Yesterday, the Federal Circuit issued a quite important decision in the area of willful infringement. The decision, before the court on mandamus, is In re Echostar. The key question in the matter is the scope of the waiver created by Echostar’s reliance on legal advice as a way to dispel the notion that its infringement was willful. Resolving a longstanding split in the district courts, the Federal Circuit holds that (a) the question is a matter of Federal Circuit (not regional circuit) law, and (b) the waiver does not extend to materials that the advising lawyer did not communicate to the client. Instead, these uncommunicated materials remain behind the protective cloak of the work product doctrine.
One point of clarification and then a few comments. Under the EchoStar ruling, uncommunicated work-product that references, discusses, or embodies a specific communication with the client IS subjet to the waiver. There is no blanket rule that uncommunicated work-product alway need not be produced. Additionally, the EchoStar decision, as a published order, may raise more questions than it answers. In dicta it notes that a broad subject matter waiver of the AC privilege applies when an accused infringer relies on an opnion of counsel. It also effectively instructs that this waiver extends to communications with counsel who provide nondisclosed opinions. The dicta is broad enough to support an argument that the waiver applies to trial counsel. Footnote 4, again a point of dicta, notes that the waiver can extend to post-suit-filing communications if on-going willfulness is in the case. Hence, the decision has opened a nasty can of worms as to how far the waiver extends as applied to trial counsel. While the court’s discussion of the limitations to waiver of uncommunicated work-product may provide some clear guidance on that single issue, the dicta in the opinion as to the scope of the subject-matter waiver will likely lead to more disputes on privilege issues and may even lead to accused infringers thinking long and hard before disclosing opinions of counsel because the risk of waiver as to communications with trial counsel may be to great to chance.
All good points. I wasn’t trying to be comprehensive.
Comments are closed.