United States District Court, S.D. New York
May 28, 2004.
CONVOLVE, INC., and MASSACHUSETTS INSTITUTE OF TECHNOLOGY, Plaintiffs, -against- COMPAQ COMPUTER CORP. and SEAGATE TECHNOLOGY, INC., Defendants
The opinion of the court was delivered by: JAMES FRANCIS, Magistrate Judge
MEMORANDUM AND ORDER
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.
A. Legal Standards
Under 35 U.S.C. § 284, a trial court may, at its discretion, increase
the damages awarded for patent infringement to a maximum of three times
the compensatory award assessed by a jury. Although not mandated by
statute, such enhanced damages have been approved "where the infringer
acted in wanton disregard of the patentee's patent rights, that is, where
the infringement is willful." Read Corp. v. Portec, Inc., 970 F.2d 816,
826 (Fed. Cir. 1992) (citations omitted); accord Thorn EMI North
America, Inc. v. Micron Technology, Inc., 837 F. Supp. 616, 620 (D. Del.
1993) (citing Mathis v. Spears, 857 F.2d 749, 754 (Fed. Cir. 1988)).
One important factor in determining the willfulness of an infringer's
actions is whether legal advice was sought before the infringement
occurred. See Variable-Parameter Fixture Development Corp. v. Morpheus
Lights, Inc., No. 90 Civ. 5593, 1994 WL 97572, at *1 (S.D.N.Y. March 18,
1994) ("[A] potential infringer having actual notice of another's patent
has an affirmative duty of due care that normally requires the potential
infringer to obtain competent legal advice before infringing or
continuing to infringe.") (quoting Minnesota Mining and Manufacturing
Co. v. Johnson & Johnson Orthopaedics, Inc., 976 F.2d 1559, 1580 (Fed. Cir. 1992)); Underwater Devices Inc. v. Morrison-Knudsen Co.,
717 F.2d 1380, 1389-90 (Fed. Cir. 1983). Where such advice is obtained,
reliance on the advice must be reasonable; the central focus in a
determination of willfulness is the infringer's state of mind. See Ortho
Pharmaceutical Corp. v. Smith, 959 F.2d 936, 944 (Fed. Cir. 1992);
Thorn, 837 F. Supp. at 620.
Where a party in a patent infringement action asserts the advice of
counsel as a defense to a claim of willful infringement, it waives the
attorney-client privilege as to the subject matter of the advice
received. See, e.g., Carl Zeiss Jena GmbH v. Bio-Rad Laboratories Inc.,
No. 98 Civ. 8012, 2000 WL 1006371, at *1 (S.D.N.Y. July 19, 2000);
Saint-Gobain/Norton Industrial Ceramics Corp. v. General Electric Co.,
884 F. Supp. 31, 33 (D. Mass. 1995). This rule follows from the general
principle that if privileged communications are placed "in issue" by
virtue of claims or defenses in litigation, then a "broad subject
matter waiver [of the privilege] is effected." Oxyn Telecommunications,
Inc. v. Onse Telecom, No. 01 Civ. 1012, 2003 WL 660848, at *6 (S.D.N.Y.
Feb. 27, 2003); accord In re Grand Jury Proceedings, 219 F.3d 175, 183
& n.4 (2d Cir. 2000) (citing 8 J. Wigmore, Evidence § 2327 (McNaughton
ed., 1961)). The rule seeks to promote fairness in patent litigation,
since "it would be fundamentally unfair to allow a party to disclose
opinions which support its position, and simultaneously conceal those
which are adverse." Saint-Gobain, 884 F. Supp. at 33.
As codified in Rule 26(b)(3) of the Federal Rules of Civil Procedure, the work product doctrine requires that documents "prepared in
anticipation of litigation or for trial" be produced only upon a showing
of: (1) "substantial need" by the discovering party and (2) "undue
hardship" if the documents must be obtained by other means. Even where
the required showing is made, Rule 26(b)(3) mandates that "the court
shall protect against disclosure of the mental impressions, conclusions,
opinions, or legal theories of an attorney." Thus, such "mental
impression" or "opinion" work product is accorded an even greater level
of protection. See United States v. Adlman, 134 F.3d 1194, 1197 (2d Cir.
1998); Lucrosch v. Concrel, 218 F.R.D. 41, 48 (N.D.N.Y. 2003).
In this case, Seagate has asserted, as a defense to the plaintiffs'
claim of willful patent infringement and enhanced damages under
35 U.S.C. § 284, that it relied on the 7/24/00, 12/29/00, and 2/21/03
Opinions from Mr. Sekimura. Seagate concedes that by asserting this
defense, it has waived the attorney-client privilege and work product
immunity with respect to Mr. Sekimura. (Seagate Opp. at 3). The dispute
concerns the extent of the waiver with respect to attorneys other than
The plaintiffs contend that Seagate has waived both protections with
respect to "all documents and other discovery that are relevant to the
subject matter of [the Sekimura] opinions." (Pl. Seagate Memo. at 1).
They seek both privileged communications and attorney work product
relating to the same subject matter with regard to "any attorneys"
retained by Seagate. (Pl. Seagate Memo. at 2). In light of the "heightened protections for privileged information
of trial counsel," the plaintiffs request that "documents and things
which post-date Seagate's reliance on the [Sekimura] opinions" be
produced in camera so that only "evidence contradicting or casting doubt
upon the [Sekimura] opinions" can be selected for disclosure. (Pl. Seagate
Memo. at 2, 15).
Construing the plaintiffs' motion as seeking "only the privileged
communications between trial counsel and Seagate and the work product of
Seagate's trial counsel" (Seagate Opp. at 3), Seagate contends that it
has not waived any privilege with respect to trial counsel because it
"never requested and never received reliance opinions from its trial
counsel." (Seagate Opp. at 9). Seagate further contends that it "retained
opinion counsel prior to litigation and has maintained its reliance on
that counsel," and that opinion counsel was neither selected nor
influenced by Seagate's trial counsel. (Seagate Opp. at 9-10). Seagate
argues that the plaintiffs' motion, if granted, would have a chilling
effect on communications with its trial counsel (Seagate Opp. at 2), and
that a bright line should be drawn such that unless a formal opinion is
issued by trial counsel, communications with that counsel should be
absolutely protected. (Tr. at 51-52).*fn4
1. Attorney-Client Privilege
As discussed above, a party that asserts the advice of counsel defense
to a claim of willful patent infringement waives the attorney-client privilege as to the subject matter of the advice
disclosed. This waiver extends not only to the attorney who rendered the
opinion creating the waiver, but also to all other attorneys who may have
advised or communicated with the client on the same subject matter. AKEVA
L.L.C. v. Mizuno Corp., 243 F. Supp.2d 418, 423 (M.D.N.C. 2003) ("Since
the waiver encompassed the subject matter of advice, that means that all
opinions received by the client must be revealed, even those opinions the
client receives from attorneys other than opinion counsel."); accord
Beneficial Franchise Co. v. Bank One, N.A., 205 F.R.D. 212, 217 (N.D.
Ill. 2001); D.O.T. Connectors, Inc. v. J.B. Nottingham & Co., No. 4:99
Civ. 311, 2001 WL 34104928, at *2 (N.D. Fla. Jan. 22, 2001); Carl Zeiss,
2000 WL 1006371, at *1; Fonar Corp. v. Johnson and Johnson, 227 U.S.P.Q.
886, 887 (D. Mass. 1985). As explained by the Court in AKEVA:
Practical reasons exist for this rule. The exercise of
due care requires a potential infringer to act
reasonably. The infringer may not pick and choose
between what opinions will be relied upon and which
will be discarded. The totality of the circumstances
test requires that all knowledge gained by the
infringer relating to the advice subject matter must
be revealed so that the factfinder can make its own
determination as to whether the reliance was
243 F. Supp.2d at 423.
Here, Seagate has placed at issue the advice of its opinion counsel,
Mr. Sekimura, and it has produced the otherwise privileged opinions
communicated to Seagate. Seagate has therefore waived the privilege with
respect to all communications not only with Mr. Sekimura, but also with
its other attorneys, including trial counsel, concerning the subject matter of Mr. Sekimura's advice. Although
Seagate contends that it did not receive any "reliance opinions" from its
trial counsel, this representation does not foreclose the possibility
that trial counsel communicated informal opinions or oral advice. The
subject matter waiver arising from the advice-of-counsel defense clearly
extends to all such "communications," not just formal or written
opinions. See Beneficial, 205 F.R.D. at 217 ("[A] party must produce not
only other communications and opinions of the same attorney, but also
privileged information from other counsel involving the same subject.");
D.O.T., 2001 WL 34104928, at *2 ("The waiver extends to communications
between [the defendant] and any attorney, including trial counsel. . .
"); Micron Separations, Inc., v. Pall Corp., 159 F.R.D. 361, 363 (D.
Mass. 1995) (the advice-of-counsel defense effects a "`subject matter'
waiver i.e., a waiver of all communications on the same subject
With respect to the temporal scope of Seagate's waiver, it is well
established that a potential infringer having "actual notice" of
another's patent has a duty to exercise reasonable care, which normally
includes obtaining "competent legal advice." Minnesota Mining, 976 F.2d
at 1580. Since infringement is a continuing activity, this requirement of
reasonable care is a continuing duty, meaning that the nature of any
legal advice sought remains relevant "during the entire course of the
alleged infringement." AKEVA, 243 F. Supp.2d at 423; accord Micron, 159
F.R.D. at 363 ("[W]hen a party is charged with wilful infringement, what
is relevant is that party's state of mind during the time when it is taking actions which
allegedly infringe the patent."). Accordingly, a waiver of the privilege
resulting from the advice-of-counsel defense extends throughout the
period of infringement, "including up through trial." AKEVA, 243 F.
Supp.2d at 423; accord D.O.T., 2001 WL 34104928, at *2 & n.4.*fn5
Here, the plaintiffs allege that Seagate learned of the `635 and `267
patents in 1995 and 1997 respectively (Pl. Seagate Memo. at 3; Am.
Compl., 11 22, 34), and that they notified Seagate of its alleged
infringement of the `473 patent shortly after the patent issued in
November 2001. (Tr. at 72). It is undisputed that Seagate's alleged
infringement namely, its manufacture of computer disk drives using
technology that was allegedly stolen from the plaintiffs is
continuing. (Am. Compl., ¶¶ 58-62, 111, 117). Accordingly, Seagate's
waiver of the privilege resulting from its advice-of-counsel defense
should extend from the time it became aware of the plaintiffs' patents
until such time in the future that Seagate ceases its alleged
infringement. AKEVA, 243 F. Supp.2d at 423; Dunhall, 994 F. Supp. at 1206
(privilege is waived for the "entire time period of the alleged infringement").
Next, the plaintiffs propose a subject matter limitation of Seagate's
waiver such that discovery regarding trial counsel for the
"post-reliance" period would be limited to "such evidence contradicting or
casting doubt upon the [Sekimura] opinions," selected after in camera
review. (Pl. Seagate Memo. at 15). This proposal mirrors the approach
taken by the Special Master with respect to Compaq in his 9/23/03 Order.
(9/23/03 Order at 14). While there is some case law supporting the
"contradictory opinions" approach, see, e.g., Beneficial, 205 F.R.D. at
218; Thermos Co. v. Starbucks Corp., No. 96 Civ. 3833, 1998 WL 781120, at
*4-5 (N.D. Ill. Nov. 3, 1998), such a limitation does not comport with
the nature of Seagate's "subject matter waiver," which extends to the
entire subject matter of Mr. Sekimura's opinions infringement,
validity, and enforcement of the patents at issue. The waiver would
therefore encompass information that is both consistent with and contrary
to Mr. Sekimura's advice. See D.O.T., 2001 WL 34104928, at *2; Dunhall,
994 F. Supp. at 1205. Moreover, a waiver that encompasses both negative
and positive information would not cause unfairness to Seagate, since the
additional disclosure of favorable evidence would only bolster its
Nevertheless, care should be taken to minimize the disclosure of
communications pertaining to trial or litigation strategy. To be sure,
trial counsel's advice that undermines the reasonableness of the client's
reliance on advice of opinion counsel must be disclosed even if it is communicated in the context of trial
preparation. But, at the same time, trial counsel will surely address with
the client trial strategy concerning validity, infringement, and
enforcement in ways that do not implicate the advice-of-counsel defense.
Therefore, to the extent that Seagate wishes to withhold or redact
documents that would reveal trial strategy or planning, it shall submit
those documents for my in camera review.
For the foregoing reasons, the plaintiffs' motion with respect to
Seagate's waiver of the attorney-client privilege is granted. Seagate
shall produce all documents, answers to interrogatories, and deposition
testimony concerning communications between Seagate (or its in-house
counsel) and any of its attorneys, including trial counsel, with respect
to the subject matter of Mr. Sekimura's opinions, i.e., the infringement,
validity, and enforcement of the X635, `267, and 473 patents.*fn6 The
time period of the waiver runs from the time Seagate became aware of the
patents at issue and continues until such time as Seagate's alleged
infringement ends. Any communications between Seagate and its trial
counsel concerning the subject matter of Mr. Sekimura's opinions that
also relate to trial strategy or planning shall be submitted for my
review. 2. Work Product Immunity
While it is well established that assertion of the advice-of-counsel
defense in patent litigation creates a subject matter waiver with respect
to all privileged communications, the case law is inconsistent as to
whether the waiver extends to an attorney's work product. The central
split in authority pertains to the issue of "uncommunicated work product,"
that is, work product that is not disclosed to the client.*fn7 On one
hand, the cases that decline to order disclosure of attorney work product
reason that since the primary focus in an advice-of-counsel defense is
the client's state of mind, an attorney's work product is not relevant
unless it is communicated to the client. See, e.g., Nitinol Medical
Technologies, Inc. v. AGA Medical Corp., 135 F. Supp.2d 212, 218 (D.
Mass. 2000); Thorn, 837 F. Supp. at 622. Cases to the contrary reason
that because the standards for "admissibility and discoverability"
differ, all evidence "reasonably calculated to lead to the discovery of
admissible evidence" should be disclosed, including circumstantial
evidence in an attorney's files of information that might have been
communicated to the client. Dunhall, 994 F. Supp. at 1204 (citing
Fed.R.Civ.P. 26(b)(1)). Such evidence could include information shedding
light on additional oral advice that may have been given, Matsushita
Electronics Corp. v. Loral Corp., No. 92 Civ. 5461, 1995 WL 527640, at *2 (S.D.N.Y. Sept. 7, 1995), or unfavorable information where the
inference can be drawn that it was conveyed to the client, Electro
Scientific Industries, Inc. v. General Scanning, Inc., 175 F.R.D. 539,
545 (N.D. Cal. 1997).
In cases where separate and independent opinion counsel render the
opinion underlying the advice-of-counsel defense, some courts have ordered
work product disclosure only from that counsel, absent special
circumstances. As explained by the court in AKEVA, "courts have expressed
a concern about allowing a procedure that tempts attorneys and clients to
cook up an advice opinion based mainly on its palatability for the trial
while withholding unfavorable information." 243 F. Supp.2d at 424; accord
Dunhall, 994 F. Supp. at 1204 ("A narrowly circumscribed waiver, at the
discovery stage, creates a danger of a defendant utilizing favorable
opinion letters while allowing unfavorable evidence to languish in their
attorney's files under the protection of the work product doctrine.").
Nevertheless, the AKEVA court declined to order full work product
disclosure for trial counsel because the defendants "[were] not asserting
reliance on the opinion of trial attorneys, but only the opinion of an
attorney separately retained for his opinion." 243 F. Supp.2d at 422. The
[T]he broad waiver rule requiring full disclosure of
documents, even if they were not given to the client,
is best suited to the situation where the opinion
counsel is trial counsel. In that situation, the
opinion counsel has a dual role in advising the client
and, thus, there is a greater need to make sure the
opinion is not tainted by bias or other influences. .
. . To the extent that a broader waiver of work
product protection might also disclose the trial
attorney has been orchestrating a sham opinion with
opinion counsel, the Court finds that possibility to be sufficiently remote and more
difficult to orchestrate.
Id. at 424.
The circumstances of this case are similar to those of AKEVA. Here,
Seagate has separately retained independent opinion counsel to render
advice on which Seagate relies as the basis for its advice-of-counsel
defense. Seagate contends and the plaintiffs do not dispute that its
trial counsel played no role in selecting Seagate's opinion counsel and
did not influence the drafting of Mr. Sekimura's opinions. (Seagate Opp.
at 9-10).*fn8 Where there is no evidence that trial and opinion counsel
have conspired to create a "sham opinion" to gain an unfair advantage in
litigation, production of the un-communicated work product of trial
counsel is unwarranted. Compare AKEVA, 243 F. Supp.2d at 424 (ordering
full disclosure of privileged communications but not work product of
trial counsel) with K.W. Muth Co. v. Bing-Lear Manufacturing Group,
L.L.C., 219 F.R.D. 554, 577 (E.D. Mich. 2003) (work product discoverable
where defendant was "less than forthright" in disclosing oral advice of
trial counsel); Electro Scientific, 175 F.R.D. at 540, 545 (work product
waived where facts showed substantial communication between trial and
opinion counsel). The rationales advanced for a broader waiver of the work product
immunity do not withstand scrutiny, at least in these circumstances. For
example, the observation that the standard for discovery is broader than
that for admissibility, see Dunhall, 994 F. Supp. at 1204, is accurate
but immaterial, since the work product doctrine is specifically intended
to create an immunity from discovery. Likewise, the contention that
uncommunicated work product must be disclosed for fear that witnesses are
not candid about what was communicated, see Electro Scientific, 175
F.R.D. at 545, is an argument that proves too much. Attorney work product
could frequently be useful in challenging the credibility of a witness,
but the mere suspicion that that might be the case is an insufficient
basis for requiring its disclosure. Finally, while some courts that
endorse a waiver of trial counsel's work product nevertheless seek to
limit it to work product created before the lawsuit was filed, see
Dunhall, 994 F. Supp. at 1205-06; Electro Scientific, 175 F.R.D. at 546,
such a temporal constraint is illogical since a defendant's state of mind
remains relevant as long as the defendant continues its alleged
For these reasons, the plaintiffs' motion to compel discovery withheld
on the basis of the work product privilege is denied. Seagate's trial
counsel is not obligated to disclose any work product, uncommunicated to
Seagate, relating to the subject matter of the opinions issued by Mr.
Sekimura.*fn9 However, the communicated work product of any of Seagate's attorneys is discoverable under
Seagate's waiver of the attorney-client privilege. Such communicated work
product shall include materials disclosing the fact or substance of
Seagate's (or in-house counsel's) communications with any outside
counsel; accordingly, this order encompasses the plaintiffs' request for
"documents reflecting oral communications . . . between [Seagate] and
outside counsel" that relate to the subject matter of the Sekimura
opinions. (Pl. Seagate Memo. at 2).
Prior to seeking discovery from Seagate, the plaintiffs filed a similar
motion concerning Compaq, requesting privileged communications and
attorney work product with respect to attorneys other than Mr. Sekimura.
The plaintiffs sought the "work of Compaq and its various counsel," and
"communications among Compaq and between Compaq and others, including its
counsel," relating to the subject matter of Mr. Sekimura's opinions. (Pl.
Compaq Memo. at 2). As with Seagate, the plaintiffs contended that Compaq
waived both the attorney-client privilege and work product immunity with
respect to all of its attorneys, including trial counsel. (Pl. Compaq
Memo. at 5-7). The plaintiffs argued that any "temporal limitation" on Compaq's waiver should extend "at least through the
date of reliance [on Mr. Sekimura's opinions]," since those opinions were
received long after suit was filed;*fn10 the plaintiffs argued that they
were "entitled to explore what was known to Compaq at and around the time
it allegedly relied upon that opinion." (Pl. Compaq Memo. at 8, 10).
In its opposition papers, Compaq conceded waiver with respect to Mr.
Sekimura's opinions, but argued that its waiver "should only extend to
the opinions in [Mr. Sekimura's] opinion letter and not to every
privileged communication or work product information that relates to the
patents-in-suit." (Compaq Opp. at 3, 9). Compaq objected to discovery of
any communications or work product from trial counsel, asserting that
"[t]he opinions on which Compaq is relying were not drafted by Compaq's
trial counsel, nor were they drafted by Compaq's outside counsel. There
is no connection between the opinions and Compaq's trial counsel."
(Compaq Opp. at 4). It also argued that "Compaq has not received any
contrary opinion or any information that would call into question or cast
doubt on the opinions in [Mr. Sekimura's opinions]." (Compaq Opp. at 5).
The Special Master issued a ruling on September 23, 2003, holding that
Compaq had waived the privilege as to "any counsel, including trial counsel." (9/23/03 Order at 13). He ordered the
disclosure of all "opinions" communicated to Compaq by any such counsel,
as well as related work product, concerning the subject matter of Mr.
Sekimura's opinions. He also imposed temporal and subject matter
limitations, ordering full disclosure for the period "up to the date on
which [Compaq] concluded [it] would rely on the Seagate opinions," and
disclosure of "contradictory opinions. . . or those casting doubt on
earlier opinions," upon in camera review, for the post-reliance period.
(9/23/03 Order at 13-14). The parties subsequently moved for
clarification and modification of the 9/23/03 Order.
1. Law of the Case Doctrine
The "law of the case" doctrine posits that "when a court decides upon a
rule of law, that decision should [generally] continue to govern the same
issues in subsequent stages in the same case." Schwartz v. Chan,
142 F. Supp.2d 325, 329 (E.D.N.Y. 2001) (quoting Arizona v. California,
460 U.S. 605, 618 (1983)) (alteration in original). However, while the
doctrine expresses a practice "generally to refuse to reopen what has
been decided," it is "at best, a discretionary doctrine which does not
constitute a limitation on the court's power." Devilla v. Schriver,
245 F.3d 192, 197 (2d Cir. 2001) (internal quotations and citations
omitted); accord Arizona, 460 U.S. at 618 ("Law of the case directs a
court's discretion, it does not limit the tribunal's power."). A prior
decision should not be revisited "absent cogent or compelling reasons."
Rezzonico v. H & R Block, Inc., 182 F.3d 144, 149 (2d Cir. 1999) (internal quotations and citation omitted).
Since the Special Master has already ruled on the plaintiffs' motion
concerning Compaq, his 9/23/03 Order constitutes the "law of the case"
for this Court. However, strict adherence to the Order may be
unwarranted, as the Special Master has utilized a markedly different
approach to the advice-of-counsel issues in this case from the one adopted
above with respect to Seagate. Following the Special Master's ruling
would therefore create inconsistent outcomes as between the two
defendants and possibly cause confusion in the conduct of discovery.
Moreover, the 9/23/03 Order does not comport with the case law as
construed above. Specifically, while the Special Master correctly found
that by asserting the advice-of-counsel defense, Compaq waived the
attorney-client privilege with respect to "any counsel, including trial
counsel," he ordered only that any "opinions" of such counsel
communicated to Compaq be disclosed, and that such disclosure be limited
to the period preceding Compaq's decision to rely on Mr. Sekimura's
opinions; only "contradictory opinions" were ordered produced for the
post-reliance period. (9/23/03 Order at 13-14).
As previously discussed, the limitation of discovery to "opinions"
communicated from counsel is inconsistent with the broad scope of a
"subject matter waiver," which extends to "all communications on the same
subject matter." Micron, 159 F.R.D. at 363. Moreover, the pre- and
post-reliance distinction referenced in the Order is unsupported by any
case authority, and appears to be an effort by the Special Master to reconcile the case law that sets a
temporal limit as of the time of suit with the fact that "the opinions
involved [in this case] were rendered long after the suit was filed."
(9/23/03 Order at 13). In light of Compaq's continuing duty to take
reasonable care, however, any advice of counsel sought or rendered is
relevant "during the entire course of the alleged infringement" up to the
point of trial. AKEVA, 243 F. Supp.2d at 423. Finally, the limitation to
"contradictory opinions" in the post-reliance period does not comport
with Compaq's "subject matter waiver," which pertains to both positive
and negative information received from counsel.
2. Procedural Issues
Compaq has raised two procedural objections that, if well-founded,
could affect the weight that should be given to the law of the case
doctrine. Namely, Compaq contends that the Special Master already issued
a ruling on its motion for clarification during a telephone conference on
September 26, 2003 (Compaq's 10/1/03 Letter at 1; Tr. at 43-44), and that
the plaintiffs' motion for modification was untimely (Compaq's Letter to
Hon. George B. Daniels dated October 29, 2003 ("Compaq 10/29/03 Letter")
at 1-2, 5). If Compaq is correct, then the Special Master's Order would
have been beyond my authority to review.
However, neither of Compaq's procedural objections has merit. With
respect to the September 26 telephone conference, the Special Master
unequivocally stated: "Putting aside for the moment the scope of what I
intended to include within the term Opinion, [Compaq's] e-mail of Sept. 29 accurately sets forth our discussion [on
September 26]. The scope of `Opinion' will be dealt with in response to
the motion for clarification." (E-mail from Pasquale Razzano to Robert
W. Morris and others dated Sept. 30, 2003) (emphasis added).
Accordingly, Compaq's motion for clarification was not decided by the
Special Master on September 26, 2003. With respect to timeliness, Compaq
does not dispute that the Special Master extended the time to file
objections to his ruling to October 24, 2003. (Compaq's 10/29/03 Letter
at 5). While the plaintiffs' October 24 letter to Judge Daniels may have
been styled as a request for a pre-motion conference under Local Rule
37.2 rather than a direct appeal of the Special Master's order under Rule
53 of the Federal Rules of Civil Procedure, it nevertheless raised
objections to the underlying substance of the Special Master's ruling.
The plaintiffs' motion for modification was therefore timely.
3. Attorney-Client Privilege
As discussed above, a waiver of the privilege arising from the
advice-of-counsel defense waives the privilege as to the subject matter
of the advice rendered. This waiver pertains not only to the attorney
rendering the advice but also to all other attorneys who may have
communicated with Compaq about the subject matter of the advice.
Moreover, since a potential infringer has a continuing duty to seek legal
advice on patents of which it is aware, the nature of the advice received
and the resulting waiver of the privilege extends throughout the period
of alleged infringement. In light of these principles, Compaq's initial contention that the
scope of its waiver extends only to the opinions set forth in Mr.
Sekimura's reports has no merit. Under Compaq's "subject matter waiver,"
any communications it may have had with counsel on the issues of
infringement, validity, and enforceability are discoverable, even if
those communications do not refer specifically to Mr. Sekimura's reports.
Moreover, the fact that Compaq's trial counsel did not draft Mr.
Sekimura's opinions has no bearing on the scope of waiver, since the
independent advice of trial counsel concerning the subject matter in
question would be probative of Compaq's state of mind.
With respect to temporal limitations, the time period of a waiver in
continuing infringement cases extends, as noted above, from the time a
potential infringer becomes aware of another's patent until the alleged
infringement ends. Here, the plaintiffs have alleged that Compaq learned
of their `635 and `267 patents in 1998 (Pl. Compaq Memo. at 3; Am.
Compl., /?/ /?/ 23-26, 34), and that they notified Compaq of its alleged
infringement of the `473 patent in November 2001. (Tr. at 9). It is
undisputed that Compaq's alleged infringement is continuing. Accordingly,
Compaq's waiver should extend from the time it became aware of the
plaintiffs' patents until it ceases the alleged infringement.
Finally, a subject matter limitation to "contradictory opinions" is
unwarranted in this case. As discussed above, Compaq's waiver extends to
all communications from counsel, not just contrary advice, on the subject
matter of Mr. Sekimura's opinions. Moreover, the plaintiffs need not rely on Compaq's
representation that no contradictory information was received, as they
are entitled to draw their own conclusions based on the discovery
produced. See Dunhall, 994 F. Supp. at 1205 (discovery must not involve
"gatekeeping by defense counsel").
Accordingly, the plaintiffs' motion to compel discovery withheld on the
basis of the attorney-client privilege is granted with respect to Compaq.
Compaq shall produce all documents, answers to interrogatories, and
deposition testimony concerning communications between Compaq (or its
in-house counsel) and any of its attorneys, including trial counsel, with
respect to the subject matter of Mr. Sekimura's opinions, i.e., the
infringement, validity, and enforcement of the `635, `267, and `473
patents. The time period of the waiver shall begin at the time Compaq
became aware of the patents at issue and shall not end until such time
Compaq's alleged infringement ends. Any communications between Compaq and
its trial counsel concerning the subject matter of Mr. Sekimura's
opinions but also containing or relating to trial strategy or planning
may be submitted to the Court for in camera review.
4. Work Product Immunity
As discussed above, discovery of work product, while sometimes
necessary to uncover circumstantial evidence of information communicated
to the client, is most appropriate in the case of opinion counsel who has
been retained to render an opinion on the patents at issue. Where there
is no evidence of collusion between trial and opinion counsel, disclosure of trial counsel's work product is
unwarranted. As with Seagate, Compaq relies on the separate and
independent advice of Mr. Sekimura as the basis of its advice-of-counsel
defense, and it has unequivocally stated that its trial counsel has "no
connection" with Mr. Sekimura's opinions. Accordingly, work product
disclosure from Compaq's trial counsel is unwarranted.
During a hearing before this Court, plaintiffs' counsel added, "[I]f
trial counsel is feeding a defendant information that says go get an
opinion because you're probably going to have to pay a reasonably royalty
here,. . . [t]hat's not a reasonable opinion. It may be a perfectly
reasonable opinion bought and paid for, but that's not the law." (Tr. at
61-62). As an example, plaintiffs' counsel noted, "Let's say that . . .
prior to receiving an opinion on the ['473] patent, trial counsel said
let's sit down together and figure out [how] not to infringe this patent,
let's design around it. And the opinion of counsel that you get months
later says that you didn't infringe before;. . . I think those are two
pretty different things." (Tr. at 62). Plaintiffs' counsel argued,
"[T]hat happened here," alleging that in October 2002, Compaq's trial
counsel "worked with Compaq to design around the ['473] patent," and that
subsequently, Compaq decided to rely on Mr. Sekimura's non-infringement
opinion in February 2003. (Tr. at 62).
The representations of plaintiffs' counsel do not support a finding
that work product privilege was waived with respect to Compaq's trial counsel. Even assuming that trial counsel rendered
contrary advice prior to Compaq's reliance on Mr. Sekimura's opinions,
that fact does not show that trial counsel helped obtain a "sham" or
biased opinion from Mr. Sekimura, or that trial counsel colluded with Mr.
Sekimura to produce an opinion favorable to Compaq in this litigation. To
the extent that inconsistent advice was rendered, the nature and
substance of that advice can be explored, as discussed above, through
discovery of privileged communications between Compaq and its trial
Accordingly, the plaintiffs' motion to compel discovery withheld on the
basis of the work product privilege is denied with respect to Compaq.
Compaq's trial counsel is not obligated to produce any work product,
uncommunicated to Compaq, relating to the subject matter of the opinions
issued by Mr. Sekimura. However, the communicated work product of any of
Compaq's attorneys is discoverable under Compaq's waiver of the
attorney-client privilege. Such communicated work product shall include
materials disclosing the fact or substance of Compaq's (or in-house
counsel's) communications with any outside counsel.
For the reasons set forth above, I grant the plaintiffs' motions to
compel with respect to both defendants as to discovery withheld on the
basis of the attorney-client privilege, but not as to that withheld on
the basis of work product immunity. The defendants shall respond to the
plaintiffs' discovery requests in accordance with this Memorandum and
Order. SO ORDERED.