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

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BELDEN - FINAL 11/29/2007 4:08 PM 936 WISCONSIN LAW REVIEW The District Court for the Eastern District of Texas held that because EchoStar asserted the advice-of-counsel defense, it waived immunity for all communications with and any work product of Merchant & Gould. 26 The court found that EchoStar waived workproduct protection regardless of whether Merchant & Gould communicated the work product to EchoStar. 27 Both EchoStar and Merchant & Gould filed petitions for a writ of mandamus with the Federal Circuit. 28 On review, the court first addressed EchoStar’s waiver of attorneyclient privilege, holding that the waiver “applies to all other communications relating to the same subject matter.” 29 The court found the waiver applied to both EchoStar’s in-house counsel and Merchant & Gould, despite the fact that EchoStar chose not to rely on Merchant & Gould’s advice. 30 The court of appeals then addressed the waiver of work-product protection, noting that district courts, to construe the waiver properly, should balance the policy favoring the work-product doctrine with fairness to the plaintiff. 31 The goal of waiver is to prevent a party from using advice as both a “sword and a shield”; 32 that is, an alleged infringer should not be permitted to waive privilege for favorable advice and assert privilege for unfavorable advice. 33 Recognizing that district courts might experience difficulty in balancing these policies, the court identified three categories of work product that it considered potentially relevant to the advice-of-counsel defense: (1) documents embodying a communication between the attorney and client concerning the subject matter of the case; 34 (2) documents reflecting the attorney’s mental impressions that were not 26. Id. 27. Id. 28. Id. at 1296–97, 1305. Judges Gajarsa, Schall, and Prost heard EchoStar’s petition, and Gajarsa drafted the opinion of the court. Id. at 1296. 29. Id. at 1298–99 (quoting Fort James Corp. v. Solo Cup Co., 412 F.3d 1340, 1349 (Fed. Cir. 2005)). 30. Id. at 1299. 31. See id. at 1299–1305. 32. Id. at 1301. 33. Id. 34. This first category includes traditional opinion letters. Id. at 1302. Opinion letters are the letters containing the opinion upon which the defendant relies in reasonably believing the plaintiff’s patent is invalid, unenforceable, or not infringed. See Sean C. Cunningham, The When, Who, What and Why of Patent Opinion Letters, DLA PIPER PUBLICATIONS, 2002, http://www.dlapiper.com/global/publications/ detail.aspx?ref=snapshot&pub=485. Accordingly, opinion letters form the basis of the advice-of-counsel defense. See id.
BELDEN - FINAL 11/29/2007 4:08 PM 2007:933 A Guide to Waiver After EchoStar and Seagate 937 communicated to the client; 35 and (3) documents referencing a communication between the attorney and client concerning the case’s subject matter that were not actually communicated to the client. 36 The court noted that the first category fell under the scope of the waiver of attorney-client privilege and, thus, was discoverable. 37 The court of appeals found that work product in the second category (which the attorney never communicates to the client) was not discoverable. 38 Because such work product embodies only the thoughts of the attorney, it has little bearing on the alleged infringer’s state of mind. 39 Therefore, the court found the policies supporting the workproduct doctrine outweighed any value that this type of work product might provide to the willfulness inquiry. 40 In contrast, the court of appeals cautiously found work product to be discoverable in the third category (referencing a communication between the attorney and client but not communicated to the client). 41 Unlike work product that falls within the second category, the court found work product that references or describes a communication between the attorney and client to have substantial value in determining what communications the attorney actually made to the client. 42 The court noted the danger of such documents possibly containing work product that falls within the second category, suggesting that the parties should carefully redact such work product before production. 43 On its face, EchoStar appears to be a step-by-step guide to the scope of waiver of attorney-client privilege and work-product immunity when an alleged infringer relies on the advice-of-counsel defense in an action for willful patent infringement. To be sure, the opinion substantially clarifies a previously murky, complicated area of patent law, particularly with respect to the law governing work-product immunity. Inspection of district court cases subsequent to EchoStar 35. EchoStar, 448 F.3d at 1302. 36. Id. (citing Thorn EMI N. Am., Inc. v. Micron Tech., 837 F. Supp. 616, 622–23 (D. Del. 1993)). The Federal Circuit acknowledged that these three categories were not necessarily exhaustive. Id. at 1302 n.3. 37. Id. at 1302. 38. Id. at 1303. 39. Id. at 1304. 40. Id. 41. Id. As an example of such work product, the court wrote that “if an attorney writes a memorandum or an e-mail to his associate referencing a phone call with the client, in which he indicates that he discussed the client’s potential infringement, then such a memorandum is discoverable.” Id. 42. Id. 43. Id.
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