Judge Bataillon just issued an eminently cite-able opinion on the scope of the common interest privilege—an issue that comes up quite a bit in the district, but is notoriously hard to pin down.
What makes this case—Fraunhofer-Gesellschaft Zur Forderung der angewandten Forschung e.V. v. Sirius XM Radio Inc., C.A. No. 17-184 (D. Del. Sept. 2, 2022) (Mem. and Order)—so useful is that the plaintiff and its alleged common interest BFF had three separate agreements which were executed at different times. This, in turn, allowed the Court to neatly lay out where along the chain of agreements the common interest privilege attached.
NDA Is Not Enough
All three agreements between Fraunhofer and IPXI (the aforementioned BFF) centered on licensing the patents in suit. The first such agreement was a non-disclosure agreement executed by both parties while they were discussing the possibility of a licensing agreement. The Court found this agreement insufficient to create any common interest privilege, noting that "An NDA does not create legal obligations beyond nondisclosure." Id. at 5. As noted in the Magistrate Judge's Order that Judge Bataillon affirmed, the NDA specifically stated that "Nothing herein shall obligate any party to proceed with any transaction . . . ." Fraunhofer, D.I. 579 (D. Del June 28, 2022).
"Master Agreement" Is Enough
Next, Fraunhofer and IPXI entered into a "Master Agreement." This agreement did not actually transfer any rights to the patents, but set forth the general terms under which various patents might be licensed and noted than any such agreement "shall include at least the following terms . . . ."
Judge Fallon held (the parties did not object to this holding and so Judge Bataillon did not address it) that this licensing amuse-bouche was sufficient to establish a common interest, stating:
A review of the Master Agreement establishes that Fraunhofer and IPXI were committed to an exclusive license agreement and had agreed to mutual obligations, for example, IPXI's right to seek a "commercially Essential" Evaluation of the patents by an expert. As parties to the Master Agreement, they shared a common legal interest in strong and enforceable patents.
Id. at 9.
License Option Agreement
Shortly after executing the Master Agreement, Fraunhofer and IPXI entered into a Licesne Option Agreement which actually transferred patent rights. As you probably guessed given the above, the Court found that this agreement also created a common interest privilege. I could have stopped, but three headings look better.
You're welcome.
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