The AIPLA’s Model Patent Jury Instructions on willful infringement provide that “the totality of circumstances” surrounding alleged patent infringement must be considered by a jury in its determination. These circumstances include “whether [the accused] intentionally copied the claimed invention or a product covered by [the patentee]’s patent, whether [the accused] exercised due care to avoid infringing the patent, whether [the accused] [relied on competent legal advice], and whether [the accused] presented a substantial defense to infringement.” If an accused infringer reasonably relied on competent advice of counsel indicating that a patent is not infringed, invalid, or unenforceable – whether or not the advice is ultimately deemed to be erroneous – then the advice evidences that the infringement was not willful and hence, damages are not to be amplified.

The EchoStar Issue

The Federal Circuit took up the issue of attorney-client privilege waiver in the controversial EchoStar case. In re EchoStar Comm. Corp., 448 F.3d 1294 (Fed. Cir. 2006). Here, EchoStar’s in-house counsel advised that its products did not infringe a patent owned by TiVo. When TiVo later sued EchoStar, EchoStar sought additional advice from outside counsel Merchant and Gould P.C. and raised the advice-of-counsel defense against claims of willful infringement. The court issued a landmark ruling, holding that “when EchoStar chose to rely on the advice of in-house counsel, it waived the attorney-client privilege with regard to any attorney-client communication relating to the same subject matter, including communications with counsel other than in-house counsel, which would include communications with Merchant and Gould.” EchoStar, 448 F.3d at 1299. According to the court, in order to prevent abuses of the attorney-client privilege waiver as

both a sword [by waiving the privilege as to favorable opinions] and a shield [by asserting the privilege as to damaging communications], . . . when a party defends its actions by disclosing an attorney-client communication, it waives the attorney-client privilege as to all such communications regarding the same subject matter.

EchoStar, 448 F.3d at 1301. This holding effectively left accused infringers vulnerable to the possibility of having to produce any and all communications relating to the subject of patent infringement – even communications with litigation counsel in preparation for trial. The court further articulated that “when an alleged infringer asserts its advice-of-counsel defense regarding willful infringement of a particular patent, it waives its immunity for any document or opinion that embodies or discusses a communication to or from it concerning whether that patent is valid, enforceable, and infringed by the accused.” EchoStar, 448 F.3d at 1304.

Notably, the EchoStar court did not squarely address whether the waiver extends beyond the specific subject matter of the opinion to include all defenses to willful infringement. The Federal Circuit underscored its reasoning with a cautionary comment that “[b]y asserting the advice-of-counsel defense to a charge of willful infringement, the accused infringer and his or her attorney do not give their opponent unfettered discretion to rummage through all of their files and pillage all of their litigation strategies.” EchoStar, 448 F.3d at 1303.

In the aftermath of EchoStar, district courts have struggled with striking the appropriate balance as to the scope of attorney-client privilege to be waived. Indeed, the Federal Circuit has been receptive to the corresponding inconsistencies and recently granted en banc reconsideration of this issue in In re Seagate Tech. LLC, __ Fed.Appx. (Fed. Cir. 2007) (en banc).

Post-EchoStar Approaches

One of the first district court reactions to EchoStar came from the District of Columbia, in Intex Recreation Corp. v. Team Worldwide Corp., 439 F.Supp.2d 46 (D.D.C. July 14, 2006). The court interprets EchoStar as endorsing an expansive scope of waivable attorney-client privilege:

the Federal Circuit did not expressly hold that when an alleged infringer utilizes advice of counsel as a defense to willful infringement of a patent, the waiver of the attorney-client privilege and work product immunity associated with that opinion is limited to the specific defenses (validity, enforceability, infringement) addressed in counsel’s opinion…[Rather, the Federal Circuit] stated that the discoverable documents consist of communications “concerning the subject matter of the case[.]” EchoStar, 448 F.3d at 1302. The use of the phrase “subject matter of the case” rather than “subject matter of the opinion” suggests that the Federal Circuit contemplated a broad waiver rather than the limited waiver envisioned by [Plaintiff].

Intex, 439 F.Supp.2d at 50. According to Intex, EchoStar mandates that a waiver of attorney-client protections in reliance on the advice of opinion counsel necessarily waives “the attorney-client and work product privileges for any document or opinion that embodies or discusses a communication to or from it concerning whether [the patent-in-suit] is valid, enforceable, and infringed.” Intex, 439 F.Supp.2d at 51.

Conversely, the Delaware District Court pared down EchoStar‘s potentially broad-brush ruling on the scope of attorney-client privilege in Ampex Corp. v. Eastman Kodak Co., No. 04-1373, 2006 U.S. Dist. LEXIS 48702 (D. Del. July 17, 2006). Here, Plaintiff sought communications between Defendant and its trial counsel bearing on the subject of infringement by broadly asserting that in light of EchoStar, “there is no temporal limitation on the waiver of privilege … nor is there any distinction between advice received from trial counsel and that received from opinion counsel.” Ampex, 2006 U.S. Dist. LEXIS 48702, at *6. The court rejects this argument:

the EchoStar court’s use of the word “such” to modify the phrase “communications regarding the same subject matter” indicates that the court intended a far more limited meaning than Ampex wishes to give it … [T]he court is emphasizing the unfairness of allowing a party to hold back an attorney’s opinion that is inconsistent with a different opinion it chooses to show the world. [citation]. The modified “such” thus strongly implies that the type of communications being discussed are opinions expressed in a manner comparable to the opinion that is disclosed.

Ampex, 2006 U.S. Dist. LEXIS 48702, at *8-9. The court affirmatively preserves the attorney-client privilege by hypothesizing, “if all attorney-client discussions touching on the same subject were to be viewed as ‘advice’ or ‘opinions’ on a par with the legal opinions that were at issue in EchoStar, the court’s comments would have to be understood as demolishing the practical significance of the attorney-client privilege.” Ampex, 2006 U.S. Dist. LEXIS 48702, at *10. According to this court, it would require more than an inference from the Federal Circuit’s decision in EchoStar to effect “a wholesale revision of the historical understanding of the attorney-client privilege” and convince him that the bedrock principle of attorney-client privilege is on its way to complete erosion. Ampex, 2006 U.S. Dist. LEXIS 48702, at *11.

Another patent-heavy jurisdiction grappling with the reach of attorney-client privilege is the Eastern District of Texas. In Autobytel, Inc. v. Dealix Corp., No. 2:04-CV-338, 2006 U.S. Dist. LEXIS 72032 (E.D. Tex. Oct. 3, 2006), the court declined to interpret EchoStar as requiring a broad subject matter waiver, when it announced, “[t]he Court is not persuaded that EchoStar mandates waiver as to unenforceability, validity, and non-infringement when an advice-of-counsel defense of non-infringement only is asserted.” Autobytel, 2006 U.S. Dist. LEXIS 72032, at *13-14.

In its reasoning, the court took into account the legal considerations behind waiving the advice-of-counsel privilege. “The purpose of the advice-of-counsel privilege waiver is to allow an inquiry into the infringer’s state of mind regarding the infringer’s reasonable reliance on its advice of counsel.” Autobytel, 2006 U.S. Dist. LEXIS 72032, at *15. Where a Defendant reasonably believed that the accusations of infringement were without merit, and that belief was based on the competent advice of counsel, the Defendant should not be required to expose its arsenal of communications concerning critical trial strategy. Autobytel, 2006 U.S. Dist. LEXIS 72032, at *15-16. Given that non-infringement, invalidity, and unenforceability are separate legal defenses used against allegedly infringing behavior, the court declined to blur the distinction and expand the scope of waivable subject matter to include disclosure of communication regarding all three issues. Autobytel, 2006 U.S. Dist. LEXIS 72032, at *15-16.


While the EchoStar court pronounced its respect for the long-standing principle of attorney-client privilege and explicitly warned against granting Plaintiffs “unfettered discretion to rummage through all of their [opponent’s] files and pillage all of their litigation strategies,” the court seems to have created more confusion by leaving ambiguity as to precisely whom the waiver of attorney-client privilege applies. EchoStar, 448 F.3d at 1303. Trial attorneys today proceed with extreme trepidation when advising clients as to obtainng an infringement opinion prior to the outset of litigation. In the wake of EchoStar, federal courts stand divided, with some courts insisting on the broadest waiver and disclosure of all communications regarding patent infringement, invalidity, and enforceability, while other courts narrowly limiting the waiver to communications and documents specifically related to the advisory opinion. Notwithstanding the outcome of the In re Seagate decision, patent attorneys will likely breathe a sigh of relief for the Federal Circuit’s long-awaited clarification of the inconsistencies among lower courts.