In this regard, NYIPLA prefers the DC circuit decision for a major purpose test to a major purpose test. In the case of 2014 Kelloggthen Brett Kavanaugh, DC Circuit Judge, called the significant purpose test “clearer, more precise and more predictable”.
NYIPLA wrote ef: “The Significant Purpose Test allows for an open discussion between clients and their counsel, can be predictably applied by judges and counsel, and is easily understood by the layperson. As such, it best fulfills the purposes of attorney-client privilege.”
According to the association, if the other tests were used, it would leave too much room for interpretation, as it is difficult to agree on the main purpose of the communication or to guess whether a court would see it the same way. In fact, the current Supreme Court Justice, Kavanaugh, wrote in the Kellogg The DC Circuit ruling states that determining the primary purpose of communications between attorneys and clients “may be an inherently impossible task.”
In its Executive Summary, NYIPLA cited several examples where attorney-client communications necessarily serve a dual purpose. Under a significance test, clients and IP attorneys have a better idea of whether the communication is privileged or not. This includes communicating about the launch of a new product or the acquisition of intellectual property.
When an attorney and client are unable to speak freely about such issues, NYIPLA argued that it “can result in undue compartmentalization of information and impede the free discussion of IP matters in dual-purpose communications.” The client may need to direct the attorney to provide legal advice only and entrust the business information to someone else to apply the advice.”
Where to go from here
The Supreme Court granted the motion in October, setting the hearing date for Monday, January 9, 2023.
Several other organizations, including the Washington Legal Foundation, the California Lawyers Association, and the Association of Professional Responsibility Lawyers, have submitted amicus briefs to the Supreme Court.
The petitioner is being represented by lawyers from Hochman Salkin Toscher and Munger and Tolles & Olson LLP. Irena Royzman of Kramer Levin wrote the NYIPLA briefing.
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