Common Legal Interest Doctrine Saves Privileged Documents From Production Where Parties Contemplated An Acquisition Of Patents

Plaintiff moved to compel the production of documents that were listed on the defendants' privilege logs. The district court explained the disputed documents as follows: "The disputed documents at issue were either authored by Ablation Frontiers, Inc.'s ("AFI") outside counsel for AFI, or Medtronic's outside counsel for Medtronic. The documents were subsequently turned over to each respective party by the other during Medtronic's negotiations to acquire all of AFI's products and related intellectual property."

The plaintiff asserted that the documents were not privileged because they pertained to business advice and not legal advice.

The district court noted that the Ninth Circuit normally applies an eight part test to determine attorney-client privilege: (1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal adviser, (8) unless the protection be waived.

In re Grand Jury Investigation, 974 F.2d 1068, 1071 n. 2 (9th Cir. 1992) (quoting United States v. Margolis (In re Fischer), 557 F.2d 209, 211 (9th Cir. 1977)).

After reviewing the documents in camera, the district court determined that they met the eight factor test. Nonetheless, the plaintiff contended that disclosure of the documents to an unrelated third party in a business transaction waived the privilege. Defendants contended that the privilege was not waived because the communications fit within the common legal interest doctrine. "The common interest privilege . . . applies where the (1) communication is made by separate parties in the course of a matter of common [legal] interest; (2) the communication is designed to further that effort; and (3) the privilege has not been waived." Id. at 495 (citation omitted)."

The plaintiff contended that the doctrine did not apply because the communications were in...