In re EchoStar: Opinion Waiver Does Not Extend To Work Product Never Communicated To The Client

In re EchoStar Communications (Fed. Cir. 2006, order).

In an order on mandamus, the CAFC has vacated a district court’s decision that would require EchoStar’s outside counsel (who provided an infringement opinion) to produce documents that were never communicated to EchoStar.

Before TiVo sued, EchoStar relied on the advice of its in-house counsel in continuing to produce its allegedly infringing product.  After the suit was filed, EchoStar hired Merchant & Gould (M&G), but decided not to rely on the IP Boutique’s advice.  Since EchoStar was relying on advice in defense of a willfulness charge, TiVo asked for any M&G opinions and associated work product.

The district court ordered production of M&G’s infringement opinions as well as “all work product . . . whether or not communicated to EchoStar.”  The non-communicated subject matter, according to the district court, might contain information disclosed to EchoStar — even if the documents themselves were not disclosed.

On appeal, the CAFC (Gajarsa) came to several conclusions:

1. An in-house attorney providing an opinion to executives can be an “opinion of counsel.”  And, relying on that opinion in court will create a waiver of attorney-client privilege. According to the court, “[u]se of in-house counsel may affect the strength of the defense, but it does not affect the legal nature of the advice.”
2. Attorney-Client privilege is distinct from Work-Product protection.  Waiver of one, does not necessarily waive the other.
3. Here, “[w]ork-product waiver extends only so far as to inform the court of the infringer’s state of mind.”
4. Importantly, “work product, which is never communicated to the client, is not discoverable” even after waiver of attorney-client privilege.

[I]f a legal opinion or mental impression was never communicated to the client, then it provides little if any assistance to the court in determining whether the accused knew it was infringing, and any relative value is outweighed by the policies supporting the work-product doctrine.

This case goes a long way in clarifying the scope of waiver, which has been in dispute in essentially every patent case where an opinion is asserted. The court also discusses how redaction should take place and gives rather easy guidlines for determining when a document would fall within the waiver.

Notes:

• Joe Miller’s Comments
• Knorr-Bremse
• Golden Blount