The opinion
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8 UNITED STATES DISTRICT COURT
9 NORTHERN DISTRICT OF CALIFORNIA
10 San Francisco Division
11 PETER STALEY, et al., Case No. 19-cv-02573-EMC(LB)
12 Plaintiffs,
DISCOVERY ORDER
13 v.
Re: ECF No. 617
14 GILEAD SCIENCES, INC., et al.,
15 Defendants.
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The parties dispute whether Janssen appropriately redacted information about loss of patent
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exclusivity as privileged. Janssen contends that the information reflects its attorneys’ legal
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impressions, and the plaintiffs contend that the information is not privileged because the
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predominant purpose of the communication was business strategy, not legal advice. The parties
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submitted nine documents for in camera review as a representative sample of their dispute.1
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The court held a hearing on May 20, 2021 and issued an order the following day finding that
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Exhibit 3 and Exhibit 9, which is a draft of Exhibit 3, are privileged. The court also found that the
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first rows and the second bullet points in the third rows of Exhibit 5, page 156, and Exhibit 6, page
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163, are privileged. The court found that the remaining exhibits and redactions were not privileged
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1 Discovery Letter – ECF No. 573. Citations refer to material in the Electronic Case File (“ECF”);
1 based on the submitted briefing but directed the parties to meet and confer about a new case that
2 Janssen raised at the hearing, which it said demonstrated the remaining documents were
3 privileged.2 The parties submitted a supplemental discovery letter addressing the new case and
4 making arguments regarding the remaining exhibits the court did not find were privileged in its
5 first order.3 The court can decide the dispute without oral argument. N.D. Cal. Civ. L.R. 7-1(b).
6 Based on the supplemental letter, the court finds that, except as noted below, the remaining
7 exhibits and redactions are privileged.
8 The Ninth Circuit has defined the relevant standard for determining privilege:
9 (1) Where legal advice of any kind is sought (2) from a professional legal adviser in his
capacity as such, (3) the communications relating to that purpose, (4) made in confidence
10 (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself
or by the legal adviser, (8) unless the protection be waived.
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12 United States v. Ruehle, 583 F.3d 600, 607 (9th Cir. 2009) (quotation omitted). The attorney-client
13 privilege does not apply to an attorney’s communications about business matters (as opposed to
14 legal advice). United States v. ChevronTexaco Corp., 241 F. Supp. 2d 1065, 1076 (N.D. Cal. 2002).
15 “Corporations may not conduct their business affairs in private simply by staffing a transaction with
16 attorneys.” Id. (citing United States v. Margolis (In re Fischel), 557 F.2d 209, 211 (9th Cir. 1977)).
17 So, for example, an email is not privileged merely because an attorney is on the thread and there are
18 contemporaneous meetings seeking legal advice about the subject-matter of the emails. See, e.g.,
19 Epic Games, Inc. v. Apple Inc., No. 20-cv-05640-YGR (TSH), Order – ECF No. 512 at 2 (N.D. Cal.
20 Apr. 28, 2021). Similarly, an attorney’s reviewing and revising documents is not privileged when
21 one cannot tell “what the legal advice or edits were.” Id.
22 “[The] party asserting the attorney-client privilege has the burden of establishing the [existence
23 of an attorney-client] relationship and the privileged nature of the communication.” Ruehle, 583
24 F.3d at 607 (quoting United States v. Bauer, 132 F.3d 504, 507 (9th Cir. 1997)). In other words,
25 “[t]he party asserting the privilege bears the burden of proving each essential element” of the
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2 Order – ECF No. 590 at 3–4.
1 attorney-client-privilege test. Id. at 608 (citing United States v. Munoz, 233 F.3d 1117, 1128 (9th
2 Cir. 2000)). “Because it impedes full and free discovery of the truth, the attorney-client privilege is
3 strictly construed.” Id. (quoting United States v. Martin, 278 F.3d 988, 999 (9th Cir. 2002)).
4 Janssen contends that although patent expiration dates are publicly available, whether and
5 when a drug might lose exclusivity requires legal analysis, and such analysis is legal advice that is
6 privileged.4 In support of this contention, Janssen cites to King Drug Co. of Florence v. Cephalon,
7 Inc., 2013 WL 4836572 (E.D. Pa. Sept. 11, 2013). In King Drug, the court considered a privilege
8 challenge to a set of documents that redacted “analyses of the strength of Cephalon’s
9 modafinilrelated intellectual property, and estimates regarding the timing of generic entry into the
10 market in various scenarios.” Id. at *7. These analyses and estimates were provided by in-house
11 and patent attorneys, and the court held they constituted legal advice. Id.
12 The court finds that, in addition to Exhibits 3 and 9, the redacted information in Exhibits 1, 2,
13 4, 5, 6 and 8 is privileged. As in King Drug, the redacted information does not include mere expiry
14 dates based on public information or statute. It contains legal analysis regarding when particular
15 drugs might lose exclusivity, specific factors that might impact the potential exclusivity period,
16 and certain caveats regarding potential extensions and other considerations. This analysis
17 constitutes legal advice and is privileged.
18 The plaintiffs contend that this case is different from King Drug because the communications
19 at issue here were made primarily for a business purpose and that “strategies to extend a product’s
20 life cycle and exclusivity are commercial, not legal, in nature.”5 But the redactions are not
21 business strategies couched in mere references to a statute or regulation. They are legal analyses
22 that involve lawyers’ impressions and advice about patent exclusivity. Moreover, the redactions
23 are narrowly tailored to redact only the privileged analyses. Elsewhere in the documents, the loss
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4 Id. at 2.
5 Id. at 5 (quoting FTC v. Abbvie, Inc., No. 14-5151, 2015 WL 8623076, at *13 (E.D. Pa. Dec. 14,
] of exclusivity dates — absent the context of the underlying, privileged legal analysis — are
2 || unredacted.®
3 The court finds that the redactions in Exhibits 1, 2, 4, 5, 6, and 8 are privileged. Janssen did
4 || not address Exhibit 7 in its supplemental letter, and the redactions in Exhibit 7 include patent
5 expiry dates, not loss of exclusivity analyses like in the other documents. The court therefore finds
6 || that Exhibit 7 is not privileged.
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8 IT IS SO ORDERED.
9 Dated: June 14, 2021 Lit EC
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LAUREL BEELER
United States Magistrate Judge
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° E.g., ECF No. 572-4 at 66 (stating the valuation of a deal assuming “Darunavir LOE Jan 2021” with
28 the LOE unredacted).