Waiving Attorney-Client Privilege: Patent Opinions Developed by In-House Engineers, Patent Agents and Attorneys
By now, those who follow patent issues in this country will undoubtedly have heard of In Re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007), in which the Federal Circuit heightened the standard for establishing willful patent infringement to a recklessness standard, and clarified the scope of the waiver of attorney-client privilege and work product immunity with regard to opinions of counsel relied on by defendants accused of willfully infringing. Several courts have since addressed the Seagate opinion in some detail, including the U.S. District Court for the Southern District of New York, which is presiding over the original Seagate matter (Convolve, Inc. v. Compaq Computer Corp., No. 00-civ-5141).
In the Convolve case, Seagate opposed Convolve's claims of willful patent infringement by relying on an opinion generated by its engineering staff together with its in-house counsel and a patent agent (they also relied on outside counsel’s opinion). Convolve then moved for an order compelling Seagate to allow discovery from Seagate's in-house counsel. The court didn't buy Seagate’s argument that the opinion was simply an engineering report, and instead found that Seagate had waived the attorney-client privilege as to all documents within the scope of the waiver as defined in In re Echostar Communs. Corp. It ordered Seagate to produce not just emails concerning the in-house opinion, which Seagate previously had produced, but any letters, memorandum, conversations, or the like between the Seagate's attorney and his client, as well as any documents referencing the communications between attorney and client concerning the opinion. Memorandum and Order (Jan. 22, 2008).
This ruling would have been different had Seagate not conducted its own internal patent infringement investigation before engaging outside counsel, and then relied on that investigation to establish that its actions did not rise to the level of recklessness. Companies that use in-house employees to investigate patent infringement claims (which is common), and then help in-house attorneys to develop an opinion regarding patent infringement, should not expect documents and conversations about that investigation to remain protected under the attorney-client privilege or work product doctrine, even if the company later procures and relies on an opinion from outside counsel. You just never know how far a judge will go with a waiver under In re Echostar.
Check back later for a summary of what other courts are saying about In re Seagate.
I represent authors, artists, and educators, as well as engineers, doctors, scientists, small not-for-profit companies and multi-billion dollar international corporations. My law practice focuses on patent litigation and patent procurement in the life sciences sector (drugs, nutritional supplements, and medical devices), but I also provide patent, copyright, trademark, and trade secret counseling in the financial, telecommunications, automotive, environmental protection, and consumer electronics industries, to name a few. As a registered patent attorney and professional engineer, I help companies maximizing the value of their technology assets in the United States and around the world by strategically identifying and managing the business risks associated with procuring, maintaining, licensing, and enforcing intellectual property assets.