20 Dec 2012

Experts' reports, waiver of privilege and antipsychotic drugs

by Richard Hoad

If an expert takes notes and then uses them to prepare an affidavit or expert’s report, legal professional privilege in those notes is likely to be waived. Redacting or masking documents will not always be an effective strategy.

A recent Federal Court decision serves as a reminder about the need to take care when dealing with experts (Bristol-Myers Squibb Company v Apotex Pty Ltd (No 3) [2012] FCA 1310).

How the expert's notes came in existence

Bristol-Myers Squibb (BMS) has sued Apotex in the Federal Court alleging that Apotex has infringed BMS’ patent covering an antipsychotic agent. Apotex cross-claimed against BMS, alleging that BMS’ patent was invalid.

One of the pieces of prior art relied upon by Apotex in its invalidity action is a European patent. Apotex alleges that, if one performed one of the examples in the European patent (Example 1), the resultant product would be one that is claimed in certain claims of BMS’ patent. As such, Apotex contends, those claims are invalid because they are not novel.

The Court made orders for an experiment to be conducted to carry out Example 1, in order to test Apotex’s assertion that the resultant product was one claimed in BMS’ patent. The experiment was conducted by Apotex’s expert, in the presence of BMS’ expert. During the course of the experiment, BMS’ expert, Professor Easton, took notes. After the experiment had been conducted, Professor Easton swore an Affidavit setting out his observations.

Apotex sought an order that BMS provide the notes to Apotex. BMS refused to produce the notes on the basis that they were privileged. BMS did, however, provide Apotex with a redacted (or masked) version of the notes. It was said by BMS that the only parts of the notes that were redacted were aspects that did not find their way into the Affidavit – and that, as such, privilege in those aspects of the notes had not been waived. In response, Apotex said that the notes were not privileged and that, even if they were, any privilege had been waived by the filing of the Affidavit. On that basis, Apotex sought production of an unredacted version of the notes.

Were the notes protected by legal professional privilege?

BMS argued that the notes were protected by legal professional privilege because they were a record of confidential communications between a solicitor and a third party, created for the dominant purpose of use in the litigation.

In response, Apotex argued that the undisclosed parts of the notes did not attract legal professional privilege, making three main submissions:

  • first, a claim for legal professional privilege must be supported by focused and specific evidence of the purpose for which the particular document was created, and such evidence was lacking in the present case;
  • second, documents created unilaterally by an expert witness (such as notes) do not attract legal professional privilege because they are not in the nature of, and would not expose, communications; and
  • finally, the notes cannot constitute a confidential communication capable of attracting privilege, since they are recorded observations of a non-confidential experiment.

The Court rejected all three of Apotex’s submissions, holding that the notes were covered by legal professional privilege on their creation. The expert's presence at the experiment was for the purposes of providing information, advice and opinions that responded to requests by BMS’ solicitors. Further, the notes were made to enable the expert to communicate those matters to BMS’ solicitors.

Had any privilege been waived?

The Court then considered whether the privilege in the notes was waived when they were used for the purposes of preparing the Affidavit.

As noted above, BMS submitted that the undisclosed parts of the notes concerned issues and subject matter different from those set out in the Affidavit.

In response, Apotex argued that any privilege was waived because the notes were used to prepare the Affidavit. Apotex said that the use of the notes for that purpose was inconsistent with the maintenance of the confidentiality which legal professional privilege is intended to protect.

The Court agreed with Apotex that privilege in the notes had been waived on the filing of the Affidavit. The Court held that the undisclosed parts of the notes were not “mere musings by [Professor Easton] unrelated to the very tasks that had been assigned to him”. Rather, the notes dealt with a single subject matter – being the same subject matter addressed in the Affidavit. The Court held that BMS “cannot selectively disclose parts of the notes through the filing and service of Professor Easton’s affidavit and consistently maintain legal professional privilege over the balance of them” because “privilege relating to a document which deals with one subject matter cannot be waived as to part and asserted as to the remainder”.

As a result, the Court ordered BMS to produce the notes to Apotex. It will be interesting to see what use is made of the notes during the trial, which started on 10 December 2012. In the meantime, litigants have been reminded that they should treat all correspondence with an expert, as well as notes taken by an expert or during meetings with experts, as potentially discoverable.


Thanks to Jonathan Selby for his help in writing this article.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.