• ALJ Rogers Grants Motion To Compel In Certain Video Game Systems And Controllers (337-TA-743)
  • March 30, 2012 | Author: Alexander E. Gasser
  • Law Firm: Oblon, Spivak, McClelland, Maier & Neustadt, L.L.P. - Alexandria Office
  • On March 21, 2012, ALJ Robert K. Rogers, Jr. issued the public version of Order No. 16 (dated May 26, 2011) in Certain Video Game Systems and Controllers (Inv. No. 337-TA-743) granting-in-part Respondents Nintendo Co., Ltd. and Nintendo of America Inc.’s (collectively “Nintendo”) motion to compel the production of documents that Complainant Motiva, LLC (“Motiva”) was allegedly improperly withholding as privileged.

    The Order addressed several sets of potentially privileged information.  According to the Order, the first was a freedom to operate opinion (“Standley Opinion”) prepared for the principals of Motiva - Kevin Ferguson and Donald Gronachan, by the Standley Law Group.  Motiva alleged that the Standley Opinion was privileged, even though the principals of Motiva shared the opinion with an alleged third party, Mr. Smith, who Motiva asserted was an early investor in Motiva.  Because Mr. Smith paid for the Standley Opinion, he and the other principals were “business partners,” he and the other principals agreed to keep the opinion confidential, and all three individuals had a common legal interest in Motiva.  Nintendo and the Commission Investigative Staff (“OUII”) argued that Motiva waived the privilege regarding the Standley Opinion by providing it to Mr. Smith.  They alleged that nothing indicated that Mr. Smith ever spoke with or sought legal advice from the Standley Law Group, and that he was only a prospective business partner who split the legal cost of the opinion with the two principals of Motiva.  OUII argued that the common interest privilege extended only to those who share common legal interests, rather than solely business or commercial interests, and that Mr. Smith’s sole role was “a provider of financial support,” which is not within the scope of the attorney-client privilege.  ALJ Rogers determined that even if Motiva could substantiate its assertions that Mr. Smith was a business partner and paid for the opinion, Motiva still failed to provide evidence to demonstrate that Mr. Smith had an identical legal, as opposed to business interest.  ALJ Rogers therefore determined that Motiva’s disclosure of the opinion to Mr. Smith waived attorney-client privilege, and Motiva should therefore produce the opinion and all other communications relating to the opinion.

    The second group of documents discussed in the Order were potentially privileged communications relating to Motiva’s domestic industry assertions.  The Standley Opinion also fell within this group, because Motiva relied upon the $11,000 fee for the opinion to support its domestic industry case.  ALJ Rogers determined that the only way to test Motiva’s assertion that the opinion relates to the asserted patents is to examine the opinion, and by putting the contents of the opinion “at issue,” Motiva again waived privilege with respect to the opinion.   Nintendo further argued that by putting the time, fees, and expenses spent by Motiva’s principles for patent prosecution and litigation at issue to prove domestic industry, Motiva waived privilege over such communications, because Nintendo should be permitted to examine and challenge whether  Motiva and its principles devoted the time and resources claimed.  According to the Order, Motiva argued that it produced extensive documentation demonstrating the time and expense spent on prosecution, including billing records, and that with respect to collateral litigation, Motiva was not relying upon the efforts of its attorneys to support a domestic industry, in part, because Motiva’s counsel is working on a contingency basis, and there are no billing records to produce.  OUII argued that while Motiva waived privilege with respect to its expenditures for establishing an alleged domestic industry, it had not waived the substance of any attorney-client communications or work product. ALJ Rogers agreed with OUII and determined that the present situation was analogous to cases where attorneys’ fees are at issue and information must be produced relating to the amounts billed and the general purpose or subject of the work performed to substantiate allegations, but the substance of attorney-client communications are not waived.  With respect to patent prosecution, ALJ Rogers determined that Motiva must produce several documents on its privilege log described as invoices or billing records.  As to the collateral litigation, ALJ Rogers determined that Motiva must produce the entirety of its fee arrangement regarding its related litigation, which it in-part previously withheld, due to privilege — however, Nintendo’s broad request to produce all privileged documents regarding prosecution and litigation was denied.

    ALJ Rogers next determined that Motiva’s privilege log was deficient and violated Ground Rule 4.10.1 for at least the following reasons:

    • Instead of identify a person as an author or sender of a document, the privilege log only identified “custodian” information, which masked the author of a document.  Also, instead of listing a person, the log identified entities, such as “Standley Law Group,” which is insufficient.
    • Rather than separate regular and copy recipients, Motiva improperly combined and did not differentiate between the two.
      The log failed to consistently identify the name of a person, together with their position and entity with which they are employed or associated.  Instead, the log merely listed institutions in entries, or names or persons without their position or affiliation.
    • The log failed to provide sufficient detail as to the general subject matter of each document.  For example, “email regarding attorney/client phone conversation,” fails to indicate any basis for a claimed privilege, and should include additional detail regarding the patents, applications, or litigations to which they relate.
    • Similarly generic descriptions, which failed to state that documents were prepared in anticipation of litigation or relate to litigation were insufficient to support a finding or work product protection.
    • ALJ determined that emails regarding “incorporation” failed to substantiate any claim for work product, and such emails were ordered to be produced.
    • Correspondence between the principals of Motiva that did not appear to involve an attorney, and did not state that they were for the purpose of seeking legal advice were insufficient to support a claim of privilege.  However, ALJ Rogers determined that Motiva would be given one final opportunity to amend its privilege log to provide descriptions adequate to support the claim of privilege.

    Accordingly, ALJ Rogers ordered Motiva to provide an amended privilege log that complies with Ground Rule 4.10.1, and produce any information required by the Order, or which failed to meet the requirements of the ground rule.