Best Practices For Atty-Client Privilege In Patent Litigation

• Published date: 01 September 2023
• Subject Matter: Intellectual Property, Litigation, Mediation & Arbitration, Patent, Disclosure & Electronic Discovery & Privilege, Trials & Appeals & Compensation
• Law Firm: Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
• Author: Mr Lionel Lavenue, Joseph Myles and Pu-Cheng (Leo) Huang

Under Title 35 of the U.S. Code, Section 284, a victorious patent owner in a patent infringement suit may seek an award of up to three times the damages award ' treble damages ' if the patent owner proves the infringer's conduct was willful.

In 2016, the U.S. Supreme Court's ruling in Halo Electronics, Inc. v. Pulse Electronics, Inc. brought significant changes to the landscape of willful infringement.¹

Halo underscored the importance of the accused infringer's post-discovery actions concerning a competitor's patent, highlighting the critical role of timing in determining willfulness.

To mitigate the risk of treble damages, companies often seek legal opinions, such as noninfringement and invalidity opinions, to demonstrate that they acted in good faith to avoid infringement.

However, relying on these opinions presents a challenge. Presenting an opinion of counsel waives the attorney-client privilege for communications relating to the opinion on the theory that a party cannot use privilege as a sword and a shield.

The Halo decision raised new considerations for the timing of this waiver, changing the calculus for obtaining and presenting opinions of counsel. Since Halo, the law of privileged waiver has shaped itself around the types of opinions useful for avoiding willfulness findings, and best practices for preserving privilege have evolved out of this law.

This article discusses the diverse approaches taken by courts when determining the scope of waiver and offers best practices for companies seeking to leverage opinions of counsel as a defense to willful infringement allegations, while simultaneously safeguarding their attorney-client privilege.

The Scope of Waiver: Impact on Protections for Other Evidence

The scope of waiver is the extent to which a party waives its attorney-client privilege and work-product immunity when asserting an advice-of-counsel defense. Simply put, a party cannot selectively disclose favorable advice while concealing unfavorable advice.

By invoking an advice-of-counsel defense, the accused infringer obviously does not automatically grant their opponent unrestricted access to all their files and litigation strategies, but there is some waiver of privilege. Courts differ in their interpretation of the scope of this waiver, leading to uncertainty and inconsistent outcomes.

There are three key considerations when deciding the scope of waiver.

First, courts address whether asserting the advice-of-counsel defense waives work product immunity concerning the subject matter of the defense. This distinction is crucial, as the attorney-client privilege and work product immunity offer different but potentially overlapping protections.

While the attorney-client privilege safeguards communications between a client and their attorney, work product immunity safeguards materials prepared in anticipation of litigation. Some district courts have held that producing an opinion of counsel or relying on advice of counsel may waive the attorney-client privilege regarding other opinions on the same subject matter.

But, courts have also acknowledged that the work product immunity, codified in the Federal Rule of Civil Procedure 26(b), may still protect...