1. Novelis Request for Internal Arconic Trade Secret List, and Privilege Dispute over Arconic Document

In its October 2, 2018 discovery letter brief (Dkt. 191 (“Novelis Letter”)), Novelis argued that two separate issues had arisen at the deposition of Arconic witness, Andy Mills. First, Mr. Mills testified that he had seen an internal Arconic trade secrets list, and Novelis wrote to Arconic after the deposition requesting production of the list, which Novelis believed it had never received. (Novelis Letter at 7.) Arconic responded to that request by stating that Arconic’s document production was “not deficient in this regard.” (Id.) In Arconic’s October 8, 2018 discovery letter brief response (Dkt. 200 (“Arconic Response”) at 8), Arconic stated that it does not maintain lists of its trade secrets in the same format ordered by the Court for purposes of this case, and therefore that it was not surprising that other documents previously produced by Arconic count and describe its trade secrets differently than in Arconic’s trade secret identification chart. (Id.)

The other issue raised by Novelis is that Arconic clawed back an email and attachment during Mr. Mills’ deposition, claiming the document was privileged. Novelis asserted that the lawyer copied on the email did not participate in the discussion at all, and therefore that the email could not be covered by privilege. (Novelis Letter at 9.) Arconic responded that the attachment was a draft attachment to the Novelis-Arconic license agreement (“License”) while it was still under negotiation subject to advice from Arconic’s counsel, and therefore that the email was a privileged communication. (Arconic Response at 8.)

The parties have since resolved both disputes because Arconic agreed to produce the clawed-back email and attachment, which apparently is the same document as the disputed list of trade secrets mentioned by Mr. Mills in his deposition.

2. Dispute over Additional Arconic Custodians

In its June 29, 2018 letter, Novelis argued that it had sufficient reason to believe that four proposed additional Arconic custodians—Eric Roegner, Klaus Kleinfeld, David Hess and Lori Lecker—had files related to Novelis’s counterclaims, including the Elliott Management proxy fight as it related to the allegations in the counterclaim; Elliott Management’s view that the License caused Arconic to lose market share to Novelis; and Novelis’s theory regarding the motives to file this lawsuit and terminate the License (the “counterclaim theories”). (See6/29/2018 Novelis Letter at 10-11.) The Special Master recommended that Arconic run tests of the relevant search terms and that the parties meet and confer about the results. (R&R No. 16 at 7.)

*2 Since that time, Arconic ran the search terms and generated a hit report, which reflects approximately 180,000 new documents to review. (Novelis Letter at 13.) Novelis argues that the search results reflect potentially relevant documents that should be reviewed and produced. (Id.) Arconic responds that Novelis would only be satisfied by review of all of the results, even for the terms that individually yield tens of thousands of documents. (Arconic Response at 10.)

When this issue was first raised before the July 13, 2018 hearing, Arconic had represented to Novelis, and to the Special Master, that Arconic is “unaware of any communications of meetings between Plaintiff and Elliott Management Corporation concerning the NDA, License, A951 process, P552 program, or the ’030 patent.” (Dkt. 142 at 6.) At the hearing, Arconic explained that it formed this understanding by relying on Arconic’s in-house counsel, who made inquiries internally. (July Hr’g Tr. at 123:2-23.) It is therefore surprising that the potential custodians whom Arconic represented were totally irrelevant yielded approximately 180,000 documents when searched for terms relevant to this litigation. Specifically, variations on the terms A951 and P552, and related terms, yielded 2083 and 1462 unique documents, respectively. (Novelis Letter, Ex. 18 at 3 (first and second row).) Likewise, variations on searching for documents about Novelis’s patent application yielded 7524 unique documents. (Id. at 4 (first row).) Given these results, Arconic’s prior representation rings hollow, and Novelis is entitled to have these documents reviewed. The Special Master recommends that Arconic review all of the test terms reflected in the hit report reviewed and produce the responsive, non-privileged results. The Special Master notes that, in a case where Arconic has already produced 2.25 million pages of documents (Novelis Letter at 22), an additional 180,000 documents to review does not constitute a substantial burden.

Another disputed issue is whether Arconic must produce, not only responsive documents that are identified relating to the counterclaim theories, but also documents found in the review of these custodians related to other issues in the case, such as the A951 technology, the parties’ License and Arconic’s profits. (Novelis Letter at 13-14.) Arconic asserts that this goes beyond the scope of the purposes of these test terms. (Arconic Response at 10; Hr’g Tr. at 18:16-19:6.)

The Special Master recommends that non-privileged documents responsive to any of the issues in this litigation should be produced if identified in this review. It is common in litigation to identify custodians for one purpose and then discover that they have documents related to other relevant topics. Because Arconic will be reviewing the documents, there is minimal extra burden of producing additional responsive documents identified that relate to issues outside of the counterclaim theories. Nor is there any justification for why responsive documents—no matter how they’re identified—should not be produced when found.

3. Novelis Interrogatory re: Chemical Sources

Novelis Corp. Interrogatory No. 3 asks Arconic to identify its “source and/or supplier for A951 Chemicals” and requests for the Bates numbers of related documents and the identity of three people knowledgeable about this topic. (Novelis Letter, Ex. 23.) Novelis argues that the “means (and costs) of manufacturing A951 is directly related to Novelis’s counterclaim regarding Arconic’s price manipulation of A951.”(Id. 15.) At the Hearing, counsel for Novelis elaborated that it is aware that Chemetall is the supplier of the A951 chemical, but that Chemetall purchases the inputs for A951 from other suppliers and that Novelis needs the pricing of these inputs to understand the extent of the price markup Novelis has been paying as a result of the Chemetall-Arconic supply agreement. (Hr’g Tr. at 26:24-28:10.) Arconic’s position is that the underlying source for the chemicals is not relevant because Arconic has already produced documents that “clearly show the extent to which A951 pricing reflected the cost of manufacturing as opposed to Arconic’s royalty.” (Arconic Response at 10.)

*3 Novelis’s price manipulation counterclaim is premised on the allegation that the cost Novelis paid for the A951 chemical was artificially inflated. Though, as Arconic points out, the Chemetall-Arconic supply agreement (“Chemetall Agreement”) does reflect the markup Novelis paid relative to Arconic, Novelis is entitled to explore the underlying pricing, including as it relates to the baseline “Target Price” established in the Chemetall Agreement Paragraph 1.1.2. However, such information appears to exceed what current Interrogatory No. 3 says, which is “Your [Arconic’s] source and/or supplier” for the chemical. (Novelis Letter, Ex. 23.) It does not seek the source of Chemetall’s suppliers, nor any pricing information.

The Special Master recommends that Arconic be ordered to respond to the interrogatory as written, except that it is not obligated to provide each Bates number if it provides identifying information sufficient to easily and readily locate the documents, such as author, subject and date. The individuals identified pursuant to the interrogatory should be familiar with Chemetall’s chemical sources and pricing, to the extent known to Arconic. The Special Master is not saying that the additional information Novelis seeks is not relevant, bit simply that it was not requested in this interrogatory. Novelis may seek such information through other forms of discovery, including if the antitrust counterclaims survive Arconic’s pending opposition to Novelis’s motion for leave to amend its counterclaims. The Special Master notes that this detailed pricing information may be more efficiently learned through Chemetall directly.

4. Attempts to Reverse-Engineer A951 Technology

Novelis Corp. Interrogatory No. 4 seeks to know of any “awareness of and/or investigation” by Arconic of any attempts by third parties to reverse-engineer the A951 technology. (Novelis Letter, Ex. 23.) Arconic did not respond to this interrogatory. (Id. at 10-11.) In Arconic’s Response, it represented that it is not aware of any such attempts. (Arconic Response at 11.) At the Hearing, Novelis indicated it would like that representation in the interrogatory responses so that it is an admission. (Hr’g Tr. at 33:16-24.) The Special Master recommends that Arconic be required to update its interrogatory answer to reflect this.

5. Meetings and Communications with Ford and Chemetall

Novelis Inc. Interrogatories No. 14 and 15 seek information on “all communications and meetings” with Ford and Chemetall, respectively, on a variety of listed subjects, including the dates, each attendee and the substance of the communication. (Novelis Letter, Exhibit 26.) Novelis objects to Arconic’s response, comprised of “non-exclusive” lists of certain documents reflecting communications that occurred with Ford and Chemetall, as insufficient to get the complete picture of the relationships with Ford and Chemetall. For example, Novelis believes it is entitled to discovery to gain an “understanding the dynamics with Ford and any requirements that have been placed on the parties based on Ford” and communications with Chemetall, which is “squarely within the middle of” the price manipulation counterclaim. (Hr’g Tr. at 34:16-23, 35:7-12.) Arconic objects to the burden of recounting every single communication with its customer and chemical supplier over a multi-year period. (Arconic Response at 11.)

The Special Master recommends that Arconic does not need to respond to Interrogatories No. 14 and 15 as written because of the burden imposed by them and the breadth of the topics for which they seek a very detailed response. For example, Interrogatory No. 14 seeks detailed information for every single communication between Arconic and Ford regarding the A951 process, among other things. (Novelis Letter, Ex. 26 at 13.) Requesting such an accounting of meetings and communications with a longtime customer is unduly broad, and to comply with the instructions of the interrogatory would be extremely burdensome for Arconic. The Special Recommends that Novelis craft more specific interrogatories tailored to test specific theories that can only be tested through this form of discovery. If this interrogatory procedure is too cumbersome, the Special Master will consider whether to permit Novelis to take a 30(b)(6) deposition on the topic, limited to the communications known by Arconic to have occurred between Chemetall and Ford about the A951 process, limited to the issues raised by its counterclaims.

6. Arconic’s Use of Rule 33(d)

*4 Novelis also complains of Arconic’s invocation of Rule 33(d) in responding to certain interrogatories. (Novelis Letter at 17.) Novelis asserts that the Rule requires Arconic to identify documents by Bates number, quoting the requirement to provide “sufficient detail to enable the interrogating party to locate and identify them as readily as the responding party could.” (Id.) Rule 33(d) does not explicitly require identification by Bates number, and there is no reason why other identifying information, such as the document author, date and title, is not “sufficient detail” to identify the documents referenced. Given the sophistication of e-discovery platforms, this information can be used to search for the relevant document quite efficiently, so long as Arconic is providing accurate, precise author, date and file name information. Arconic may find it more efficient to provide Bates number information, but so long as Novelis can identify them in Arconic’s production, Arconic is not required to do so. The Special Master recommends denying Novelis’s request that Arconic provide Bates numbers for all interrogatory responses that identify or list documents. As to other aspects of Arconic’s responses, the interrogatories at issue are discussed elsewhere in this Report & Recommendation, as well as Report & Recommendation No. 20, so each will not be individually analyzed here.

7. Novelis Document Request No. 40

Novelis Document Request No. 40 seeks all documents relating to Arconic’s licensing of, or efforts to license, any of the patents related to the A951 technology. (Novelis Letter at 18.) Arconic has agreed (i) to produce such documents that relate to the two patents that are the subject of the Arconic-Novelis license, and (ii) to run search strings of the patent numbers for all of the patents listed in Request No. 40 and to produce results those searches yield. (Hr’g Tr. at 44:24-45, 39:16-19.) Arconic objects, however, to conducting further searches for any licenses that relate to the other patents, or for communications related to such licenses or efforts to license those technologies. The other patents relate to very different technologies (for example to aluminum beverage cans), and therefore, Arconic objects that they cannot be relevant to any damages calculation. (Id. at 40:24-41:13.) Novelis counters that licensing of other applications of the technology still reflect the underlying value of A951 and therefore would be relevant to Novelis’s challenging of Arconic’s proffered damages. (Id. at 43:19-44:11.) At the Hearing, counsel for Arconic was unsure as to how many other licenses related to other technologies exist, and which of them have already been produced. (Id. at 44:12-24, 45:24-46:5.)

The Special Master recommends that Arconic be required to produce any licenses responsive to Request No. 40 for all patents, except for aluminum cans. If Arconic concludes that all such licenses have already been produced, it should confirm that to Novelis in a supplemental written discovery response and should be available to discuss with Novelis the details of Arconic’s search for responsive licenses. As to Arconic’s “efforts to license” these technologies, the request is insufficiently clear. Therefore, the Special Master will limit that portion of the document request to include documents communicating offers to license, or responses to requests to license, that have financial consideration terms; such terms are pertinent to the financial value of Arconic’s A951 technology and should be produced.

8. Novelis Document Requests No. 115 and 116

Document Request No. 115 seeks all documents “that refer or relate to Arconic’s protection and/or handling of confidential information and/or trade secrets,” including documents produced in two other lawsuits involving different Arconic technologies. Novelis argues that Arconic’s corporate practices reflecting Arconic’s handling and protection of confidential information/trade secrets was an issue that was litigated. (Novelis Letter at 19, n.25.) Document Request No. 116 has a similar subject matter but seeks “[a]ll documents or communications (including, without limitation, briefs, affidavits, deposition transcripts, emails, letters, and discovery responses) created in the course” of those cases related to the handling of confidential information. (Id. at 19, n.26.) Novelis argues that this information is pertinent to its defense that Arconic did not properly protect its alleged trade secrets and/or confidential information. (Id. at 19.)

*5 At the Hearing, two witnesses were discussed in connection with this issue: (i) a prior expert who submitted a report and testified about Arconic’s adequate measures to protect its confidential information, and (ii) a prior fact witness who testified about the subject. (Hr’g Tr. at 48:9-49:6.) Both are witnesses in this case as well. As to the proposed expert, counsel for Arconic confirmed that he will submit a report testify as to the same subject in this case. (Id. at 50:13-51:11.) Arconic argues that his prior report and testimony are not relevant because the confidential information at issue there related to a different technology. (Id.) Novelis argues that the prior cases are germane because they will show that that Arconic changed its practices in handling its confidential information before filing a lawsuit in 2014, which was “right in the middle” of Arconic’s relationship with Novelis. (Id. at 47:10-48:8.) Therefore, according to Novelis, the practices, even with respect to different technology, are highly relevant in this case.

Because the expert will be testifying about the same subject—Arconic’s protection of its confidential information—and because the applicable time period overlaps this case, the Special Master recommends Arconic be ordered to produce unredacted copies of the prior expert report and his testimony, with the appropriate confidentiality designation under the Protective Order.

The fact witness on Arconic’s protection of confidential information is Eric Roegner. Novelis asserts that Arconic produced Roegner’s deposition, but the deposition testimony is redacted. (Id. 53:13-14.) Counsel for Arconic explained that it is not counsel on that case and was not responsible for the redactions. (Id. at 53:23-25.) At the Hearing, counsel for Arconic agreed to request permission from Arconic to review an unredacted copy of the transcript. (Id. at 54:6-12.)

The Special Master recommends that Arconic be ordered to produce the prior transcript for Mr. Roegner in unredacted form, protected by the appropriate designation under the Protective Order. Arconic’s “permission” is not a basis upon which to object to a proper document request. If there are topics covered in the deposition that are entirely unrelated to the handling and protection of confidential information/trade secrets, and include highly sensitive commercial information, Arconic’s counsel may redact such paragraphs, but shall supply an unredacted version to the Special Master for in camera review, highlighting the redacted portions, and accompanied by a letter explaining why the top tier of the Protective Order is insufficient to protect Arconic’s interests. In addition, such letter shall state the confidentiality order that applied to such redacted portions in the prior lawsuit.

Novelis has raised a defense directly on the issue—whether Arconic’s protections of its confidential information have been sufficient. Therefore, it is directly relevant. If Novelis propounds an interrogatory, or deposition question asking (i) whether there was any change in Arconic’s policies, handling or designation of documents as confidential during the time period of the Arconic/Novelis contractual relationship, (ii) when such change occurred, (iii) and whether any of the documents in this case that are designated as confidential ever had a non-confidential designation, such inquiries are material to this case

9. Extension of Discovery Deadline

Novelis requests an extension of the current discovery deadline from November 1, 2018 to January 31, 2019. (Novelis Letter at 21.) Novelis details the extensive additional discovery yet to be completed, including numerous party and third-party depositions and Novelis’s 86-topic 30(b)(6) deposition of Arconic, yet to be scheduled. Novelis argues the extension is justified by the scope, expansion and complexity of this case, including Arconic’s $800 million in alleged damages, the fact that Arconic now asserts hundreds of separate trade secrets, and the number of Novelis’s counterclaims (even before the additional proposed antitrust counterclaims, yet to be decided). (Id. at 22.)

*6 An extension of the discovery deadline, as a modification to the Scheduling Order, is subject to a good cause standard or judicial consent. Fed. R. Civ. Pro. 16(4). Cases of this complexity and size often have discovery and other deadlines extended, and the Special Master finds that this standard is easily met here, where the recent Hearing made clear that neither the Special Master, nor the Court has been provided with a clear set of Trade Secrets that are supported by alleged facts necessary to claim a trade secret. (See R&R No. 20.)

The priority is an organized, triable case, and not a race to trial. In light of the fact that depositions have been stayed by order of the Special Master in Report & Recommendation No. 20, to avoid the need to retake such depositions once proper trade secret identification is finally made, the Special Master recommends that the Court extend the discovery deadline to March 31, 2019, and further notes that an additional extension could be needed, depending on the pace of compliance and completion of the process set forth in Report & Recommendation No. 20, which must precede the resumption of scheduling depositions. Indeed, some depositions taken before the most recent Hearing (which revealed the trade secret identification deficit) may need to be retaken.

Both parties are on notice that unreasonable delays or non-cooperation will not be tolerated and may cause the recommendation for sanctions.

10. Scope, Number and Duration of 30(b)(6) Depositions

On September 19, 2018, Novelis served an 86-topic Rule 30(b)(6) deposition notice on Arconic, who objects that the topics list is excessive and that it will require more deposition hours than Novelis previously requested, and the Court granted. (Novelis Letter, Ex. 44; Arconic Response at 3-4). The Special Master recommends that counsel be given 10 days from entry of this Report & Recommendation to complete negotiations of Novelis’s 30(b)(6) topics list to attempt to allocate witnesses efficiently and streamline the process as much as possible. The parties should annotate the notice with the name of the witness who will testify to each topic. The parties shall promptly bring any disputes to the Special Master, who will resolve them promptly. Such depositions that cannot occur until a satisfactory identification of trade secrets occurs shall be scheduled last, with other 30(b)(6) depositions on other topics prioritized. If counsel for both parties agree that a particular 30(b)(6) deposition can occur prior to full and complete compliance with Report & Recommendation No. 20, then such deposition may be scheduled.

Because the case is more complex than originally contemplated by Report & Recommendation No. 8, the Special Master hereby vacates the number of hours and number of such depositions set forth therein. The Special Master will determine an appropriate number of hours and deponents for each party after (i) the negotiation of Novelis’s topic list; (ii) the completion of compliance with Report & Recommendation No. 20; and (iii) there has been a final ruling on Novelis’s motion to amend the counterclaims to add antitrust counterclaims.

11. Request to Increase the Number of Fact Depositions

In light of the increased complexity of this case, the Special Master recommends expanding the number of depositions beyond the ten permitted in the Federal Rules. Expansion of fact depositions is warranted when the party seeking the additional depositions shows it is “reasonable and necessary.” Wertz v. GEA Heat Exchangers Inc., 2015 WL 8959408, at *2-3 (M.D. Pa. Dec. 16, 2015). To justify its request, a party is required to specify the individuals it wishes to depose and make a “particularized showing” of the reasons the additional depositions are needed. Alaska Elec. Pension Fund v. Pharmacia Corp., 2006 WL 6487632, at *3-4 (D. N.J. Aug. 22, 2006) (citations omitted).

*7 Novelis has listed the additional deponents and discussed numerous factors justifying the additional depositions. Accordingly, the Special Master recommends granting Novelis 12 additional depositions. The Special Master notes that Arconic has not requested additional depositions, and thus has not yet met the requirement to make a “particularized showing.” However, Arconic should be given the opportunity to do so, within a reasonable period of time after a ruling on the motion to amend the counterclaim to add antitrust defenses. If Arconic makes a sufficient showing of need for additional depositions, the Special Master recommends the requested additional depositions should be granted. The Special Master also observes that both parties have issues left to uncover given the expanding nature of the case and sees no prejudice to expanding depositions such that both parties receive additional deposition time.

Any depositions noticed for witnesses who were identified as relevant in discovery, for example in an interrogatory response, would be presumed relevant and appropriate. If either party feels that one of its witnesses being noticed for deposition is duplicative, harassing or unlikely to yield relevant information, the party may raise the issue with the Special Master.

12. Availability of Novelis Witness Theresa MacFarlane

Arconic’s October 2, 2018 discovery letter brief (“Arconic Letter”), Arconic asserts that Novelis has provided very few dates, and has been slow to provide those dates, for a key witness, Theresa MacFarlane, one of the inventors of the ’440 patent application. (Arconic Letter at 1.) Arconic requests that Novelis be compelled to provide multiple dates prior to the November 1, 2018 close of fact discovery.

During the Hearing, when it became clear that trade secret identification by Arconic had yet to be completed in compliance with this Court’s Order, the Special Master orally ordered that depositions be deferred until this court-ordered prerequisite be completed. This essentially moots the current request to set a date for Ms. MacFarlane’s deposition. Once depositions resume after the Special Master has found that Report & Recommendation No. 20 has been complied with, all parties shall expeditiously provide several possible deposition dates; and the adverse party shall ensure that its scheduling conflicts for the proposed dates be minimized.

13. Novelis’s Improvements Chart

Arconic seeks a chart from Novelis describing its alleged improvements as part of “mirror image obligations,” referencing a discussion during the July 12, 2018 hearing about the fact that disclosure obligations in this case are not only one-way and that Novelis would also be required to disclose its improvements. (Arconic Letter at 2.) Promptly after that hearing, Arconic wrote Novelis a letter seeking a chart of its improvements, including a statement of what was already in the public domain. (Arconic Letter, Ex. 5.) In its October 9, 2018 letter response (“Novelis Response” at 2-3), Novelis asserts that it has provided detailed information in its discovery responses that provides the information needed by Arconic to understand the claimed improvements. Further, Novelis asserts that it has offered to “(a) identify the inventors and invention dates for the remaining improvements and (b) identify additional public domain information,” and that Arconic did not respond to this offer and instead sought relief from the Court. (Id. at 4.)

The Special Master recommends that Novelis be ordered to make a chart providing the information sought in Arconic’s July 24, 2018 letter (Arconic Letter, Ex. 5). This constitutes a reasonable burden and would organize the information for Arconic and the Court. Novelis should also provide the additional information it offered to provide in its September 26, 2018 letter (Novelis Letter, Ex. G).

14. Novelis A951 Profits Information

Arconic also seeks a more fulsome response to Interrogatory No. 9 requesting “detailed information relating to Novelis’ historical, actual and forecasted volume, revenue and profits from sales of A951-treated aluminum.” (Arconic Letter at 2.) Novelis responds that it recently produced two large spreadsheets reflecting much of the requested information, which had to be manually prepared because Novelis does not maintain the data in the form and reflecting the metrics as requested by Arconic. (Hr’g Tr. at 69:12-70:2.) Novelis plans to supplement the production to provide the remaining information.

*8 When pressed by Arconic for a date certain, given that this issue has been under discussion for some time, Novelis committed to providing it by mid-November 2018. (Id. at 71:14-23.) Accordingly, the Special Master will reserve on this issue. If Arconic is not satisfied that Novelis’s forthcoming supplement to its response to this interrogatory, Arconic may seek relief from the Special Master.

15. Privilege: Novelis’s ’440 Patent Application

Arconic raises a privilege waiver argument regarding documents related to Novelis’s patent application. Specifically, Arconic argues that Novelis waived privilege when it put attorney advice “at issue” through its defense that the ’440 patent application reflected its improvements and did not appropriate non-public Arconic technology. (Arconic Letter at 3.) Arconic asserts that Novelis’s defense constitutes an advice of counsel defense that waives privilege over all communications related to the filing of the patent application.

In the Third Circuit, advice of counsel waiver of privilege occurs when “[t]he advice of counsel is placed in issue where the client asserts a claim or defense, and attempts to prove that claim or defense by disclosing or describing an attorney client communication.” Rhone-Poulenc Rorer Inc. v. Home Indem. Co., 32 F.3d 851, 863 (3d Cir. 1994) (emphasis added). In Nesselrotte v. Allegheny Energy, Inc., 2008 WL 2858401 (W.D. Pa. July 22, 2008), the court analyzed the Rhone-Poulenc standard as requiring two prongs be met and found there was no waiver because party asserting privilege did not affirmatively disclose materials to support the advice of counsel defense to constitute any waiver. In contrast, in a patent infringement case, a party did “implicitly” put the advice received from counsel at issue when she gave testimony at deposition about specific legal advice received from counsel in response to questions about decisions made by her employer. Martin Marietta Materials, Inc. v. Bedford Reinforced Plastics, Inc., 227 F.R.D. 382, 397 (W.D. Pa. 2005). Thus, asserting an affirmative defense does put advice of counsel “at issue” unless the legal advice of counsel is affirmatively used to support one’s defense.

In its Answer, Novelis has not pleaded, and elsewhere has not raised, an advice of counsel theory or affirmative defense explicitly supported by advice of counsel. In examining the Answer and Affirmative Defenses, Novelis has not disclosed nor described any privileged communications or advice to support its theory that its patent application constituted its own improvements, rather than Arconic’s technology.

Nor has Arconic identified any privileged communications asserted by Novelis to satisfy the second prong of the Third Circuit test. Arconic relies on a non-privileged email to support its theory of waiver (discussed immediately below) and lists several entries from Novelis’s privilege log, which, according to Arconic, demonstrate that Novelis is improperly failing to disclose communications related to the patent application process. (Arconic Letter at 4.) It is difficult to deduce anything from these entries to assist in resolving this motion. Some of the entries reflect the law firm of Kilpatrick Townsend & Stockton LLP, which presumably acted as patent counsel. Other entries list several individuals and unidentified “others” who may or may not be lawyers. It is not surprising that there would be entries on Novelis’s privilege log about the patent application process, and absent an allegation that Novelis has produced some privileged documents while shielding others, there is no basis presented at present to demonstrate that the documents were improperly withheld.

*9 Instead, Arconic supports its position by referring to a non-privileged email produced by Novelis that shows the co-inventors of the Novelis patent application referencing Arconic materials when drafting a portion of the patent application to suggest that Novelis could be shielding other similar emails from disclosure by claiming privilege. (Id., Ex. 7.) Arconic asserts that Novelis is trying to use privilege as a “sword and a shield,” (id. at 3)—which is defined in this District as “both invok[ing] a privilege to shield [a party’s] communications with its attorneys ... and defend[ing] its conduct with reference to advice received by counsel.” Travelers Casualty & Surety Co. v. Ins. Co. of N. Am., 609 F.3d 143, 155 (3d Cir. 2010) (emphasis added). This email could be more negative than positive for Novelis, and thus it appears to show that Novelis was not improperly withholding harmful document while producing only helpful ones.

Arconic’s theory of waiver rests on its assertion that Novelis’s “improvements” defense is essentially Novelis’s “good faith belief” that its patent application was within its legal rights. Therefore, privileged documents constitute the “only direct proof” of whether Novelis, in fact, had that belief. (Arconic Letter at 5-6 (citing Kidder Peabody & Co, Inc. v. IAG Intern. Acceptance, 1997 WL 272405, at *2, 5 (S.D.N.Y. May 21, 1997).) However, the assertion is just as easily read as one of contractual rights, set forth expressly in the License. Both parties recite the License as a basis for their contract claims, defenses and counterclaims. This does not, without more, expose both parties to a claim that in so doing they have waived their attorney client privilege.

Moreover, this Circuit has expressly repudiated the standard advanced by Arconic that essentially finds that fairness requires the otherwise privileged communications be produced because they would reveal facts that are “vital, highly probative, directly relevant or even go to the heart of an issue” because this “dubious” standard would undermine the important goal of protecting candid attorney-client communications. Rhone-Poulenc at 864. Accordingly, a waiver only occurs when the party claiming privilege “attempts to prove [a] claim or defense by disclosing or describing an attorney client communication.” In re Niaspan Antitrust Litig., 2018 WL 2363577, at *2 (E.D. Pa. May 24, 2018)(quoting Rhone-Poulenc, 32 F.3d at 863).

There is no legal advice that Novelis has stated it intends to use affirmatively to prove or defend the claims in this case. Stating that the ’440 patent application reflected its own improvements, and not Arconic’s proprietary technology, is not tantamount to an advice of counsel defense. “Advice is not in issue merely because it is relevant, and does not necessarily become in issue merely because the attorney’s advice might affect the client’s state of mind in a relevant manner.” Rhone-Poulenc at 863. Further, there is no showing to support Arconic’s claim that Novelis’s privileged documents are the “only direct proof” of Novelis’s improvements defense. Novelis points to sources of proof to substantiate its improvements defense that have nothing to do with legal advice, such as documents produced by Novelis allegedly showing independent development of the claims of its patent application. Cases in this Circuit are clear that a defendant must affirmativelyput advice of counsel at issue, and Novelis, at this time, has not done so. See United States v. Medicor Assocs., Inc., 2014 WL 12588331, at *8 (W.D. Pa. June 16, 2014), report and recommendation adopted sub nom. United States ex rel. Emanuele v. Medicor Assocs., Inc., 2014 WL 12587074 (W.D. Pa. July 25, 2014) (Conti, J.)

For the foregoing reasons, the Special Master recommends that the Court deny the motion seeking a finding that there has been a waiver of Novelis’s privileged communications regarding the ’440 patent application.

Conclusion

*10 For the foregoing reasons, the Special Master recommends that the Court order that:

A proposed Form of Order will be filed by the Special Master as Report & Recommendation #23.