United States: Motion To Exclude Advice Of Counsel Granted Where Defendant Sought To Rely On Pre-Investigation Advice On Cease And Desist Letter While Preventing Discovery Of Advice

Last Updated: April 16 2013
Article by Stanley M. Gibson

Volterra Semiconductor ("Volterra") filed a motion to prevent Primarion from offering evidence regarding the subjective prong of the Seagate test on willful infringement. See In re Seagate Technology, LLC 497 F.3d 1360 (Fed. Cir. 2007). As explained by the district court, "Volterra argues that Primarion's Seventh Supplemental Responses to Volterra's Interrogatory No. 7 demonstrate that the willfulness witnesses identified by Primarion (Sandro Cerato, Arun Mittal and Ken Ostrom) may offer testimony at trial that Primarion's decision to continue to market and produce infringing devises after receiving Volterra's cease and desist letter was based, in part, on an investigation undertaken by counsel."

Based on this interrogatory response, Volterra contended that Primarion was seeking to use the privilege as both a sword and a shield by presenting evidence of counsel's investigation to show that it took the cease and desist letter seriously, while also asserting the attorney client privilege to block any discovery as to the investigation.

As framed by the district court, "Volterra asks the Court to issue an order excluding at trial all testimony, evidence or argument relating to: 1) Primarion's actions after receiving the cease and desist letter, including that they conducted an investigation, consulted with counsel or took the cease and desist letter seriously; 2) Primarion's decision to continue to produce the products, given it was based on Primarion's beliefs as to infringement and validity that were formed after consultation with counsel; and 3) the witnesses' beliefs about infringement and validity formed after consultation with counsel. Docket 1772 at 1. Alternatively, Volterra seeks an order that, by disclosing witnesses that relied on the advice of counsel, Defendants have waived the attorney-client privilege. In that case, Volterra asserts, the Court should also order that the witnesses answer questions in their depositions regarding their communications with counsel, that Primarion provide full and complete Rule 30(b)(6) testimony and that Volterra be permitted to subpoena documents and obtain testimony from Defendants' counsel."

The district court found that there was no waiver of the attorney client privilege based on the interrogatory responses because Primarion had repeatedly stated it was not asserting an advice of counsel defense. "Primarion has repeatedly claimed that it is not asserting an advice of counsel defense and that its disclosures in response to Volterra's Interrogatory were not a voluntary waiver but rather, a compelled response to the Court's order. Primarion further asserts that its witnesses will not offer any testimony at trial that gives rise to a waiver of attorney-client privilege. In this context, the Court concludes that it is inappropriate to find a waiver of attorney-client privilege based on Primarion's interrogatory response."

Nonetheless, the district court did find that it was appropriate to preclude Primarion from relying on evidence relating to its response to the cease and desist letter. "The Patent Local Rules require that a party who intends to rely upon advice of counsel as part of a patent-related claim or defense for any reason must make its election to assert such a defense on a timely basis; otherwise, any advice of counsel defense can only be asserted pursuant to a stipulation by the parties. See Patent L.R. 3-7. Here, the time for Primarion to elect to assert an advice of counsel defense is long past. Indeed, Primarion has confirmed that it is not asserting such a defense and it would be manifestly unfair to allow Primarion to waive the privilege at trial, having declined to assert reliance on advice of counsel and having prevented discovery into privileged matters."

Indeed, the district court specifically found that allowing such evidence would permit Primarion to use the privilege as both a shield and a sword. "While Primarion suggest that a privileged communication is only put "in issue" if its contents are specifically identified or quoted, it has not cited any authority for that proposition, which the Court finds to be incorrect. A similar issue was addressed in Claffey v. River Oaks Hyundai, 486 F.Supp.2d 776 (N.D. Ill., 2007), which the Court finds instructive. There, a defendant sought to establish that it acted in good faith by introducing evidence that it followed reasonable procedures to ensure compliance with the law, including documents showing that its usual process included consultation with counsel. Id. at 778. Though the court deferred ruling on the motion, it opined that the defendant's "introduction of such documents would leave a fact finder with the distinct impression that [it] relied on advice by counsel on the matters at issue in this case. Id. The Court further found that if the defendant were "allowed to create this impression but still maintain it attorney-client privilege, it would in effect be using the privilege as both a shield and a sword" and therefore held that if the defendant "actually relie[d] on any documents or other evidence that would tend to suggest that its procedures included consultation with counsel, it [would] be deemed to have waived its attorney-client privilege." Id. This Court finds the same reasoning applies here. In particular, the introduction of any evidence that Primarion's investigation included seeking advice of counsel would be sufficient to put that advice in issue and further, would result in unfairness to Volterra to the extent it would leave the jury with the impression that Primarion relied on the advice of counsel."

Accordingly, the district court granted the motion to exclude the evidence pertaining to the investigation that stemmed from the cease and desist letter.

Volterra Semiconductor Corp. v. Primarion, Inc., et al, Case No. 08-cv-05129-JCS (N.D. Cal. April 3, 2013)

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