Isensee sued HO Sports for patent infringement and moved to compel production of various documents. The products complained of were sold by H.O. Sports. In a clever transaction, HO Sports acquired the assets off H.O. Sports, but did not purchase the business. However, HO still claimed attorney-client privilege for various documents created by H.O. Sports.
HO has taken inconsistent positions in this action, which the court expressly noted. To avoid liability, HO claims it was not the successor of H.O. but just purchased assets. To claim attorney-client privilege, HO claims it is the successor of H.O.
The magistrate judge granted the motion to compel without addressing the merits of the privilege arguments. His decision was that the sale of assets cannot convey the privilege. The district court showed disapproval with HO Sports but reassigned the matter to the magistrate judge to consider the merits of the privilege arguments.