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Judge Sleet rules on privilege issue relating to assignment of patent application.

In a recent Order, Judge Gregory M. Sleet ruled that a plaintiff/assignee lacked standing to assert privilege over communications between its assignor and the assignor’s counsel, explaining that the assignment of a patent, on its own, does not result in the assignee “inheriting” the assignor’s attorney-client privilege with respect to the prosecution of the patent.  Green Mountain Glass, LLC v. Saint-Gobain Containers, Inc., C.A. No. 14-392-GMS (D. Del. Jan. 14, 2015).  Rather, Judge Sleet explained, the privilege analysis depends on a close review of the facts to determine whether the assignment resulted in a “transfer of control of the business and the continuation of the business under new management,” as opposed to simply the transfer of an asset.  Id. at 2 n.1 (quoting SimpleAir, Inc. v. Microsoft Corp., 2013 WL 4574594, at *2 (E.D. Tex. Aug. 27, 2013)).  In this case, the Court found that the assignor and assignee entities “were certainly not strangers to one another,” but saw “no relationship that would support a transfer of privilege.”  The Court acknowledged that “a planned stock-for-stock merger” could support a showing that “a continuous relationship existed between” the assignor and the assignee, but noted that in this case “the anticipated merger did not occur.”  Id. at 2 n.1.  As a result, the Court viewed the assignment as a mere transfer of assets, with no transfer of privilege.

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