note a guide to waiver after echostar and seagate - UW Law School
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BELDEN - FINAL 11/29/2007 4:08 PM<br />
NOTE<br />
A GUIDE TO WAIVER AFTER ECHOSTAR AND SEAGATE:<br />
WHEN YOU RAISE THE ADVICE-OF-COUNSEL DEFENSE<br />
TO WILLFUL PATENT INFRINGEMENT,<br />
WHAT ARE YOU GIVING UP?<br />
BRETT P. BELDEN*<br />
I. INTRODUCTION<br />
Patent litigation is an extremely high-risk, high-potential-reward<br />
type of litigation. Patent infringement 1 suits are very expensive <strong>to</strong><br />
litigate, costing anywhere from $500,000 <strong>to</strong> nearly $4 million<br />
depending on the amount of damages at issue. 2 Furthermore, the<br />
plaintiff places the validity of its patent rights at issue <strong>and</strong> risks the<br />
possibility that a court will find those rights invalid. 3<br />
However, the potential rewards for the plaintiff (<strong>and</strong> dangers for<br />
infringers) are significant as well. Actual damages regularly are in the<br />
millions, 4 <strong>and</strong> in some cases juries have awarded damages in the<br />
* J.D. expected, University of Wisconsin <strong>Law</strong> <strong>School</strong>, 2008; B.S.E.E.,<br />
B.S., University of Wisconsin–Milwaukee, 2005. I would like <strong>to</strong> thank my edi<strong>to</strong>rs,<br />
Kerry Burchill <strong>and</strong> Melissa Caulum, as well as Brian Bean, for their careful <strong>and</strong><br />
insightful edits <strong>and</strong> suggestions throughout the several drafts of this Note. I would also<br />
like <strong>to</strong> thank Professor Pilar Ossorio for her generous substantive guidance on this<br />
<strong>to</strong>pic.<br />
1. Patent infringement generally consists of (1) making, using, selling,<br />
offering <strong>to</strong> sell, or importing an invention covered by a patent’s claims without the<br />
patent owner’s permission or (2) inducing or contributing <strong>to</strong> such acts. See 5 DONALD<br />
S. CHISUM, CHISUM ON PATENTS §§ 16.01, 17.01 (2006).<br />
2. AM. INTELLECTUAL PROP. LAW ASS’N, REPORT OF THE ECONOMIC SURVEY<br />
22 (2003). Costs rose significantly in the two years between 2001 <strong>and</strong> 2003, increasing<br />
approximately $500,000 for suits where between $1 million <strong>and</strong> $25 million was at risk<br />
<strong>and</strong> approximately $1 million for suits where over $25 million was at risk. Id.<br />
3. ADAM B. JAFFE & JOSH LERNER, INNOVATION AND ITS DISCONTENTS 32<br />
(2004).<br />
4. See PRICEWATERHOUSECOOPERS LLP, 2007 PATENT AND TRADEMARK<br />
DAMAGES STUDY 13 (2007); John Dragseth, Note, Coerced Waiver of the At<strong>to</strong>rney-<br />
Client Privilege for Opinions of Counsel in Patent Litigation, 80 MINN. L. REV. 167,<br />
167 n.2 (1995) (citing a study of patent cases from 1982–94 which found that of cases<br />
in which damages were awarded, half awarded at least $1 million).
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934 WISCONSIN LAW REVIEW<br />
billions. 5 Furthermore, plaintiffs can often receive an injunction<br />
ordering a defendant <strong>to</strong> cease the infringing activities. 6 Finally, if the<br />
court finds the infringement willful, 7 it has the discretion <strong>to</strong> award<br />
enhanced damages as well as at<strong>to</strong>rneys’ fees. 8 Due <strong>to</strong> the significant<br />
potential monetary gains, plaintiffs allege willfulness in nearly every<br />
suit for patent infringement. 9<br />
The at<strong>to</strong>rney-client privilege <strong>and</strong> at<strong>to</strong>rney-work-product doctrine<br />
have become essential <strong>to</strong>ols of the American legal system, particularly<br />
in regard <strong>to</strong> willful-patent-infringement cases. 10 Together, they allow<br />
at<strong>to</strong>rneys <strong>to</strong> obtain frank <strong>and</strong> complete disclosure from their clients 11<br />
<strong>and</strong> <strong>to</strong> document their thoughts <strong>and</strong> legal strategies 12 without the fear<br />
that client communications <strong>and</strong> work product will be discoverable in<br />
future litigation. These <strong>to</strong>ols are necessary because at<strong>to</strong>rneys cannot<br />
adequately represent their clients if certain communications <strong>and</strong><br />
thoughts are exposed <strong>to</strong> the knowledge of opposing counsel. 13 In actions<br />
for willful patent infringement the issues are complex, <strong>and</strong> welldeveloped<br />
pretrial advice <strong>and</strong> trial strategy are critical for success.<br />
Therefore, at<strong>to</strong>rney-client privilege <strong>and</strong> work-product protection play a<br />
particularly important role in patent litigation.<br />
At<strong>to</strong>rney-client privilege <strong>and</strong> work-product protection can,<br />
however, be waived by clients. 14 In willful patent infringement actions,<br />
5. See, e.g., Evan Hansen & Eliot Van Buskirk, MP3’s Loss, Open Source’s<br />
Gain, WIRED, Feb. 23, 2007, available at http://wired.com/entertainment/music/<br />
news/2007/02/72785.<br />
6. See JAFFE & LERNER, supra <strong>note</strong> 3, at 31.<br />
7. Whether an act of infringement is willful depends on the alleged<br />
infringer’s intent <strong>and</strong> reasonable beliefs. See Ortho Pharm. Corp. v. Smith, 959 F.2d<br />
936, 944 (Fed. Cir. 1992). Willfulness is determined in consideration of the <strong>to</strong>tality of<br />
the circumstances. See id. For further discussion of willful patent infringement, see<br />
infra Part II.A.3.<br />
8. See 35 U.S.C. §§ 284–85 (2000). The court has the authority <strong>to</strong> award up<br />
<strong>to</strong> three times the amount of actual damages. Id. § 284.<br />
9. See Kimberly A. Moore, Empirical Statistics on Willful Patent<br />
Infringement, 14 FED. CIR. B.J. 227, 232 (2004).<br />
10. See In re EchoStar Commc’ns Corp., 448 F.3d 1294, 1298 (Fed. Cir.<br />
2006); EDNA SELAN EPSTEIN, THE ATTORNEY-CLIENT PRIVILEGE AND THE WORK-<br />
PRODUCT DOCTRINE 2–3, 480–81 (4th ed. 2001).<br />
11. EPSTEIN, supra <strong>note</strong> 10, at 3. The at<strong>to</strong>rney-client privilege forbids an<br />
at<strong>to</strong>rney from disclosing certain confidential client communications either voluntarily or<br />
by compulsion absent a <strong>waiver</strong> of privilege by the client. Id. at 2–3; see also discussion<br />
infra Part II.A.1.<br />
12. EPSTEIN, supra <strong>note</strong> 10, at 480–81. The work-product doctrine protects an<br />
at<strong>to</strong>rney’s mental impressions <strong>and</strong> analysis from discovery by opposing counsel. Id.;<br />
see also discussion infra Part II.A.2.<br />
13. EPSTEIN, supra <strong>note</strong> 10, at 477.<br />
14. See id. at 363–91, 607–15, 618–41.
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2007:933 A Guide <strong>to</strong> Waiver After EchoStar <strong>and</strong> Seagate 935<br />
defendants often assert the defense of reliance on advice of counsel. 15<br />
By asserting this defense, a defendant claims that it reasonably believed<br />
it did not infringe any valid patent right held by the plaintiff due <strong>to</strong><br />
advice it received from counsel. 16 The defendant au<strong>to</strong>matically waives<br />
at<strong>to</strong>rney-client privilege <strong>and</strong> work-product protection by raising the<br />
advice-of-counsel defense. 17 In determining the scope of the <strong>waiver</strong>,<br />
courts must balance the policies favoring the at<strong>to</strong>rney-client privilege<br />
<strong>and</strong> work-product protection with the need for plaintiffs <strong>to</strong> have access<br />
<strong>to</strong> certain communications <strong>and</strong> work product in order <strong>to</strong> attack the<br />
defense. 18<br />
After attempting <strong>to</strong> define the scope of <strong>waiver</strong> several times in the<br />
past, the United States Court of Appeals for the Federal Circuit set out<br />
once again in 2006 <strong>to</strong> clarify the scope of <strong>waiver</strong> in In re EchoStar<br />
Communications Corp. 19 TiVo, Inc., filed suit against EchoStar<br />
Communications Corporation, EchoStar DBS Corporation, EchoStar<br />
Technologies Corporation, <strong>and</strong> Echosphere Limited Liability Company<br />
(collectively “EchoStar”) for willfully infringing one of its patents. 20 In<br />
response, EchoStar asserted reliance on the advice of its in-house<br />
counsel that it did not infringe TiVo’s patent. 21 EchoStar also obtained<br />
legal advice from at<strong>to</strong>rneys at Merchant & Gould, P.C. (“Merchant &<br />
Gould”) 22 subsequent <strong>to</strong> the filing of the action. 23 EchoStar chose,<br />
however, not <strong>to</strong> rely on this advice. 24 TiVo sought production of<br />
documents from EchoStar <strong>and</strong> Merchant & Gould. 25<br />
15. See id. at 347–48, 351, 625; discussion infra Part II.A.3.<br />
16. See Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 944 (Fed. Cir. 1992);<br />
see also EPSTEIN, supra <strong>note</strong> 10, at 347–48; discussion infra Part II.A.3.<br />
17. See EPSTEIN, supra <strong>note</strong> 10, at 347.<br />
18. See In re EchoStar Commc’ns Corp., 448 F.3d 1294, 1302 (Fed. Cir.<br />
2006).<br />
19. Id. at 1298, 1300–02.<br />
20. Id. at 1296–97. TiVo’s patent covered time-warping technology frequently<br />
used in digital video recorders (DVRs). EchoStar Loses Bid for New Trial, N.Y.<br />
TIMES, Nov. 28, 2006, at C4. EchoStar manufactures <strong>and</strong> sells DVRs under its Dish<br />
Network br<strong>and</strong>. See Dish Network, http://www.dishnetwork.com (last visited Sept. 26,<br />
2007); EchoStar, http://<strong>echostar</strong>fixedsatellite.com (last visited Sept. 26, 2007).<br />
21. EchoStar, 448 F.3d at 1297; TiVo Inc. v. EchoStar Commc’ns Corp.,<br />
No. 2:04-CV-1 (DF), 2005 U.S. Dist. LEXIS 42481, at *3, *21–23 (E.D. Tex. Sept.<br />
26, 2005).<br />
22. Merchant & Gould is an intellectual property law firm. See Merchant &<br />
Gould, http://www.merchantgould.com/index.html (last visited Sept. 26, 2007).<br />
23. EchoStar, 448 F.3d at 1297. Neither this opinion nor the district court<br />
opinion revealed the nature of Merchant & Gould’s advice <strong>to</strong> EchoStar. Id.; TiVo,<br />
2005 U.S. Dist. LEXIS 42481.<br />
24. EchoStar, 448 F.3d at 1297.<br />
25. Id.
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936 WISCONSIN LAW REVIEW<br />
The District Court for the Eastern District of Texas held that<br />
because EchoStar asserted the advice-of-counsel defense, it waived<br />
immunity for all communications with <strong>and</strong> any work product of<br />
Merchant & Gould. 26 The court found that EchoStar waived workproduct<br />
protection regardless of whether Merchant & Gould<br />
communicated the work product <strong>to</strong> EchoStar. 27 Both EchoStar <strong>and</strong><br />
Merchant & Gould filed petitions for a writ of m<strong>and</strong>amus with the<br />
Federal Circuit. 28<br />
On review, the court first addressed EchoStar’s <strong>waiver</strong> of at<strong>to</strong>rneyclient<br />
privilege, holding that the <strong>waiver</strong> “applies <strong>to</strong> all other<br />
communications relating <strong>to</strong> the same subject matter.” 29 The court found<br />
the <strong>waiver</strong> applied <strong>to</strong> both EchoStar’s in-house counsel <strong>and</strong> Merchant &<br />
Gould, despite the fact that EchoStar chose not <strong>to</strong> rely on Merchant &<br />
Gould’s advice. 30<br />
The court of appeals then addressed the <strong>waiver</strong> of work-product<br />
protection, noting that district courts, <strong>to</strong> construe the <strong>waiver</strong> properly,<br />
should balance the policy favoring the work-product doctrine with<br />
fairness <strong>to</strong> the plaintiff. 31 The goal of <strong>waiver</strong> is <strong>to</strong> prevent a party from<br />
using advice as both a “sword <strong>and</strong> a shield”; 32 that is, an alleged<br />
infringer should not be permitted <strong>to</strong> waive privilege for favorable<br />
advice <strong>and</strong> assert privilege for unfavorable advice. 33<br />
Recognizing that district courts might experience difficulty in<br />
balancing these policies, the court identified three categories of work<br />
product that it considered potentially relevant <strong>to</strong> the advice-of-counsel<br />
defense: (1) documents embodying a communication between the<br />
at<strong>to</strong>rney <strong>and</strong> client concerning the subject matter of the case; 34 (2)<br />
documents reflecting the at<strong>to</strong>rney’s mental impressions that were not<br />
26. Id.<br />
27. Id.<br />
28. Id. at 1296–97, 1305. Judges Gajarsa, Schall, <strong>and</strong> Prost heard EchoStar’s<br />
petition, <strong>and</strong> Gajarsa drafted the opinion of the court. Id. at 1296.<br />
29. Id. at 1298–99 (quoting Fort James Corp. v. Solo Cup Co., 412 F.3d<br />
1340, 1349 (Fed. Cir. 2005)).<br />
30. Id. at 1299.<br />
31. See id. at 1299–1305.<br />
32. Id. at 1301.<br />
33. Id.<br />
34. This first category includes traditional opinion letters. Id. at 1302.<br />
Opinion letters are the letters containing the opinion upon which the defendant relies in<br />
reasonably believing the plaintiff’s patent is invalid, unenforceable, or not infringed.<br />
See Sean C. Cunningham, The When, Who, What <strong>and</strong> Why of Patent Opinion Letters,<br />
DLA PIPER PUBLICATIONS, 2002, http://www.dlapiper.com/global/publications/<br />
detail.aspx?ref=snapshot&pub=485. Accordingly, opinion letters form the basis of the<br />
advice-of-counsel defense. See id.
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2007:933 A Guide <strong>to</strong> Waiver After EchoStar <strong>and</strong> Seagate 937<br />
communicated <strong>to</strong> the client; 35 <strong>and</strong> (3) documents referencing a<br />
communication between the at<strong>to</strong>rney <strong>and</strong> client concerning the case’s<br />
subject matter that were not actually communicated <strong>to</strong> the client. 36 The<br />
court <strong>note</strong>d that the first category fell under the scope of the <strong>waiver</strong> of<br />
at<strong>to</strong>rney-client privilege <strong>and</strong>, thus, was discoverable. 37<br />
The court of appeals found that work product in the second<br />
category (which the at<strong>to</strong>rney never communicates <strong>to</strong> the client) was not<br />
discoverable. 38 Because such work product embodies only the thoughts<br />
of the at<strong>to</strong>rney, it has little bearing on the alleged infringer’s state of<br />
mind. 39 Therefore, the court found the policies supporting the workproduct<br />
doctrine outweighed any value that this type of work product<br />
might provide <strong>to</strong> the willfulness inquiry. 40<br />
In contrast, the court of appeals cautiously found work product <strong>to</strong><br />
be discoverable in the third category (referencing a communication<br />
between the at<strong>to</strong>rney <strong>and</strong> client but not communicated <strong>to</strong> the client). 41<br />
Unlike work product that falls within the second category, the court<br />
found work product that references or describes a communication<br />
between the at<strong>to</strong>rney <strong>and</strong> client <strong>to</strong> have substantial value in determining<br />
what communications the at<strong>to</strong>rney actually made <strong>to</strong> the client. 42 The<br />
court <strong>note</strong>d the danger of such documents possibly containing work<br />
product that falls within the second category, suggesting that the parties<br />
should carefully redact such work product before production. 43<br />
On its face, EchoStar appears <strong>to</strong> be a step-by-step <strong>guide</strong> <strong>to</strong> the<br />
scope of <strong>waiver</strong> of at<strong>to</strong>rney-client privilege <strong>and</strong> work-product immunity<br />
when an alleged infringer relies on the advice-of-counsel defense in an<br />
action for willful patent infringement. To be sure, the opinion<br />
substantially clarifies a previously murky, complicated area of patent<br />
law, particularly with respect <strong>to</strong> the law governing work-product<br />
immunity. Inspection of district court cases subsequent <strong>to</strong> EchoStar<br />
35. EchoStar, 448 F.3d at 1302.<br />
36. Id. (citing Thorn EMI N. Am., Inc. v. Micron Tech., 837 F. Supp. 616,<br />
622–23 (D. Del. 1993)). The Federal Circuit acknowledged that these three categories<br />
were not necessarily exhaustive. Id. at 1302 n.3.<br />
37. Id. at 1302.<br />
38. Id. at 1303.<br />
39. Id. at 1304.<br />
40. Id.<br />
41. Id. As an example of such work product, the court wrote that “if an<br />
at<strong>to</strong>rney writes a memor<strong>and</strong>um or an e-mail <strong>to</strong> his associate referencing a phone call<br />
with the client, in which he indicates that he discussed the client’s potential<br />
infringement, then such a memor<strong>and</strong>um is discoverable.” Id.<br />
42. Id.<br />
43. Id.
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938 WISCONSIN LAW REVIEW<br />
reveals, however, that some important questions remain unanswered in<br />
the wake of the decision. 44<br />
Part II of this Note provides background helpful for the analysis of<br />
EchoStar, including a summary of precedent regarding the scope of<br />
<strong>waiver</strong> prior <strong>to</strong> EchoStar. Part III analyzes the EchoStar opinion as well<br />
as several recent district court opinions relying on EchoStar <strong>and</strong><br />
identifies two primary questions that were not conclusively addressed in<br />
the decision: (1) whether the <strong>waiver</strong> extends <strong>to</strong> all possible defenses <strong>to</strong><br />
patent infringement or only those addressed in the formal opinion on<br />
which the alleged infringer relies; 45 <strong>and</strong> (2) whether the <strong>waiver</strong> extends<br />
<strong>to</strong> trial counsel. 46 Part III also discusses In re Seagate Technology,<br />
LLC, 47 the Federal Circuit’s answer <strong>to</strong> the second question in which it<br />
held that the <strong>waiver</strong> generally does not extend <strong>to</strong> trial counsel. 48 Part IV<br />
attempts <strong>to</strong> properly resolve the unanswered first question <strong>and</strong> analyze<br />
the appropriateness of the Federal Circuit’s solution <strong>to</strong> the second<br />
question in Seagate by focusing on the reasoning of EchoStar.<br />
This Note concludes by suggesting that the district courts can<br />
properly solve the vast majority of future <strong>waiver</strong> issues by focusing on<br />
the policy concerns <strong>and</strong> balancing test of EchoStar. By focusing on<br />
these building blocks of EchoStar, the Federal Circuit appropriately<br />
held in Seagate that the <strong>waiver</strong> should not extend <strong>to</strong> trial counsel. 49<br />
With respect <strong>to</strong> the unresolved first question, the district courts should<br />
follow the example set in Seagate <strong>and</strong> apply the EchoStar reasoning <strong>to</strong><br />
conclude that the <strong>waiver</strong> should extend only <strong>to</strong> the defenses referenced<br />
in the underlying opinion rather than <strong>to</strong> all possible defenses.<br />
44. See discussion infra Part III.D.2.<br />
45. For example, if an alleged infringer relies upon counsel’s advice that the<br />
alleged infringer’s conduct does not infringe (i.e., a noninfringement opinion), it is<br />
unclear whether the <strong>waiver</strong> extends <strong>to</strong> all three possible defenses (invalidity,<br />
unenforceability, <strong>and</strong> noninfringement) or only <strong>to</strong> noninfringement. See infra Part<br />
III.D.2.a.<br />
46. Trial counsel is involved in preparation for actual or potential litigation, as<br />
opposed <strong>to</strong> opinion counsel, who gives advice regarding potential infringement but is<br />
not involved in preparation for litigation. See In re Seagate Tech., LLC, No. 06-M830,<br />
slip op. at 15 (Fed. Cir. Aug. 20, 2007).<br />
47. Id.<br />
48. Id. at 18, 21.<br />
49. Id.
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2007:933 A Guide <strong>to</strong> Waiver After EchoStar <strong>and</strong> Seagate 939<br />
II. BACKGROUND TO ECHOSTAR<br />
A. Legal Concepts Central <strong>to</strong> EchoStar<br />
1. THE ATTORNEY-CLIENT PRIVILEGE<br />
The at<strong>to</strong>rney-client privilege is one of the oldest <strong>and</strong> most<br />
important common-law doctrines recognized by the courts. 50 It protects<br />
confidential communications between at<strong>to</strong>rneys <strong>and</strong> their clients by<br />
generally prohibiting discovery of such communications. 51 The<br />
privilege belongs <strong>to</strong> the client, not the at<strong>to</strong>rney, <strong>and</strong> only the client has<br />
the authority <strong>to</strong> waive it. 52 The at<strong>to</strong>rney, therefore, must assert the<br />
privilege in regard <strong>to</strong> confidential communications with the client unless<br />
the client permits disclosure. 53<br />
Courts have long recognized the strong policy justifications behind<br />
the at<strong>to</strong>rney-client privilege. 54 The at<strong>to</strong>rney-client privilege is intended<br />
<strong>to</strong> “encourage full <strong>and</strong> frank communication between at<strong>to</strong>rneys <strong>and</strong><br />
their clients.” 55 Without the privilege, people might choose not <strong>to</strong> seek<br />
the advice of an at<strong>to</strong>rney at all out of fear that their communications<br />
could be subject <strong>to</strong> discovery. 56 At best, clients would selectively<br />
withhold information from their at<strong>to</strong>rneys in an effort <strong>to</strong> avoid<br />
disclosing information that could harm them in future litigation. 57<br />
Without complete <strong>and</strong> honest disclosure on the part of clients, it is<br />
exceedingly difficult for at<strong>to</strong>rneys <strong>to</strong> offer useful legal advice. 58 Such<br />
competent legal advice is considered essential <strong>to</strong> “promote broader<br />
public interests in the observance of law <strong>and</strong> administration of<br />
justice.” 59<br />
50. See EPSTEIN, supra <strong>note</strong> 10, at 2. (“[The at<strong>to</strong>rney-client privilege] was<br />
accepted as early as the reign of Elizabeth I.”).<br />
51. See id. There are several exceptions <strong>to</strong> this rule (such as when the<br />
at<strong>to</strong>rney is being sued by the client for malpractice) under which disclosure of<br />
confidential communications is allowed, see id., but for the purposes of this Note, this<br />
description will suffice.<br />
52. Id.<br />
53. Id.<br />
54. See, e.g., Upjohn Co. v. United States, 449 U.S. 383 (1981); Fisher v.<br />
United States, 425 U.S. 391 (1976); Hunt v. Blackburn, 128 U.S. 464 (1888); United<br />
States v. United Shoe Mach. Corp., 89 F. Supp. 357 (D. Mass. 1950).<br />
55. Upjohn, 449 U.S. at 389.<br />
56. See United Shoe, 89 F. Supp. at 358 (“In a society as complicated in<br />
structure as ours <strong>and</strong> governed by laws as complex <strong>and</strong> detailed as those imposed upon<br />
us, expert legal advice is essential.”).<br />
57. EPSTEIN, supra <strong>note</strong> 10, at 3.<br />
58. See Hunt, 128 U.S. at 470.<br />
59. Upjohn, 449 U.S. at 389.
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2. THE WORK-PRODUCT DOCTRINE<br />
Like the at<strong>to</strong>rney-client privilege, the work-product doctrine has<br />
become one of the fundamental doctrines of the current American legal<br />
system, despite its relatively short his<strong>to</strong>ry in American law. 60 The<br />
Supreme Court first recognized work-product protection in 1947 in<br />
Hickman v. Taylor, 61 <strong>and</strong> the Federal Rules of Civil Procedure have<br />
since codified it. 62 The work-product doctrine protects the “mental<br />
impressions, conclusions, opinions, or legal theories” of an at<strong>to</strong>rney<br />
from unnecessary discovery by another party. 63 Such work may be<br />
reflected “in interviews, statements, memor<strong>and</strong>a, correspondence,<br />
briefs, mental impressions, personal beliefs, <strong>and</strong> countless other<br />
tangible <strong>and</strong> intangible ways.” 64 However, work-product protection is<br />
not absolute; there are exceptions under which opposing parties can<br />
gain access <strong>to</strong> work product despite the work-product doctrine. 65 Even<br />
when discovery is ordered under such exceptions, courts are careful <strong>to</strong><br />
protect the at<strong>to</strong>rney’s thoughts from discovery. 66<br />
Like the at<strong>to</strong>rney-client privilege, the work-product doctrine is<br />
supported by strong policy justifications that are central <strong>to</strong> the operation<br />
of the judicial system. 67 In order for an at<strong>to</strong>rney <strong>to</strong> work effectively <strong>and</strong><br />
properly represent a client, it is necessary for the at<strong>to</strong>rney <strong>to</strong> “work<br />
with a certain degree of privacy, free from unnecessary intrusion by<br />
opposing parties <strong>and</strong> their counsel.” 68 Without work-product protection,<br />
60. See EPSTEIN, supra <strong>note</strong> 10, at 480–81.<br />
61. 329 U.S. 495 (1947).<br />
62. See FED. R. CIV. P. 26(b)(3). It is important <strong>to</strong> <strong>note</strong> that the codified rule<br />
protects from discovery only documents <strong>and</strong> tangible things. See EPSTEIN, supra <strong>note</strong><br />
10, at 481. Therefore, courts still consider Hickman the st<strong>and</strong>ard for evaluating types<br />
of intangible work product not covered by the codified rule. See id. Furthermore,<br />
courts frequently utilize the principles outlined in Hickman <strong>to</strong> interpret the codified<br />
rule. Id.<br />
63. FED. R. CIV. P. 26(b)(3).<br />
64. Hickman, 329 U.S. at 511.<br />
65. See id. (“Where relevant <strong>and</strong> non-privileged facts remain hidden in an<br />
at<strong>to</strong>rney’s file <strong>and</strong> where production of those facts is essential <strong>to</strong> the preparation of<br />
one’s case, discovery may properly be had.”); FED. R. CIV. P. 26(b)(3) (specifying that<br />
the court can order discovery of an at<strong>to</strong>rney’s work product “only upon a showing that<br />
the party seeking discovery has substantial need of the materials in the preparation of<br />
the party’s case <strong>and</strong> that the party is unable without undue hardship <strong>to</strong> obtain the<br />
substantial equivalent of the materials by other means”).<br />
66. See FED. R. CIV. P. 26(b)(3) (“In ordering discovery of such materials<br />
when the required showing has been made, the court shall protect against disclosure of<br />
the mental impressions, conclusions, opinions, or legal theories of an at<strong>to</strong>rney or other<br />
representative of a party concerning the litigation.”).<br />
67. See EPSTEIN, supra <strong>note</strong> 10, at 481.<br />
68. Hickman, 329 U.S. at 510–11.
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an at<strong>to</strong>rney’s written thoughts <strong>and</strong> strategies would become an open<br />
book for opponents <strong>to</strong> read freely upon mere dem<strong>and</strong>. 69 Therefore,<br />
most at<strong>to</strong>rneys would opt not <strong>to</strong> organize their thoughts in<strong>to</strong> a written<br />
form at all <strong>to</strong> protect themselves <strong>and</strong> their clients. 70 Such a situation<br />
would be detrimental <strong>to</strong> at<strong>to</strong>rneys’ performance, <strong>to</strong> their clients’<br />
interests, <strong>and</strong> <strong>to</strong> the effectiveness of the judicial system as a whole. 71<br />
3. WILLFUL PATENT INFRINGEMENT AND THE<br />
ADVICE-OF-COUNSEL DEFENSE<br />
A party is guilty of patent infringement when that party infringes<br />
upon another’s valid, enforceable patent rights. 72 The Patent Act defines<br />
infringement according <strong>to</strong> the rights conferred upon a patent holder. 73<br />
Accordingly, section 271(a) provides that “whoever without authority<br />
makes, uses, offers <strong>to</strong> sell, or sells any patented invention, within the<br />
United States or imports in<strong>to</strong> the United States any patented invention<br />
during the term of the patent therefore, infringes the patent.” 74 In<br />
addition <strong>to</strong> injunctive relief, patent holders can receive compensa<strong>to</strong>ry<br />
damages for infringement of the right <strong>to</strong> exclude the patent granted<br />
them, <strong>and</strong> the courts have frequently upheld significant compensa<strong>to</strong>ry<br />
damage awards. 75<br />
If courts find willful infringement, they can choose at their<br />
discretion <strong>to</strong> award enhanced damages of up <strong>to</strong> three times the already<br />
substantial compensa<strong>to</strong>ry damages, as well as at<strong>to</strong>rney’s fees. 76 In<br />
69. Id. at 511.<br />
70. Id.<br />
71. Id. (“The effect on the legal profession would be demoralizing. And the<br />
interests of the clients <strong>and</strong> the cause of justice would be poorly served.”).<br />
72. See 5 CHISUM, supra <strong>note</strong> 1, § 16.01.<br />
73. Id. § 16.02. Section 154 of the Patent Act provides that a patent confers<br />
upon the holder the “right <strong>to</strong> exclude others from making, using, offering for sale, or<br />
selling the invention throughout the United States or importing the invention in<strong>to</strong> the<br />
United States” during the term of the patent. 35 U.S.C. § 154 (2000).<br />
74. 35 U.S.C. § 271(a) (2000). Section 271(a) defines direct infringement. A<br />
party may also indirectly infringe patent rights by inducing or contributing <strong>to</strong> direct<br />
infringement by others. See 5 CHISUM, supra <strong>note</strong> 1, § 17.01 (citing 35 U.S.C. §§<br />
271(b), 271(c)).<br />
75. See Dragseth, supra <strong>note</strong> 4, at 167 n.2 (citing a study of patent cases from<br />
1982–94 which found that of cases in which damages were awarded, the award was at<br />
least $1 million in nearly half of the cases); PRICEWATERHOUSECOOPERS LLP, supra<br />
<strong>note</strong> 4, at 13, 15.<br />
76. See Read Corp. v. Portec, Inc., 970 F.2d 816, 826 (Fed. Cir. 1992)<br />
(holding a finding of willfulness is sufficient <strong>to</strong> justify enhanced damages); Rohm &<br />
Haas Co. v. Crystal Chem. Co., 736 F.2d 688, 691 (Fed. Cir. 1984) (holding a finding<br />
of willfulness <strong>to</strong> justify granting at<strong>to</strong>rney’s fees <strong>to</strong> the plaintiff); 35 U.S.C. § 284<br />
(authorizing courts <strong>to</strong> award enhanced damages of up <strong>to</strong> three times the actual
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evaluating willfulness, courts consider the <strong>to</strong>tality of the circumstances 77<br />
reflecting the alleged infringer’s intent <strong>and</strong> reasonable beliefs. 78 The<br />
Federal Circuit has outlined several fac<strong>to</strong>rs that are germane <strong>to</strong> the<br />
determination of willfulness. 79 The Federal Circuit has consistently<br />
emphasized that an alleged infringer who has notice of another’s patent<br />
rights has an “affirmative duty <strong>to</strong> exercise due care <strong>to</strong> determine<br />
whether or not he is infringing.” 80 Due <strong>to</strong> the significant potential<br />
monetary benefit, plaintiffs in actions for patent infringement almost<br />
always include an allegation of willfulness in their complaints. 81<br />
One defense alleged infringers commonly use <strong>to</strong> rebut an allegation<br />
of willfulness is reliance on the advice of counsel. 82 An alleged<br />
infringer raising this defense claims that it sought out the advice of<br />
counsel <strong>and</strong>, due <strong>to</strong> the advice received, it reasonably believed either<br />
damages); 35 U.S.C. § 285 (authorizing courts <strong>to</strong> award at<strong>to</strong>rneys’ fees in exceptional<br />
cases).<br />
77. See, e.g., Gustafson, Inc. v. Intersystems Indus. Prods., Inc., 897 F.2d<br />
508, 510 (Fed. Cir. 1990).<br />
78. See, e.g., Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 944 (Fed. Cir.<br />
1992).<br />
79. See, e.g., Rolls-Royce Ltd. v. GTE Valeron Corp., 800 F.2d 1101, 1110<br />
(Fed. Cir. 1986); Read Corp., 970 F.2d at 826–27. The following fac<strong>to</strong>rs cited in Read<br />
Corp. are frequently utilized by courts <strong>to</strong> evaluate allegations of willfulness:<br />
(1) whether the infringer deliberately copied the ideas or design of another;<br />
(2) whether the infringer, when he knew of the other’s patent protection,<br />
investigated the scope of the patent <strong>and</strong> formed a good-faith belief that it<br />
was invalid or that it was not infringed; . . .<br />
(3) the infringer’s behavior as a party <strong>to</strong> the litigation. . . .<br />
(4) Defendant’s size <strong>and</strong> financial condition. . . .<br />
(5) Closeness of the case. . . .<br />
(6) Duration of defendant’s misconduct. . . .<br />
(7) Remedial action by the defendant. . . .<br />
(8) Defendant’s motivation for harm. . . .<br />
(9) Whether defendant attempted <strong>to</strong> conceal its misconduct.<br />
Id.<br />
80. Underwater Devices, Inc. v. Morrison-Knudsen Co., 717 F.2d 1380,<br />
1389 (Fed. Cir. 1983), quoted in Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v.<br />
Dana Corp., 383 F.3d 1337, 1343 (Fed. Cir. 2004). It should be <strong>note</strong>d that the Federal<br />
Circuit has overruled the duty-of-due-care st<strong>and</strong>ard of Underwater Devices in favor of a<br />
“recklessness” st<strong>and</strong>ard. In re Seagate Tech., LLC, No. 06-M830, slip op. at 11–12<br />
(Fed. Cir. Aug. 20, 2007). While this change has the potential <strong>to</strong> significantly impact<br />
willfulness, this st<strong>and</strong>ard is outside the focus of this Note.<br />
81. One recent empirical study found that willfulness was alleged in 92.3% of<br />
the patent infringement cases studied. See Moore, supra <strong>note</strong> 9, at 232.<br />
82. See EPSTEIN, supra <strong>note</strong> 10, at 347–48, 351, 625.
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that the plaintiff’s patent was invalid or unenforceable or that the<br />
alleged infringer’s conduct did not infringe the plaintiff’s patent<br />
rights. 83 Therefore, whether the defense is effective depends not on the<br />
legal correctness of the opinion, but rather on whether the opinion is<br />
complete enough, under the <strong>to</strong>tality of the circumstances, <strong>to</strong> instill in<br />
the alleged infringer a reasonable belief that the patent is invalid,<br />
unenforceable, or not infringed. 84 This is consistent with the courts’<br />
focus on the alleged infringer’s state of mind in determining the<br />
presence or absence of willfulness.<br />
While the advice-of-counsel defense can be an effective <strong>to</strong>ol for an<br />
alleged infringer in rebutting an allegation of willfulness, the alleged<br />
infringer also subjects itself <strong>to</strong> certain risks. By raising the defense, the<br />
alleged infringer necessarily puts at issue not only its own beliefs<br />
regarding the invalidity, unenforceability, <strong>and</strong>/or noninfringement of<br />
the patent but also any communications it had with counsel that might<br />
have influenced its beliefs. 85 Therefore, the alleged infringer asserting<br />
the defense waives the at<strong>to</strong>rney-client privilege with respect <strong>to</strong> certain<br />
communications with counsel regarding infringement <strong>and</strong> possibly<br />
waives protection of certain at<strong>to</strong>rney work product as well. 86<br />
As a result, the alleged infringer faces a difficult decision. On one<br />
h<strong>and</strong>, it can forego the advice-of-counsel defense <strong>and</strong> maintain at<strong>to</strong>rneyclient<br />
privilege <strong>and</strong> work-product protection. By doing so, however, it<br />
will risk a potentially disastrous finding of willfulness. On the other<br />
h<strong>and</strong>, it can assert the advice-of-counsel defense <strong>and</strong> possibly shield<br />
itself from a finding of willfulness. By choosing this option, however, it<br />
will waive at<strong>to</strong>rney-client privilege <strong>and</strong> work-product protection <strong>and</strong><br />
reveal <strong>to</strong> the opposition many documents <strong>and</strong> communications that<br />
would otherwise be protected. 87 The fact that the scope of the <strong>waiver</strong> of<br />
83. See Ortho Pharm. Corp., 959 F.2d at 944.<br />
84. Id.<br />
85. See discussion infra Part II.B.<br />
86. See discussion infra Part II.B.<br />
87. The decision <strong>to</strong> assert or forgo the defense used <strong>to</strong> be even more<br />
complicated. In Kloster Speedsteel AB v. Crucible Inc., 793 F.2d 1565, 1580 (Fed.<br />
Cir. 1986), the alleged infringer did not assert the advice-of-counsel defense but rather<br />
was silent as <strong>to</strong> whether or not it had ever sought out advice of counsel regarding its<br />
potential infringement. The court held that the alleged infringer’s “silence on the<br />
subject, in alleged reliance on the at<strong>to</strong>rney-client privilege, would warrant the<br />
conclusion that it either obtained no advice of counsel or did so <strong>and</strong> was advised that its<br />
[conduct] would be an infringement of valid U.S. patents.” Id. This “adverse<br />
inference” continued <strong>to</strong> be recognized by the Federal Circuit until 2004, when the court<br />
finally decided <strong>to</strong> eliminate the adverse inference, citing its detrimental effect on the<br />
at<strong>to</strong>rney-client relationship. Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana<br />
Corp., 383 F.3d 1337, 1343–44 (Fed. Cir. 2004). Yet even though the adverse<br />
inference has been eliminated, the advice-of-counsel defense still plays a large role in
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944 WISCONSIN LAW REVIEW<br />
at<strong>to</strong>rney-client privilege <strong>and</strong> work-product protection was unclear prior<br />
<strong>to</strong> EchoStar further complicated the alleged infringer’s dilemma. 88<br />
Because the scope of the <strong>waiver</strong> was unclear, the alleged infringer did<br />
not know exactly what information it would be sacrificing if it chose <strong>to</strong><br />
assert the advice-of-counsel defense. 89<br />
B. Precedent Regarding the Scope of Waiver<br />
Prior <strong>to</strong> EchoStar, the Federal Circuit provided remarkably little<br />
guidance on the scope of <strong>waiver</strong> of at<strong>to</strong>rney-client privilege <strong>and</strong> workproduct<br />
protection upon assertion of the advice-of-counsel defense. This<br />
lack of guidance likely reflects, at least in part, the difficulty defendants<br />
experience in attempting <strong>to</strong> obtain appellate review of district court<br />
rulings regarding the scope of <strong>waiver</strong>. 90 Furthermore, the Federal<br />
Circuit is the only source of appellate guidance regarding the scope of<br />
<strong>waiver</strong> because it has exclusive jurisdiction over substantive issues of<br />
patent law, 91 <strong>and</strong> the scope of <strong>waiver</strong> is one such issue. 92 Therefore, the<br />
district courts have largely been on their own in determining the<br />
appropriate scope of <strong>waiver</strong> when the defendant invokes the advice-ofcounsel<br />
defense <strong>to</strong> willful patent infringement. As a result, the district<br />
courts have varied widely in their approaches <strong>to</strong> the scope of <strong>waiver</strong>,<br />
<strong>and</strong> at<strong>to</strong>rneys <strong>and</strong> their clients have been uncertain about how broad the<br />
scope of <strong>waiver</strong> will be in any given case. 93<br />
the <strong>to</strong>tality-of-the-circumstances test for willful infringement, <strong>and</strong> therefore the choice<br />
the alleged infringer faces is still a very difficult one.<br />
88. See Jared Goff, Comment, The Unpredictable Scope of the Waiver<br />
Resulting from the Advice-of-Counsel Defense <strong>to</strong> Willful Patent Infringement, 1998<br />
BYU L. REV. 213, 213–14 (1998).<br />
89. See Vi<strong>to</strong> J. DeBari, Federal Circuit Clarifies Scope of Advice-Of-Counsel<br />
Waiver, THE METROPOLITAN CORP. COUNS., June 2006, at 10, available at http://<br />
www.metrocorpcounsel.com/pdf/2006/June/10.pdf.<br />
90. See Goff supra <strong>note</strong> 88, at 222–23. Rulings regarding the scope of <strong>waiver</strong><br />
are discovery rulings <strong>and</strong> are interlocu<strong>to</strong>ry in nature. Id. at 222. Interlocu<strong>to</strong>ry appeals<br />
are extremely difficult <strong>to</strong> obtain; ordinarily, a final ruling must be issued before the<br />
case is ripe for appeal. Id. At that point, the appeal is largely moot because the<br />
privileged information has already been released. Id. Furthermore, the only other<br />
method of relief is <strong>to</strong> petition for a writ of m<strong>and</strong>amus, <strong>and</strong>, like interlocu<strong>to</strong>ry appeals,<br />
writs of m<strong>and</strong>amus are rarely granted. Id.<br />
91. In re EchoStar Commc’ns Corp., 448 F.3d 1294, 1298 (Fed. Cir. 2006)<br />
(citing Advanced Cardiovascular Sys., Inc. v. Medtronic, Inc., 265 F.3d 1294, 1303<br />
(Fed. Cir. 2001)).<br />
92. EchoStar, 448 F.3d at 1298 (citing In re Spalding Sports Worldwide, Inc.,<br />
203 F.3d 800, 803–04 (Fed. Cir. 2000)).<br />
93. See, e.g., Aspex Eyewear, Inc. v. E’Lite Optik, Inc., 276 F. Supp. 2d<br />
1084, 1091–96 (D. Nev. 2003); Thorn EMI N. Am., Inc. v. Micron Tech., Inc., 837<br />
F. Supp. 616, 622–23 (D. Del. 1993).
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The Federal Circuit did provide some guidance regarding the<br />
scope of <strong>waiver</strong> of the at<strong>to</strong>rney-client privilege in Fort James Corp. v.<br />
Solo Cup Co. 94 In Fort James, the court held that the scope of the<br />
<strong>waiver</strong> extends “<strong>to</strong> all other communications relating <strong>to</strong> the same<br />
subject matter.” 95 The court <strong>note</strong>d that <strong>to</strong> hold otherwise would be<br />
unfair <strong>to</strong> the plaintiff since the defendant could disclose favorable<br />
communications while hiding unfavorable communications behind<br />
privilege. 96 The court gave no concrete guidance as <strong>to</strong> what constitutes<br />
the “same subject matter” 97 but rather held that courts should “weigh<br />
the circumstances of the disclosure, the nature of the legal advice<br />
sought, <strong>and</strong> the prejudice <strong>to</strong> the parties of permitting or prohibiting<br />
further disclosures.” 98 While Fort James provided some guidance<br />
regarding <strong>waiver</strong> of at<strong>to</strong>rney-client privilege, the Federal Circuit<br />
provided no such guidance regarding work-product protection prior <strong>to</strong><br />
EchoStar. 99<br />
As a result of the Federal Circuit’s general lack of guiding<br />
authority, the district courts had taken widely varying approaches when<br />
determining the scope of <strong>waiver</strong>. Some district courts favored a narrow<br />
scope of <strong>waiver</strong>, holding that work product the at<strong>to</strong>rney never<br />
communicated <strong>to</strong> the client is not discoverable. 100 These courts reasoned<br />
that work product never communicated <strong>to</strong> the client is not relevant <strong>to</strong><br />
the client’s state of mind. And since the willfulness inquiry focuses<br />
solely on the client’s state of mind <strong>and</strong> not that of the client’s at<strong>to</strong>rney,<br />
such work product should not be discoverable. 101<br />
94. 412 F.3d 1340 (Fed. Cir. 2005).<br />
95. Id. at 1349. This st<strong>and</strong>ard is consistent with the court’s previous decisions<br />
relating <strong>to</strong> <strong>waiver</strong> of the at<strong>to</strong>rney-client privilege. See Genentech, Inc. v. U.S. Int’l<br />
Trade Comm’n, 122 F.3d 1409, 1416 (Fed. Cir. 1997).<br />
96. Fort James, 412 F.3d at 1349. Courts sometimes refer <strong>to</strong> this concept as<br />
using the at<strong>to</strong>rney-client privilege as both “a sword <strong>and</strong> a shield.” E.g., EchoStar, 448<br />
F.3d at 1301.<br />
97. Fort James, 412 F.3d at 1349. The court said that there is no “bright line<br />
test” for determining what constitutes the same subject matter due <strong>to</strong> the factual nature<br />
of the determination. Id.<br />
98. Id. at 1349–50.<br />
99. The Federal Circuit’s most relevant authority, Genentech, suggested only<br />
that work-product protection could be waived but did not hint at how broad or narrow<br />
the scope of <strong>waiver</strong> should be. See Genentech, 122 F.3d at 1415. More importantly,<br />
Genentech specified that work-product protection could be waived because the<br />
defendant disclosed the work product <strong>to</strong> a third party, not because the defendant raised<br />
the advice-of-counsel defense <strong>to</strong> willful patent infringement. Id. Therefore, Genentech<br />
was not particularly useful guidance for the district courts.<br />
100. See, e.g., Nitinol Med. Techs., Inc. v. AGA Med. Corp., 135 F. Supp.<br />
2d 212, 218–19 (D. Mass. 2000); Thorn EMI N. Am., Inc. v. Micron Tech., Inc., 837<br />
F. Supp. 616, 622–23 (D. Del. 1993).<br />
101. See Thorn, 837 F. Supp. at 622–23.
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Other district courts found the <strong>waiver</strong> <strong>to</strong> be broad, ordering<br />
production of all work product related <strong>to</strong> the same subject matter<br />
regardless of whether it was communicated <strong>to</strong> the client. 102 These courts<br />
emphasized that fairness necessitates that the plaintiff have access <strong>to</strong> all<br />
work product <strong>to</strong> uncover what advice counsel actually gave the client. 103<br />
Otherwise, counsel could simply deliberately omit unfavorable<br />
information from the opinion communicated <strong>to</strong> the client. 104 Still other<br />
district courts had taken this broad <strong>waiver</strong> a step further, reasoning that<br />
because the client relies on the thoughts <strong>and</strong> advice of the at<strong>to</strong>rney, both<br />
the at<strong>to</strong>rney’s <strong>and</strong> the client’s states of mind are at issue. 105 Due <strong>to</strong> the<br />
wide variety of approaches taken by the district courts, it has been<br />
difficult for at<strong>to</strong>rneys <strong>and</strong> their clients <strong>to</strong> predict how broad the scope of<br />
the <strong>waiver</strong>—particularly of work-product protection—will be in any<br />
given case.<br />
III. ANALYSIS OF ECHOSTAR AND SUBSEQUENT WAIVER DECISIONS<br />
A. TiVo, Inc. v. EchoStar Communications Corp.: The Decision of<br />
the United States District Court for the Eastern District of Texas 106<br />
The EchoStar decision arose out of a dispute between TiVo <strong>and</strong><br />
EchoStar regarding a patent owned by TiVo. 107 TiVo alleged that<br />
EchoStar willfully infringed TiVo’s patent 108 (“the ‘389 patent”) on a<br />
technology commonly utilized in digital video recorders. 109 After<br />
learning about the issuance of the ‘389 patent, but prior <strong>to</strong> the filing of<br />
TiVo’s complaint, EchoStar had its in-house counsel assess EchoStar’s<br />
exposure for infringement liability. 110 EchoStar’s in-house counsel<br />
advised that EchoStar did not infringe the claims 111 of the ‘389 patent,<br />
102. See, e.g., Aspex Eyewear, Inc. v. E’Lite Optik, Inc., 276 F. Supp. 2d<br />
1084, 1092–93 (D. Nev. 2003).<br />
103. Id.<br />
104. Id.<br />
105. See, e.g., Novartis Pharms. Corp. v. EON Labs Mfg., Inc., 206 F.R.D.<br />
396, 399 (D. Del. 2002).<br />
106. No. 2:04-CV-1 (DF), 2005 U.S. Dist. LEXIS 42481 (E.D. Tex. Sept. 26,<br />
2005).<br />
107. Id. at *3–4.<br />
108. U.S. Patent No. 6,233,389 (filed July 30, 1998).<br />
109. See id. Digital video recorders are also commonly referred <strong>to</strong> as DVRs.<br />
110. TiVo, 2005 U.S. Dist. LEXIS 42481, at *4.<br />
111. “Claims” are the part of the patent which describe the “subject matter<br />
which the applicant regards as his invention.” 3 CHISUM, supra <strong>note</strong> 1, § 8.01. Claims<br />
“define the invention for the purpose of determining infringement, that is, what
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<strong>and</strong> EchoStar relied on this advice <strong>and</strong> continued <strong>to</strong> manufacture its<br />
digital video recorders. 112 After TiVo filed its complaint, EchoStar<br />
sought additional advice from at<strong>to</strong>rneys at Merchant & Gould, who<br />
subsequently prepared two opinion letters 113 for EchoStar. 114<br />
In response <strong>to</strong> TiVo’s allegation of willful infringement, EchoStar<br />
asserted reliance on the advice of its in-house counsel but not on that of<br />
Merchant & Gould. 115 TiVo filed a motion <strong>to</strong> compel discovery of the<br />
opinions <strong>and</strong> communications both prior <strong>to</strong> <strong>and</strong> <strong>after</strong> the filing of its<br />
complaint. 116 Magistrate Judge Harry McKee held that EchoStar waived<br />
at<strong>to</strong>rney-client privilege <strong>and</strong> work-product protection for any documents<br />
<strong>and</strong> communications made prior <strong>to</strong> the filing of the complaint. 117<br />
McKee further held, however, that EchoStar had only waived privilege<br />
for advice concerning infringement, <strong>and</strong> thus TiVo could not discover<br />
privileged information relating <strong>to</strong> validity or enforceability. 118 EchoStar<br />
filed a motion for reconsideration of McKee’s orders. 119<br />
On review, Judge David Folsom found that McKee had erred in<br />
his construction of the temporal scope of <strong>waiver</strong> as well as his<br />
distinction between communicated <strong>and</strong> uncommunicated work<br />
product. 120 Folsom upheld McKee’s finding that the <strong>waiver</strong> extended<br />
only <strong>to</strong> subject matter relating <strong>to</strong> infringement <strong>and</strong> not invalidity or<br />
enforceability. 121 However, Folsom found McKee’s holding that the<br />
<strong>waiver</strong> extended only <strong>to</strong> prefiling communications <strong>and</strong> work product <strong>to</strong><br />
be erroneous. 122 Instead, he held that the scope of <strong>waiver</strong> included all<br />
communications <strong>and</strong> work product pertaining <strong>to</strong> advice of counsel<br />
concerning infringement regardless of when EchoStar obtained the<br />
advice. 123<br />
constitutes the ‘patented invention’ that persons cannot make, use or sell without the<br />
authority of the patent owner.” Id.<br />
112. TiVo, 2005 U.S. Dist. LEXIS 42481, at *4, *21–22. EchoStar<br />
manufactures digital video recorders under its Dish Network br<strong>and</strong>, <strong>and</strong> its current<br />
digital video recorders are called DishDVRs. See Dish Network, http://<br />
www.dishnetwork.com (last visited Sept. 26, 2007).<br />
113. See supra <strong>note</strong> 34 (explaining the significance of opinion letters in willful<br />
patent infringement suits).<br />
114. TiVo, 2005 U.S. Dist. LEXIS 42481, at *4–6.<br />
115. Id. at *4–5.<br />
116. Id. at *6.<br />
117. Id. at *7–8.<br />
118. Id.<br />
119. Id. at *9.<br />
120. Id. at *25–26.<br />
121. Id. at *23.<br />
122. Id. at *24.<br />
123. Id.
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948 WISCONSIN LAW REVIEW<br />
Furthermore, Folsom held that the scope of <strong>waiver</strong> did not depend<br />
on whether the opinions or materials were communicated <strong>to</strong><br />
EchoStar. 124 So long as they pertained <strong>to</strong> the issue of infringement, they<br />
were discoverable. 125 Folsom therefore ordered EchoStar <strong>to</strong> produce the<br />
two opinions drafted by Merchant & Gould as well as any other<br />
documents or communications related <strong>to</strong> the infringement analysis<br />
performed by Merchant & Gould for EchoStar. 126 EchoStar responded<br />
by filing a petition for a writ of m<strong>and</strong>amus with the Federal Circuit<br />
requesting that the court vacate Folsom’s order <strong>to</strong> compel discovery. 127<br />
B. EchoStar’s Petition for a Writ of M<strong>and</strong>amus<br />
In its petition for a writ of m<strong>and</strong>amus, 128 EchoStar argued that the<br />
district court made several errors in its construction of the scope of<br />
<strong>waiver</strong> of at<strong>to</strong>rney-client privilege <strong>and</strong> work-product protection. 129<br />
First, EchoStar argued that the court erred in holding that EchoStar’s<br />
reliance on the opinion of its in-house counsel caused a <strong>waiver</strong> of the<br />
at<strong>to</strong>rney-client privilege protecting communications with outside<br />
counsel at Merchant & Gould. 130 EchoStar argued that an alleged<br />
infringer must rely on the advice of outside counsel in order <strong>to</strong> raise the<br />
traditional advice-of-counsel defense. 131 Accordingly, EchoStar<br />
maintained it had not raised the advice-of-counsel defense because it<br />
merely relied on an internal investigation by its in-house counsel. 132 The<br />
district court’s holding undermined an earlier Federal Circuit decision<br />
in Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 133<br />
124. Id. at *23–24.<br />
125. Id.<br />
126. Id. at *25–26.<br />
127. In re EchoStar Commc’ns Corp., 448 F.3d 1294, 1296 (Fed. Cir. 2006).<br />
After the Federal Circuit granted Merchant & Gould leave <strong>to</strong> intervene, Merchant &<br />
Gould also filed a petition for a writ of m<strong>and</strong>amus. Id.<br />
128. Petition for Writ of M<strong>and</strong>amus, EchoStar, 448 F.3d 1294, Misc. No. 803<br />
(Fed. Cir. Oct. 11, 2005).<br />
129. Id. at 1–3.<br />
130. Id. at 13–15.<br />
131. Id.<br />
132. Id.<br />
133. 383 F.3d 1337 (Fed. Cir. 2004). Knorr-Bremse is well known in the<br />
patent realm because it eliminated the “adverse inference,” which had been long upheld<br />
by the Federal Circuit. Id. at 1344. Prior <strong>to</strong> Knorr-Bremse, the court held that an<br />
adverse inference could be drawn when a defendant failed <strong>to</strong> produce an opinion of<br />
counsel or invoked at<strong>to</strong>rney-client privilege <strong>and</strong> work-product protection in response <strong>to</strong><br />
an allegation of willful infringement. Id. at 1343–44. In other words, if a defendant<br />
failed <strong>to</strong> produce an opinion of counsel or invoked privilege, the finder of fact was free<br />
<strong>to</strong> infer that the defendant either chose not <strong>to</strong> obtain an opinion of counsel regarding its
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which stated that an alleged infringer has no duty <strong>to</strong> consult outside<br />
counsel. 134<br />
Second, EchoStar argued that the district court misconstrued the<br />
scope of <strong>waiver</strong> of work-product protection. 135 The court erred by<br />
holding that the <strong>waiver</strong> extended <strong>to</strong> documents of Merchant & Gould<br />
that it never actually communicated <strong>to</strong> EchoStar. 136 Noting the absence<br />
of any governing Federal Circuit precedent on the issue, 137 EchoStar<br />
contended that the appropriate scope of <strong>waiver</strong> should not include<br />
documents never conveyed <strong>to</strong> the client because such documents are not<br />
relevant <strong>to</strong> the client’s state of mind. 138 Therefore, they shed no light on<br />
the issue of willfulness. 139 Furthermore, EchoStar maintained that the<br />
district court misconstrued the temporal scope of <strong>waiver</strong> of workproduct<br />
protection as well. 140 If the <strong>waiver</strong> extends <strong>to</strong> uncommunicated<br />
work product at all, it should only extend <strong>to</strong> uncommunicated work<br />
product created prior <strong>to</strong> the beginning of the case; it should never<br />
extend <strong>to</strong> uncommunicated work product created <strong>after</strong> the case was<br />
filed. 141<br />
C. In re EchoStar Communications Corp.:<br />
The Federal Circuit Opinion<br />
The Federal Circuit granted EchoStar <strong>and</strong> Merchant & Gould’s<br />
petitions for a writ of m<strong>and</strong>amus, 142 <strong>and</strong> for the first time the court<br />
directly addressed the scope of <strong>waiver</strong> of work-product protection when<br />
an alleged infringer raises the advice-of-counsel defense. 143 In its<br />
opinion, the court drew a sharp distinction between the at<strong>to</strong>rney-client<br />
privilege <strong>and</strong> the work-product doctrine, addressing the <strong>waiver</strong> of each<br />
potential infringement or the defendant obtained unfavorable advice. Id. at 1343. An<br />
alleged infringer has an affirmative duty <strong>to</strong> avoid infringing others’ known patent<br />
rights. Id. at 1345–46. Therefore, the adverse inference was strong evidence that the<br />
alleged infringer failed <strong>to</strong> meet this affirmative duty <strong>and</strong> therefore its infringement was<br />
willful. Id. The court found that this adverse inference impeded <strong>to</strong>o harshly on the<br />
at<strong>to</strong>rney-client relationship, <strong>and</strong>, thus, it was no longer appropriate. Id.<br />
134. Petition for Writ of M<strong>and</strong>amus, EchoStar, 448 F.3d 1294, Misc. No. 803<br />
(Fed. Cir. Oct. 11, 2005).<br />
135. Id. at 16–26.<br />
136. Id. at 16.<br />
137. Id. at 18.<br />
138. Id. at 18–21.<br />
139. Id.<br />
140. Id. at 24–26.<br />
141. Id.<br />
142. 448 F.3d 1294 (Fed. Cir. 2006). The opinion of the court was written by<br />
Gajarsa for a panel that also included Schall <strong>and</strong> Prost. Id. at 1296.<br />
143. See id. at 1296–1305.
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separately. 144 The court <strong>note</strong>d that while the two concepts are related,<br />
they are distinct from one another <strong>and</strong> find support in different policy<br />
rationales. 145 Thus, it is possible for an alleged infringer <strong>to</strong> waive one<br />
without necessarily waiving the other. 146 The court’s emphasis of this<br />
distinction is <strong>note</strong>worthy since prior district court decisions routinely<br />
addressed the scope of <strong>waiver</strong> without clearly distinguishing between<br />
the two concepts. 147<br />
The Federal Circuit agreed with the district court regarding the<br />
scope of <strong>waiver</strong> of at<strong>to</strong>rney-client privilege <strong>and</strong> found EchoStar had<br />
waived privilege by relying on the advice of its in-house counsel. 148<br />
EchoStar’s in-house counsel rendered an opinion upon which EchoStar<br />
relied in forming its belief that it did not infringe the ‘389 patent. 149<br />
Despite the fact that the opinion came from an in-house employee, it<br />
was still the legal advice of an at<strong>to</strong>rney. Thus EchoStar’s reliance on<br />
the advice constituted an assertion of the advice-of-counsel defense. 150<br />
The court stayed true <strong>to</strong> its decision in Fort James 151 in its<br />
construction of the scope of <strong>waiver</strong> of the at<strong>to</strong>rney-client privilege. 152<br />
The court held that once an alleged infringer raises the advice-ofcounsel<br />
defense, it au<strong>to</strong>matically waives the at<strong>to</strong>rney-client privilege. 153<br />
The scope of the <strong>waiver</strong> includes “all other communications relating <strong>to</strong><br />
144. See id.<br />
145. Id. at 1300–01.<br />
146. Id. at 1300.<br />
147. The district court’s decision is an excellent example of how district courts<br />
tended <strong>to</strong> group <strong>waiver</strong> of the two protections <strong>to</strong>gether. Throughout the opinion, the<br />
court discussed the scope of <strong>waiver</strong> of at<strong>to</strong>rney-client privilege <strong>and</strong> work-product<br />
protection <strong>to</strong>gether. See TiVo Inc. v. EchoStar Commc’ns Corp., No. 2:04-CV-1 (DF),<br />
2005 U.S. Dist. LEXIS 42481, at *15, *23–25 (E.D. Tex. Sept. 26, 2005) (“The scope<br />
of privilege/work product <strong>waiver</strong>, once an advice of counsel defense is asserted, should<br />
be <strong>guide</strong>d by fairness. . . . Regardless of when the opinions or materials were<br />
transcribed or communicated <strong>to</strong> EchoStar, such information . . . goes <strong>to</strong> show<br />
EchoStar’s state of mind with respect <strong>to</strong> willful infringement. . . . EchoStar [is] <strong>to</strong><br />
produce the two Merchant & Gould opinions <strong>and</strong> all <strong>note</strong>s, communications, or other<br />
documentation related <strong>to</strong> any infringement analysis of the ‘389 patent undertaken by<br />
Merchant & Gould.”).<br />
148. EchoStar, 448 F.3d at 1299.<br />
149. Id.<br />
150. Id. The court <strong>note</strong>d that while use of in-house counsel did not affect the<br />
“legal nature of the advice,” it may affect the strength of the advice-of-counsel defense.<br />
Id. (citing Underwater Devices, Inc. v. Morrison-Knudsen Co., 717 F.2d 1380, 1390<br />
(Fed. Cir. 1983)).<br />
151. 412 F.3d 1340 (Fed. Cir. 2005).<br />
152. EchoStar, 448 F.3d at 1299.<br />
153. Id.
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the same subject matter.” 154 Furthermore, the court commented in a<br />
foot<strong>note</strong> that there is no temporal limitation <strong>to</strong> the scope of <strong>waiver</strong> of<br />
at<strong>to</strong>rney-client privilege (or work-product protection as well) as long as<br />
the advice is relevant <strong>to</strong> ongoing infringement. 155 Therefore, the court<br />
held that EchoStar waived privilege for communications with Merchant<br />
& Gould concerning the same subject matter as the in-house opinion<br />
upon which it relied. 156<br />
The bulk of the court’s opinion addressed the scope of <strong>waiver</strong> of<br />
work-product protection, <strong>and</strong> the court held that despite strong policy<br />
justifications an alleged infringer can still waive work-product<br />
protection by raising the advice-of-counsel defense. 157 The court began<br />
by addressing the policy justifications behind the work-product<br />
doctrine. 158 It focused on the need for at<strong>to</strong>rneys <strong>to</strong> be free <strong>to</strong> document<br />
their thoughts <strong>and</strong> strategies without fear of having an opposing party<br />
pilfer these thoughts <strong>and</strong> strategies through discovery. 159 The court<br />
viewed the work-product doctrine as necessary <strong>to</strong> promote “a fair <strong>and</strong><br />
efficient adversarial system.” 160<br />
In light of these strong policy justifications, the court held that<br />
<strong>waiver</strong> of work-product protection is not as broad in scope as <strong>waiver</strong> of<br />
at<strong>to</strong>rney-client privilege. 161 Instead, the court found that the scope of<br />
<strong>waiver</strong> of work-product protection is limited <strong>to</strong> “factual” or “nonopinion”<br />
work product regarding the same subject matter as the opinion<br />
upon which the alleged infringer relies. 162<br />
The court acknowledged that the distinction between “factual” <strong>and</strong><br />
“opinion” work product might not always be clear. 163 In such cases,<br />
district courts should determine the nature of the work product by<br />
balancing the policy preventing the use of protection as a “sword <strong>and</strong> a<br />
shield” 164 with the policy favoring the work-product doctrine. 165 District<br />
154. Id. (quoting Fort James, 412 F.3d at 1349). While the EchoStar court’s<br />
construction of at<strong>to</strong>rney-client privilege <strong>waiver</strong> was consistent with the construction in<br />
Fort James, neither opinion clarified exactly what the “same subject matter” means.<br />
See infra Part III.D.2.a.<br />
155. EchoStar, 448 F.3d at 1302 n.4.<br />
156. Id. at 1299.<br />
157. Id. at 1302.<br />
158. Id. at 1301.<br />
159. Id.<br />
160. Id.<br />
161. See id.<br />
162. Id. at 1302 (quoting In re Martin Marietta Corp., 856 F.2d 619, 625 (4th<br />
Cir. 1988)).<br />
163. Id.<br />
164. See, e.g., id. at 1301; supra <strong>note</strong>s 94–99 <strong>and</strong> accompanying text.<br />
165. Id. at 1302.
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courts should remain mindful that the focus of the willfulness inquiry is<br />
on the state of mind of the alleged infringer, not the at<strong>to</strong>rney. 166<br />
Therefore, according <strong>to</strong> the court, if work product does not<br />
provide any information regarding communications made <strong>to</strong> the alleged<br />
infringer, it necessarily has no impact on his state of mind <strong>and</strong> is<br />
irrelevant <strong>to</strong> the willfulness inquiry. 167 If the work product does contain<br />
information relevant <strong>to</strong> the alleged infringer’s state of mind, however,<br />
the work product should generally be discoverable. 168 The primary goal<br />
of <strong>waiver</strong> is <strong>to</strong> ensure that the alleged infringer cannot “shield” such<br />
work product behind the work-product doctrine while simultaneously<br />
using the advice of counsel as a “sword” <strong>to</strong> attack the plaintiff’s<br />
willfulness assertion. 169<br />
To help avoid further confusion in the district courts regarding<br />
how <strong>to</strong> employ the balancing test, the court also provided a framework<br />
for categorizing work product. 170 The court identified “three categories<br />
of work product” 171 as potentially relevant <strong>to</strong> analyzing the <strong>waiver</strong>:<br />
(1) documents that embody a communication between the<br />
at<strong>to</strong>rney <strong>and</strong> client concerning the subject matter of the case,<br />
such as a traditional opinion letter; (2) documents analyzing<br />
the law, facts, trial strategy, <strong>and</strong> so forth that reflect the<br />
at<strong>to</strong>rney’s mental impressions but were not given <strong>to</strong> the client;<br />
<strong>and</strong> (3) documents that discuss a communication between<br />
at<strong>to</strong>rney <strong>and</strong> client concerning the subject matter of the case<br />
but are not themselves communications <strong>to</strong> or from the<br />
client. 172<br />
The court <strong>note</strong>d that work product in the first category was<br />
covered by the at<strong>to</strong>rney-client privilege because it embodies a<br />
communication between the at<strong>to</strong>rney <strong>and</strong> client. 173 Therefore, work<br />
166. Id. at 1303.<br />
167. Id.<br />
168. Id.<br />
169. Id.<br />
170. See id. at 1302–04.<br />
171. Id. at 1302. The court acknowledged that not all work product will fit<br />
neatly in<strong>to</strong> the three categories. Id. at n.3. The categories are broad <strong>and</strong> general<br />
enough, however, that a district court should be able <strong>to</strong> fit most work product in<strong>to</strong> one<br />
of the categories.<br />
172. Id. at 1302.<br />
173. Id. A “communication” need not be oral <strong>to</strong> fall under the at<strong>to</strong>rney-client<br />
privilege; a document can be a “communication” as well. Id.
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product in the first category is discoverable under the <strong>waiver</strong> of<br />
at<strong>to</strong>rney-client privilege. 174<br />
The court found work product in the second category <strong>to</strong> fall<br />
outside the scope of <strong>waiver</strong>. 175 Work product in this category is<br />
“opinion” work product, which reflects the mental impressions of the<br />
at<strong>to</strong>rney. 176 When never communicated <strong>to</strong> the client, this work product<br />
provides very little information regarding the alleged infringer’s state of<br />
mind. For this reason, it is not much help <strong>to</strong> the willfulness inquiry. 177<br />
Therefore, the court found the policy favoring the work-product<br />
doctrine <strong>to</strong> outweigh the limited value of this type of work product <strong>to</strong><br />
the willfulness inquiry <strong>and</strong> declared such work product <strong>to</strong> be<br />
undiscoverable. 178<br />
Finally, the court found work product in the third category, which<br />
refers <strong>to</strong> documents discussing a communication between the at<strong>to</strong>rney<br />
<strong>and</strong> client that were not actually communicated <strong>to</strong> the client, <strong>to</strong> fall<br />
within the scope of <strong>waiver</strong>. 179 While such work product does not bear<br />
as directly on the client’s state of mind as the communicative work<br />
product of the first category, it can provide information regarding what<br />
communications the at<strong>to</strong>rney actually made <strong>to</strong> the client. 180 Thus, such<br />
work product can reveal communications that may have affected the<br />
state of mind of the client regarding infringement, <strong>and</strong> it is relevant <strong>to</strong><br />
the willfulness inquiry. 181 The court found this relevancy <strong>to</strong> outweigh<br />
the justifications for protecting the work product <strong>and</strong> held that such<br />
work product is discoverable. 182<br />
The court did <strong>note</strong>, however, that work product that falls in the<br />
third category might contain work product from the second category<br />
(thoughts <strong>and</strong> analysis of the at<strong>to</strong>rney never communicated <strong>to</strong> the<br />
client). 183 The court advised that the parties should carefully redact such<br />
information. 184 Furthermore, the court suggested that in camera<br />
174. EchoStar, 448 F.3d at 1302.<br />
175. Id. at 1303–04.<br />
176. Id.<br />
177. Id. at 1304.<br />
178. Id.<br />
179. Id. at 1302–03. For an example given by the court of such work product,<br />
see supra <strong>note</strong> 41.<br />
180. EchoStar, 448 F.3d at 1304.<br />
181. Id.<br />
182. Id.<br />
183. Id.<br />
184. EchoStar, 448 F.3d at 1304.
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954 WISCONSIN LAW REVIEW<br />
inspection 185 by the district court might be appropriate in some<br />
instances. 186<br />
In sum, the EchoStar court attempted <strong>to</strong> clearly state the principles<br />
that should <strong>guide</strong> district courts in construing the scope of <strong>waiver</strong>. The<br />
court held that the <strong>waiver</strong> of at<strong>to</strong>rney-client privilege extends <strong>to</strong> all<br />
communications relating <strong>to</strong> the same subject matter as the opinion upon<br />
which the alleged infringer relies. 187 In regard <strong>to</strong> work-product <strong>waiver</strong>,<br />
the court held that only nonopinion work product is waived <strong>and</strong> that the<br />
district courts should balance the policy favoring work-product<br />
protection with the policy preventing sword-<strong>and</strong>-shield use of<br />
protection. 188 Recognizing that the application of this balancing test is<br />
not a trivial task for district courts, the court provided additional<br />
assistance by describing the three-prong test that district courts can use<br />
<strong>to</strong> classify most kinds of work product. 189<br />
D. Waiver Cases Subsequent <strong>to</strong> EchoStar<br />
The EchoStar opinion appears <strong>to</strong> resolve successfully the prior<br />
confusion that plagued district courts, at<strong>to</strong>rneys, <strong>and</strong> clients alike<br />
regarding the scope of <strong>waiver</strong> of work-product protection. The court<br />
properly focused on balancing the policy justifications underlying the<br />
work-product doctrine with the policy of promoting fairness <strong>to</strong> the<br />
plaintiff. 190 Furthermore, the court recognized that the balancing test<br />
may prove difficult for district courts <strong>to</strong> apply uniformly, so it went a<br />
step further <strong>and</strong> provided a framework that the district courts could use<br />
<strong>to</strong> easily categorize most work product. 191 While this framework is<br />
helpful for the district courts in applying the balancing test, it is also an<br />
invaluable <strong>and</strong> sorely needed 192 predictive <strong>to</strong>ol for at<strong>to</strong>rneys. 193<br />
Accordingly, practitioners have generally expressed widespread praise<br />
for EchoStar. 194<br />
185. In camera inspection refers <strong>to</strong> “a trial judge’s private consideration of<br />
evidence.” BLACK’S LAW DICTIONARY 775 (8th ed. 2004).<br />
186. EchoStar, 448 F.3d at 1304.<br />
187. Id. at 1299.<br />
188. Id. at 1302.<br />
189. Id. at 1302–04.<br />
190. Id. at 1302.<br />
191. Id. at 1302–04.<br />
192. See generally Goff, supra <strong>note</strong> 88, at 235–36.<br />
193. See Michael L. Kiklis & John C. Koski, Waive Farewell <strong>to</strong> Uncertainty:<br />
EchoStar Clarifies Scope of Waiver in Advice-of-Counsel Defense, THE COMPUTER &<br />
INTERNET LAWYER, Sept. 2006, at 1.<br />
194. See, e.g., id. at 7 (“In this environment, EchoStar is a welcome<br />
development. It clarifies the law <strong>and</strong> practice with respect <strong>to</strong> the advice-of-counsel
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Section 1 examines several district court cases that have utilized<br />
the EchoStar framework <strong>to</strong> construe the scope of <strong>waiver</strong> appropriately.<br />
Section 2 addresses two issues that, despite the court’s clarity in<br />
EchoStar, have continued <strong>to</strong> cause confusion in the district courts.<br />
Specifically, Section 2.a examines whether the scope of <strong>waiver</strong> extends<br />
<strong>to</strong> all three potential defenses <strong>to</strong> infringement (invalidity,<br />
unenforceability, <strong>and</strong> noninfringement) or only <strong>to</strong> the defense(s)<br />
addressed in the opinion upon which the alleged infringer relies.<br />
Section 2.b discusses whether the scope of <strong>waiver</strong> extends <strong>to</strong> trial<br />
counsel.<br />
1. DISTRICT COURT CASES IN WHICH THE COURT SUCCESSFULLY<br />
APPLIED THE ECHOSTAR FRAMEWORK<br />
The district courts seem <strong>to</strong> have little difficulty applying the<br />
framework <strong>to</strong> determine the appropriate scope of work-product <strong>waiver</strong><br />
in willful-infringement cases subsequent <strong>to</strong> EchoStar. Where previously<br />
the district courts had exhibited a great deal of confusion, 195 the<br />
decisions since EchoStar have applied the new framework <strong>and</strong><br />
confidently separated most work product neatly in<strong>to</strong> one of the three<br />
categories. 196 The district courts in several of these decisions provide<br />
textbook examples of how <strong>to</strong> apply the EchoStar framework.<br />
The District Court for the Southern District of Indiana h<strong>and</strong>ed<br />
down the first such decision a mere twenty-five days <strong>after</strong> the Federal<br />
Circuit released its EchoStar opinion. 197 In Indiana Mills &<br />
Manufacturing, Inc. v. Dorel Industries, Inc., 198 the plaintiff filed suit<br />
for willful patent infringement, <strong>and</strong> the defendants responded by<br />
defense.”); DeBari, supra <strong>note</strong> 89, at 10 (“The In re EchoStar decision should help <strong>to</strong><br />
provide guidance <strong>and</strong> more certainty <strong>to</strong> the determination of the proper scope of the<br />
<strong>waiver</strong> associated with the advice-of-counsel defense <strong>to</strong> willful infringement.”).<br />
195. See supra Part II.B.<br />
196. See, e.g., Affinion Net Patents, Inc. v. Maritz, Inc., 440 F. Supp. 2d<br />
354, 356–57 (D. Del. 2006); Au<strong>to</strong>bytel, Inc. v. Dealix Corp., 455 F. Supp. 2d 569,<br />
572–77 (E.D. Tex. 2006); Beck Sys., Inc. v. Managesoft Corp., No. 05 C 2036, 2006<br />
U.S. Dist. LEXIS 53963, at *20–23 (N.D. Ill. July 14, 2006); see also Ind. Mills &<br />
Mfg., Inc. v. Dorel Indus., Inc., No. 1:04-cv-01102-LJM-WTL, 2006 U.S. Dist.<br />
LEXIS 34023, at *10, *18–21 (S.D. Ind. May 26, 2006). Indiana Mills &<br />
Manufacturing, Inc. v. Dorel Industries, Inc. has since been withdrawn. Ind. Mills &<br />
Mfg., Inc. v. Dorel Indus., Inc., No. 1:04-cv-01102-LJM-WTL, 2006 U.S. Dist.<br />
LEXIS 47852, at *1–2 (S.D. Ind. July 14, 2006). However, the court withdrew its<br />
opinion based on misapprehension of facts, so it appears that the court’s reasoning<br />
based on the original (albeit inaccurate) facts would still be valid. See id.<br />
197. Dorel, 2006 U.S. Dist. LEXIS 34023, at *1.<br />
198. Id.
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asserting the advice-of-counsel defense. 199 In a ruling prior <strong>to</strong> the<br />
Federal Circuit’s release of EchoStar, the district court ruled that the<br />
plaintiff was only entitled <strong>to</strong> discovery of work product that was<br />
actually communicated <strong>to</strong> the client. 200 After the court released the<br />
EchoStar opinion, the plaintiff filed a motion for reconsideration. 201<br />
Upon reconsideration, the court concluded that it must adjust its<br />
construction of the scope of <strong>waiver</strong> for work product never<br />
communicated <strong>to</strong> the client. 202 In its previous order, the court had ruled<br />
that all such work product was beyond the scope of <strong>waiver</strong>, regardless<br />
of the information reflected therein. 203 After applying the EchoStar<br />
framework, the court found that its prior ruling had failed <strong>to</strong> account<br />
for work product in the third category, which reflects documents<br />
discussing communications with the client that are never disclosed <strong>to</strong><br />
the client. 204 Therefore, the court properly adjusted its prior ruling <strong>to</strong><br />
find work product of this nature <strong>to</strong> fall within the scope of <strong>waiver</strong> <strong>and</strong><br />
be discoverable. 205<br />
The District Court for the Northern District of Illinois similarly<br />
reconsidered its previous construction of the scope of <strong>waiver</strong> in light of<br />
EchoStar in Beck Systems, Inc. v. Managesoft Corp. 206 In Beck, the<br />
defendant again asserted the advice-of-counsel defense <strong>to</strong> an allegation<br />
of willful patent infringement. 207 Prior <strong>to</strong> the defendant’s decision <strong>to</strong><br />
raise the advice-of-counsel defense (<strong>and</strong> prior <strong>to</strong> the EchoStar decision),<br />
the court announced that its previous Beneficial Franchise Co. v. Bank<br />
One N.A. 208 decision would govern the scope of <strong>waiver</strong>. 209 In<br />
Beneficial, the court held that the <strong>waiver</strong> of at<strong>to</strong>rney-client privilege<br />
extended <strong>to</strong> all advice of counsel concerning the same subject, including<br />
advice from at<strong>to</strong>rneys other than the at<strong>to</strong>rney upon whose opinion the<br />
defendant relies. 210 Furthermore, under Beneficial, work product the<br />
at<strong>to</strong>rney communicated <strong>to</strong> the client was also discoverable. 211 Work<br />
product not communicated <strong>to</strong> the client, however, was only<br />
199. Id. at *2–3.<br />
200. Id. at *6–7.<br />
201. Id. at *7–8.<br />
202. Id. at *21.<br />
203. Id. at *6–7.<br />
204. Id. at *21.<br />
205. Id.<br />
206. No. 05 C 2036, 2006 U.S. Dist. LEXIS 53963, at *20–23 (N.D. Ill. July<br />
14, 2006).<br />
207. Id. at *2–3.<br />
208. 205 F.R.D. 212 (N.D. Ill. 2001).<br />
209. Beck, 2006 U.S. Dist. LEXIS 53963, at *3.<br />
210. Id. at *17 (citing Beneficial, 205 F.R.D. at 217).<br />
211. Id. at *18.
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discoverable if it contradicted or cast doubt on the disclosed opinions. 212<br />
After the release of the EchoStar decision, both parties argued that the<br />
court’s construction of the scope of <strong>waiver</strong> required revision <strong>to</strong> conform<br />
<strong>to</strong> the Federal Circuit’s new decision. 213<br />
The Beck court agreed. 214 The district court applied the Federal<br />
Circuit’s EchoStar framework <strong>to</strong> its prior construction of the scope of<br />
<strong>waiver</strong>. 215 The court concluded that its construction of the <strong>waiver</strong> of<br />
at<strong>to</strong>rney-client privilege was consistent with EchoStar <strong>and</strong>, therefore,<br />
required no revision. 216 The Beneficial construction of the scope of<br />
<strong>waiver</strong> of communicated work product was also consistent with<br />
EchoStar. 217<br />
However, as in Indiana Mills, 218 the Beck court concluded that it<br />
needed <strong>to</strong> adjust its prior construction of the scope of <strong>waiver</strong> as it<br />
applied <strong>to</strong> uncommunicated work product. 219 In regard <strong>to</strong> the second<br />
category, uncommunicated work product that reflects only the mental<br />
impressions of the at<strong>to</strong>rney, EchoStar imposed a <strong>waiver</strong> narrower than<br />
that of Beneficial because such work product is never discoverable<br />
under EchoStar, regardless of whether it contradicts the disclosed<br />
opinions. 220 The court found the <strong>waiver</strong> of work product in the third<br />
category, however, <strong>to</strong> be broader in EchoStar than Beneficial. 221 In<br />
Beneficial, the court treated work product in the third category, which<br />
references a communication with the client, no differently than work<br />
product in the second category. In either case, the work product was<br />
only discoverable if it contradicted or cast doubt on the disclosed<br />
opinions. 222 Under the EchoStar framework, all work product in the<br />
third category falls within the scope of <strong>waiver</strong>. 223 The court, therefore,<br />
altered its instructions in accordance with the changes <strong>to</strong> its<br />
construction of the scope of <strong>waiver</strong>. 224<br />
Finally, the District Court for the District of Delaware applied the<br />
EchoStar framework <strong>to</strong> properly classify a piece of work product in<br />
212. Id. at *18–19 (citing Beneficial, 205 F.R.D. at 218).<br />
213. Id. at *3–4.<br />
214. See id. at *18–20.<br />
215. See id. at *13–20.<br />
216. Id. at *17–18.<br />
217. Id. at *18.<br />
218. No. 1:04-cv-01102-LJM-WTL, 2006 U.S. Dist. LEXIS 34023 (S.D. Ind.<br />
May 26, 2006).<br />
219. Beck, 2006 U.S. Dist. LEXIS 53963, at *18–20.<br />
220. Id. at *18–19.<br />
221. Id. at *19–20.<br />
222. Id. at *18–20.<br />
223. Id. at *19–20.<br />
224. Id. at *20–23.
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Affinion Net Patents, Inc. v. Maritz, Inc. 225 In Affinion, the<br />
defendant’s counsel mistakenly produced two charts comparing patent<br />
claims 226 <strong>to</strong> a piece of prior art 227 during a deposition. 228 The following<br />
day, the defendant’s counsel asked the plaintiff’s counsel <strong>to</strong> return the<br />
charts, but the plaintiff argued that the defendant waived protection of<br />
the charts because the defendant had asserted the advice-of-counsel<br />
defense <strong>to</strong> the plaintiff’s allegation of willful patent infringement. 229 The<br />
court concluded that the defendant did not waive work-product<br />
protection <strong>to</strong> the charts under the EchoStar framework because the<br />
defendant’s at<strong>to</strong>rney did not give the charts <strong>to</strong> the defendant. 230<br />
Furthermore, the charts did not reference a communication with the<br />
defendant. 231 Therefore, the court denied the plaintiff’s motion <strong>to</strong><br />
compel discovery of the charts. 232<br />
While the straightforward <strong>and</strong> predictable nature of each of these<br />
decisions is <strong>note</strong>worthy, the Affinion decision is particularly<br />
remarkable because of the District Court for the District of Delaware’s<br />
previous tendency <strong>to</strong> produce widely varying scopes of <strong>waiver</strong> in<br />
different willful-patent-infringement cases. 233 The court had previously<br />
run the gamut of <strong>waiver</strong>s, producing opinions where the court<br />
construed the scope of <strong>waiver</strong> very narrowly, 234 very broadly, 235 <strong>and</strong><br />
somewhere in between. 236 Accordingly, practitioners were relatively<br />
powerless <strong>to</strong> predict how broad a <strong>waiver</strong> would be imposed in a case<br />
before the court. 237 Therefore, Affinion demonstrates that the EchoStar<br />
225. 440 F. Supp. 2d 354, 356–57 (D. Del. 2006).<br />
226. For information regarding claims, see supra <strong>note</strong> 111.<br />
227. “Prior art,” for the purposes of this Note, is a reference (e.g., a prior<br />
patent or published patent application or a technical document) that describes all or part<br />
of the claimed invention. See BLACK’S LAW DICTIONARY 119 (8th ed. 2004).<br />
228. Affinion, 440 F. Supp. 2d at 356.<br />
229. Id.<br />
230. Id. at 356–57.<br />
231. Id. at 357.<br />
232. Id.<br />
233. See DeBari, supra <strong>note</strong> 89, at 10.<br />
234. See Thorn EMI N. Am., Inc. v. Micron Tech., Inc., 837 F. Supp. 616,<br />
623 (D. Del. 1993).<br />
235. See Novartis Pharm. Corp. v. Eon Labs Mfg., Inc., 206 F.R.D. 396, 399<br />
(D. Del. 2002). It is notable that Judge Farnan, the author of this opinion, authored the<br />
Affinion opinion as well. Affinion, 440 F. Supp. 2d at 355.<br />
236. See Mosel Vitelic Corp. v. Micron Tech., Inc., 162 F. Supp. 2d 307, 316<br />
(D. Del. 2000); DeBari, supra <strong>note</strong> 89, at 10.<br />
237. See Kiklis & Koski, supra <strong>note</strong> 193, at 3 (“Pity the poor patent litiga<strong>to</strong>r<br />
with a case before a new judge in Delaware. If asked by the client what <strong>to</strong> expect when<br />
the privilege is waived, he might as well consult the Magic 8 Ball.”).
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framework has the potential <strong>to</strong> bring uniformity <strong>to</strong> even the most<br />
unpredictable of district courts.<br />
2. CONFUSION IN THE DISTRICT COURTS FOLLOWING ECHOSTAR<br />
Despite its substantial contribution <strong>to</strong>wards clarifying the scope of<br />
<strong>waiver</strong> upon assertion of the advice-of-counsel defense, EchoStar did<br />
leave ambiguity in regard <strong>to</strong> some important scope of <strong>waiver</strong> issues. 238<br />
Two of these issues have arisen repeatedly in district court opinions<br />
since EchoStar: (1) whether the scope of <strong>waiver</strong> extends <strong>to</strong> all potential<br />
defenses <strong>to</strong> infringement (invalidity, unenforceability, <strong>and</strong><br />
noninfringement) or just <strong>to</strong> those defenses addressed in the opinion<br />
upon which the alleged infringer relies; <strong>and</strong> (2) whether the scope of<br />
<strong>waiver</strong> extends <strong>to</strong> advice given by trial counsel. Like the general scope<br />
of work-product <strong>waiver</strong> before EchoStar, both issues have caused<br />
significant confusion in the district courts, <strong>and</strong> the courts have<br />
accordingly split on how <strong>to</strong> address the issues. This Section addresses<br />
each of these issues in turn. In addition, this Section discusses In re<br />
Seagate Technology, LLC, 239 the Federal Circuit’s answer <strong>to</strong> the second<br />
question in which it held that the <strong>waiver</strong> generally does not extend <strong>to</strong><br />
trial counsel.<br />
a. Does the <strong>waiver</strong> extend <strong>to</strong> all possible defenses <strong>to</strong> patent<br />
infringement or only those defenses addressed in the underlying opinion<br />
of counsel?<br />
The first of these two issues is determining the patent infringement<br />
defenses <strong>to</strong> which the <strong>waiver</strong> extends. An alleged infringer can defend<br />
against an accusation of patent infringement by arguing that the patent<br />
is invalid, 240 unenforceable, 241 or not infringed. 242 When an alleged<br />
infringer raises the advice-of-counsel defense, it clearly waives<br />
238. To be fair, the issues that have arisen in subsequent district court decisions<br />
generally were not at issue in the EchoStar case.<br />
239. No. 06-M830 (Fed. Cir. Aug. 20, 2007).<br />
240. By asserting that the patent is invalid, the alleged infringer argues that the<br />
patent does not meet the requirements for patentability, <strong>and</strong> therefore the United States<br />
Patent <strong>and</strong> Trademark Office should never have issued the patent. See 6 CHISUM, supra<br />
<strong>note</strong> 1, § 19.01. If a patent is invalid, then the patent holder has no rights of exclusion,<br />
so infringement is impossible.<br />
241. A valid patent may still be found unenforceable for certain public policy<br />
reasons. See id. (noting that, among other reasons, a patent may be found<br />
unenforceable due <strong>to</strong> fraudulent procurement or inequitable conduct, patent misuse or<br />
violation of antitrust laws, unreasonable delay in filing an infringement suit).<br />
242. One defense <strong>to</strong> patent infringement is that the alleged infringer’s conduct<br />
simply does not constitute infringement. See supra <strong>note</strong>s 72–75 <strong>and</strong> accompanying text.
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protection for all at<strong>to</strong>rney-client communications <strong>and</strong> certain at<strong>to</strong>rney<br />
work product concerning the “same subject matter” as the opinion upon<br />
which it relies. 243 The case law is unclear, however, regarding whether<br />
the “subject matter” of the opinion includes all possible infringement<br />
defenses or only the defenses addressed in the opinion of counsel upon<br />
which the alleged infringer relies. 244<br />
Several of the district courts have held that the <strong>waiver</strong> extends <strong>to</strong><br />
all possible infringement defenses, not just those that are referenced in<br />
the opinion that forms the basis of the advice-of-counsel defense. 245<br />
First, the Federal Circuit wrote in its opinion that work product is<br />
discoverable only if it embodies or references communications<br />
“concerning the subject matter of the case.” 246 The District Court for<br />
the District of Columbia interpreted the Federal Circuit’s use of this<br />
phrase, as opposed <strong>to</strong> “subject matter of the opinion,” as evidence of its<br />
intent <strong>to</strong> include all possible infringement defenses within the scope of<br />
<strong>waiver</strong>. 247 Furthermore, the Federal Circuit wrote that an alleged<br />
infringer waives work-product immunity “for any document or opinion<br />
that embodies or discusses a communication <strong>to</strong> or from it concerning<br />
whether that patent is valid, enforceable, <strong>and</strong> infringed by the<br />
accused.” 248 The district courts found this phrase further supported their<br />
contention that the Federal Circuit intended the subject matter <strong>waiver</strong> <strong>to</strong><br />
extend <strong>to</strong> all three defenses. 249<br />
Several other district courts, however, have held that the scope of<br />
<strong>waiver</strong> is limited <strong>to</strong> the defenses referenced in the opinion upon which<br />
the defendant relies. 250 The District Court for the Eastern District of<br />
243. In re EchoStar Commc’ns Corp., 448 F.3d 1294, 1299 (Fed. Cir. 2006)<br />
(quoting Fort James Corp. v. Solo Cup Co., 412 F.3d 1340, 1349 (Fed. Cir. 2005)).<br />
244. This is a critical issue that arises frequently because it is common for the<br />
opinion upon which the alleged infringer relies <strong>to</strong> address only one or two of the<br />
defenses. Often, the opinion addresses only the defense of noninfringement (which is<br />
why patent at<strong>to</strong>rneys frequently refer <strong>to</strong> these opinions as “noninfringement” opinions).<br />
245. See, e.g., Kimberly-Clark Corp. v. Tyco Healthcare Retail Group, No.<br />
05-C-985, 2007 U.S. Dist. LEXIS 5974, at *5 (E.D. Wis. Jan. 26, 2007); Affinion Net<br />
Patents, Inc. v. Maritz, Inc., 440 F. Supp. 2d 354, 356 (D. Del. 2006); Intex<br />
Recreation Corp. v. Team Worldwide Corp., 439 F. Supp. 2d 46, 50 (D. D.C. 2006);<br />
Outside The Box Innovations, LLC v. Travel Caddy, Inc., 455 F. Supp. 2d 1374, 1379<br />
(N.D. Ga. 2006).<br />
246. Intex, 439 F. Supp. 2d at 50 (quoting EchoStar, 448 F.3d at 1302).<br />
247. Id. at 50.<br />
248. EchoStar, 448 F.3d at 1304.<br />
249. See, e.g., Intex, 439 F. Supp. 2d at 50; Outside The Box, 455 F. Supp.<br />
2d at 1377.<br />
250. See, e.g., Au<strong>to</strong>bytel, Inc. v. Dealix Corp., 455 F. Supp. 2d 569, 574–75<br />
(E.D. Tex. 2006); Informatica Corp. v. Bus. Objects Data Integration, Inc., No. C 02-<br />
3378 JSW, 2006 U.S. Dist. LEXIS 58976, at *6–8 (N.D. Cal. Aug. 9, 2006); Beck
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Texas 251 best summarized the reasoning behind this limitation on the<br />
scope of <strong>waiver</strong> in its Au<strong>to</strong>bytel, Inc. v. Dealix Corp. decision. 252 The<br />
court first <strong>note</strong>d that the district court opinion underlying EchoStar had<br />
limited the scope of <strong>waiver</strong> <strong>to</strong> noninfringement because the opinion of<br />
in-house counsel upon which EchoStar relied focused on<br />
noninfringement. 253 In granting m<strong>and</strong>amus, the Federal Circuit altered<br />
the district court’s holding regarding the scope of <strong>waiver</strong> in several<br />
aspects, but it did not explicitly alter the district court’s limitation of the<br />
<strong>waiver</strong> <strong>to</strong> noninfringement. 254 Furthermore, the Federal Circuit cited<br />
Akeva LLC v. Mizuno Corp. 255 as support for its determination that the<br />
<strong>waiver</strong> extends <strong>to</strong> all at<strong>to</strong>rney-client communications concerning the<br />
same subject matter. 256 In Akeva, the court defined the “same subject<br />
matter” as the subject matter of the opinion. 257<br />
The court then proceeded <strong>to</strong> apply the broader policy justifications<br />
described by EchoStar <strong>to</strong> determine the appropriateness of limiting the<br />
<strong>waiver</strong> <strong>to</strong> the defenses of the underlying opinion. 258 The court <strong>note</strong>d that<br />
“[t]he purpose of the advice-of-counsel privilege <strong>waiver</strong> is <strong>to</strong> allow an<br />
inquiry in<strong>to</strong> the infringer’s state of mind regarding the infringer’s<br />
reasonable reliance on its advice of counsel.” 259<br />
Since invalidity, unenforceability, <strong>and</strong> noninfringement are distinct<br />
defenses, the court reasoned that information regarding defenses not at<br />
issue in the underlying opinion would be of little value in determining<br />
Sys., Inc. v. Managesoft Corp., No. 05 C 2036, 2006 U.S. Dist. LEXIS 53963, at<br />
*20–21 (N.D. Ill. July 14, 2006); Ind. Mills & Mfg., Inc. v. Dorel Indus., Inc., No.<br />
1:04-cv-01102-LJM-WTL, 2006 U.S. Dist. LEXIS 34023, at *18 (S.D. Ind. May 26,<br />
2006).<br />
251. The court’s treatment in this case is particularly <strong>note</strong>worthy because the<br />
District Court for the Eastern District of Texas is considered a patent “rocket docket”<br />
due <strong>to</strong> its speedy resolution of patent infringement cases. See Michael C. Smith, Rocket<br />
Docket: Marshall Court Leads Nation in Hearing Patent Cases, 69 TEX. B.J. 1044,<br />
1045–46 (2006). As a result, plaintiffs frequently choose <strong>to</strong> file in this court. Id.<br />
252. 455 F. Supp. 2d 569, 572–77 (E.D. Tex. 2006).<br />
253. Id. at 575. The district court opinion also came from the District Court for<br />
the Eastern District of Texas. See TiVo Inc. v. EchoStar Commc’ns Corp., No. 2:04-<br />
CV-1 (DF), 2005 U.S. Dist. LEXIS 42481 (E.D. Tex. Sept. 26, 2005).<br />
254. Au<strong>to</strong>bytel, 455 F. Supp. 2d at 575.<br />
255. 243 F. Supp. 2d 418, 423 (M.D. N.C. 2003).<br />
256. Au<strong>to</strong>bytel, 455 F. Supp. 2d at 575; see also Informatica Corp. v. Bus.<br />
Objects Data Integration, Inc., No. C 02-3378 JSW, 2006 U.S. Dist. LEXIS 58976, at<br />
*6–7 (N.D. Cal. Aug. 9, 2006).<br />
257. Au<strong>to</strong>bytel, 455 F. Supp. 2d at 575 (citing Akeva, 243 F. Supp. 2d at<br />
422).<br />
258. See id.<br />
259. Id.
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the reasonableness of the alleged infringer’s reliance on the opinion. 260<br />
The court then applied the EchoStar balancing test <strong>and</strong> found that the<br />
policies favoring the at<strong>to</strong>rney-client privilege <strong>and</strong> work-product doctrine<br />
outweighed whatever utility there might be in extending the <strong>waiver</strong> <strong>to</strong><br />
include all possible defenses <strong>to</strong> infringement. 261 Therefore, the court did<br />
not read EchoStar <strong>to</strong> require such a broad subject matter <strong>waiver</strong>. 262<br />
b. Does the <strong>waiver</strong> extend <strong>to</strong> the communications <strong>and</strong> work product<br />
of trial counsel?<br />
The second issue that has challenged the district courts is<br />
whether the scope of <strong>waiver</strong> includes at<strong>to</strong>rney-client communications<br />
<strong>and</strong> work product of trial counsel. The Federal Circuit in EchoStar held<br />
that by raising the advice-of-counsel defense, an alleged infringer<br />
waives privilege regarding “at<strong>to</strong>rney-client communications relating <strong>to</strong><br />
the same subject matter, including communications with counsel other<br />
than in-house counsel.” 263 Yet, the district courts have been unclear as<br />
<strong>to</strong> whether “counsel other than in-house counsel” includes trial counsel.<br />
Accordingly, the district courts have taken various approaches when<br />
faced with requests for disclosure of at<strong>to</strong>rney-client communications<br />
<strong>and</strong> work product of trial counsel. In fact, the confusion exhibited by<br />
these widely varying approaches led the Federal Circuit <strong>to</strong> intervene<br />
again, in In re Seagate Technology, LLC, 264 addressing this issue barely<br />
over a year <strong>after</strong> deciding EchoStar.<br />
Section (i) discusses the varying district court treatments of the<br />
<strong>waiver</strong> as it applies <strong>to</strong> trial counsel. Section (ii) then analyzes Seagate,<br />
in which the Federal Circuit held that the <strong>waiver</strong> of both at<strong>to</strong>rney-client<br />
privilege <strong>and</strong> work-product protection generally does not extend <strong>to</strong> trial<br />
counsel. 265<br />
(i) The various approaches of the district courts<br />
Several courts have held that the scope of <strong>waiver</strong> includes all<br />
communications <strong>and</strong> work product of trial counsel related <strong>to</strong> the same<br />
260. Id. For example, information about an alleged infringer’s state of mind<br />
regarding the validity of the patent would give little insight in<strong>to</strong> the reasonableness of<br />
its reliance on counsel’s advice that the patent was not infringed.<br />
261. Id.<br />
262. Id.<br />
263. In re EchoStar Commc’ns Corp., 448 F.3d 1294, 1299 (Fed. Cir. 2006).<br />
264. See In re Seagate Tech., LLC, No. 06-M830, slip op. (Fed. Cir. Aug. 20,<br />
2007).<br />
265. Id. at 18, 21.
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subject matter. 266 Most of these courts have found their primary support<br />
for this position in EchoStar’s reliance on Akeva LLC v. Mizinou<br />
Corp. 267 In Akeva, the court explicitly held that all opinions relating <strong>to</strong><br />
the same subject matter were discoverable, including those of trial<br />
counsel. 268 Therefore, these courts conclude that the Federal Circuit’s<br />
reasoning in EchoStar combined with its reliance on Akeva<br />
demonstrates its intent that communications <strong>and</strong> work product of trial<br />
counsel be included within the scope of <strong>waiver</strong>. 269<br />
Furthermore, the District Court for the Eastern District of New<br />
York found the balancing test of EchoStar <strong>to</strong> support extending the<br />
<strong>waiver</strong> <strong>to</strong> trial counsel. 270 The court found that excluding trial at<strong>to</strong>rneys<br />
from the scope of <strong>waiver</strong> would allow an alleged infringer <strong>to</strong> use<br />
“sword-<strong>and</strong>-shield” 271 tactics by selectively choosing which opinions <strong>to</strong><br />
reveal. 272 Additionally, the court found that extending the <strong>waiver</strong> <strong>to</strong> trial<br />
counsel would not unduly burden the at<strong>to</strong>rney-client privilege because<br />
the decision <strong>to</strong> raise the advice-of-counsel defense is completely within<br />
the control of the alleged infringer. 273 Accordingly, the court found<br />
that, on balance, the policy of fairness <strong>to</strong> the plaintiff outweighed the<br />
policies favoring the at<strong>to</strong>rney-client privilege <strong>and</strong> work-product<br />
doctrine, <strong>and</strong> that the <strong>waiver</strong> therefore extends <strong>to</strong> trial counsel. 274<br />
At least one district court has held that the <strong>waiver</strong> does not extend<br />
<strong>to</strong> trial counsel. In Ampex Corp. v. Eastman Kodak Co., 275 the District<br />
Court for the District of Delaware found that the language <strong>and</strong> context<br />
266. See, e.g., Affinion Net Patents, Inc. v. Maritz, Inc., 440 F. Supp. 2d<br />
354, 356 (D. Del. 2006); Computer Assocs. Int’l, Inc. v. Simple.com, Inc., No. 02<br />
Civ 2748 (DRH) (MLO), 2006 U.S. Dist. LEXIS 77077, at *12–14 (E.D. N.Y. Oct.<br />
20, 2006); Informatica Corp. v. Bus. Objects Data Integration, Inc. No. C 02-3378<br />
JSW, 2006 U.S. Dist. LEXIS 58976, at *6–7 (N.D. Cal. Aug. 9, 2006); Beck Sys.,<br />
Inc. v. Managesoft Corp., No. 05 C 2036, 2006 U.S. Dist. LEXIS 53963, at *15–18<br />
(N.D. Ill. July 14, 2006).<br />
267. 243 F. Supp. 2d 418 (M.D. N.C. 2003); See, e.g., Computer Assocs.,<br />
2006 U.S. Dist. LEXIS 77077, at *13; Informatica, 2006 U.S. Dist. LEXIS 58976, at<br />
*6–7; Beck, 2006 U.S. Dist. LEXIS 53963, at *16 n.1.<br />
268. Akeva, 243 F. Supp. 2d at 423.<br />
269. See Computer Assocs., 2006 U.S. Dist. LEXIS 77077, at *13.<br />
270. See id. at *13–14.<br />
271. In re EchoStar Commc’ns Corp., 448 F.3d 1294, 1304 (Fed. Cir. 2006).<br />
272. Computer Assocs., 2006 U.S. Dist. LEXIS 77077, at *13; see also<br />
Lifenet, Inc. v. Musculoskeletal Transplant Found., Inc., 490 F. Supp. 2d 681, 688<br />
(E.D. Va. 2007).<br />
273. Computer Assocs., 2006 U.S. Dist. LEXIS 77077, at *14; see also<br />
Lifenet, 490 F. Supp. 2d at 689.<br />
274. Computer Assocs., 2006 U.S. Dist. LEXIS 77077, at *7–8, *13–14.<br />
275. No. 04-1373–KAJ, 2006 U.S. Dist. LEXIS 48702 (D. Del. July 17,<br />
2006).
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of the EchoStar opinion indicated that the Federal Circuit intended the<br />
scope of <strong>waiver</strong> of at<strong>to</strong>rney-client privilege <strong>to</strong> include only<br />
communications expressed in a manner similar <strong>to</strong> that of the underlying<br />
opinion. 276 Advice of trial counsel exhibits a character different from<br />
the advice of opinion counsel upon which an alleged infringer relies. 277<br />
Furthermore, the court stressed that if all at<strong>to</strong>rney-client<br />
communications on the same subject were viewed as “advice” or<br />
“opinions” the practical significance of the at<strong>to</strong>rney-client privilege<br />
would be destroyed. 278 Such a weakening of the at<strong>to</strong>rney-client privilege<br />
is at odds with comments of the Federal Circuit in recent decisions. 279<br />
Still other district courts have attempted <strong>to</strong> craft an intermediate<br />
approach, finding that the <strong>waiver</strong> extends <strong>to</strong> communications <strong>and</strong> work<br />
product of trial counsel, but limiting the scope of the <strong>waiver</strong>. These<br />
courts have found that EchoStar is factually incompatible with the issue<br />
of extension of the <strong>waiver</strong> <strong>to</strong> trial counsel, <strong>and</strong> therefore by itself is<br />
inconclusive on the issue. 280 Without clearly controlling law, these<br />
courts have crafted their own intermediate test, finding the <strong>waiver</strong><br />
extends only <strong>to</strong> communications <strong>and</strong> communicated work product of<br />
trial counsel that contain “conclusions or advice that contradict or cast<br />
doubt on the earlier opinions.” 281 This intermediate approach considers<br />
both the need for discovery <strong>to</strong> avoid “sword-<strong>and</strong>-shield” tactics <strong>and</strong> the<br />
policies favoring both the at<strong>to</strong>rney-client privilege <strong>and</strong> work-product<br />
doctrine. 282 Thus, it is consistent with EchoStar. 283<br />
The District Court for the Northern District of California crafted a<br />
different intermediate approach in Genentech, Inc. v. Insmed Inc. 284<br />
The court found the intermediate approach taken by other courts,<br />
extending <strong>waiver</strong> only <strong>to</strong> contradic<strong>to</strong>ry or doubt-casting<br />
communications <strong>and</strong> work product of trial counsel, <strong>to</strong> have significant<br />
276. Id. at *8–9.<br />
277. See id. at *9–10.<br />
278. Id. at *10.<br />
279. Id. (citing In re EchoStar Commc’ns Corp., 448 F.3d 1294, 1300–01<br />
(Fed. Cir. 2006)); Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp.,<br />
383 F.3d 1337, 1343–44 (Fed. Cir. 2004)).<br />
280. See Intex Recreation Corp. v. Team Worldwide Corp., 439 F. Supp. 2d<br />
46, 52 (D. D.C. 2006); Ind. Mills & Mfg., Inc. v. Dorel Indus., Inc., No. 1:04-cv-<br />
01102-LJM-WTL, 2006 U.S. Dist. LEXIS 34023, at *19–20 (S.D. Ind. May 26,<br />
2006).<br />
281. Intex, 439 F. Supp. 2d at 52.<br />
282. Dorel, 2006 U.S. Dist. LEXIS 34023, at *14–15.<br />
283. Id. at *20.<br />
284. 442 F. Supp. 2d 838 (N.D. Cal. 2006).
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practical problems. 285 Instead, the court held the scope of <strong>waiver</strong> <strong>to</strong><br />
include “documents <strong>and</strong> communications that contain opinions (formal<br />
or informal) <strong>and</strong> advice central <strong>and</strong> highly material” <strong>to</strong> the subject<br />
matter of the opinion of counsel upon which the alleged infringer<br />
relies. 286 The court reasoned that this approach would exclude most<br />
low-level documents <strong>and</strong> communications regarding trial strategy from<br />
the <strong>waiver</strong> while still allowing the plaintiff discovery of opinions <strong>and</strong><br />
advice of trial counsel relevant <strong>to</strong> the willfulness inquiry. 287<br />
The District Court for the Eastern District of Missouri created yet<br />
another intermediate approach in Iridex Corp. v. Synergetics, Inc., 288<br />
holding that the <strong>waiver</strong> extends <strong>to</strong> trial counsel except for opinions<br />
given solely <strong>to</strong> evaluate settlement options. 289 The court <strong>note</strong>d that<br />
although its approach may be inconsistent with other district court<br />
decisions, nothing in EchoStar expressly prohibited such an<br />
approach. 290 Furthermore, the court found its approach appropriate in<br />
light of the public policy favoring the compromise <strong>and</strong> settlement of<br />
disputes. 291<br />
(ii) In re Seagate Technology, LLC: The Federal Circuit Weighs In<br />
Again<br />
In light of the widespread confusion in the district courts exhibited<br />
by these many differing approaches, the Federal Circuit chose <strong>to</strong><br />
address en banc whether the <strong>waiver</strong> extends <strong>to</strong> trial counsel in In re<br />
Seagate Technology, LLC. 292 In Seagate, Convolve, Inc., <strong>and</strong> the<br />
Massachusetts Institute of Technology sued Seagate Technology, LLC,<br />
for willful patent infringement. 293 Seagate retained outside counsel <strong>to</strong><br />
provide opinions concerning the patents in question prior <strong>to</strong> the lawsuit<br />
but did not receive any opinions until <strong>after</strong> Convolve <strong>and</strong> MIT filed the<br />
complaint. 294 Seagate announced that it intended <strong>to</strong> raise the advice-of-<br />
285. The court expressed skepticism regarding a trial at<strong>to</strong>rney’s ability <strong>to</strong><br />
accurately judge what contradicts or casts doubt on the underlying opinion while<br />
simultaneously advocating for the client. Id. at 846. Furthermore, the court questioned<br />
what would constitute doubt sufficient <strong>to</strong> make disclosure necessary. Id.<br />
286. Id. at 847.<br />
287. Id.<br />
288. No. 4:05CV1916 CDP, 2007 U.S. Dist. LEXIS 7747 (E.D. Mo. Feb. 2,<br />
2007).<br />
289. Id. at *3–4.<br />
290. Id. at *4.<br />
291. Id.<br />
292. No. 06-M830, slip op. (Fed. Cir. Aug. 20, 2007).<br />
293. Id. at 2.<br />
294. Id.
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counsel defense based on the opinions it obtained from its outside<br />
counsel. 295 Convolve responded by moving for the district court <strong>to</strong><br />
compel discovery of all communications <strong>and</strong> work product of Seagate’s<br />
other counsel, including its trial counsel. 296<br />
The district court granted the motion, holding that Seagate waived<br />
at<strong>to</strong>rney-client privilege <strong>and</strong> work-product protection for any counsel,<br />
including trial counsel, concerning the subject matter of the outside<br />
counsel opinions. 297 The court held that the temporal scope of the<br />
<strong>waiver</strong> extended from when Seagate first obtained knowledge of the<br />
patents in question <strong>to</strong> whenever the alleged infringement ceased. 298 The<br />
court allowed for in camera review of documents reflecting trial<br />
strategy but <strong>note</strong>d that it would order disclosure of any trial counsel<br />
advice that affected the reasonableness of relying on the outside counsel<br />
opinions. 299 After the district court refused <strong>to</strong> certify an interlocu<strong>to</strong>ry<br />
appeal, Seagate petitioned the Federal Circuit for a writ of m<strong>and</strong>amus<br />
<strong>to</strong> s<strong>to</strong>p disclosure of communications <strong>and</strong> work product of its trial<br />
counsel. 300<br />
The Federal Circuit asked the parties <strong>to</strong> argue whether or not the<br />
<strong>waiver</strong> of both at<strong>to</strong>rney-client privilege <strong>and</strong> work-product protection<br />
should extend <strong>to</strong> trial counsel. 301 Several third-party organizations,<br />
perhaps most notably the American Bar Association <strong>and</strong> the American<br />
Intellectual Property <strong>Law</strong> Association, submitted amicus briefs in<br />
support of Seagate’s petition arguing that trial counsel should be<br />
immune from <strong>waiver</strong> of at<strong>to</strong>rney-client privilege <strong>and</strong> work-product<br />
protection. 302<br />
295. Id. at 3.<br />
296. Id.<br />
297. Id. at 3–4.<br />
298. Id.<br />
299. Id. at 4.<br />
300. Id.<br />
301. Id. at 1. The Federal Circuit also asked the parties <strong>to</strong> address whether it<br />
should revise or eliminate the duty-of-due-care st<strong>and</strong>ard under which an alleged<br />
infringer with notice of another’s patent rights has an affirmative duty <strong>to</strong> investigate<br />
whether it infringes those rights al<strong>to</strong>gether. Id. While this could potentially have a<br />
significant impact on the <strong>waiver</strong> issues presented in this Note, this duty-of-due-care<br />
question is not discussed.<br />
302. Brief for Am. Bar Assoc. as Amicus Curiae in Support of Petitioner, In re<br />
Seagate Tech., LLC, No. 06-M830, slip op. (Fed. Cir. Aug. 20, 2007), available at<br />
http://www.abanet.org/intelprop/Seagate-brief.pdf; Brief for Amicus Curiae Am.<br />
Intellectual Prop. <strong>Law</strong> Assoc. in Support of Petitioner, In re Seagate Tech., LLC, No.<br />
06-M830, slip op. (Fed. Cir. Aug. 20, 2007), available at http://www.aipla.org/<br />
Content/ContentGroups/Issues_<strong>and</strong>_Advocacy/Amicus_Briefs1/20079/AIPLASeagatebr<br />
f.pdf; see also Brief of Amicus Curiae, Biotechnology Indus. Org., in Support of<br />
Petitioner, In re Seagate Tech., LLC, No. 06-M830, slip op. (Fed. Cir. Aug. 20,
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The Federal Circuit agreed, holding that the <strong>waiver</strong> generally does<br />
not extend <strong>to</strong> trial counsel for either at<strong>to</strong>rney-client privilege or workproduct<br />
protection. 303 The court began by noting that the purpose of the<br />
<strong>waiver</strong> is fairness; that is, the <strong>waiver</strong> is intended <strong>to</strong> prevent an alleged<br />
infringer from using the privilege as both a “sword <strong>and</strong> a shield.” 304<br />
According <strong>to</strong> the court, the function of trial counsel in the legal system<br />
has a significantly different nature than that of opinion counsel. 305<br />
Opinion counsel serves an objective role, providing opinions upon<br />
which the client bases its business decisions. 306 Trial counsel, on the<br />
other h<strong>and</strong>, serves a decidedly subjective role, coordinating litigation<br />
strategy <strong>and</strong> advocating for the client in the adversarial judicial<br />
process. 307 The court stated that because of the fundamental difference<br />
between the two roles <strong>and</strong> the type of advice each imparts <strong>to</strong> the client,<br />
the client’s relationship with trial counsel does not present the same<br />
“sword <strong>and</strong> shield” concerns as its relationship with opinion counsel. 308<br />
Therefore, the balance of fairness does not favor extending the <strong>waiver</strong><br />
<strong>to</strong> communications <strong>and</strong> work product of trial counsel. 309<br />
Furthermore, the court <strong>note</strong>d that under ordinary circumstances,<br />
willfulness will depend largely on an alleged infringer’s prelitigation<br />
conduct. 310 Accordingly, the court found that communications <strong>and</strong> work<br />
product of trial counsel have little, if any, relevance <strong>to</strong> the willfulness<br />
inquiry. 311 The court also advised that if an alleged infringer’s postfiling<br />
2007), available at http://bio.org/ip/amicus/Seagate.pdf; Brief of Intellectual Prop.<br />
Owners Assoc. as Amicus Curiae in Support of Petitioner, In re Seagate Tech., LLC,<br />
No. 06-M830, slip op. (Fed. Cir. Aug. 20, 2007), available at http://www.ipo.org/<br />
AM/Template.cfm?Section=Home&TEMPLATE=/CM/ContentDisplay.cfm&CONTE<br />
NTID=14227.<br />
303. In re Seagate Tech., LLC, No. 06-M830, slip op. at 18, 21 (Fed. Cir.<br />
Aug. 20, 2007). The court addressed the <strong>waiver</strong> of at<strong>to</strong>rney-client privilege <strong>and</strong> workproduct<br />
protection separately but <strong>note</strong>d that the rationale for limiting the <strong>waiver</strong> of both<br />
is the same. Id. at 15–21.<br />
304. Id. at 14.<br />
305. Id. at 15.<br />
306. Id.<br />
307. Id.<br />
308. Id.<br />
309. Id.<br />
310. Id. at 16. The court reasoned that, at the time of filing a complaint, a<br />
plaintiff must have a good faith basis for alleging willfulness; therefore, a willfulness<br />
claim included in the original complaint must be based upon the defendant’s prefiling<br />
conduct. Id.<br />
311. Id. at 18.
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conduct is reckless, a preliminary injunction will typically be an<br />
available remedy for a patentee. 312<br />
In light of the above fac<strong>to</strong>rs, the court held that asserting the<br />
advice-of-counsel defense generally does not affect a <strong>waiver</strong> of<br />
at<strong>to</strong>rney-client privilege <strong>and</strong> work-product protection with respect <strong>to</strong><br />
trial counsel. 313 However, the court was careful <strong>to</strong> <strong>note</strong> that it was not<br />
imposing an absolute rule. 314 Rather, the court instructed that the<br />
district courts, at their discretion, should feel free <strong>to</strong> extend <strong>waiver</strong> <strong>to</strong><br />
trial counsel in unique circumstances. 315<br />
IV. APPLICATION OF THE ECHOSTAR REASONING TO THE<br />
TWO QUESTIONS<br />
As previously mentioned, the two issues cited above 316 have caused<br />
a great deal of confusion in the district courts. Much of this confusion<br />
is attributable <strong>to</strong> the fact that the issues do not fit neatly in<strong>to</strong> the threecategory<br />
framework the Federal Circuit provided in EchoStar. 317<br />
Because the framework does not clearly address the issues, many of the<br />
district courts have proceeded <strong>to</strong> pick individual phrases <strong>and</strong> cases out<br />
of the EchoStar opinion <strong>to</strong> justify their various holdings on the two<br />
issues. 318 This practice of focusing on details spread throughout the<br />
opinion is largely responsible for the wide variety of approaches that<br />
the district courts have employed subsequent <strong>to</strong> EchoStar.<br />
312. Id. at 17. It should be <strong>note</strong>d that “recklessness” now must also be shown<br />
in order <strong>to</strong> establish willfulness under the Federal Circuit’s new st<strong>and</strong>ard. See id.<br />
313. Id. at 18, 21.<br />
314. Id.<br />
315. Id. According <strong>to</strong> the court, an instance where a party or counsel engages<br />
in chicanery is an example of a unique circumstance. Id.<br />
316. See supra Parts III.D.2.a (discussing the issue of whether the <strong>waiver</strong><br />
extends <strong>to</strong> all possible defenses or only those referenced in the underlying opinion) <strong>and</strong><br />
III.D.2.b (discussing the issue of whether the <strong>waiver</strong> extends <strong>to</strong> trial counsel).<br />
317. See, e.g., Intex Recreation Corp. v. Team Worldwide Corp., 439 F.<br />
Supp. 2d 46, 52 (D. D.C. 2006); Ind. Mills & Mfg., Inc. v. Dorel Indus., Inc., No.<br />
1:04-cv-01102-LJM-WTL, 2006 U.S. Dist. LEXIS 34023, at *19–20 (S.D. Ind. May<br />
26, 2006).<br />
318. See, e.g., Intex, 439 F. Supp. 2d at 50; Outside The Box Innovations,<br />
LLC v. Travel Caddy, Inc., 455 F. Supp. 2d 1374, 1377 (N.D. Ga. 2006); Computer<br />
Assocs. Int’l, Inc. v. Simple.com, Inc., No. 02 Civ. 2748 (DRH) (MLO), 2006 U.S.<br />
Dist. LEXIS 77077, at *13 (E.D. N.Y. Oct. 20, 2006); Informatica Corp. v. Bus.<br />
Objects Data Integration, No. C 02-3378 JSW, 2006 U.S. Dist. LEXIS 58976, at *6–7<br />
(N.D. Cal. Aug. 9, 2006); Beck Sys., Inc. v. Managesoft Corp., No. 05 C 2036, 2006<br />
U.S. Dist. LEXIS 53963, at *16 n.1 (N.D. Ill. July 14, 2006).
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However, the Federal Circuit anticipated that issues would arise<br />
that would not fit neatly in<strong>to</strong> the EchoStar framework. 319 District courts<br />
should not view the framework as an all-encompassing solution <strong>to</strong> all<br />
possible scope-of-<strong>waiver</strong> issues. Rather, they should see the framework<br />
as a <strong>to</strong>ol for simplifying the balancing test described in EchoStar. When<br />
an issue does not fit in<strong>to</strong> the framework, district courts should balance<br />
the policies favoring protection of the at<strong>to</strong>rney-client relationship with<br />
the policies <strong>to</strong> prevent “sword-<strong>and</strong>-shield litigation tactics.” 320<br />
Furthermore, district courts should be mindful that the willfulness<br />
inquiry focuses on the “infringer’s state of mind” regarding the opinion<br />
upon which he relies. 321 By focusing on these conceptual building<br />
blocks of EchoStar, district courts can identify appropriate solutions for<br />
both of the issues as well as for most other scope-of-<strong>waiver</strong> issues that<br />
the courts will face in the future.<br />
Section A analyzes the as-yet-unresolved question of whether the<br />
<strong>waiver</strong> should include all three defenses <strong>to</strong> infringement or only those<br />
referenced in the underlying opinion. Section B examines the Federal<br />
Circuit’s resolution of the second question—whether the <strong>waiver</strong> should<br />
extend <strong>to</strong> trial counsel in Seagate—<strong>and</strong> evaluates the appropriateness of<br />
the Federal Circuit’s approach.<br />
A. The Scope of Waiver Should Include Only Those<br />
Defenses Referenced in the Opinion on<br />
Which the Alleged Infringer Relies<br />
By properly applying the reasoning of EchoStar, courts should<br />
conclude that the scope of <strong>waiver</strong> is limited <strong>to</strong> the defenses referenced<br />
in the underlying opinion <strong>and</strong> does not extend <strong>to</strong> all possible defenses.<br />
The Federal Circuit, particularly as of late, has expressed high regard<br />
for the policies favoring the at<strong>to</strong>rney-client privilege <strong>and</strong> work-product<br />
doctrine. 322 Courts should therefore not broaden the scope of <strong>waiver</strong><br />
lightly, as doing so necessarily infringes upon the sanctity of the<br />
at<strong>to</strong>rney-client relationship. Whether or not a broad scope of <strong>waiver</strong> is<br />
justified depends upon its necessity <strong>to</strong> ensure fairness for the plaintiff—<br />
allowing the plaintiff <strong>to</strong> evaluate all information about the alleged<br />
319. In re EchoStar Commc’ns Corp., 448 F.3d 1294, 1302 n.3 (Fed. Cir.<br />
2006) (“We by no means anticipate that all work product in every case will fit in<strong>to</strong> one<br />
of these three categories.”).<br />
320. See id. at 1302.<br />
321. Id. at 1303.<br />
322. See id. at 1300–01; In re Seagate Tech., LLC, No. 06-M830, slip op.<br />
(Fed. Cir. Aug. 20, 2007); Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana<br />
Corp., 383 F.3d 1337, 1344–45 (Fed. Cir. 2004).
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infringer’s state of mind regarding its reliance on the advice of counsel.<br />
A broad construction of the <strong>waiver</strong> as it relates <strong>to</strong> a particular issue may<br />
be justified if it is reasonably necessary <strong>to</strong> protect against “sword-<strong>and</strong>shield”<br />
323 tactics by the alleged infringer. In applying the balancing test,<br />
courts should determine whether the additional benefit of fairness <strong>to</strong> the<br />
plaintiff resulting from the broader construction of <strong>waiver</strong> would<br />
outweigh the added interference with the at<strong>to</strong>rney-client relationship.<br />
Extending the <strong>waiver</strong> <strong>to</strong> include all possible defenses <strong>to</strong><br />
infringement would provide little, if any, additional fairness <strong>to</strong> the<br />
plaintiff. As the court <strong>note</strong>d in Au<strong>to</strong>bytel, Inc. v. Dealix Corp., the<br />
focus of the willfulness inquiry is on the alleged infringer’s state of<br />
mind regarding its reasonable reliance on the opinion of counsel. 324<br />
Therefore, information about the alleged infringer’s state of mind<br />
regarding defenses not referenced in the underlying opinion would have<br />
little, if any, utility in the willfulness inquiry. 325 Allowing discovery of<br />
communications <strong>and</strong> work product relating <strong>to</strong> all possible infringement<br />
defenses would not prevent the alleged infringer from using advice of<br />
counsel as “both a sword <strong>and</strong> a shield.” 326 Rather, such a broad scope<br />
of <strong>waiver</strong> would serve <strong>to</strong> take away the alleged infringer’s shield for<br />
defenses that it does not use as a sword. Whatever limited benefit of<br />
fairness the plaintiff receives by broadening the <strong>waiver</strong> <strong>to</strong> include all<br />
defenses is outweighed by the interests of protecting the alleged<br />
infringer’s at<strong>to</strong>rney-client relationship. Therefore, the balancing test<br />
favors a scope of <strong>waiver</strong> limited <strong>to</strong> those defenses referenced in the<br />
underlying opinion.<br />
Perhaps an example best illustrates the appropriateness of limiting<br />
the <strong>waiver</strong> <strong>to</strong> defenses referenced in the underlying opinion: Widget<br />
World owns a patent on a particular type of widget. American Widgets<br />
develops its own type of widget. After learning of Widget World’s<br />
patent, American Widgets obtains advice from its outside patent<br />
counsel, who informs American Widgets that it does not believe<br />
American Widgets’ widget infringes Widget World’s patent. Widget<br />
World sues for willful patent infringement, <strong>and</strong> American Widgets<br />
responds by claiming that it relied on the advice of counsel that its<br />
widget did not infringe Widget World’s patent.<br />
In this example, any advice American Widgets obtained regarding<br />
noninfringement would fall within the scope of <strong>waiver</strong> because it would<br />
be relevant <strong>to</strong> the reasonableness of American Widgets’ belief that its<br />
323. EchoStar, 448 F.3d at 1302.<br />
324. Au<strong>to</strong>bytel, Inc. v. Dealix Corp., 455 F. Supp. 2d 569, 572 (E.D. Tex.<br />
2006).<br />
325. Id.<br />
326. EchoStar, 448 F.3d at 1301.
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widget did not infringe Widget World’s patent. But what benefit would<br />
come from finding the <strong>waiver</strong> <strong>to</strong> include advice of counsel regarding<br />
the validity or enforceability of Widget World’s patent? American<br />
Widgets does not claim that it continued <strong>to</strong> produce its widgets because<br />
it believed Widget World’s patent was invalid or unenforceable. If that<br />
were American Widgets’ position, then the <strong>waiver</strong> would appropriately<br />
extend <strong>to</strong> the defenses of validity <strong>and</strong> enforceability.<br />
Instead, American Widgets claims it continued <strong>to</strong> produce its<br />
widgets only because it believed its widgets did not infringe Widget<br />
World’s patent, regardless of its validity or enforceability. Even if<br />
American Widgets did receive advice of counsel that Widget World’s<br />
patent was both valid <strong>and</strong> enforceable, this advice would be irrelevant<br />
<strong>to</strong> American Widgets’ belief that its widget did not infringe the patent.<br />
Therefore, extending the <strong>waiver</strong> <strong>to</strong> include validity <strong>and</strong> enforceability in<br />
this case would unnecessarily interfere with American Widgets’<br />
relationship with its outside patent counsel, <strong>and</strong> the <strong>waiver</strong> should be<br />
limited <strong>to</strong> noninfringement.<br />
B. The Scope of Waiver Should Not Include Communications <strong>and</strong><br />
Work Product of Trial Counsel<br />
The Federal Circuit in Seagate was correct in holding that the<br />
<strong>waiver</strong> should not extend <strong>to</strong> communications <strong>and</strong> work product of trial<br />
counsel. As the court <strong>note</strong>d, the relationship between a trial at<strong>to</strong>rney<br />
<strong>and</strong> client is unique from that of other at<strong>to</strong>rney-client relationships. 327 A<br />
trial at<strong>to</strong>rney is charged with the task of coordinating <strong>and</strong> executing the<br />
litigation efforts of the client, <strong>and</strong> therefore much of the at<strong>to</strong>rney-client<br />
communications <strong>and</strong> work product of a trial at<strong>to</strong>rney reflect complex<br />
litigation strategies <strong>and</strong> theories regarding how best <strong>to</strong> approach certain<br />
aspects of the case. 328 Furthermore, unlike opinion counsel, trial<br />
counsel serves the role of a biased advocate in the adversarial judicial<br />
process. 329 It is especially crucial for trial counsel <strong>to</strong> be able <strong>to</strong> have<br />
frank <strong>and</strong> open communications with the client as well as document<br />
thoughts <strong>and</strong> legal strategies. Therefore, this relationship presents<br />
unique challenges <strong>to</strong> courts attempting <strong>to</strong> construe properly the scope of<br />
<strong>waiver</strong>.<br />
Because of the special nature of this relationship, application of the<br />
same broad <strong>waiver</strong> that is applied <strong>to</strong> opinion counsel is inappropriate.<br />
327. See In re Seagate Tech., LLC, No. 06-M830, slip op. at 15 (Fed. Cir.<br />
Aug. 20, 2007); Genentech, Inc. v. Insmed Inc., 442 F. Supp. 2d 838, 844–45 (N.D.<br />
Cal. 2006).<br />
328. See Genentech, 442 F. Supp. 2d at 846.<br />
329. See Seagate, No. 06-M830, slip op. at 15.
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The need <strong>to</strong> protect the at<strong>to</strong>rney-client relationship <strong>and</strong> the policies<br />
favoring the at<strong>to</strong>rney-client privilege <strong>and</strong> work-product doctrine are<br />
particularly strong with respect <strong>to</strong> trial counsel. An unduly broad<br />
<strong>waiver</strong> of at<strong>to</strong>rney-client communications <strong>and</strong> work product of trial<br />
counsel can lead <strong>to</strong> devastating results for a defendant. While at<strong>to</strong>rneys<br />
may redact material, 330 advice regarding defenses <strong>and</strong> trial strategy may<br />
be so intermingled that redaction may fail <strong>to</strong> save key trial strategy<br />
from disclosure. More importantly, for trial counsel <strong>to</strong> be an effective<br />
advocate, trial counsel must be free <strong>to</strong> discuss the details <strong>and</strong> likelihood<br />
of success regarding infringement defenses without fear of harming the<br />
client’s case. Therefore, the marginally increased ability <strong>to</strong> protect<br />
against unfair litigation tactics by the defendant does not balance the<br />
encroachment that such a broad <strong>waiver</strong> would make upon the unique<br />
relationship between trial counsel <strong>and</strong> client.<br />
Proponents of a broad extension of the <strong>waiver</strong> <strong>to</strong> trial counsel<br />
argue that this encroachment is acceptable because the alleged infringer<br />
can choose not <strong>to</strong> raise the defense. 331 However, because the advice-ofcounsel<br />
defense is often the most effective defense against a finding of<br />
willfulness, this may not be much of a choice. Accordingly, alleged<br />
infringers may still routinely choose <strong>to</strong> assert the advice-of-counsel<br />
defense regardless of the broad trial counsel <strong>waiver</strong>. Instead, the<br />
practical effect of a broad <strong>waiver</strong> would likely be <strong>to</strong> discourage trial<br />
counsel from documenting important thoughts, ideas, <strong>and</strong><br />
communications with the client because they would all potentially be<br />
discoverable. Thus, this approach would severely impede upon defense<br />
counsel’s ability <strong>to</strong> serve his or her client without appreciably<br />
increasing the fairness <strong>to</strong> the plaintiff.<br />
The limited <strong>waiver</strong>s applied in Iridex, Genentech, Intex, <strong>and</strong> Dorel<br />
are similarly inappropriate solutions. On their face, these solutions<br />
appear <strong>to</strong> balance the policies favoring the at<strong>to</strong>rney-client privilege <strong>and</strong><br />
work-product doctrine with fairness <strong>to</strong> the plaintiff. However, these<br />
solutions are largely unworkable.<br />
The Iridex court’s limited <strong>waiver</strong>, excluding opinions given<br />
“solely for the purpose of evaluating settlement options,” 332 is<br />
inefficient <strong>and</strong> impractical. There is no feasible way <strong>to</strong> determine<br />
whether a defendant obtained advice solely <strong>to</strong> evaluate settlement<br />
options or for some other purpose. Conceivably, all advice received by<br />
the defendant is obtained <strong>to</strong> evaluate options. This construction of the<br />
scope of <strong>waiver</strong> would require courts <strong>to</strong> painstakingly evaluate the<br />
330. EchoStar, 448 F.3d. at 1304.<br />
331. See supra <strong>note</strong> 273 <strong>and</strong> accompanying text.<br />
332. Iridex Corp. v. Synergetics, Inc., No. 4:05CV1916 CDP, 2007 U.S. Dist.<br />
LEXIS 7747, at *4 (E.D. Mo. Feb. 2, 2007).
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defendant’s subjective intent in obtaining advice <strong>and</strong> thus would be very<br />
inefficient. Furthermore, the highly subjective nature of this approach<br />
would make it difficult for trial at<strong>to</strong>rneys <strong>and</strong> clients <strong>to</strong> predict the<br />
communications <strong>and</strong> work product <strong>to</strong> which the <strong>waiver</strong> would extend in<br />
any given case.<br />
The Genentech solution, limiting <strong>waiver</strong> <strong>to</strong> advice “central <strong>and</strong><br />
highly material” 333 <strong>to</strong> the subject matter of the underlying opinion, <strong>and</strong><br />
the Intex <strong>and</strong> Dorel solutions, limiting <strong>waiver</strong> <strong>to</strong> advice which<br />
contradicts or casts doubt on the underlying opinion, are also<br />
unworkable solutions, albeit somewhat more practical than the Iridex<br />
approach. These st<strong>and</strong>ards could be more easily applied than the Iridex<br />
st<strong>and</strong>ard because they are not based on the defendant’s intent. These<br />
solutions are also highly subjective, however, <strong>and</strong> therefore would<br />
spark a great deal of contention between the parties regarding whether<br />
advice is “central <strong>and</strong> highly material” 334 <strong>to</strong> the subject matter of the<br />
underlying opinion or contradicts or casts doubt on the opinion. It<br />
would be very difficult, if not impossible, for a trial at<strong>to</strong>rney <strong>to</strong><br />
simultaneously fulfill his or her duty as a zealous advocate for the client<br />
<strong>and</strong> accurately <strong>and</strong> objectively classify work product in<strong>to</strong> one of these<br />
categories. As a result, the court would be forced <strong>to</strong> review many<br />
communications <strong>and</strong> work product of trial counsel in camera <strong>to</strong><br />
determine if they are highly material, somewhat material, or truly<br />
contradict or cast doubt on the underlying opinion. Furthermore,<br />
because it is unclear what the threshold would be <strong>to</strong> consider<br />
communications or work product “highly” material, or <strong>to</strong> contradict or<br />
cast doubt, these solutions would again be highly unpredictable for trial<br />
at<strong>to</strong>rneys <strong>and</strong> clients. Accordingly, these solutions would be very costly<br />
<strong>and</strong> inefficient for both alleged infringers <strong>and</strong> <strong>to</strong> the system as a whole.<br />
Additionally, <strong>and</strong> perhaps more importantly, these solutions still fail <strong>to</strong><br />
account properly for the necessity for trial counsel <strong>to</strong> freely discuss<br />
potential defenses with his or her client.<br />
By focusing on the reasoning that <strong>guide</strong>d its holding in EchoStar,<br />
the Federal Circuit properly concluded that the scope of <strong>waiver</strong> should<br />
not extend <strong>to</strong> trial counsel. 335 The court immediately focused its<br />
discussion on the fact that the <strong>waiver</strong> is intended <strong>to</strong> promote fairness<br />
<strong>and</strong> protect against sword-<strong>and</strong>-shield tactics by the alleged infringer. 336<br />
The court recognized that because of the special nature of trial counsel,<br />
the danger of such sword-<strong>and</strong>-shield tactics was significantly lower than<br />
333. 442 F. Supp. 2d at 847.<br />
334. Id.<br />
335. In re Seagate Tech., LLC, No. 06-M830, slip op. (Fed. Cir. Aug. 20,<br />
2007).<br />
336. Id. at 14.
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in the case of opinion counsel. 337 Furthermore, the court appropriately<br />
acknowledged that public policy favoring the at<strong>to</strong>rney-client privilege<br />
<strong>and</strong> work-product doctrine is particularly strong with respect <strong>to</strong> trial<br />
counsel because trial counsel’s effectiveness as a zealous advocate is<br />
crucial <strong>to</strong> the operation of the adversarial system of justice. 338<br />
Consequently, the court properly determined that the balance of<br />
fairness generally advised against extending the <strong>waiver</strong> <strong>to</strong><br />
communications <strong>and</strong> work product of trial counsel. 339<br />
One concerning aspect of the Seagate opinion, however, is that the<br />
court clearly <strong>and</strong> unambiguously left the door open for district courts <strong>to</strong><br />
extend the <strong>waiver</strong> <strong>to</strong> trial counsel in “unique circumstances.” 340 One of<br />
the significant benefits of a bright-line rule that the <strong>waiver</strong> does not<br />
extend <strong>to</strong> trial counsel is that it is predictable. Under a bright-line rule,<br />
alleged infringers know exactly what <strong>to</strong> expect if they choose <strong>to</strong> assert<br />
the advice-of-counsel defense. The Federal Circuit’s “unique<br />
circumstances” instruction <strong>to</strong> the district courts could potentially lead <strong>to</strong><br />
more unpredictability if the district courts take it <strong>to</strong> heart. Despite its<br />
two solid attempts at clarifying the scope of <strong>waiver</strong> in EchoStar <strong>and</strong><br />
Seagate, the Federal Circuit may very well find itself needing <strong>to</strong> revisit<br />
the <strong>waiver</strong> issue <strong>to</strong> define what qualifies as “unique circumstances.”<br />
V. CONCLUSION<br />
EchoStar is an excellent <strong>to</strong>ol for district courts attempting <strong>to</strong><br />
construe the scope of <strong>waiver</strong> properly, as well as for at<strong>to</strong>rneys hoping<br />
<strong>to</strong> predict how broad the scope of <strong>waiver</strong> will be upon assertion of the<br />
advice-of-counsel defense. Its reliance on fundamental policy fac<strong>to</strong>rs in<br />
its balancing test makes it highly adaptable <strong>to</strong> the many different<br />
situations that arise in willful-patent-infringement cases. Furthermore, it<br />
provides a three-category framework that greatly simplifies the<br />
determination of the appropriate scope of <strong>waiver</strong> of work-product<br />
protection. The EchoStar decision serves <strong>to</strong> illuminate substantially an<br />
area of patent law that previously had been frustratingly unclear.<br />
Yet despite EchoStar’s contribution <strong>to</strong> the scope of work-product<br />
<strong>waiver</strong>, two questions remain unclear in district court decisions<br />
subsequent <strong>to</strong> EchoStar: (1) whether the <strong>waiver</strong> extends <strong>to</strong> all possible<br />
defenses <strong>to</strong> patent infringement or only those addressed in the formal<br />
opinion on which the alleged infringer relies; <strong>and</strong> (2) whether the<br />
337. Id. at 15.<br />
338. Id. at 16.<br />
339. Id. at 18, 21.<br />
340. Id. at 18.
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<strong>waiver</strong> extends <strong>to</strong> trial counsel. These questions have produced enough<br />
significant confusion in the district courts <strong>to</strong> warrant additional attention<br />
from the Federal Circuit.<br />
The second question, whether the <strong>waiver</strong> extends <strong>to</strong> trial counsel,<br />
has already received such attention in the Federal Circuit’s Seagate<br />
opinion. In Seagate, the Federal Circuit held that the <strong>waiver</strong> of<br />
at<strong>to</strong>rney-client privilege <strong>and</strong> work-product protection should not extend<br />
<strong>to</strong> trial counsel. 341 Seagate st<strong>and</strong>s as an excellent example of how a<br />
court can utilize the policies <strong>and</strong> balancing test underlying EchoStar <strong>to</strong><br />
come <strong>to</strong> an appropriate solution when a <strong>waiver</strong> issue does not neatly fit<br />
in the EchoStar framework. When the same reasoning applied in<br />
EchoStar <strong>and</strong> Seagate is applied <strong>to</strong> the first question, courts should<br />
conclude that the <strong>waiver</strong> applies only <strong>to</strong> the defenses referenced in the<br />
underlying opinion <strong>and</strong> not <strong>to</strong> all three infringement defenses. If the<br />
district courts focus on the policy concerns <strong>and</strong> balancing test utilized in<br />
EchoStar <strong>and</strong> Seagate, they should be able <strong>to</strong> successfully navigate<br />
practically any <strong>waiver</strong> issues that may arise in the future.<br />
341. Id. at 18, 21.