The opinion of the court was delivered by: JAMES FRANCIS, Magistrate Judge
The plaintiffs in this action have sued the defendants, Seagate
Technology, Inc. ("Seagate") and Compaq Computer Corp. ("Compaq"),
alleging, among other claims, willful patent infringement of the
plaintiffs' computer disk drive technology. The defendants, in turn,
assert that they acted in good faith because they relied on the advice of
counsel. They concede that by relying on an advice-of-counsel defense,
they have waived the attorney-client privilege as well as work product
immunity with respect to communications with and documents created by
opinion counsel. At issue now are two questions that have split the
courts: to what extent does reliance on advice of counsel waive the
attorney-client privilege for communications with trial counsel, and does
any such waiver extend to trial counsel's work product?
On July 13, 2000, the plaintiffs initiated this lawsuit alleging, among
other claims, theft of trade secrets and patent infringement in connection with the plaintiffs' "Input Shaping" and
"Quick and Quiet" technologies. The "Input Shaping" technology permits
machines to operate more quickly and quietly by reducing vibrations
associated with machine movement. (Amended Complaint ("Am. Compl."),
¶ 3). The "Quick and Quiet" application is a computer control panel
feature that permits users to select between the fastest or quietest
performance for computer disk drives. (Am. Compl., ¶ 6).
The "Input Shaping" technology is the subject of United States patent
numbers 4,916,635 (the "`635 patent") and 5,638,267 (the "`267 patent"),
which were issued to the plaintiffs on April 10, 1990, and June 10, 1997
respectively. (Am. Compl., ¶¶ 3, 109). A third patent, United States
patent number 6,314,473 (the "`473 patent"), was issued on November 6,
2001, and covered the plaintiffs' "Quick and Quiet" technology. (Am.
Compl., ¶¶ 6, 116). On January 25, 2002, the plaintiffs filed an Amended
Complaint, adding the `473 patent to their patent infringement claim
(Am. Compl., 11 115-120), and seeking treble damages on the ground that
the defendants' infringement of the `635 and `267 patents was "knowing,
willful and deliberate." (Am. Compl., ¶ 114).
Seagate initially retained the law firm of Orrick, Herrington &
Sutliffe to serve as its trial counsel but later switched to the firm of
McDermott, Will & Emery. Fish & Neave serves as trial counsel for
After the filing of the original complaint, Seagate retained Gerald T.
Sekimura, who was then with the law firm of Limbach & Limbach L.L.P., to provide an opinion as to the legality of its conduct.
Mr. Sekimura issued three written opinions. The first opinion, dated July
24, 2000 (the "7/24/00 Opinion"), concerned the `635 and `267 patents and
International Application WO 99/45535 (the "`535 International
Application"), which relates to technology similar to that covered by the
`473 patent (Am. Compl., ¶ 4). The report reviewed the computer disk
drive technology used in Seagate's products and the plaintiffs' patent
claims and concluded that many of the plaintiffs' claims were invalid and
that the plaintiffs had failed to show infringement by Seagate's existing
products. (7/24/00 Opinion at 1-21). The report noted that further
analysis was needed because only 186 of the over 340 claims made by the
plaintiffs had been reviewed (7/24/00 Opinion at 1), and it noted that the
`535 International Application analyzed in the report "is not an issued
patent." (7/24/00 Opinion at 16).
On December 29, 2000, Mr. Sekimura forwarded to Seagate an "Updated
Report Re Convolve Patents" (the "12/29/00 Opinion") concerning the same
patents and application as the 7/24/00 Opinion. The 12/29/00 Opinion drew
the same conclusions as the 7/24/00 Opinion but added, with respect to
the `267 patent, that many of the plaintiffs' claims were not only
invalid but may be unenforceable due to incomplete disclosures of prior
art by the inventors. (12/29/00 Opinion at 2, 29). The report also
recommended that further review of the `535 International Application be
postponed until the U.S. Patent and Trademark Office evaluated the
plaintiffs' claims to determine whether to issue a patent. (12/29/00 Opinion at 2). The report noted again that only
186 claims had been reviewed, and that "[f]urther supplementation may be
desired of this study." (12/29/00 Opinion at 1).
Finally, on February 21, 2003, Mr. Sekimura, now with the law firm of
Gray Gary, provided Seagate with an opinion (the "2/21/03 Opinion")
concerning the `473 patent. The report reviewed the eight "independent"
and seven "dependent" claims made by the plaintiffs, and drew various
conclusions regarding Seagate's non-infringement of the `473 patent and
the invalidity of the plaintiffs' claims. (2/21/03 Opinion at 13-14,
In late 2001 or early 2002, Compaq retained Michael S. Dowler of the
law firm of Howrey Simon Arnold & White to prepare an opinion concerning
the plaintiffs' patents. (Letter from Special Master Pasquale A. Razzano
dated Sept. 18, 2003 (the "9/18/03 Order") at 2). Compaq thereafter
instructed Mr. Dowler to stop work on his report after it learned of the
Seagate opinions obtained from Mr. Sekimura. (9/18/03 Order at 2). Before
that decision was made, however, Mr. Dowler forwarded to Compaq an email
"draft opinion" or "template" that analyzed the "disclosures and
prosecution histories" relating to the `635, `267, and `473 patents.
(9/18/03 Order at 3). The "draft opinion" contained a "Conclusion"
section, which stated, "Compaq __'s do not infringe any of the system
claims . . . " (9/18/03 Order at 3).
On July 27, 2001, the Honorable John S. Martin, to whom the case was then assigned,*fn1 appointed Pasquale A. Razzano to serve as a
Special Master to hear and determine all discovery disputes relating to
trade secret information. Pursuant to a Scheduling Order issued by Mr.
Razzano, both Seagate and Compaq notified the plaintiffs in early 2003 of
their intent to rely on the 7/24/00, 12/29/00, and 2/21/03 Opinions from
Mr. Sekimura as the basis for their advice-of-counsel defense to the
claim of willful patent infringement. (Letter from Pasquale A. Razzano
dated September 23, 2003 (the "9/23/03 Order") at 2-3). The defendants
disclosed the three opinions to the plaintiffs, and made Mr. Sekimura
available for a deposition. (Defendant Compaq Computer Corporation's
Opposition to Plaintiff Convolve, Inc.'s July 10, 2003 Motion to Compel
Discovery from Compaq ("Compaq Opp.") at 1-2). All "correspondences and
work product (regardless of whether it was or was not communicated to
Seagate)" were produced from Mr. Sekimura's files, as were communications
with Mr. Sekimura in Seagate's files. (Seagate Technology LLC's
Opposition to Convolve, Inc.'s Motion to Compel Discovery from Seagate
("Seagate Opp.") at 3). Moreover, two of Compaq's in-house attorneys were
deposed "on the subject of opinions of counsel," (Compaq Opp. at 2).
On May 23, 2003, the plaintiffs moved to compel discovery relating to
Mr. Dowler from Compaq. In an order dated September 18, 2003, the Special
Master held that by asserting the advice-of-counsel defense, Compaq had
waived the attorney-client and work product privileges with respect to "all opinions of counsel on the same
subject." (9/18/03 Order at 5). The Special Master ordered that Compaq
produce the "draft" opinion from Mr. Dowler and "all other documents
relating thereto," and he ordered Mr. Dowler to appear for a deposition.
(9/18/03 Order at 6-7). The Special Master excluded Compaq's trial
counsel, Fish & Neave, from his order, noting that trial counsel was the
subject of a separate motion. (9/18/03 Order at 5 n.3).
On July 10, 2003, the plaintiffs again moved to compel discovery from
Compaq with regard to the "work of Compaq and its various counsel, and
communications among Compaq and between Compaq and others, including its
counsel, which evidence relates to the infringement, validity and
enforceability of the patents-in-suit." (Convolve, Inc.'s Memorandum of
Points and Authorities in Support of its Motion to Compel Discovery from
Compaq ("Pl. Compaq Memo.") at 2). In an order dated September 23, 2003,
the Special Master ruled that Compaq must produce "all opinions
communicated to it. . . by any counsel, including trial counsel, up to
the date on which [Compaq] concluded [it] would rely on the Seagate
opinions." (9/23/03 Order at 13) (emphasis omitted). Additionally, the
Special Master ordered production of "all documents relied on or
considered by such counsel. . . in connection with any opinions or
information communicated to Compaq. . . . " (9/23/03 Order at 13). For
the post-reliance period, the Special Master ordered that "communications
between trial counsel [and Compaq]" be produced in camera for disclosure
of "contradictory opinions of trial counsel, or those casting doubt on earlier opinions." (9/23/03 Order at 14)
By letter dated October 1, 2003, Compaq moved for clarification of the
Special Master's order, requesting a ruling on the "scope of `opinion'
discovery contemplated by the Order." (Compaq Letter to Pasquale A.
Razzano dated Oct. 1, 2003 ("Compaq 10/1/03 Letter") at 3). Compaq
asserted that the term "opinion" should be construed to mean "a `formal'
opinion, whether written or oral, that was provided to a client in
response to a request from the client for an opinion." (Compaq 10/1/03
Letter at 1).
On October 1, 2003, the plaintiffs moved to compel discovery from
Seagate.*fn2 Contending that such discovery should extend beyond the
"opinions" referenced in the 9/23/03 Order (Convolve, Inc.'s Memorandum
of Points and Authorities in Support of its Motion to Compel Discovery
from Seagate ("Pl. Seagate Memo.") at 2 n.1), the plaintiffs sought to
internal communications on the same subjects as the
formal [Sekimura] opinions, communications between
Seagate and any attorneys on the same subjects as the
formal opinions, documents reflecting outside
counsel's opinion as to the same subjects of the
formal opinions, documents reviewed or considered, or
forming the basis for outside counsel's opinion as to
the subject matter of the formal opinions, and
documents reflecting when oral communications
concerning the subjects of the opinions occurred
between Compaq and outside counsel.
(Pl. Seagate Memo. at 2) (emphasis omitted). In a letter to the Special Master dated October 10, 2003, the
plaintiffs asserted that a conflict of interest may exist with respect to
Mr. Razzano, arising from the brief representation by Mr. Razzano's law
firm, Fitpatrick, Cella, Harper & Scinto, of a defendant in another
patent infringement action. (Plaintiffs' Letter to Pasquale A. Razzano
dated Oct. 10, 2003 ("Pl. 10/10/03 Letter")).*fn3
disagreement with the plaintiffs' position, the Special Master
nevertheless recused himself on October 14, 2003. (Razzano 10/14/03
Letter at 3).
By letter dated October 24, 2003, the plaintiffs requested that the
Honorable George B. Daniels set a pre-motion conference with respect to
several outstanding discovery disputes, including the parties'
disagreements over the Special Master's 9/23/03 Order. (Plaintiffs'
Letter to Hon. George B. Daniels dated Oct. 24, 2003 ("Pl. 10/24/03
Letter") at 1, 4). In their letter, the plaintiffs moved for modification
of the order such that the discovery ordered from Compaq not be "limited
to `opinions' and their supporting documents, but extend to other
evidence concerning the subject matter of the opinions, i.e., validity,
infringement or enforceability of the patents in suit." (Pl. 10/24/03
Letter at 4). On December 9, 2003, Judge Daniels referred the case to me for
pre-trial supervision, including resolution of the pending disputes.