Rowe Int’l. Corp. v. Ecast, Inc., __ F. Supp.2d __, 2007 WL 831772 (N.D. Ill. Mar. 19, 2007) (Kennelly, J.).
Judge Kennelly held that plaintiff Arachnid waived its privilege as to a limited scope of information and held that Arachnid’s related uses of the information did not rise to the level of the crime-fraud exception, even if they may have been inequitable conduct. Arachnid filed a motion seeking the return of three inadvertently produced, privileged "patent reports." Defendants filed a cross-motion to compel production of privileged materials arguing that Arachnid waived the privilege as to the three documents and that the crime-fraud exception destroyed the privilege to the extent it was not waived. The Court agreed that the patent reports were inadvertently produced, but still held the privilege was waived on a limited scope of information. In 1999, a former Arachnid employee testified that he learned from Arachnid’s attorneys that "the only way we would receive [one of] the patent[s-in-suit] was if we included that information." While a former employee cannot waive the privilege, Arachnid’s attorneys attended the deposition in question and failed to object to the question or the answer. Additionally, Arachnid later turned the transcript over to the PTO during prosecution of a subsequent application and to defendants during production in the instant case. These actions combined to waive the privilege as to the specific information discussed by the ex-employee, the inclusion of figure 2 in the patent.
The Court then held that the crime-fraud exception did not apply. Defendants argued that Arachnid’s counsel’s statements to the PTO during examination that a prior art reference identified as Sidi was "fundamentally different" from the examined invention was fraudulent because the inadvertently disclosed patent reports showed that counsel believed the Sidi reference anticipated some or all of Arachnid’s application. But the Court held that hold attorney argument to that high a standard would chill legal representation. For example, the Court noted that defendants’ requested standard would prevent a criminal defense attorney from warning his client that he would surely be convicted, but then arguing to the jury that the government had not proven its case beyond a reasonable doubt.