Will State Courts Recognize Patent Agent Privilege?

A Texas Court of Appeals held that the privilege between patent agents and their clients - recognized by the Federal Circuit in In re Queen’s University, No. 2015-145 (Fed. Cir. March 7, 2016) - is not recognized by Texas state courts. In re Andrew Silver, 05-160074-CV (Dallas Ct. App. Aug. 17, 2016).  The court reasoned that, because the “Federal Circuit applies its own law for substantive and procedural issues” for patent-related cases, “in a civil case, [Texas] state law governs privilege” and “Queen’s University is not binding here.”  A dissent would have recognized patent agent privilege for matters relating to patent prosecution, but not for litigation.

Andrew Silver owns patents (numbers not listed in the opinion) relating to a device that allows restaurant patrons to order meals, play games, and pay their checks at their tables. Silver licensed the patents to Tabletop Media, LLC. The lawsuit concerns a contract dispute, governed by Texas state law, related to the licenses.  The trial court ordered Silver to produce emails between Silver and his non-attorney patent agent, Raffi Gostanian. Silver filed a writ of mandamus to the Court of Appeals to withdraw the order to compel production of the communications between Silver and his patent agent.

To succeed on a writ of mandamus in Texas appellate courts, the party seeking relief “must show that the trial court abused its discretion and that [there is] no adequate appellate remedy.” The court held that “only privileges grounded in the Texas Constitution, statutes, the Texas Rules of Evidence, or other rules established pursuant to statute are recognized in Texas.” Notably, the court held that Queen’s University was not binding because “the underlying dispute does not involve a determination of the validity of the patent or whether Tabletop Media, LLC infringed on the patent…and neither this Court nor the trial court is required to apply federal patent law to the merits of this case.”

The dissent is worth reading in full because it explains the factual underpinnings of the case and the Texas laws applied in the holding. Notably, the dissent cited Sperry v. State of Florida, 373 U.S. 379 (1963), which held that “the preparation and prosecution of patent applications for others constitutes the practice of law,” and that non-attorney patent agents could not be prohibited by the State of Florida from prosecuting patents. Texas Rule of Evidence 503(a)(3), the dissent explained, defines a “lawyer” as “a person authorized…to practice law in any state or nation.” Relying on Sperry, the dissent would recognize patent agents as “lawyers” for the purposes of Rule 503(a)(3) because patent agents are authorized by the U.S. (“a nation”) for patent prosecution.  Thus, the dissent would recognize patent agent privilege for communications and documents related to patent prosecution but would compel the communications related to litigation matters. Because the court compelled production of privileged documents, the dissent would have held that the trial court abused its discretion and would have granted the writ of mandamus.

Lessons for Practice  

In light of this case, take care to preserve attorney-client privilege when working with matters that may result in a proceeding in a state court. The majority opinion sets up an awkward situation where the same communications may be privileged in federal litigation but unprivileged in state litigation. It is unclear whether other courts will follow the reasoning of Silver or the dissent, or whether other states have privilege laws as strict as Texas. When drafting a sale or license for patents, consult local state laws regarding privilege when the patents were prosecuted by a patent agent without supervision of a patent attorney.