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ORGANON INC. v. MYLAN PHARMACEUTICALS

February 17, 2004.

ORGANON INC. and AKZO NOBEL N.V., Plaintiffs,
v.
MYLAN PHARMACEUTICALS, INC., Defendant; ORGANON INC. and AKZO NOBEL N.V., Plaintiffs, v. TEVA PHARMACEUTICALS USA, INC., Defendant; ORGANON INC. and AKZO NOBEL N.V., Plaintiffs, v. ALPHAPHARM PTY, LTD., Defendant



The opinion of the court was delivered by: FAITH HOCHBERG, District Judge

OPINION & ORDER

This matter calls upon the Court to decide a legal issue of first impression under the laws of the Netherlands. That question is whether documents noticed by Defendants in 2002 Page 2 to be produced by Organon's Dutch patent agents*fn1 are presumptively entitled to be privileged in the same manner as would a patent attorney's confidential communications, absent an applicable exception to the attorney-client privilege doctrine.

On April 4, 2003, the Dutch legislature enacted amendments to the Dutch Patent Act. The relevant section states:
Unless otherwise under or pursuant to the law, a patent agent or an individual working under such agent's supervision, is obligated to observe confidentiality regarding all that of which the agent becomes aware pursuant to his activities. This obligation remains in force after termination of the relevant activities.
Memorandum of Amendment. The amendments became effective on May 1, 2003.

  In light of the April 4, 2003 Dutch legislation regarding patent agents' privilege under the Dutch Patent Act, this Court has vacated Magistrate Judge Chesler's Order and its own affirmance thereof*fn2 to review de novo the issue of whether the Dutch patent agents' documents asserted as privileged must be produced. There is no doubt that the documents, if demanded today, would be cloaked with a privilege, absent an applicable exception to the attorney-client privilege. However, the Defendants demanded the documents in 2002. Thus, the issue at bar is whether the April 4, 2003 Dutch legislation regarding patent agents constitutes a newly created Page 3 privilege that did not previously exist, or whether it is a codification of an existing privilege that had been recognized by the Dutch legal system through implication and common practice. Under the applicable choice of laws doctrine, this Court shall consider the law of the Netherlands in determining the appropriate legal principles that will apply. This issue would be one of first impression for the Dutch Supreme Council (the "Dutch Supreme Court"), and this Court shall endeavor to interpret Dutch law in the same manner as would the highest court in the Netherlands.

  Dutch Case Law

  The sole Dutch case that touches upon the issue of whether communications of patent agents are privileged when they act within the scope of a patent attorney's functions is Bruil v. Tital Int'l, Jan. 5, 1988, N.J. 1989, 563. Judge Chesler, in his December 4, 2002 Order, and Magistrate Judge Thynge, in Tulip Computers Int'l B. V. v. Dell Computer Corp., 210 F.R.D. 100 (D. Del. 2002), reached two different conclusions based on divergent interpretations of Bruil.

  In Bruil, the Dutch district court held that a patent agent may not assert the privilege of non-disclosure for acts beyond the scope of his specific duties in rendering assistance with respect to patent applications. The court did not expressly discuss the privilege of patent agents acting within the scope of their duties because the case involved a patent agent who was clearly acting outside the scope of his professional capacity as a patent agent. It is Bruil's silence, rather than what was explicitly stated, that both Judge Chesler and Judge Thynge considered in reaching their respective conclusions, and both of their decisions pre-dated the legislative enactment in April 2003. Page 4

  In Tulip, Judge Thynge interpreted Bruil's silence as follows: "[I]f Article 165(2)(b) did not apply to patent attorneys, the Dutch court could have easily so stated and based its opinion on that finding." Tulip, 210 F.R.D. at 103-04. In effect, Judge Thynge found that Bruil's silence implied the existence of a privilege for Dutch patent agents. In affirming Tulip, the District Court considered the recent amendments to the Dutch Patent Act (see infra for a discussion of the Memorandum of Amendment) and noted that the amendments "can fairly be read as a codification of existing law, at least as easily as it can be read in the fashion urged by Dell." Tulip Computers Int'l B. V. v. Dell Computer Corp., No. 00-981, slip op. at 2-3 (D. Del. Feb. 10, 2003). Judge Chesler, however, determined that the Dutch court never reached the issue of privilege for patent agents, and therefore, absent an explicit statutory provision, there was no basis to assume that the Bruil court recognized that communications with patent agents are privileged.

  Defendants have sought to fill the legal void by analogy to a Dutch Supreme Court decision denying privilege for tax consultants, No. 1570 Decision, N.J. 1986, 815, May 6, 1986 (hereinafter, "In re Tax Consultant"). Defendants argue, by analogy, that the highest court of the Netherlands would regard Dutch tax consultants and patent agents similarly, particularly with respect to whether communications with them are privileged under Dutch law. In In re Tax Consultant, the Dutch Supreme Court determined that a tax consultant shall not be accorded the same status as an attorney or a notary and, therefore, is not entitled to the privilege that would exempt him from testifying. In re Tax Consultant, Judgment on the Plea, ¶ 4.3. Defendants contend that the same analysis should apply to patent agents, pointing out that both tax consultants and patent agents share similarities as professional groups, both of which have Page 5 private codes of conduct that require them to safeguard the privacy of their client's communications. Defendants argue that, because Dutch law in 1986 did not recognize the privilege for tax consultants, this Court should decide that patent agents likewise had no confidentiality privilege under Dutch law prior to the legislature's enactment of the April 2003 Memorandum of Amendment. See infra for a discussion of the Memorandum of Amendment.

  In reaching its decision, the In re Tax Consultant Court reasoned that "it must be borne in mind that the tax consultant group is not homogenous and there is no law to exclude anybody from working as a tax consultant. . . .Under these conditions, the tax consultant cannot be counted among the previously mentioned group of confidants who are entitled to the right not to have to testify." Id. at ¶ 4.4. The absence of legal restrictions limiting who can qualify as a tax consultant was an important aspect of the Court's decision. Because "anybody" could work as a tax consultant, a sweeping exemption shielding tax consultants from testifying would undermine "the public interest of having the truth see the light in court." Id. at ¶ 4.2.

  The Dutch "exemption from testifying" is highly analogous to the privilege of confidentiality. Indeed no party to this case has argued otherwise. The highest court of the Netherlands accords this privilege "to a limited group of people who, by their office or profession, are held to secrecy about all that was confided to them because of their status and whose social function implies that . . . each person can freely, and without fear for disclosure of what was communicated, approach them for help and advice." Id. Patent agents in the Netherlands are regulated by provisions of the Dutch Patent Act, which limits by concrete Page 6 criteria who may become patent agents.*fn3 Accordingly, because Dutch patent agents are a homogenous group of professionals that is regulated by a statute, this Court holds that the courts of the Netherlands would find that patent agents are within the definition of a "limited group" distinguished from tax consultants by the In re Tax Consultant Court.*fn4

  Dutch Statutory Law

  Pursuant to the State Act of June 13, 2003 and a royal decree dated April 4, 2003, the Dutch legislature enacted amendments to the Dutch Patent Act that state unequivocally that Dutch patent agent's communications are entitled to a privilege similar to the attorney-client privilege accorded to patent attorney's communications in the United States. On May 1, 2003, statutory provisions governing the privileged nature of communications with patent agents became effective. Accordingly, "a patent agent or an individual working under such agent's supervision, is obligated to observe confidentiality regarding all that of which the agent becomes aware pursuant to his activities." Memorandum of Amendment, No. 6, 27 193 (R1658), ¶ 4.

  In the accompanying explanation, the legislature likened the patent agent's obligation of confidentiality to that of attorneys and civil-law notaries.*fn5 Memorandum of Page 7 Amendment, Explanation. Moreover, the obligation of confidentiality extends internationally to cover both European patent agents and patent agents in the United States, as the legislature so clarified:
If the obligation did not apply to Dutch patent agents, they could be forced, under certain circumstances, to disclose ...

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