On May 1, 2006, the Federal Circuit ruled on a mandamus petition challenging a trial court’s ruling on the scope of a waiver of attorney-client privilege and work product immunity (a waiver made to use the advice of counsel to rebut a charge that the infringement in the case was willful). The case is In re EchoStar Communications Corp., 448 F.3d 1294 (Fed. Cir. 2006). I’ve blogged it before, focusing on the Federal Circuit’s ” recogniz[ing] at least three categories of work product that are potentially relevant to the advice-of-counsel defense … includ[ing]: (1) documents that embody a communication between the attorney and client concerning the subject matter of the case, such as a traditional opinion letter; (2) documents analyzing the law, facts, trial strategy, and so forth that reflect the attorney’s mental impressions but were not given to the client; and (3) documents that discuss a communication between attorney and client concerning the subject matter of the case but are not themselves communications to or from the client.” Id. at 1302. The first and third categories must, after a waiver, be produced, whereas the second need not be. Id. at 1302-04.

In my earlier post, I did not discuss EchoStar’s slumbering dicta giant — whether a waiver, once made, extends to trial counsel (not simply to pre-suit opinion counsel, or to separate post-suit opinion counsel). The giant is waking.

First, here’s what the Federal Circuit said in EchoStar’s fateful footnote 4:

EchoStar contends that waiver of opinions does not extend to advice and work product given after litigation began. While this may be true when the work product is never communicated to the client, it is not the case when the advice is relevant to ongoing willful infringement, so long as that ongoing infringement is at issue in the litigation. See Akeva LLC, 243 F.Supp.2d at 423 (”[O]nce a party asserts the defense of advice of counsel, this opens to inspection the advice received during the entire course of the alleged infringement.”); see also Crystal Semiconductor Corp. v. TriTech Microelectronics Int’l, Inc., 246 F.3d 1336, 1351-1353 (Fed. Cir. 2001) (noting that an infringer may continue its infringement after notification of the patent by filing suit and that the infringer has a duty of due care to avoid infringement after such notification).

448 F.3d at 1302 n.4.

Second, the district courts, in the space of three days in mid-July, used three different approaches to the trial counsel waiver question while nominally applying EchoStar’s teaching. The three approaches are (1) extend the waiver fully to communications with trial counsel, (2) deny the waiver to communications with trial counsel, and (3) extend the waiver to communications with trial counsel that call into doubt the opinion counsel’s opinion about infringement liability. Below the fold, I provide more details about these district court decisions. An accused infringer will no doubt take this up soon with the Federal Circuit, by way of a mandamus petition challenging an order compelling production of attorney-client communications.
Waiver fully includes trial counsel

The case using this approach is Informatica Corp. v. Business Objects Data Integration, Inc., 2006 WL 1038461 (N.D. Cal. July 14, 2006). [Hat tip to David Hricik, who blogged Informatica at Patent Baristas.] Here’s the key text from Informatica:

While opinion counsel and trial counsel can be walled off from each other, the immurement is immaterial — what matters, according to the decision by the Federal Circuit in Echostar, is the state of mind of BODI. For all the above reasons, Informatica’s motion to compel further responses from BODI is granted. This Court finds that, by asserting advice of counsel as a defense to a charge of willful infringement of Informatica’s patents, BODI waived privilege for both pre-and post-filing pertinent attorney-client communications and work product. Under the analysis in Echostar, it is immaterial whether BODI’s opinion counsel and trial counsel are from the same firm, different firms or are even the same person.

Id. at *8.

Waiver does not include trial counsel

The case using this approach is Ampex Corp. v. Eastman Kodak Co., 2006 WL 1995149 (D. Del. July 17, 2006). Here’s the key text from Ampex:

According to Ampex, it matters not when or in what context the subsequent communication occurs. Citing Akeva L.L.C. v. Mizuno Corp., 243 F .Supp.2d 418 (M.D.N.C.2003), a case also cited by the Federal Circuit in its Echostar opinion, Ampex contends that there is no temporal limitation on the waiver of privilege, if infringing activity continues, nor is there any distinction between advice received from trial counsel and that received from opinion counsel. Ampex asserts that the Echostar opinion, in conjunction with Akeva, makes everything fair game for discovery, including communications between trial counsel and client during trial.

I am compelled to reject Ampex’s reading of Echostar as far too broad and its motion as an extravagant demand at odds with the generally understood contours of the attorney-client privilege. …

Nothing in th[e factual] context [of EchoStar] … indicates a desire by the Court of Appeals to have every communication a client has with its trial counsel on the very subject of an infringement trial open to review by opposing counsel.

This is not elevating form over substance, as Ampex implies. It is not the form of the communication that matters, it is the content. If one received advice of non-infringement and also received an opinion on that same topic from another attorney, it would not matter on the question of waiver how the communication was labeled. But, if all attorney-client discussions touching on the same subject were to be viewed as “advice” or “opinions” on a par with the legal opinions that were at issue in Echostar, the court’s comments would have to be understood as demolishing the practical significance of the attorney-client privilege, a result obviously at odds with other comments in Echostar, see 448 F.3d at 1300-01 (”We recognize the privilege in order to promote full and frank communication between a client and his attorney so that the client can make well-informed legal decisions and conform his activities to the law.”), and with other emphatic pronouncements of the Federal Circuit regarding the privilege, see Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337, 1344 (Fed.Cir.2004) (”There should be no risk of liability in disclosures to and from counsel in patent matters; such risk can intrude upon full communication and ultimately the public interest in encouraging open and confident relationships between client and attorney.”). It will take more than the inference Ampex wants to draw from Echostar to persuade me that the Federal Circuit intends a wholesale revision of the historical understanding of the attorney-client privilege.

Id. at *2-*3.

Waiver includes trial counsel’s doubt-raising communications

The case using this approach is Intex Recreation Corp. v. Team Worldwide Corp., 2006 WL 2023552 (D.D.C. July 14, 2006). Here’s the key text from Intex:

[Patentee] TWW submits that Intex must provide “all communications and documents reflecting such communications, regardless of date, concerning whether the ‘469 patent is valid, enforceable, and infringed, not just communications regarding the October 26, 2004 oral opinion.” In support of its contention, TWW submits that “[i]n EchoStar, the Federal Circuit clearly held that the waiver of the attorney-client privilege and work product immunity extends into the future for so long as the alleged infringement continues[.]” …

Although neither party addressed it in their written submissions or during oral argument, another judge of this court has already addressed the issue presented. In an action in which Intex was a party, this court addressed “the issue of any temporal limitation” on an alleged infringer’s waiver of the attorney-client and work product protections. See Intex, 2005 U.S. Dist. LEXIS 10149 at * 15. In that case, the court recognized that:

The issue of any temporal limitation on an otherwise broad waiver of attorney-client privilege has divided federal courts, with many courts insisting on the broadest waiver and hence disclosure of all communications and documents regarding the subject matter of the opinion through trial, while other courts construct the subject matter narrowly and limit waiver to communications and documents created prior to litigation, in order to maximize protection of litigation work product.

Id. (internal citations omitted). Upon a review of the relevant authorities, the court adopted the holding of BASF Aktiengesellschaft v. Reilly Indus., Inc., 283 F.Supp.2d 1000, 1005-06 (S.D.Ind.2003), and found that:

[A] ‘middle ground’ is the most appropriate approach to this issue, under which waiver extends only to those trial counsel work product materials that have been communicated to the client and ‘contained conclusions or advice that contradict or cast doubt on the earlier opinions.’ … Hence, any otherwise privileged documents or other information generated by [the alleged infringer] or its counsel subsequent to the [opinion letters] issued in 2000 (including post-suit materials), and relating to the subject matter of those opinion letters, must be produced if the documents were communicated to [the infringer] and if they question or contradict in any way the competence or validity of the opinions rendered.

Intex, 2005 U.S. Dist. LEXIS 10149 at *14-15 (quoting BASF, 283 F.Supp.2d at 1006).

The undersigned finds that the mechanism this Court has previously set forth is applicable to the instant dispute.

Id. at *5-*7.