Free Reply Brief - District Court of Delaware - Delaware

Case 1 :04-cv-00360-JJF Document 178 Filed 06/19/2006 Page 1 of 3
IN THE UNITED STATES DISTRICT COURT
FOR T1-IE DISTRICT OF DELAWARE r
AI·`I·`INlON NET PATENTS, INC., ) .
Plaintiff, i Civil Action No. 04-360-JJF 1
) .
v- ) .
)
MARITZ INC., ) l
Defendant. 1 i
REPLY IN SUPPORT OF MARI'I`Z'S FIRST MOTION TO COMPEI.
Affinion opposes Maritz's motion with the claim that Netcentives transferred its attorney- .
client privilege along with its privileged documents. But it presents no evidence that such
transfer of privilege was intended by Netcentives.
Recognizing this, Affinion takes a different tack, arguing that, "When a party sells . . .
assets directly at issue in prior litigation, the attoruey—c1ient privilege transfers with that sale."
P!rnrn{;'f’s Oppnstrieii (Di /49), p. 2. Attinion cites three eases to support this assertion. Ir!.
But none of them provides support and, moreover, diem aside, each ease is distinguishable.
In re Grand Jury Snbpoenas, 734 F. Supp. 1207 (E.D. Va. 1990), involved "[w]hether a
parent corporation controls the attomey/client/work product privileges of a wholly-owned
subsidiary after its sale .... " /r/. at 1210. The District Court, citing Conimodities Futures
Trrm'i'ng Conirnission v. Weintrcttib, 471 U.S. 343 (1985), held that, since the parent had sold the
subsidiary, it could no longer control the subsidiaries' exercise ofprivilegc. Id. at 121 1. It
further noted that "[a] transfer of assets, without more, is not sufficient to affect ct transfer ofthe
privileges; control of the entity possessing the privileges must also pass for the privileges to
pass" Id. at n. 3. Affinion bought patents from Netcentives; it did not acquire control.

Case 1:04-cv-00360-JJF Document 178 Filed 06/19/2006 Page 2 of 3
In Excess In.sw·r1rrr:e Co., Lrr/. v. Smuiee, l996 WL 409224 (ED. La.), certain insureds
assigned to a judgment creditor their coverage claims against their insurer in partial satisfaction
of a judgment against them arising out of a wrongful death claim. The judgment
creditor/assignee sought to waive the attorney—client privilege of the judgment debtor/assignors.
Holding that Louisiana law controlled the privilege waiver issue, the District Court affirmed the
Magistrate Judges order denying a motion to compel production of the privileged documents.
This case, based on Louisiana law, lends no support to Afiinioirs opposition.
In Gmac C/ri't'c/ren’s Product. Inc. v. Rego/0 Inrerrictionrtl, LLC. 1999 WL 553478 t'E.D.
Pa), the issue was whether an attomey was properly disqualitied under Rule 1.9 of the
Pennsylvania Rules of Professional Conduct for a conflict of interest. Graco sued Century
Products for patent infringement. Frederick; Tecce, Esq., represented Century. After winning ri
judgment, Graco bought all the ongoing business assets of Century, but not the stock. Thereafter
Graco sued Regalo International for patent infringement. Teece entered his appearance as
Rcgato‘s attorney. The District Coun disqualified Tecce, finding that he was in possession of
confidential information and was acting contrary to the material interests of his fonner client.
The case at hand bears no resemblance to the Graco case.
Aftinion also argues that as assignee of the patents, it shares a common legal interest with
Netcentivcs. While parties so situated sometimes share a common interest, as where an
inventor/assignor and an employer/assignee share joint counsel who assists both in securing a
patent, no such common interest arose out of the bankruptcy sale ofthe '4I2 patent. First, as
documented in Maritz's opening brief, Netcentives' patent prosecution lawyers never represented
or consulted with Affinion during prosecution ofthe '4l2 patent or vice versa. In re Regents, lOl
F.3d 1386, 1389-90 (Fed. Cir. 1996). Second, as a condition ofthe bankruptcy sale, Affinion
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Case 1:04-cv-00360-JJF Document 178 Filed 06/19/2006 Page 3 of 3
granted back to Nctecntives at uonexclusive license to practice the patents. Given that the license
was nonexclusive, Netcentives and Aftinion had no protected common legal interest. Id. at
1390 (holding that "[t]he legal interest between Lilly and UC was substantially identical because
of the potentially and ultimately exclusive nature of the license agreement."); Katz v. AT&T
Corp., 191 F.R.D. 433,437 n. 4 (E.D. Pa. 2000).
ln sum, Aftinion has not shown that Neteentive‘s disclosure of withheld documents was
part of a transfer of corporate control or under circumstances where Netcentivcs and Afiinion
had joint legal interests. Thus, the Court should order the documents to be produced.
Respectfully submitted,
CONNOLLY BOVE LODGE & HUTZ LL?
rj _ l
Date: June 13, 2006 By: ` fe
Riidolfl?. Hi1t7( 4R4)
Patricia Srnink Rogowski (#2632)
The Nemours Building
1007 Orange Street
P.O. Box 2207
Wilmington, DE 19899
(302)6SR-914l
J. Bennett Clark
David W. Harlan
Jennifer E. 1-Ioekel
Marc W. Vander Tuig
SENNIGER. POWERS
One Metropolitan Square, 16th Floor
St. Louis, MO 63102
(314) 231-5400
Attorneys for Maritz Inc.
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