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Newriver, Inc. v. Newkirk Products

December 4, 2008

NEWRIVER, INC., PLAINTIFF,
v.
NEWKIRK PRODUCTS, INC., DEFENDANT.



The opinion of the court was delivered by: Randolph F. Treece United States Magistrate Judge

MEMORANDUM-DECISION and ORDER

On November 30, 2006, NewRiver, Inc. (NewRiver) commenced a patent infringement case against Newkirk Products, Inc. (Newkirk) in the United States District Court for the District of Massachusetts. Dkt. No. 1-2, Lee Palmatter, Esq., Decl., dated July 11, 2008, Ex. A, Compl. Count One of the Complaint pleads that Newkirk's infringement of NewRiver's patent '635 was knowingly and wilful. Compl. at ¶ 20. On April 5, 2007, Newkirk filed its Answer. Palmatter Decl., Ex. B, Answer. Approximately a year later, on June 19, 2008, NewRiver served subpoenas upon Attorneys Robert Heslin and Wayne F. Reinke, who either work or reside within the Northern District of New York. Id. Exs. C & D.

Newkirk moves this Court to quash these subpoenas and to issue a protective order. Dkt. Nos. 1, 1-3, Def.'s Mem. of Law, dated July 11, 2008. NewRiver opposes Newkirk's Motion. Dkt. Nos. 4, Pl.'s Mem. of Law, dated Aug. 19, 2008, & 4-7, John L. Strand, Esq., Decl., dated Aug. 18, 2008. Newkirk filed a Reply to NewRiver's Opposition. Dkt. Nos. 7, Def.'s Reply Mem. of Law, dated Sept. 9, 2008, & 8, Lee Palmateer, Esq., Decl., dated Sept. 9, 2008.

For the reasons stated below, Newkirk's Motion is denied.

I. BACKGROUND

The parties essentially agree to these basic facts. As noted above, NewRiver accuses Newkirk, inter alia, of wilful patent infringement. During the course of discovery, especially with regard to the element of willfulness, Newkirk produced written opinions of non-infringement (the Opinions) by its attorneys, Heslin Rothenberg Farley & Mesti P.C., as well as other attorney-client communications related to the Opinions. Attorneys Robert Heslin and Wayne Reinke authored those Opinions. In reliance upon the advice of counsel defense, that being Newkirk's decision to rely on the non-infringement opinions in defense of the allegations of wilful infringement, Newkirk has also produced work product referencing such previously disclosed communications. Dkt. No. 8, Palmateer Reply Decl. at ¶ 3. We note that Attorney Heslin is also acting as one of Newkirk's trial counselors.

By voluntarily surrendering these documents, NewRiver argues that Newkirk has waived its attorney-client privilege, and possibly work product protection, with regard to the subject matter of the Opinions. There have been depositions of Newkirk's employees but, nonetheless, NewRiver seeks the depositions of these opinion counselors. Accordingly, on June 19, 2008, NewRiver served subpoenas to have these attorneys deposed on July 16, 2008, however, prior to the latter date, Newkirk filed this Motion to quash the subpoenas.

II. ANALYSIS

To appreciate what is at stake, it is incumbent to enunciate the current state of the law regarding wilful infringement.

[P]roof of willful infringement permitting enhanced damages requires at least a showing of objective recklessness. [T]o establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent. If this threshold objective standard is satisfied, the patentee must also demonstrate that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer.

Voda v. Cordis Corp., 536 F.3d 1311, 1327 (Fed. Cir. 2008) (quoting In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (internal quotation marks and citations omitted).

Under the objectively reckless standard, the state of mind of the accused infringer is not relevant. In re Seagate Tech., LLC, 497 F.3d at 1371. Willfulness will depend on an infringer's conduct prior to filing the complaint. Id. at 1374 (prelitigation conduct).

Often, as it appears to be the facts in our case, an accused infringer asserts an advice of counsel defense. By asserting this defense, the accused wilful infringer attempts to establish that "due to reasonable reliance on advice from counsel, its continued accused activities were done in good faith." In re Seagate Tech., LLC, 497 F.3d at 1369. Once a party chooses to rely upon the advice of counsel, the attorney-client privilege with regard to all attorney-client communication related to the same subject matter is waived. In re EchoStar Commc'n Corp., 448 F.3d 1294, 1299 & 1301 (Fed. Cir. 2006). This waiver, however, does not grant carte blanche the accuser's ability to rummage through all of the attorneys' files or to have unfettered access to the defense litigation strategies. Id. at 1303. Because counsel's opinion is not critical for its legal correctness, it is important to the inquiry whether it is 'thorough enough, as combined with other factors, to instill a belief in the infringer that a court might reasonably hold the ...


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