Abstract

     In any given patent dispute, the protections afforded by the attorney-client privilege and work product doctrines are foundational assumptions when documentation is created and client communications take place. The purpose of each doctrine is to encourage “full and frank communication” between lawyer and client, and afford attorneys the opportunity to permit thorough trial preparation without the fear that such material will become available to opposing counsel through discovery. Therefore, memorandum, e- mails and transcribed voicemails often contain sensitive information created based on the parties’ belief that the sensitive information will not become available to opposing counsel. However, when creating such sensitive documentation, attorneys may not always carefully consider the fact that the sensitive material may later be displayed— larger than life—to a jury examining whether their client has engaged in willful patent infringement.
     At first blush, it may be difficult to conceive of circumstances under which such protections would be voluntarily waived. However, an accused infringer seeking to rely on an “advice of counsel” defense to a charge of willful infringement may choose to do so as a necessary price to pay to obtain the benefits of an advice of counsel defense Generally, prior to invoking an advice of counsel defense, a client will engage opinion counsel, who is asked to consider the patent claims and the potentially infringing process, method or device, and to provide an independent, informed legal opinion as to whether infringement has occurred or whether the patent will likely be held valid and enforceable. If the client has exercised diligence in obtaining a competent, independent and informed opinion of counsel indicating that there is no infringement and/or that the patent is invalid or unenforceable, the client may then assert good faith reliance on counsel’s opinion when the patent-holder claims that the allegedly infringing activity is willful. According to the courts, a patent holder’s good faith reliance on an opinion of counsel constitutes important evidence that an infringement was not “willful.”
     After litigation commences and the alleged infringer decides to rely on an opinion of counsel defense, the alleged infringer must then produce the opinion of counsel to opposing counsel. Established precedent holds that the “deliberate injection of the advice of counsel defense into a case waives the attorney-client privilege.” The issue then becomes the court’s determination of the scope of the waiver. Does the waiver of attorney-client privilege extend solely to counsel’s opinion? Does it include all communications with the client concerning the opinion? Does the waiver extend to trial counsel? Is the protection afforded to work product created in anticipation of litigation, such as trial strategy memoranda, also waived? Answers to these questions can be found in a number of district court decisions, each of which evidence the court’s increasingly fractionalized view on the scope of waiver. In fact, even trial courts within the same district have reached strikingly different results. To make matters worse, the Federal Circuit has yet to provide any definitive ruling on the issue.
     Once litigation commences and the advice of counsel defense is invoked, rarely are agreements on the scope of waiver of privilege reached between the parties because patent holders typically have little incentive to agree to anything less than the fullest disclosure permitted by law. The potential to mine the alleged infringer’s files in the hopes of obtaining a glimpse into its trial strategy or of discovering a “smoking gun” admission that would eliminate or substantially impair the alleged infringer’s defenses at trial creates a powerful incentive to hold out for maximum disclosure. On the other hand, alleged infringers will fight to keep the scope of the waived privileged information as narrow as possible. However, where the accused infringer has retained the same counsel for both opinion work and trial, trial strategy memoranda  may be particularly at risk for production to the opponent.
     Two recent district court decisions, Aspex Eyewear, Inc. v. E’lite Optik, Inc., and BASF Aktiengesellschaft v. Reilly Industries, Inc., demonstrate the courts’ difficulty in arriving at a uniform position on the scope of waiver and uncertainty facing patent holders and their counsel. Aspex Eyewear and BASF both illustrate the courts’ willingness to examine the specific  facts and circumstances of each case when determining the scope of the waiver. Because the scope of the waiver question depends on the circumstances present in a particular case, both Aspex Eyewear and BASF demonstrate a troublesome lack of predictability for those involved in drafting opinions of counsel.
     Given the uncertainty as to whether information held or obtained by opinion counsel will ultimately become discoverable by opposing counsel and admissible at trial, counsel preparing an opinion must exercise great care. This challenge is especially difficult, given that as a temporal matter, an opinion is typically generated well in advance of a court’s determination of the precise scope of the waiver in any particular case. Because of the possibility that the court might compel a broad scope of disclosure that may contain damaging admissions, additional consideration must be given to whether to proffer the advice of counsel opinion after litigation has commenced.
     BASF and Aspex Eyewear illustrate the risks inherent in relying on an opinion of counsel at trial and provide lessons to those accused of patent infringement and their counsel. As both courts found, the scope of the waiver rests to some degree in the hands of the accused infringer and their counsel. Thus, reviewing these decisions is helpful to those involved patent disputes in which the patent holder may become accused of willful patent infringement.