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

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BELDEN - FINAL 11/29/2007 4:08 PM 934 WISCONSIN LAW REVIEW billions. 5 Furthermore, plaintiffs can often receive an injunction ordering a defendant to cease the infringing activities. 6 Finally, if the court finds the infringement willful, 7 it has the discretion to award enhanced damages as well as attorneys’ fees. 8 Due to the significant potential monetary gains, plaintiffs allege willfulness in nearly every suit for patent infringement. 9 The attorney-client privilege and attorney-work-product doctrine have become essential tools of the American legal system, particularly in regard to willful-patent-infringement cases. 10 Together, they allow attorneys to obtain frank and complete disclosure from their clients 11 and to document their thoughts and legal strategies 12 without the fear that client communications and work product will be discoverable in future litigation. These tools are necessary because attorneys cannot adequately represent their clients if certain communications and thoughts are exposed to the knowledge of opposing counsel. 13 In actions for willful patent infringement the issues are complex, and welldeveloped pretrial advice and trial strategy are critical for success. Therefore, attorney-client privilege and work-product protection play a particularly important role in patent litigation. Attorney-client privilege and work-product protection can, however, be waived by clients. 14 In willful patent infringement actions, 5. See, e.g., Evan Hansen & Eliot Van Buskirk, MP3’s Loss, Open Source’s Gain, WIRED, Feb. 23, 2007, available at http://wired.com/entertainment/music/ news/2007/02/72785. 6. See JAFFE & LERNER, supra note 3, at 31. 7. Whether an act of infringement is willful depends on the alleged infringer’s intent and reasonable beliefs. See Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 944 (Fed. Cir. 1992). Willfulness is determined in consideration of the totality of the circumstances. See id. For further discussion of willful patent infringement, see infra Part II.A.3. 8. See 35 U.S.C. §§ 284–85 (2000). The court has the authority to award up to three times the amount of actual damages. Id. § 284. 9. See Kimberly A. Moore, Empirical Statistics on Willful Patent Infringement, 14 FED. CIR. B.J. 227, 232 (2004). 10. See In re EchoStar Commc’ns Corp., 448 F.3d 1294, 1298 (Fed. Cir. 2006); EDNA SELAN EPSTEIN, THE ATTORNEY-CLIENT PRIVILEGE AND THE WORK- PRODUCT DOCTRINE 2–3, 480–81 (4th ed. 2001). 11. EPSTEIN, supra note 10, at 3. The attorney-client privilege forbids an attorney from disclosing certain confidential client communications either voluntarily or by compulsion absent a waiver of privilege by the client. Id. at 2–3; see also discussion infra Part II.A.1. 12. EPSTEIN, supra note 10, at 480–81. The work-product doctrine protects an attorney’s mental impressions and analysis from discovery by opposing counsel. Id.; see also discussion infra Part II.A.2. 13. EPSTEIN, supra note 10, at 477. 14. See id. at 363–91, 607–15, 618–41.
BELDEN - FINAL 11/29/2007 4:08 PM 2007:933 A Guide to Waiver After EchoStar and Seagate 935 defendants often assert the defense of reliance on advice of counsel. 15 By asserting this defense, a defendant claims that it reasonably believed it did not infringe any valid patent right held by the plaintiff due to advice it received from counsel. 16 The defendant automatically waives attorney-client privilege and work-product protection by raising the advice-of-counsel defense. 17 In determining the scope of the waiver, courts must balance the policies favoring the attorney-client privilege and work-product protection with the need for plaintiffs to have access to certain communications and work product in order to attack the defense. 18 After attempting to define the scope of waiver several times in the past, the United States Court of Appeals for the Federal Circuit set out once again in 2006 to clarify the scope of waiver in In re EchoStar Communications Corp. 19 TiVo, Inc., filed suit against EchoStar Communications Corporation, EchoStar DBS Corporation, EchoStar Technologies Corporation, and Echosphere Limited Liability Company (collectively “EchoStar”) for willfully infringing one of its patents. 20 In response, EchoStar asserted reliance on the advice of its in-house counsel that it did not infringe TiVo’s patent. 21 EchoStar also obtained legal advice from attorneys at Merchant & Gould, P.C. (“Merchant & Gould”) 22 subsequent to the filing of the action. 23 EchoStar chose, however, not to rely on this advice. 24 TiVo sought production of documents from EchoStar and Merchant & Gould. 25 15. See id. at 347–48, 351, 625; discussion infra Part II.A.3. 16. See Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 944 (Fed. Cir. 1992); see also EPSTEIN, supra note 10, at 347–48; discussion infra Part II.A.3. 17. See EPSTEIN, supra note 10, at 347. 18. See In re EchoStar Commc’ns Corp., 448 F.3d 1294, 1302 (Fed. Cir. 2006). 19. Id. at 1298, 1300–02. 20. Id. at 1296–97. TiVo’s patent covered time-warping technology frequently used in digital video recorders (DVRs). EchoStar Loses Bid for New Trial, N.Y. TIMES, Nov. 28, 2006, at C4. EchoStar manufactures and sells DVRs under its Dish Network brand. See Dish Network, http://www.dishnetwork.com (last visited Sept. 26, 2007); EchoStar, http://echostarfixedsatellite.com (last visited Sept. 26, 2007). 21. EchoStar, 448 F.3d at 1297; TiVo Inc. v. EchoStar Commc’ns Corp., No. 2:04-CV-1 (DF), 2005 U.S. Dist. LEXIS 42481, at *3, *21–23 (E.D. Tex. Sept. 26, 2005). 22. Merchant & Gould is an intellectual property law firm. See Merchant & Gould, http://www.merchantgould.com/index.html (last visited Sept. 26, 2007). 23. EchoStar, 448 F.3d at 1297. Neither this opinion nor the district court opinion revealed the nature of Merchant & Gould’s advice to EchoStar. Id.; TiVo, 2005 U.S. Dist. LEXIS 42481. 24. EchoStar, 448 F.3d at 1297. 25. Id.
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