Here is the text of new Federal Rule of Evidence 502, eliminating waiver resulting from inadvertent disclosures of attorney-client privileged or work-product materials in federal litigation:
Federal Rule of Evidence 502 (signed into law September 19, 2008)
The following provisions apply, in the circumstances set out, to disclosure of a communication or information covered by the attorney-client privilege or work-product protection.
(a) Disclosure made in a federal proceeding or to a federal office or agency; scope of a waiver. —
When the disclosure is made in a federal proceeding or to a federal office or agency and waives the attorney-client privilege or work-product protection, the waiver extends to an undisclosed communication or information in a federal or state proceeding only if:
(1) the waiver is intentional;
(2) the disclosed and undisclosed communications or information concern the same subject matter; and
(3) they ought in fairness to be considered together.
(b) Inadvertent disclosure. —
When made in a federal proceeding or to a federal office or agency, the disclosure does not operate as a waiver in a federal or state proceeding if:
(1) the disclosure is inadvertent;
(2) the holder of the privilege or protection took reasonable steps to prevent disclosure; and
(3) the holder promptly took reasonable steps to rectify the error, including (if applicable) following Fed. R. 25 Civ. P. 26(b)(5)(B).
(c) Disclosure made in a state proceeding. —
When the disclosure is made in a state proceeding and is not the subject of a state-court order concerning waiver, the disclosure does not operate as a waiver in a federal proceeding if the disclosure:
(1) would not be a waiver under this rule if it had been made in a federal proceeding; or
(2) is not a waiver under the law of the state where the disclosure occurred.
(d) Controlling effect of a court order. —
A federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court – in which event the disclosure is also not a waiver in any other federal or state proceeding.
(e) Controlling effect of a party agreement. —
An agreement on the effect of disclosure in a federal proceeding is binding only on the parties to the agreement, unless it is incorporated into a court order.
(f) Controlling effect of this rule. —
Notwithstanding Rules 101 and 1101, this rule applies to state proceedings and to federal court-annexed and federal court-mandated arbitration proceedings, in the circumstances set out in the rule. And notwithstanding Rule 501, this rule applies even if state law provides the rule of decision.
(g) Definitions. —
In this rule:
(1) “attorney-client privilege” means the protection that applicable law provides for confidential attorney-client communications; and
(2) “work-product protection” means the protection that applicable law provides for tangible material (or its intangible equivalent) prepared in anticipation of litigation or for trial.
This rule comes too late for the many lawyers spending their weekday mornings in dark bars, drinking their memories away, their careers ruined by inadvertent disclosure of privileged client documents. It also comes too late to save the hundreds of millions of dollars spent on document review over the last few decades, in an effort to make sure that privileged materials aren’t produced to opposing counsel. But, better late than never. Click here to read the explanatory note on this rule.
Blockshopper.com is one of many small web sites that have sprung up to follow local residential real estate markets. So far, the site highlights purchases in upscale neighborhoods in Chicago, St. Louis, South Florida and Las Vegas. The site identifies purchasers by name, street address of the property and the price paid. Of course, this information is available in local real estate publications (like Banker & Tradesman here in Boston) or at the local registry of deeds. Blockshopper also performs an Internet search on the person, and based on what it finds identifies the purchaser’s job title and employer. When it can, the site pulls a photo of the person from somewhere on the Internet (like the purchaser’s company site), and pastes it into the item. If the home purchaser has an online bio, the site will link to it.
Example: I saw on Blockshopper that Juan Luis Goujon had recently purchased a property in Chicago. I Googled “Juan Luis Goujon,” and the first hit I got was to Blockshopper, profiling the property, linking to Mr. Goujon’s company, and posting a photo of him from the site. Mr. Goujon is not a celebrity or a politician, and he may not be thrilled with this publicity (if anyone truly cares). However, the information regarding the address of the property, the purchase price, and Mr. Goujon’s job as an executive at a Chicago HR firm, are all public, factual information.
So, if you are Mr. Goujon, or any one of the many other real estate purchasers profiled by Blockshopper, just too bad, eh? In the age of almost unlimited information, factual, public information like this can be pulled together and posted on the Internet, right? So you would think, but not so fast.
Jones Day is one of the largest law firms in the U.S., with over 2,000 lawyers worldwide. That’s a heck of a lot of lawyers, no matter how you slice it. As many lawyers know, Jones Day is one of the premier law firms in the United States, respected by its clients and feared by its adversaries. These are not people to trifle with.
Blockshopper encountered Jones Day after Blockshopper profiled several Jones Day associates who had purchased real estate in Chicago. No big deal here – the properties were not exactly big ticket items, and you wouldn’t think that anyone would be very interested, with the possible exception of the attorneys’ friends and co-workers at Jones Day. And, as it often does, Blockshopper posted photos of the attorneys (from the Jones Day web site) and provided a link to their bios on the Jones Day site.
But Jones Day was very interested. It filed suit against Blockshopper in U.S. Federal District Court in Chicago. After reminding the court that Jones Day is “one of the world’s most famous law firms” (probably unnecessary), the complaint goes on to assert that:
the photos of the associates were “proprietary.” (Recall: they can be viewed on Jones Day’s public web site).
the references to Jones Day on Blockshopper were likely to cause “confusion and mistake” as to the source of the services provided on the site. In other words, people looking at Blockshopper could be misled to think that the site was affiliated with, or sponsored by, Jones Day. Accordingly, Jones Day claimed that Blockshopper was infringing Jones Day’s trademark rights.
Of course, these allegations (along with some others that I’ll skip over here) would seem to fail the laugh test. It challenges my imagination to think that anyone would conclude that the link to a couple of Jones Day associates on this site suggested that Jones Day had sponsored the site or was in some way associated with the site. After all, the World Wide Web is built on links – millions of them, if not billions. Everyone who uses the Internet for a few hours quickly realizes that a link does not mean that the “linked to” site has anything to do with the “linked from” site. And, the Blockshopper site links to hundreds of other purchasers, often with links to their web sites. Does Jones Day think that users of the site will conclude that the employers of those real estate purchasers are also sponsors of the site? (Interestingly, Blockshopper’s reported real estate purchases seem to involve a disproportionately large number of lawyers).
When you file a suit that doesn’t pass the laugh test, you attract unwanted attention, especially when you are “one of the world’s most famous law firms” and the suit threatens what many would consider First Amendment rights of expression. When it comes to the First Amendment, the Internet is very protective of its own.
And so, Jones Day’s lawsuit has attracted a great deal of attention. A Google search (“Jones Day” and Blockshopper) results in hundreds of hits, almost all (based on my quick survey) critical of Jones Day. The old expression is that “there’s no such thing as bad publicity,” but in this case, I have to wonder. On the other hand, the owners of Blockshopper must be drinking Dom Pérignon champagne and eating Beluga caviar – they could never have bought this much publicity for their site. I doubt that very many people in Chicago were even aware of the site. (Hey guys, when are you opening a Boston branch?).
It takes muscle to fight muscle, and the Electronic Frontier Foundation (the pre-eminent civil liberties group focused on digital media), has come to the rescue in Blockshopper’s defense. The EFF has filed a motion to dismiss the case which (in my opinion) makes mincemeat of Jones Day’s claims.
I expect a quick retreat by Jones Day. But, as a matter of principal, I think that Blockshopper (with the EFF’s encouragement and support) will demand that Jones Day drop its suit without terms. However, we’ll have to wait to see how this plays out; after all, Jones Day is not known to back down from a fight.
Nevertheless, I the lawyers at Jones Day who filed this case, and the associates whose real estate purchases led to the case, may be asking themselves, “what was I thinking”? And other lawyers at Jones Day may be wondering whether, after this is all over, their future real estate purchases will be targeted for special attention by Blockshopper.
The release of the Google Chrome web browser on September 2nd attracted a huge amount of publicity. The release of the browser was accompanied by a 38 page comic book, featuring cartoon figures of real-life Google employees, and explaining some of the features and technology associated with the browser. The comic book was illustrated by “cartoon theorist” Scott McLoud.
This is pretty cool stuff – hiring a top cartoonist to help you explain a new software product. Much better than a traditional technical manual!
Meta tags consist of words and phrases that are intended to describe the contents of a website. These descriptions are embedded within the website’s computer code. Although websites do not display their meta tags to visitors, Internet search engines utilize meta tags in various ways. First, when a computer user enters particular terms into an Internet search engine, the engine may rank a webpage that contains the search terms within its meta tags higher in the list of relevant results. Second, when a particular webpage is listed as a relevant search result, the search engine may use the meta tags to provide the searcher a brief description of the web page.
The First Circuit has affirmed a finding of trademark infringement based on the defendant’s use of meta tags to attract potential customers of the plaintiff using search engines to find the plaintiff’s web site. The case is Venture Tape v. McGill tried in U.S. District Court by Judge Morris E. Lasker. The defendant’s actions were described as follows by the First Circuit:
The record contains numerous admissions that meta tags and invisible background text on [defendant’s] website incorporated [plaintiff’s] exact marks. … [Defendant] even admitted that he intentionally used [plaintiff’s] marks for the express purpose of attracting customers …
The background text used by the defendant was “white lettering on a white background screen,” sort of a “poor man’s” meta tag.
If you don’t know what meta tags are, go to any web page, and in your browser click VIEW/PAGE SOURCE (or similar terms, depending on your browser). You’ll see the HTML code for the page, and you’ll see the meta elements in the head section of the document. As best I can recall (and determine, based on a quick Westlaw search), this is the first time the First Circuit has ruled on whether the use of meta tags can give rise to trademark infringement. There are technical and legal arguments that can be made against this conclusion, but they were not discussed by the First Circuit. In fact, the First Circuit appeared to assume that the use of meta tags constituted a violation of the Lanham Act, so long as the traditional criteria for trademark infringement were satisfied.
We’ve been following the lower courts’ interpretation and application of eBay v. MercExchangesince the case was decided by the Supreme Court in May 2006. In eBay the Court held that post-judgment injunctions were not “automatic” for successful patent plaintiffs, but rather that the trial court had to apply the traditional equitable test to determine whether an injunction or ongoing royalties were the appropriate remedy.
In June I gave a presentation at Massachusetts Continuing Legal Education on developments in this area in the two years since the decision. (Warning – the Powerpoint won’t make a lot of sense without the voice-over, but it gives some idea of the landscape).
As I discussed then, a constellation of issues was forming around the question of how to assess future royalties if it is determined that this was the appropriate remedy after final judgment. By then, of course, the jury has gone home. Was it up to the judge to determine the royalty? Would there be a new trial (jury or otherwise) on this issue alone? Would the pre-judgment royalty be used for future royalties (as some courts have done)?
Not surprisingly, a U.S. District Judge in the Eastern District of Texas has taken the first real “shot” at this issue. In early August Federal District Court Judge Clark issued an order in several cases, advising the parties that he expected the issue of future royalties to be tried with liability and past damages. He stated:
Should an injunction issue, a jury finding on a future royalty could be used to set a reasonable amount to be paid into escrow during the period of any stay which might be granted. If an injunction is not warranted, the jury verdict might be used by the parties as one factor in agreeing on a license, or by the court in arriving at an ongoing royalty rate for a compulsory license. In either case, time and expense can be saved by having the damages experts testify once, rather than hold a separate mini-trial on the issue of future damages post-verdict. This procedure would encourage the experts to keep their testimony about past and future damages logically consistent, and to give reasons for any differences.
Judge Clark explained that this procedure would not automatically result in an award of future damages in the amount advised by the jury (as described by the judge, the jury’s findings are not binding on the court), or be determinative in any way of the decision whether to issue an injunction or award future royalties.
Although this procedure would add another dimension of cost and complexity to a patent trial, it may make sense where there is a reasonable likelihood that future royalties (rather than a permanent injunction) will be the final remedy.
However, one would hope that a trial judge would not impose this procedure in cases where a preliminary determination concludes that the likelihood of future royalties is weak (for example, as in the case of direct competition between the patent holder and the defendant). It’s worth watching to see whether this approach catches on with other judges in the EdTX and in other districts, and if so how it evolves.
Damages experts must be sharpening their pencils and working overtime this summer ….
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lot of lawyers, no matter how you slice it. As many lawyers know, Jones Day is one of the premier law firms in the United States, respected by its clients and feared by its adversaries. These are not people to trifle with.
test. It challenges my imagination to think that anyone would conclude that the link to a couple of Jones Day associates on this site suggested that Jones Day had sponsored the site or was in some way associated with the site. After all, the World Wide Web is built on links – millions of them, if not billions. Everyone who uses the Internet for a few hours quickly realizes that a link does not mean that the “linked to” site has anything to do with the “linked from” site. And, the Blockshopper site links to hundreds of other purchasers, often with links to their web sites. Does Jones Day think that users of the site will conclude that the employers of those real estate purchasers are also sponsors of the site? (Interestingly, Blockshopper’s reported real estate purchases seem to involve a disproportionately large number of lawyers).
