EchoStar Communications Corporation (and various related entities, collectively “EchoStar”) was sued for patent infringement by TiVo. In response to TiVo’s claim of willful patent infringement, EchoStar asserted an advice-of-counsel defense, thereby waiving its attorney-client privilege and attorney work product immunity with respect to any advice of counsel regarding patent infringement. During the proceedings, EchoStar challenged the District Court’s ruling that the scope of EchoStar’s waiver included:
- Communications made both before and after the filing of the complaint to both in-house and outside counsel, and
- All work product relating to infringement, regardless of whether or not it was communicated to EchoStar from its attorneys.
With regard to the work product issue, the Federal Circuit identified the following three categories of work product that are potentially relevant to the advice-of-counsel defense:
- Documents that embody a communication between the attorney and the client concerning the subject matter of the case
- Documents analyzing the law, facts, trial strategy, and so forth, which reflect the attorney’s mental impressions, but which were not given to the client
- Documents that discuss a communication between attorney and client concerning the subject matter of the case, but which are not themselves communications to or from the client
The Federal Circuit found that the waiver extended to the first and third categories, but not to the second category.
In concluding that the waiver did not extend to the second category of documents (i.e., work product not communicated to the client), the Federal Circuit first noted that the advice-of-counsel defense focuses on whether counsel’s opinion was thorough enough to instill a belief in the accused infringer that the court might hold that the patent is invalid, not in fringed, or unenforceable. The court then found that the relevant value of such work product is not outweighed by the policies underlying the work product doctrine.
The court addressed the issue of waiver of attorney-client privilege only briefly. EchoStar argued that its reliance on an in-house investigation supervised only by in-house attorneys was not advice-of-counsel defense; thus their attorney-client privilege should not be waived with respect to those communications with in-house counsel. The court found that whether counsel is employed by the client or hired by outside contract, the analysis is the same. Accordingly, when EchoStar chose to rely on the advice of its in-house counsel, it waived its privilege with respect to any attorney-client communications relating to the same subject matter.