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TC Technology LLC v. Sprint Corp.

United States District Court, D. Delaware

December 13, 2018

TC TECHNOLOGY LLC, Plaintiff,
v.
SPRINT CORPORATION and SPRINT SPECTRUM, L.P., Defendants.

          MEMORANDUM ORDER

         Presently before the Court is the motion to compel production of non-privileged documents filed by Defendants Sprint Corporation and Sprint Spectrum, L.P. (collectively "Sprint"). (D.I. 161). I have considered the parties' briefing. (D.I. 162, 172, 183).

         I. BACKGROUND

         Plaintiff TC Technology LLC ("TC Tech") is jointly owned by cable companies Time Warner Cable LLC ("TWC") and Cox Communications, Inc. ("Cox") and has no separate employees. (D.I. 172 at 2). TC Tech filed this action against Sprint alleging Infringement of U.S. Patent No. 5, 815, 488 ("the '488 patent") on March 10, 2016. (D.I. 1). The relevant timeline, however, starts well before TC Tech filed suit.

         In December of 2011, Sprint sued TWC and Cox, among others, for infringement of Voice over Internet Protocol ("VoIP") patents. (D.I. 162 at 2). In early 2012, TWC and Cox began to consider joint acquisition of the '488 patent from CableLabs, a consortium of U.S. cable companies. (D.I. 172 ¶ 10; D.I. 175 ¶ 7). On March 26, 2012, TWC and Cox formed TC Tech to acquire and monetize the '488 patent. (D.I. 175, ex. A). On March 30, 2012, TC Tech purchased the '488 patent from CableLabs. (Id., ex. B). In the spring of 2013, TC Tech, TWC, and Cox began to hear pitches from outside counsel for potential litigation asserting the '488 patent. (D.I. 173 ¶ 30; D.I. 175 ¶ 26). TWC and Cox met with Latham & Watkins LLP in October of 2015, and all three entities formally retained the firm in January of 2016. (D.I. 173 ¶ 33; D.I. 175 ¶ 30). In March of 2017, after this suit was filed, Sprint won a $140 million verdict against TWC. (D.I. 162 at 3).[1]Sprint settled its suit against Cox later that year. (Id.).

         Sprint brought this motion to compel the production of various pre-2013 communications between TC Tech, TWC, and Cox.[2] The disputed documents can be sorted into two, overlapping categories-(1) communications including third parties (D.I. 183 at 4 n.l, ex. A), and (2) communications alleged to be likely to contain relevant business information (D.I. 162, app. 2). In regard to the first category, the parties dispute whether TC Tech can claim attorney-client privilege via the common-interest exception to third-party disclosures.[3] (D.I. 183, ex. A; D.I. 162 at 8-15; D.I. 183 at 4-10). In regard to the second category, Sprint argues that, even if the communications are privileged in part, TC Tech should be required to produce the portions that contain non-privileged business information. (D.I. 162 at 7-8; D.I. 183 at 1-4).

         II. LEGAL STANDARD

         A. Common Interest Privilege

         "The attorney-client privilege" is a common-law privilege that "protects communications between attorneys and clients from compelled disclosure." In re Teleglobe Commc'ns Corp., 493 F.3d 345, 359 (3d Cir. 2007). In order for the privilege to apply, there must be "(1) a communication (2) made between privileged persons (3) in confidence (4) for the purpose of obtaining or providing legal assistance for the client." Id. (quoting Restatement (Third) of the Law Governing Lawyers § 68 (Am. Law. Inst. 2000)). The party asserting the privilege bears the burden of establishing the requisite elements. In re Grand Jury, 705 F.3d 133, 160 (3d Cir. 2012). A communication is only privileged if made in confidence. Teleglobe, 493 F.3d at 361. If "persons other than the client, its attorney, or their agents are present, the communication is not made in confidence." Id. Further, "if a client subsequently shares a privileged communication with a third party, then it is no longer confidential, and the privilege ceases to protect it." Id.

         The common interest doctrine is an exception to the general rule that voluntary disclosure to a third party of purportedly privileged information waives the privilege. Acceleration Bay LLC v. Activision Blizzard, 2018 WL 798731, at *4 (D. Del. Feb. 9, 2018); Leader Techs., Inc. v. Facebook, Inc., 719 F.Supp.2d 373, 376 (D. Del. 2010). The privilege protects "all communications shared within a proper 'community of interest.'" Teleglobe, 493 F.3d at 364 (citations omitted). The interests "must be 'identical, not similar, and be legal, not solely commercial.'" Leader Techs., 719 F.Supp.2d at 376 (quoting In re Regents of the Univ. of Cal, 101 F.3d 1386, 1390 (Fed. Cir. 1996)).[4] Additionally, to show that the members of the community are "allied in a common legal cause," the party asserting the privilege bears the burden of showing "that the disclosures would not have been made but for the sake of securing, advancing, or supplying legal representation." In re Regents of the Univ. of Cal, 101 F.3d at 1389 (quoting In re Grand Jury Subpoena Duces Tecum, 406 F.Supp. 381, 386 (S.D.N.Y.1975)); see also In re Bevill, Bresler & Schulman Asset Mgmt. Corp., 805 F.2d 120, 126 (3d Cir. 1986).

         The parties dispute whether the common interest doctrine also requires communications be made through separate counsel. In Teleglobe, the Third Circuit provided that "to be eligible for continued protection, the communication must be shared with the attorney of the member of the community of interest," meaning that "separate attorneys share information (and not the clients themselves)." 493 F.3d at 364-65. TC Tech argues that this language is dicta. (D.I. 172 at 11); see TD Bank, N.A. v. Hill, 2014 WL 12617548, at *3 (D.N.J. Aug. 20, 2014). Although the Third Circuit does state that its common interest opinion "may seem surplusage," it is not clear that the opinion is dicta. Teleglobe, 493 F.3d at 365 n.18 (noting that the district court erroneously found a community of interest, and that existing caselaw was confused, making it important to distinguish between the common interest privilege and the joint-client privilege). But, regardless, Teleglobe applied state law and is thus not controlling authority. See Id. at 363-65.

         This Court has previously found that requiring separate counsel is "too narrow" of an application of the common interest doctrine. See Intellectual Ventures I LLC v. Altera Corp., 2013 WL 12311005, at *5-6 (D. Del. July 25, 2013). "The Third Circuit has stated, '[t]he presence of a third party will not vitiate the attorney-client privilege, if the third party is the attorney's or client's agent or possesses a commonality of interest with the client.'" Id. (quoting In re Grand Jury Investigation, 918 F.2d 374, 386 (3d Cir. 1990)). In Intellectual Ventures, the third party to whom the privileged communications was disclosed was a non-attorney consultant. Id. at *5. The defendants argued that the common interest doctrine did not apply because, among other things, "there is no evidence that [the third party] was represented by an attorney." Id. This Court rejected that argument and found a "sufficient common interest" between the plaintiffs and the third party. Id. at *6.

         In light of Intellectual Ventures and In re Grand Jury Investigation, I find that the common interest doctrine does not strictly require that communications be between separate attorneys. It is sufficient to show that the client and third parties shared an interest that is "identical, not similar," and "legal, not solely commercial."

         B. Business Advice

         The attorney-client privilege requires that a communication be made "for the purpose of obtaining or providing legal assistance for the client." Teleglobe, 493 F.3d at 359. "Where a lawyer provides non-legal business advice, the communication is not privileged." Wachtel v. Health Net, Inc.,482 F.3d 225, 231 (3d Cir. 2007). Courts have recognized that "business and legal advice may often be inextricably interwoven." Hercules, Inc. v. Exxon Corp.,434 F.Supp. 136, 147 (D. Del. 1977). For this reason, courts look to the documents' primary purpose to determine whether ...


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