Are your confidential documents confidential?

by FPA Patent Attorneys

[authors: James Cherry & Stuart Irvine]

In April 2013 Australian patent law will change to more closely align patent attorney privilege with legal professional privilege.

While this is a welcome change, and will hopefully rectify certain flaws of the current patent attorney privilege regime, claims of privilege are not impenetrable and there are circumstances where a competitor will be granted access to confidential documents.

The main purpose of this note is to alert readers to this possibility. While access to documents will not, of course, always be granted, working under the worst-case scenario that any documents generated could become accessible to a competitor is prudent. This can include documents such as notes made by an expert witness, notes made by patent attorneys or solicitors when dealing with expert witnesses, draft patent specifications, search results, and so forth.

The issues surrounding when privilege exists, and how privilege can be lost, are numerous, complex, and beyond the scope of this article. If you have any specific queries please contact us or Stuart Irvine.

The Risk

Australian law provides mechanisms (eg discovery and notices to produce documents) for one party to seek access to documents created by or in the possession of another party. To prevent such access being granted, a party can assert that the sought documents are privileged. Even privileged documents must be disclosed, however, if that privilege is expressly or impliedly waived.

At a very high level, privilege can be asserted on the basis that a document is confidential and was created for the dominant purpose of:

  • a legal practitioner communicating legal advice to a client;
  • a registered patent attorney providing intellectual property advice to a client; or
  • providing a client with professional legal services relating to an Australian or overseas proceeding. 

The concept of privilege will be familiar to many overseas practitioners – particularly US and UK lawyers and patent attorneys – but it is important to stress that questions of when privilege exists, and when privilege will be deemed to have been waived, may be answered differently in Australia compared to other jurisdictions.

Two recent decisions of the Australian Federal Court serve as reminders that one should not automatically assume that privilege will act to prevent access to documents generated in the course of working with expert witnesses. In one of these decisions the Court acknowledged that not all documents generated by an expert would be privileged, and in the other the Court granted access to private notes taken by an expert when observing an experiment.

Where materials are generated in the course of working with an expert (whether for preparing post-filing data or evidence for use in contentious matters), the general position is:

  • if  an expert report is filed, the act of filing and relying upon the expert report may result in privilege being waived in any materials used by the expert to form their opinion. Such materials may include, for example, notes taken by patent attorneys/solicitors in expert meetings and draft expert reports.
  • irrespective of whether an expert report or affidavit is filed, materials unilaterally generated by an expert (e.g. working notes or the expert’s own drafts), and which are not in the nature of communications, may not attract privilege at all.

Optiver v Tibra (No 5)

In Optiver Australia Pty Ltd v Tibra Trading Pty Ltd (No 5)1, Tibra subpoenaed working notes from several of Optiver’s experts. The experts in question had not sworn any affidavits/reports in the dispute, which could lead one to reasonably expect that such notes would be privileged.

Although Optiver led general evidence that the experts’ notes were privileged, no specific evidence as to the nature of particular documents or document categories was provided. Absent specific evidence as to the precise nature of individual document, the Court was unable to determine the purpose(s) of the documents sought and consequently refused to set the subpoenas aside.

The Court reiterated that the crucial issue in question was:

“…whether the dominant purpose that brings a document into existence is for communication to a lawyer for the purpose of legal advice or use in legal proceedings".2

With this in mind the Court accepted that many of the subpoenaed documents were likely to be privileged, but recognised that this was not axiomatic – citing established common law that:

1. documents generated unilaterally by an expert witness, such as working notes, field notes, and the witness’s own drafts of his or her report, do not attract privilege because they are not in the nature of, and would not expose, communications; and

2. privilege cannot be maintained in documents used by an expert to from an opinion or write a report irrespective of how the expert came by those documents.

Optiver has been given a chance to put on proper evidence of privilege in relation to the subpoenaed documents.

Where evidence from an expert is filed, therefore, access to materials (such as draft expert reports and notes taken in the course of interviews in order to produce such drafts) may be sought on the basis that they were influential in the formation of the opinion put forward in the expert’s evidence.

Bristol-Myers Squibb v Apotex (No 3)

The accessibility of expert notes was considered even more recently in Bristol-Myers Squibb Company v Apotex Pty Ltd (No 3)3. While not groundbreaking, this decision clearly affirms the 2nd common law principle set out above.

In this case Apotex sought access to notes made by one of Bristol-Myers’ experts. The notes were taken by the expert when observing an experiment which was discussed in  an affidavit filed by the expert. 

In granting Apotex access to the notes the Court held that:

  • the expert’s notes were privileged as they were for the purpose of providing information responsive to Bristol-Myers’ requests; but
  • by making an affidavit in the proceedings privilege in the notes had been waived.

Critical to this finding was the Court’s conclusion that the notes in question were used “as the direct source for the observations and consequent opinions” expressed in the expert’s affidavit.

Mitigating the risk

Ultimately, whether or not a third party will be able to gain access to materials will be a question of fact.

This being the case, the best (and perhaps only) way of limiting the consequences of materials becoming accessible to other parties is to recognise this as a possibility when commencing work with an expert, and keeping it in mind throughout the process.

Even if materials are, as a matter of fact, discoverable, it does not necessarily follow that access will be sought. This is due to the simple fact if one party seeks access to materials the other party could well respond in turn. In many instances this alone may engender a reluctance to throw the first stone.

1. [2012] FCA 1226
2. [2012] FCA 1226 at 11
3. [2012] FCA 1310


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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