note a guide to waiver after echostar and seagate - UW Law School

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BELDEN - FINAL 11/29/2007 4:08 PM 944 WISCONSIN LAW REVIEW attorney-client privilege and work-product protection was unclear prior to EchoStar further complicated the alleged infringer’s dilemma. 88 Because the scope of the waiver was unclear, the alleged infringer did not know exactly what information it would be sacrificing if it chose to assert the advice-of-counsel defense. 89 B. Precedent Regarding the Scope of Waiver Prior to EchoStar, the Federal Circuit provided remarkably little guidance on the scope of waiver of attorney-client privilege and workproduct protection upon assertion of the advice-of-counsel defense. This lack of guidance likely reflects, at least in part, the difficulty defendants experience in attempting to obtain appellate review of district court rulings regarding the scope of waiver. 90 Furthermore, the Federal Circuit is the only source of appellate guidance regarding the scope of waiver because it has exclusive jurisdiction over substantive issues of patent law, 91 and the scope of waiver is one such issue. 92 Therefore, the district courts have largely been on their own in determining the appropriate scope of waiver when the defendant invokes the advice-ofcounsel defense to willful patent infringement. As a result, the district courts have varied widely in their approaches to the scope of waiver, and attorneys and their clients have been uncertain about how broad the scope of waiver will be in any given case. 93 the totality-of-the-circumstances test for willful infringement, and therefore the choice the alleged infringer faces is still a very difficult one. 88. See Jared Goff, Comment, The Unpredictable Scope of the Waiver Resulting from the Advice-of-Counsel Defense to Willful Patent Infringement, 1998 BYU L. REV. 213, 213–14 (1998). 89. See Vito J. DeBari, Federal Circuit Clarifies Scope of Advice-Of-Counsel Waiver, THE METROPOLITAN CORP. COUNS., June 2006, at 10, available at http:// www.metrocorpcounsel.com/pdf/2006/June/10.pdf. 90. See Goff supra note 88, at 222–23. Rulings regarding the scope of waiver are discovery rulings and are interlocutory in nature. Id. at 222. Interlocutory appeals are extremely difficult to obtain; ordinarily, a final ruling must be issued before the case is ripe for appeal. Id. At that point, the appeal is largely moot because the privileged information has already been released. Id. Furthermore, the only other method of relief is to petition for a writ of mandamus, and, like interlocutory appeals, writs of mandamus are rarely granted. Id. 91. In re EchoStar Commc’ns Corp., 448 F.3d 1294, 1298 (Fed. Cir. 2006) (citing Advanced Cardiovascular Sys., Inc. v. Medtronic, Inc., 265 F.3d 1294, 1303 (Fed. Cir. 2001)). 92. EchoStar, 448 F.3d at 1298 (citing In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 803–04 (Fed. Cir. 2000)). 93. See, e.g., Aspex Eyewear, Inc. v. E’Lite Optik, Inc., 276 F. Supp. 2d 1084, 1091–96 (D. Nev. 2003); Thorn EMI N. Am., Inc. v. Micron Tech., Inc., 837 F. Supp. 616, 622–23 (D. Del. 1993).
BELDEN - FINAL 11/29/2007 4:08 PM 2007:933 A Guide to Waiver After EchoStar and Seagate 945 The Federal Circuit did provide some guidance regarding the scope of waiver of the attorney-client privilege in Fort James Corp. v. Solo Cup Co. 94 In Fort James, the court held that the scope of the waiver extends “to all other communications relating to the same subject matter.” 95 The court noted that to hold otherwise would be unfair to the plaintiff since the defendant could disclose favorable communications while hiding unfavorable communications behind privilege. 96 The court gave no concrete guidance as to what constitutes the “same subject matter” 97 but rather held that courts should “weigh the circumstances of the disclosure, the nature of the legal advice sought, and the prejudice to the parties of permitting or prohibiting further disclosures.” 98 While Fort James provided some guidance regarding waiver of attorney-client privilege, the Federal Circuit provided no such guidance regarding work-product protection prior to EchoStar. 99 As a result of the Federal Circuit’s general lack of guiding authority, the district courts had taken widely varying approaches when determining the scope of waiver. Some district courts favored a narrow scope of waiver, holding that work product the attorney never communicated to the client is not discoverable. 100 These courts reasoned that work product never communicated to the client is not relevant to the client’s state of mind. And since the willfulness inquiry focuses solely on the client’s state of mind and not that of the client’s attorney, such work product should not be discoverable. 101 94. 412 F.3d 1340 (Fed. Cir. 2005). 95. Id. at 1349. This standard is consistent with the court’s previous decisions relating to waiver of the attorney-client privilege. See Genentech, Inc. v. U.S. Int’l Trade Comm’n, 122 F.3d 1409, 1416 (Fed. Cir. 1997). 96. Fort James, 412 F.3d at 1349. Courts sometimes refer to this concept as using the attorney-client privilege as both “a sword and a shield.” E.g., EchoStar, 448 F.3d at 1301. 97. Fort James, 412 F.3d at 1349. The court said that there is no “bright line test” for determining what constitutes the same subject matter due to the factual nature of the determination. Id. 98. Id. at 1349–50. 99. The Federal Circuit’s most relevant authority, Genentech, suggested only that work-product protection could be waived but did not hint at how broad or narrow the scope of waiver should be. See Genentech, 122 F.3d at 1415. More importantly, Genentech specified that work-product protection could be waived because the defendant disclosed the work product to a third party, not because the defendant raised the advice-of-counsel defense to willful patent infringement. Id. Therefore, Genentech was not particularly useful guidance for the district courts. 100. See, e.g., Nitinol Med. Techs., Inc. v. AGA Med. Corp., 135 F. Supp. 2d 212, 218–19 (D. Mass. 2000); Thorn EMI N. Am., Inc. v. Micron Tech., Inc., 837 F. Supp. 616, 622–23 (D. Del. 1993). 101. See Thorn, 837 F. Supp. at 622–23.
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