In re EchoStar Communications Corp. (Fed. Cir. 2006)
According to the Federal Circuit, work-product not communicated to the client and work-product that does not memorialize a communication between an attorney and his client is generally immune from discovery following waiver of the attorney-client privilege and work-product doctrine. Traditional workproduct communicated to the client and work-product memorializing a communication to a client, however, is generally discoverable.
After being charged as a willful infringer in a patent infringement suit, EchoStar waived its general privilege against discovery of attorney-client communications and attorney work-product by asserting a reliance on advice of counsel. Consequently, the district court ordered EchoStar to produce all work-product documents prepared by outside counsel regarding the infringement, including those that were never communicated to EchoStar. According to the district court, the rationale for its broad waiver was to encourage only “infringers who prudently and sincerely sought competent advice from competent counsel” to assert the advice of counsel defense. In response, EchoStar petitioned the Federal Circuit to challenge the scope of the order.
Before vacating the district court’s order, the Federal Circuit explained that an item or matter is discoverable if it is not privileged and if it is relevant to a claim or defense of a party. In order to promote open communication between an attorney and his client, the attorney-client privilege protects communications from discovery if “made for the purpose of obtaining legal advice.” However, the attorney-client privilege is waived when a party relies on the advice of counsel to avoid a claim of willful infringement. The scope of the waiver allows for the discoverability of all communications regarding the same subject matter.
Similarly, the work-product or immunity creates a zone of privacy and protects tangible things such as memos, letters, e-mails and other documents created by an attorney in preparation of litigation that are otherwise nonprivileged and relevant. The basis for the protection is to protect counsel’s thought processes and legal recommendations from their opponent. Like the attorney-client privilege, the immunity is waived when, for example, a party waives its immunity or when an opponent demonstrates that it substantially needs the material to prepare its case and cannot otherwise obtain the material without undue hardship. However, unlike the attorney-client privilege, the discoverability of attorney work-product is limited to factual and nonopinion work-product. An adverse party is not permitted discovery of “mental impressions, conclusions, opinions, or legal theories of an attorney or other representative.”
The Federal Circuit noted that three types of attorney work-product exist: (1) documents that include a communication between attorney and client such as a traditional infringement opinion letter; (2) documents containing analysis of legal standards and rules and other mental impressions of an attorney that are not communicated to the client; and (3) documents that were not themselves communicated to the client but otherwise memorialize a communication between attorney and client. Assuming that each type of attorney work-product contains information with regard to the appropriate subject matter of the case, the Court explained that only the fi rst and the third categories are discoverable following waiver of the work-product immunity.
More specifi cally, the Court noted that the fi rst type of work-product, e.g., a document communicated to a client, is properly discoverable subsequent waiver of the attorney-client privilege and attorney work-product immunity. The second type of work-product, e.g., a non-communicated document, is not discoverable and “deserves the highest protection from disclosure” because it does not “inform the court of the infringer’s state of mind.” With respect to the third type of work-product, e.g., a document memorializing a communication, the Court reasoned that, even if such a document does not discuss the substance of the referenced communication, it is discoverable to inform opposing parties as to what might have been communicated to the infringer. The court warned, however, that the waiver is not absolute and that the discoverability of work-product is limited to protect an attorney’s mental impressions and legal analysis when not communicated to the client.
In addition to granting the petition, the Court further explained that there is no meaningful distinction between reliance on in-house counsel and reliance on outside counsel. “Whether counsel is employed by the client or hired by outside contract, the offered advice of opinion is advice of counsel or an opinion of counsel.”