In re Seagate: -Part II- Not an All-In Game for the Privileged.

The In re Seagate matter, still being briefed before the CAFC offers only one angle on some of the larger issues of attorney-client privilege in patent cases.  It’s not an all-in forum that would allow broadly applicable principles to be decided.  Watching those TV poker stars go all-in with a 9 and a jack does make you wonder, what’s the back-up plan – go back to selling real estate.  After the panel rules on In re Seagate what’s next, en banc or cert.?  Even then, it is just one case about how one boat tried to navigate the murky waters of selective waiver.

Petitioner Seagate vacillates, in its merits brief, between seeking a revamp of the fundamental rules, and urging enough action to relieve its one problem.  On page 6, it seeks one “clear rule …[to] foster predictability among courts,” but just before and after that, urges narrower consideration “in this factual setting,” and that, it’s case “may be resolved on the narrow” subsidiary question.  Simplistically, Seagate contends that having separate counsel, the one hired only to write the opinion letter, and the others hired to pitch the same defenses in court, entitles the client to twice the privileges – one for each attorney, and each insulated from the other.  The simple reply is that an alleged willful infringer could keep changing and adding counsel, whenever it wants or desires privilege protection anew.

The recently-decided Napster appeal, and some scars from my own litigation experience aided the effort to construct what an all-in battle over privilege in a patent case would entail, as follows.  Infringement suit begets a non-willfulness opinion letter.  One aspect of the opinion is invalidity, based on prior art, reasonably believed known to the patentee, but not cited to the PTO.  Trial counsel for the infringer signals intent to rely on the opinion, and to allege inequitable conduct.  The patentee seeks discovery of all communications related to what the opinion letter discusses, and the infringer seeks discovery of all communications related to the alleged fraud on the PTO, and the knowingly baseless infringement suit.  Both sides contend that no privilege remains, because of waiver or the crime-fraud exception.  That, is the all-in hand, the range of circumstances that would enable the CAFC to explore all the competing considerations about privilege and its exceptions.

Instead, the expected outcome of In re Seagate is another piecemeal treatment, sent into the same orbit as other fragmentary rulings on privilege.  Expect nothing here, any different than the piecemeal rulings on intrinsic & extrinsic evidence of claim meaning, or on the function-way-result or subject matter disclaimer-recoupment rules.  A result-reached, set out on well-worn figures of speech – a sword, a cloak, subjective intentions, a totality of circumstances, good faith and reasonable reliance.  It’s all in the next segment of another unfinished work.

What are the better solutions?  Set out procedural rules, as the 9th Circuit just did in the Napster appeal.  District courts, whether in the Eastern District of Wahoo or the Northern District of Citified, can apply stated rules more competently than metaphoric swords, shields, or prophylactics.  The simpler option, still, is to defer, until after decision on infringement and validity, all discovery on willfullness or inequitiable conduct.  That puts it when and where it matters, and prevents that discovery from aiding one side when the basic issues are being decided.