United States v. United Shoe Mach. Corp. - 89 F. Supp. 357 (D. Mass. 1950)

Rule:

A company's general counsel and his clerks constitute for purposes of the privilege attorneys. Many communications passing to or from them fall outside the privilege because they report or comment on information coming from persons outside the corporation or from public documents, or are summaries of conferences held with or in the presence of outsiders. Communications, memoranda and the like to or from the persons in the company's patent department are not privileged, except where these communications are to or from outside counsel or the general counsel and his staff and are within the privilege.

Facts:

Defendant client is United Shoe Machinery Corporation and all its subsidiaries and affiliates considered collectively. These corporations all used the same outside and inside counsel. The legal affairs of these corporations were closely related. Except for convenience in billing and formal accounting there was no attempt to regard one particular corporation as the client. None of these corporations or their officers or employees consulted counsel with the purpose of seeking assistance in committing a crime or a tort. The defendant seasonably claimed whatever privilege it had. It did not waive its privilege by surrendering the exhibits in response to subpoenas, because it was agreed in advance by Government counsel that compliance with the subpoenas should not constitute a waiver. In a patent case, defendant sought to invoke attorney-client privilege to prevent the use of exhibits involving the work of employees on defendant's patent staff. Defendant objected to the introduction of nearly 800 exhibits on the ground that they fall within the attorney-client privilege.

Issue:

Were the introduction of exhibits falls within the attorney-client privilege?

Answer:

No.

Conclusion:

The court ruled that work performed by employees of defendant's patent department was not privileged, although some of them were attorneys, because they were not acting as attorneys in the course of their employment. The court further ruled that the privilege could apply to communications between the patent staff and defendant's legal department, if such information was confidential and was prepared for legal purposes.