Case 1:14-cv-09558-PGG-SN Document 142 Filed 12/09/19 Page 1 of 13
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`NETWORK-1 TECHNOLOGIES, INC.,
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`Plaintiff,
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`-against-
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`GOOGLE LLC and YOUTUBE, LLC,
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`Defendants.
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`SARAH NETBURN, United States Magistrate Judge:
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`12/9/2019
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`14-CV-02396 (PGG)(SN)
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`14-CV-09558 (PGG)(SN)
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`ORDER
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`Defendants Google LLC and YouTube LLC (“Google”) seek production of documents that
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`third party Amster Rothstein & Ebenstein LLP (“ARE”) withheld as protected by the attorney-
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`client or common interest privileges or the work product doctrine. ARE was counsel to Dr.
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`Ingemar Cox, the inventor of the patents in-suit, during the relevant period and is now co-
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`counsel for Plaintiff. The documents at issue are communications ARE had with Network-1 and
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`Mark Lucier, a consultant hired by Cox to assist in the sale of the patents. To resolve the dispute,
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`each party has submitted fifteen documents for in camera review. Because one document was
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`submitted by both ARE and Google, the Court reviewed twenty-nine documents in total.
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`For the reasons discussed below, Defendants’ motion is granted in part and denied in part.
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`ARE has claimed attorney-client privilege over a number of documents that are either not
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`confidential or do not contain legal advice.
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`1
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`Case 1:14-cv-09558-PGG-SN Document 142 Filed 12/09/19 Page 2 of 13
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`I. Legal Standard
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`ANALYSIS
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`ARE argues that the withheld documents are protected by the attorney-client privilege, the
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`common interest privilege, the work product privilege, or some combination of the three. “The
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`attorney-client privilege protects communications (1) between a client and his or her attorney (2)
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`that are intended to be, and in fact were, kept confidential (3) for the purpose of obtaining or
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`providing legal assistance.” Brennan Ctr. for Justice at New York Univ. Sch. of Law v. U.S.
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`Dep’t of Justice, 697 F.3d 184, 207 (2d Cir. 2012) (citing United States v. Mejia, 655 F.3d 126,
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`132 (2d Cir. 2011). Generally, the known presence of a third party destroys the privilege between
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`attorney and client. Egiazaryan v. Zalmayev, 290 F.R.D. 421, 430 (S.D.N.Y. 2013).
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`The common interest privilege is an extension of the attorney-client privilege and an
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`exception to the general rule that disclosure of confidential information to a third party destroys
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`the privilege. See HSH Nordbank AG New York Branch v. Swerdlow, 259 F.R.D. 64, 71
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`(S.D.N.Y. 2009); Allied Irish Banks, P.L.C. v. Bank of Am., N.A., 252 F.R.D. 163, 170
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`(S.D.N.Y. 2008). A party asserting the common interest privilege must demonstrate that: (1) all
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`clients and attorneys with access to the communication had agreed upon a joint approach to the
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`matter communicated, and (2) the information was imparted with the intent to further that
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`common purpose. S.E.C. v. Wyly, No. 10-CIV-5760 (SAS), 2011 WL 3055396, at *2 (S.D.N.Y.
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`July 19, 2011). The doctrine requires that parties’ common interest be “be identical, not similar,
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`and be legal, not solely commercial.” Strougo v. BEA Assocs., 199 F.R.D. 515, 520 (S.D.N.Y.
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`2001) (citation omitted). Arguing that the common interest privilege should apply to
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`communications between it and non-clients Network-1 and Mark Lucier, ARE relies on In re
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`Regents Univ. of California, 101 F.3d 1386, 1390 (Fed. Cir. 1996). The court in Regents found
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`2
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`that the common interest privilege applied to communications between a patentee and attorneys
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`of its exclusive licensee because the parties “had the same interest in obtaining strong and
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`enforceable patents.” Id. ARE contends that the common interest doctrine should apply similarly
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`here to shield communications between ARE, who represented the patentee, Mark Lucier, the
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`patentee’s consultant, and Network-1, a prospective purchaser of the patent.
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`Though “the common interest doctrine has routinely been applied in the context of patent
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`litigation,” the Court of Appeals “has warned that expansions of the attorney-client privilege
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`under the common interest rule should be ‘cautiously extended.’” In re Rivastigmine Patent
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`Litig., No. 05-MD-1661 (HB)(JCF), 2005 WL 2319005, at *3 (S.D.N.Y. Sept. 22, 2005) (citing
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`In re F.T.C., No. 18-CIV-0304 (RJW), 2001 WL 396522, at *4 (S.D.N.Y. Apr. 19, 2001)). This
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`case is distinguishable from Regents. The patentee and exclusive licensee in Regents were found
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`to have identical legal interests because “of the potentially and ultimately exclusive nature of the
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`Lilly-UC license agreement.” Regents, 101 F.3d at 1390. Here, the patentee, Dr. Cox, sought to
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`sell rather than license his interest in the patent. While the prospective purchaser, Network-1,
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`doubtless had an interest “in obtaining strong and enforceable patents,” see id., the patentee’s
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`interest in the patent’s continued viability would be diminished following the sale. That
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`Network-1 paid Dr. Cox’s legal fees and that he now acts as a consultant to Network-1, Joint
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`Letter 5, ECF No. 191, does not render the parties’ legal interests identical at the time of sale
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`negotiations. Instead, as ARE notes, these facts evidence the parties’ shared financial interest. Id.
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`Moreover, many of the communications over which ARE asserts the common interest privilege
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`were not made for the purpose of providing legal advice and instead involve business
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`negotiations which “happen to include . . . a concern about litigation.” See Bank Brussels
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`3
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`Lambert v. Credit Lyonnais (Suisse) S.A., 160 F.R.D. 437, 447 (S.D.N.Y. 1995) (common
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`interest privilege does not encompass a joint business strategy).
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`Finally, ARE claims that all the documents Google seeks are “separately protected by the
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`work product doctrine.” Joint Letter 5, ECF No. 191. The work product doctrine protects from
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`disclosure “documents and tangible things that are prepared in anticipation of litigation or for
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`trial by or for another party or its representative.” Fed. R. Civ. P 26(b)(3). To determine whether
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`a document was prepared “in anticipation of litigation,” courts consider if “in light of the nature
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`of the document and the factual situation in the particular case, the document can fairly be said to
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`have been prepared or obtained because of the prospect of litigation.” Schaeffler v. United
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`States, 806 F.3d 34, 43 (2d Cir. 2015). Documents “prepared in the ordinary course of business
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`or that would have been created in essentially similar form irrespective of the litigation” are not
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`protected by the work product privilege. Id.
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`II. Application to Disputed Documents
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`Applying these principles, the Court conducted an in camera review of the disputed
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`documents and reaches the following conclusions:
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`1. Ref. I.D. No. 829
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`This is an email from ARE to Marc Lucier, copying Dr. Cox and providing links to Audible
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`Magic’s website as well as other links with information about Audible Magic’s business and
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`products. This document is not protected by the attorney-client /common interest privilege, since
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`ARE is not proffering legal advice nor are Lucier or Cox seeking it. This document is also not
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`entitled to work-product protection as there is no indication that it was prepared in anticipation of
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`litigation.
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`4
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`2. Ref. I.D. No. 841
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`This is an email exchange between Marc Lucier, Dr. Cox, and Cox’s attorney Charles
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`Macedo regarding the details of a nondisclosure agreement to be signed by Lucier, Cox, and
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`Network-1. The document is not privileged. To the extent Macedo provides legal advice to his
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`client, Lucier’s presence on the email destroys the privilege. See Argos Holdings Inc. v.
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`Wilmington Tr. Nat’l Ass’n, No. 18-CIV-5773 (DLC), 2019 WL 1397150, at *3 (S.D.N.Y. Mar.
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`28, 2019) (presence of consultant destroys privilege where consultant is not necessary to
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`facilitate the legal advice given). The email was not prepared in anticipation of litigation and is
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`thus not protected work product.
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`3. Ref. I.D. No. 859
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`This is an email from Macedo to Lucier, Cox, and Corey Horowitz, CEO of Network-1,
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`attaching a slide deck containing background information about Dr. Cox, the patent portfolio,
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`and a summary of Google’s YouTube patents. Horowitz and Lucier’s presence on this
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`communication destroys the attorney-client privilege because, for the reasons described above,
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`the common interest exception does not apply. This document is also not protected work product
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`because it was not prepared in anticipation of litigation.
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`4. Ref. I.D. No. 899
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`This is an email chain between Horowitz and Macedo preparing for a phone call with Cox.
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`Cox is not on this communication and, as stated above, the common interest privilege does not
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`apply here to a communication between the patentee’s lawyer and the prospective buyer. This
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`document is not protected by work product doctrine, either, as it was not prepared by Macedo in
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`anticipation of litigation.
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`5
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`5. Ref. I.D. No. 919
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`This is an email chain between Macedo, Horowitz, and Jon Green of Network-1. The
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`communication includes a list of questions that Horowitz says he would like to review with Cox
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`on a diligence call. This communication is not protected by the attorney-client/common interest
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`privilege because, as described above, Horowitz is not Macedo’s client and Horowitz, in any
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`case, is not seeking legal advice. ARE does not claim work product protection of this document.
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`6. Ref. I.D. No. 1019
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`This is an email chain between Macedo and Horowitz regarding term sheet negotiations.
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`For the reasons discussed at Ref. I.D. No. 899, this email is not protected by the attorney-
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`client/common interest privilege nor does it constitute work product.
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`7. Ref. I.D. No. 1061
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`This is an email from Horowitz to Macedo, copying Green. Horowitz identifies an
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`individual patent holder whom Horowitz says “may be an interesting person to focus your (our)
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`attention on. This communication is not protected by the attorney-client privilege because
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`Horowitz is not Macedo’s client. Nor is it subject to the common interest exception for the
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`reasons discussed above. Though Horowitz may be writing in anticipation of some potential
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`litigation, the work product doctrine also does not apply because there is no response from
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`Macedo and therefore no attorney “mental impressions, opinions, or legal theories” to be
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`protected. See Strougo, 199 F.R.D. at 520 (citing Horn & Hardart Co. v. Pillsbury Co., 888 F.2d
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`8, 12 (2d Cir. 1989)). In any case, the work product protection will not apply where “the mere
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`possibility of litigation exists.” Status Time Corp. v. Sharp Elecs. Corp., 95 F.R.D. 27, 29
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`(S.D.N.Y. 1982) (citation omitted).
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`8. Ref. I.D. No. 1070
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`This is an email from Horowitz to Macedo, attaching comments to the sale term sheet. This
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`document is not protected by the attorney-client privilege as Horowitz is not Macedo’s client and
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`the common interest exception would not apply here, especially because the parties do not have
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`identical interests in negotiation of the term sheet. This communication was not prepared in
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`anticipation of litigation and is also not work product.
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`9. Ref. I.D. No. 1075
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`This is a continuation of the thread in Ref. I.D. No. 1070. For the same reasons, it is not
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`privileged.
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`10. Ref. I.D. No. 1077
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`This is another communication between Macedo and Horowitz regarding negotiation of the
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`sale term sheet. For the same reasons as Ref. I.D. No. 1070, it is not privileged.
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`11. Ref. I.D. No. 1094
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`This is an email chain between Macedo and Lucier regarding the sale term sheet. For the
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`same reasons as Ref. I.D. No. 1070, it is not subject to attorney-client /common interest privilege
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`and does not constitute work product.
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`12. Ref. I.D. No. 1218
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`This is a communication between Macedo and Horowitz attaching a Federal Circuit case
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`that Macedo identified as relevant in potential litigation against Defendants. This communication
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`is protected by the work product privilege since it was prepared by Macedo in anticipation of
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`litigation and “tends to reveal mental impressions, conclusions, opinions or theories concerning
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`the litigation.” See United States v. Adlman, 134 F.3d 1194, 1195 (2d Cir. 1998) (documents do
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`not lose work-product protection just because they are “intended to assist in the making of a
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`business decision influenced by the likely outcome of the anticipated litigation.”).
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`13. Ref. I.D. No. 1356
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`This is an email from Macedo to Horowitz, copying Cox and Green. Macedo lists proposed
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`patent claims to assert against Defendants. This document is protected by the work product
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`privilege as it was created by Macedo in anticipation of litigation against Defendants in this
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`action.
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`14. Ref. I.D. No. 1514
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`This is an email from Macedo to Horowitz and Green identifying revenue streams of
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`Defendants and other companies that provide streaming video services. This communication is
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`not protected by the attorney-client privilege/common interest privilege for the reasons discussed
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`above. In any case, the attorney-client privilege is narrowly construed, and this communication
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`may not have been for the purpose of providing legal advice. See Misek-Falkoff v. Int’l Bus.
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`Machines Corp., 144 F.R.D. 48, 49 (S.D.N.Y. 1992) (“Because the attorney-client privilege has
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`the effect of withholding relevant information from the factfinder, the privilege is narrowly
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`construed, applying only where necessary to achieve its purpose.”). It is also not protected work
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`product because the information contained in the email is the type that would have been prepared
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`in the ordinary course of business.
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`15. Ref. I.D. No. 1527
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`This is an email chain between Horowitz and Macedo, copying Cox, regarding a new patent
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`that cites Cox’s patent. The first email in the chain is protected by the work product privilege as
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`it contains Macedo’s mental impressions and appears to have been written with an eye toward
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`anticipated litigation. The later email in the chain, from Horowitz to Macedo is not work product
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`nor is it protected by the attorney-client/common interest privileges for the reasons described
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`supra.
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`16. Ref. I.D. No. 1533
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`This is an email from Macedo to Horowitz, Cox, and Green, expressing Macedo’s view that
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`a particular company should be looked at closely, likely because it may be infringing upon Cox’s
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`patent. This communication was prepared by Macedo in anticipation of potential litigation
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`against that company and is therefore protected by the work product doctrine.
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`17. Ref. I.D. No. 1535
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`This is an email from Macedo to Horowitz, Cox, and Green. The email’s subject matter
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`indicates that it was prepared in anticipation of litigation. This document is protected work
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`product.
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`18. Ref. I.D. No. 1555
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`This is an email from Macedo to Horowitz and Cox attaching and describing a complaint in
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`another patent litigation. Macedo appears to be sharing the complaint with the recipients because
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`of the description of the defendant’s product. Because it appears this email was prepared in
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`anticipation of future litigation, it is protected work product.
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`19. Ref. I.D. No. 1567
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`This is an email from Macedo to Horowitz, copying Cox and Macedo’s legal assistant
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`attaching Macedo’s billing statement. Billing statements are generally not privileged.
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`Egiazaryan, 290 F.R.D. at 430. To the extent a billing statements reveals legal advice, it might be
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`protected by attorney-client privilege. See Riddell Sports Inc. v. Brooks, 158 F.R.D. 555, 560
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`(S.D.N.Y. 1994). But here, because the common interest exception does not apply and the bills
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`were forwarded, unredacted to non-client Network-1, the attorney-client privilege was waived.
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`20. Ref. I.D. No. 1646
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`This is an email chain between Horowitz and Macedo regarding the purchase agreement
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`term sheet. For the reasons described above, communications between Macedo and Horowitz are
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`not protected by the attorney-client/common interest privilege. This document is also not
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`protected work product as it was prepared in connection with the sale of Cox’s patent, not in
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`anticipation of litigation.
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`21. Ref. I.D. No. 1680
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`This is an email from Macedo to Horowitz, copying Cox and Macedo’s legal assistant
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`attaching Macedo’s billing statement. For the same reasons discussed at Ref. I.D. 1567, this
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`document is not privileged.
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`22. Ref. I.D. No. 1719
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`This is an email chain between Horowitz and Macedo, copying Cox and Sam Schwartz, who
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`appears to be Horowitz’s attorney. The email concerns the details of the patent purchase
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`agreement. For the reasons described in Ref. I.D. No. 1094, it is not privileged. ARE does not
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`claim that this document is protected work product.
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`23. Ref. I.D. No. 1813
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`This is an email from Macedo to Horowitz and Green, copying Cox. The email attaches a
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`proposed set of claims for a new patent application. For the reasons described above, the
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`document is not protected by the attorney-client/common interest privilege. This document is not
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`protected by the work product doctrine because it relates to a patent application and was not
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`prepared for litigation. “Documents that are generated in connection with a patent application are
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`not protected by the work-product doctrine simply because an issued patent may give rise to an
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`infringement action.” Softview Computer Prod. Corp. v. Haworth, Inc., No. 97-CIV-8815
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`(KMW)(HBP), 2000 WL 351411, at *5 (S.D.N.Y. Mar. 31, 2000).
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`24. Ref. No. 1878
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`This is an email from Macedo to Horowitz and Green, copying Cox. Macedo attaches the
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`provisional as-filed version of Cox’s patent application. For the same reasons as Ref. I.D. No.
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`1813, this document is neither privileged nor protected work product.
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`25. Ref. I.D. No. 1912
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` This is an email from Macedo to Horowitz and Green, copying Cox. In the email,
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`Macedo identifies a potential patent claim against another company. This is protected work
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`product because it was prepared in anticipation of patent litigation. See Softview Computer Prod.
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`Corp., 2000 WL 351411, at *5 (“Documents pertaining to the patent application process which
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`were also prepared because of actual or anticipated litigation may be protected by the work-
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`product doctrine.”).
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`26. Ref. I.D. No. 1914
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`This is a continuation of the email chain at Ref. I.D. No. 1912. For the same reasons, it is
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`protected work product.
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`27. Ref. I.D. No. 1968
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`This is an email from Macedo to Horowitz and Green, copying Cox and providing a list of
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`proposed claims for Cox’s patent. For the same reasons described at Ref. I.D. No. 1813, this
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`document is neither privileged nor protected work product.
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`28. Ref. I.D. No. 1977
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`This is an email chain between Horowitz and Macedo, copying Cox and identifying
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`potential claims against another company. For the reasons described at Ref. I.D. No. 1912, this
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`document is protected work product.
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`29. Ref. I.D. No. 2008
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`This is an email chain between Horowitz and Macedo regarding terms of the sale from Cox
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`to Network-1. For the same reasons described at Ref. I.D. No. 1094, it is not privileged. ARE
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`does not claim work product protection over this document.
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`CONCLUSION
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`After in camera review of the documents selected by the parties, Defendants’ request is
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`GRANTED in part and DENIED in part. In summary, the common interest privilege does not
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`apply to communications between ARE and Network-1 or between ARE and Mark Lucier.
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`Accordingly, the attorney-client privilege is waived as to documents that ARE shared with
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`Lucier and Network-1, including billing statements. Materials prepared for purposes of a patent
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`application, rather than in anticipation of litigation, are not protected by the work product
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`doctrine. Similarly, communications created to provide business or negotiation advice are not
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`protected work product.
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`Within fourteen days from this order, ARE shall produce communications specified in
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`this order as non-privileged and not protected by the work product doctrine and shall review its
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`privilege log to produce any additional documents in accordance with this order.
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`12
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`The Clerk of Court is respectfully requested to terminate the motion at ECF No. 191 in
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`14-cv-02396.
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`SO ORDERED.
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`DATED:
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`December 9, 2019
`New York, New York
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`13
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