Fact or Fiction: Trial Counsel Should Author Patent Opinions

When patent issues arise, clients often need both trial counsel and opinions of counsel. Opinions are primarily needed for: 1) advice on how to avoid infringement; 2) assessment of liability risks and potential outcomes of infringement lawsuits; and 3) protection against a finding that any infringement was willful. Trial counsel are needed when a patent infringement suit is threatened, imminent, or instituted.

This article discusses the advantages of employing the same attorney or law firm as both opinion counsel and trial counsel. It explains why disqualification of counsel is not as much of a concern as some commentators emphasize. Finally, it analyzes the issues surrounding attorney-client privilege and work-product protection and concludes that the dangers are minimal with experienced trial counsel.

Advantages of Employing Opinion Counsel as Trial Counsel

There are numerous advantages to using the same attorney or law firm for both pre-litigation opinion work and trial work. One is familiarity ' that an attorney or law firm acquires specialized knowledge over time about a client and its operations. This is particularly true in the patent law context. Before an attorney can render a competent opinion, the attorney must possess an intimate knowledge of the intricacies of the involved technology. This knowledge is critical in defending against an infringement charge. Thus, the defense attorney who has spent months, if not years, assisting in pre-litigation activities will possess the necessary knowledge should litigation arise.

The client will also achieve economic efficiencies. If the client hires separate attorneys for opinion work and trial work, each attorney will need time to become familiar with the relevant technology and facts. This takes time and money. If the same attorney performs both roles, trial counsel will be familiar with the technology from serving as opinion counsel.

Timing is not critical for monetary reasons alone. Clients typically seek opinions of counsel when they fear being sued. Along with the fear of a patent lawsuit comes the potential for preliminary injunctive relief. In these circumstances an alleged infringer will generally not have much time to prepare a defense. For example, in some district courts, the average time from filing of a motion for preliminary injunction to hearing is as little as 22 days. Thus, it is important to have trial counsel up to speed as soon as possible in order to defend against a possible motion for a temporary restraining order or preliminary injunction.

The client's level of confidence is yet another advantage to using the same attorney or law firm for both pre-litigation and litigation work. A longstanding relationship will develop trust, understanding, and respect. For this reason, courts are rightfully reluctant to disturb a client's choice of counsel.

Finally, the use of the same attorney as adviser and advocate is neither unusual nor controversial. From time immemorial attorneys have prepared pre-litigation opinions for clients and then represented those clients in patent lawsuits. Indeed, maintaining the dual role of adviser and advocate is arguably the quintessential element of the attorney-client relationship.

Should Disqualification of Counsel Be a Concern?

Some attorneys and clients fear that the ethical prohibition against serving as both witness and advocate will come into play if an attorney or law firm performs both pre-litigation and trial work. Nearly every jurisdiction has adopted rules of professional conduct regulating an attorney's ability to serve as both witness and advocate. These rules typically follow either Rule 3.7 of the ABA Model Rules of Professional Conduct or DR 5-102 of the ABA Model Code of Professional Responsibility. The Model Rules prohibit an attorney from serving as litigation counsel if that attorney is “likely to be a necessary witness.” Similarly, the Model Code prohibits the attorney from serving as litigation counsel if the attorney “ought to be” a witness about the opinion. The concern is that the opinion counsel will necessarily be called to defend the opinion at trial, and therefore, will be disqualified from representing the alleged infringer in an infringement lawsuit.

A search of Westlaw and LEXIS uncovered no reported decisions where a court disqualified an attorney as trial counsel simply because that attorney prepared a pre-litigation opinion. This is because the opinion counsel is neither “likely to be a necessary witness” nor “ought to be” a witness.

Federal Circuit precedent makes clear that the primary factors to consider when evaluating an opinion of counsel are: 1) the competence of the opinion and, 2) whether the client's reliance on the opinion was reasonable. Ortho Pharmaceutical Corp. v. Smith, 959 F.2d 936, 944 (Fed. Cir. 1992); Read Corp. v. Portec, 970 F.2d 816, 828 (Fed. Cir. 1992).

The first factor, competence of the opinion, is evaluated from the text of the opinion itself. Westvaco Corp. v. Int'l Paper Co., 991 F.2d 735, 744 (Fed. Cir. 1993). In Westvaco the Federal Circuit explained that review of opinions determines whether they “evidence an adequate foundation based on a review of all necessary facts or whether they are conclusory on their face.” Id. at 743. In addition, the opinion should be reviewed for its “overall tone, its discussion of case law, its analysis of the particular facts and its reference to inequitable conduct.” Ortho, 959 F.2d at 945. Thus, the opinion counsel's testimony at trial is not needed to determine the competence of the opinion.

The second factor, reasonable reliance, is from the perspective of the alleged infringer. Ortho, 959 F.2d at 944. (“Counsel's opinion must be thorough enough, as combined with other factors, to instill a belief in the infringer that a court might reasonably hold the patent is invalid, not infringed, or unenforceable.” (Emphasis added). The opinion counsel cannot testify as to the alleged infringer's state of mind.

In the reported cases on this point, district courts have held that authors of opinions need not testify.

• Liqui-Box Corp. v. Reid Valve Co., 16 U.S.P.Q.2d 1074, 1075 (W.D. Pa. 1989): (Plaintiff wanted to call as a witness defendant's trial counsel, who wrote an opinion, but the court did not allow the testimony, reasoning that defending against a charge of willful infringement requires that the defendant show reasonable, good-faith adherence to the advice in the opinion and does not require an inquiry into counsel's state of mind.);
• Automotive Prods. v. Tilton Eng'g, Inc., 1993 U.S. Dist. LEXIS 3752 at *32 (C.D. Cal. 1993): (Held that when an opinion letter is introduced in defense to a willful infringement charge, the jury should only consider the defendant's state of mind, not the attorney's who drafted the opinion.);
• Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., 2000 U.S. Dist. LEXIS 10064, (S.D.N.Y. July 19, 2000): (A motion for disqualification was denied because the issue at trial would be whether, if there has been infringement, Bristol infringed willfully and is subject to punitive damages, and thus, the issues were limited to whether the attorney's opinion letter was a competent opinion and what Bristol's state of mind was when it decided to rely on it.)

The attorney who authors the opinion is neither “likely to be a necessary witness,” nor “ought to be” called as a witness. Therefore, opinion counsel should not, on that basis, be disqualified as trial counsel under the applicable ethical rules. Experience bears this out, trial counsel have often rendered opinions on which the client relied.

Did Novartis Open the Door?

Some commentators have argued that a recent district court decision has opened the door to disqualifying opinion counsel as trial counsel. In Novartis Pharm. Corp. v. Eon Labs Mfg., 206 F.R.D. 396, 396-97 (D. Del. 2002), the patentees requested that the alleged infringer produce all written and oral legal advice it received from its counsel with respect to the infringement, invalidity, and unenforceability of the patent, including all documents underlying that advice. Subsequently, the patentees requested that the alleged infringer supplement its production to include all documents and communications that were considered by counsel in rendering its advice. Id. at 397. Although the alleged infringer argued that the supplemental materials were protected as work product, the court concluded that the alleged infringer expressly waived its privilege with respect to attorney-client communications and work product documentation by relying on the advice of counsel defense. Id. at 398. Thus, everything with respect to the subject matter of counsel's advice was discoverable. Id. The court further stated, “it is critical for the patentee to have a full opportunity to probe, not only the state of mind of the infringer, but also the mind of the infringer's lawyer upon which the infringer so firmly relied.” Id. at 399. Some commentators have argued that since this decision places “the state of mind of opinion counsel directly at issue for purposes of discovery,” a patentee is presumably free to seek testimony from opinion counsel.

However, the Novartis case dealt with scope of waiver, not disqualification. Scope of waiver is disputed among the circuits, and the Federal Circuit has not weighed in on the issue. Lakewood Engineering and Mfg. Co. v. Lasko Products, Inc., 2003 WL 1220254, at *9 (N.D. Ill. March 14, 2003). The Delaware court is free to reach its own conclusion regarding waiver. The Federal Circuit has made clear that when evaluating opinion of counsel, the relevant factors are competence and reasonable reliance. Ortho 959 F.2d at 944; Read Corp. 970 F.2d at 828; Westvaco Corp. 991 F.2d at 744. Thus, applying the Delaware court's reasoning to whether opinion counsel need testify at trial would be inconsistent with Federal Circuit precedent.

Finally, even if a court erroneously disqualifies trial counsel who authored a pre-litigation opinion, the attorney's law firm is still eligible to serve as trial counsel. There is no reported decision where a court disqualified a law firm simply because one of its attorneys prepared an opinion of counsel for the alleged infringer. This is not surprising because Model Rule 3.7(b) expressly allows such representation.

Should Waiver Be a Concern?

Although the District of Delaware's decision in Novartis does not impact the disqualification analysis, it does raise a potential issue regarding waiver.

In Novartis, the alleged infringer's opinion counsel and trial counsel were both partners in the same law firm. Novartis, 206 F.R.D. at 396. The court held that the alleged infringer should produce all legal advice it received from any member of the firm with regard to the subject matter of the opinion. Id. Thus, the court continued, “[b]ecause the Court cannot differentiate between opinion and trial counsel, the Court will grant [patentees'] Motion To Compel to the extent it seeks the production of all legal advice [the alleged infringer] received from the … law firm relating to the subject matter of [the] opinion.” Id.

Similarly, in a recent Northern District of Illinois case, the court held that reliance on opinion of counsel waived attorney-client privilege and work-product protection with respect to opinion counsel, as well as trial counsel. Beneficial Franchise Co., Inc. v. Bank One, N.A., 205 F.R.D. 212, 218 (N.D. Ill. 2001). However, the court held that the waiver of trial counsel work product protection was limited “to documents in trial counsel's file that contradict or cast doubt on the opinions that were revealed” regardless of whether the documents were conveyed to the client or their contents discussed with the client. Id.

It is important to note that in Beneficial the alleged infringer's opinion counsel and trial counsel were members of different law firms. Id. at 219. Thus this broad waiver of attorney-client privilege and work-product protection occurs regardless of whether opinion counsel and trial counsel are from the same firm. Of course when opinion counsel serves as trial counsel, the court may well require the alleged infringer to produce all legal advice relating to the subject matter of the opinion because it cannot differentiate between opinion and trial counsel, just as the Novartis court did.

The fact is that, in practice, experienced trial attorneys do not memorialize negative opinions. Even in the case of complete waiver, the client will not produce negative trial-counsel work product because none will exist. When a client puts an opinion of counsel at issue by reliance on it, the client waives attorney-client privilege and possibly work-product protection with respect to the opinion. This can occur regardless of whether the same or different attorneys act as opinion and trial counsel. Since experienced trial attorneys do not memorialize negative opinions, the client will not be more adversely impacted by employing the same attorney or law firm than by using separate attorneys or law firms.

There are numerous advantages to employing the same attorney or law firm as opinion counsel and trial counsel. These advantages outweigh the risk that a dual role will result in disqualification of trial counsel, because the opining attorney is neither “likely to be a necessary witness” nor “ought to be” a witness. Furthermore, the risk associated with waiver of attorney-client privilege and work-product protection is realistically no greater for the client that uses the same attorney or law firm for opinion and litigation work than the client that uses separate attorneys or law firms.

When patent issues arise, clients often need both trial counsel and opinions of counsel. Opinions are primarily needed for: 1) advice on how to avoid infringement; 2) assessment of liability risks and potential outcomes of infringement lawsuits; and 3) protection against a finding that any infringement was willful. Trial counsel are needed when a patent infringement suit is threatened, imminent, or instituted.

This article discusses the advantages of employing the same attorney or law firm as both opinion counsel and trial counsel. It explains why disqualification of counsel is not as much of a concern as some commentators emphasize. Finally, it analyzes the issues surrounding attorney-client privilege and work-product protection and concludes that the dangers are minimal with experienced trial counsel.

Advantages of Employing Opinion Counsel as Trial Counsel

There are numerous advantages to using the same attorney or law firm for both pre-litigation opinion work and trial work. One is familiarity ' that an attorney or law firm acquires specialized knowledge over time about a client and its operations. This is particularly true in the patent law context. Before an attorney can render a competent opinion, the attorney must possess an intimate knowledge of the intricacies of the involved technology. This knowledge is critical in defending against an infringement charge. Thus, the defense attorney who has spent months, if not years, assisting in pre-litigation activities will possess the necessary knowledge should litigation arise.

The client will also achieve economic efficiencies. If the client hires separate attorneys for opinion work and trial work, each attorney will need time to become familiar with the relevant technology and facts. This takes time and money. If the same attorney performs both roles, trial counsel will be familiar with the technology from serving as opinion counsel.

Timing is not critical for monetary reasons alone. Clients typically seek opinions of counsel when they fear being sued. Along with the fear of a patent lawsuit comes the potential for preliminary injunctive relief. In these circumstances an alleged infringer will generally not have much time to prepare a defense. For example, in some district courts, the average time from filing of a motion for preliminary injunction to hearing is as little as 22 days. Thus, it is important to have trial counsel up to speed as soon as possible in order to defend against a possible motion for a temporary restraining order or preliminary injunction.

The client's level of confidence is yet another advantage to using the same attorney or law firm for both pre-litigation and litigation work. A longstanding relationship will develop trust, understanding, and respect. For this reason, courts are rightfully reluctant to disturb a client's choice of counsel.

Finally, the use of the same attorney as adviser and advocate is neither unusual nor controversial. From time immemorial attorneys have prepared pre-litigation opinions for clients and then represented those clients in patent lawsuits. Indeed, maintaining the dual role of adviser and advocate is arguably the quintessential element of the attorney-client relationship.

Should Disqualification of Counsel Be a Concern?

Some attorneys and clients fear that the ethical prohibition against serving as both witness and advocate will come into play if an attorney or law firm performs both pre-litigation and trial work. Nearly every jurisdiction has adopted rules of professional conduct regulating an attorney's ability to serve as both witness and advocate. These rules typically follow either Rule 3.7 of the ABA Model Rules of Professional Conduct or DR 5-102 of the ABA Model Code of Professional Responsibility. The Model Rules prohibit an attorney from serving as litigation counsel if that attorney is “likely to be a necessary witness.” Similarly, the Model Code prohibits the attorney from serving as litigation counsel if the attorney “ought to be” a witness about the opinion. The concern is that the opinion counsel will necessarily be called to defend the opinion at trial, and therefore, will be disqualified from representing the alleged infringer in an infringement lawsuit.

A search of Westlaw and LEXIS uncovered no reported decisions where a court disqualified an attorney as trial counsel simply because that attorney prepared a pre-litigation opinion. This is because the opinion counsel is neither “likely to be a necessary witness” nor “ought to be” a witness.

Federal Circuit precedent makes clear that the primary factors to consider when evaluating an opinion of counsel are: 1) the competence of the opinion and, 2) whether the client's reliance on the opinion was reasonable. Ortho Pharmaceutical Corp. v. Smith , 959 F.2d 936, 944 (Fed. Cir. 1992); Read Corp. v. Portec, 970 F.2d 816, 828 (Fed. Cir. 1992).

The first factor, competence of the opinion, is evaluated from the text of the opinion itself. Westvaco Corp. v. Int'l Paper Co., 991 F.2d 735, 744 (Fed. Cir. 1993). In Westvaco the Federal Circuit explained that review of opinions determines whether they “evidence an adequate foundation based on a review of all necessary facts or whether they are conclusory on their face.” Id. at 743. In addition, the opinion should be reviewed for its “overall tone, its discussion of case law, its analysis of the particular facts and its reference to inequitable conduct.” Ortho, 959 F.2d at 945. Thus, the opinion counsel's testimony at trial is not needed to determine the competence of the opinion.

The second factor, reasonable reliance, is from the perspective of the alleged infringer. Ortho, 959 F.2d at 944. (“Counsel's opinion must be thorough enough, as combined with other factors, to instill a belief in the infringer that a court might reasonably hold the patent is invalid, not infringed, or unenforceable.” (Emphasis added). The opinion counsel cannot testify as to the alleged infringer's state of mind.

In the reported cases on this point, district courts have held that authors of opinions need not testify.

• Liqui-Box Corp. v. Reid Valve Co., 16 U.S.P.Q.2d 1074, 1075 (W.D. Pa. 1989): (Plaintiff wanted to call as a witness defendant's trial counsel, who wrote an opinion, but the court did not allow the testimony, reasoning that defending against a charge of willful infringement requires that the defendant show reasonable, good-faith adherence to the advice in the opinion and does not require an inquiry into counsel's state of mind.);
• Automotive Prods. v. Tilton Eng'g, Inc., 1993 U.S. Dist. LEXIS 3752 at *32 (C.D. Cal. 1993): (Held that when an opinion letter is introduced in defense to a willful infringement charge, the jury should only consider the defendant's state of mind, not the attorney's who drafted the opinion.);
• Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., 2000 U.S. Dist. LEXIS 10064, (S.D.N.Y. July 19, 2000): (A motion for disqualification was denied because the issue at trial would be whether, if there has been infringement, Bristol infringed willfully and is subject to punitive damages, and thus, the issues were limited to whether the attorney's opinion letter was a competent opinion and what Bristol's state of mind was when it decided to rely on it.)

The attorney who authors the opinion is neither “likely to be a necessary witness,” nor “ought to be” called as a witness. Therefore, opinion counsel should not, on that basis, be disqualified as trial counsel under the applicable ethical rules. Experience bears this out, trial counsel have often rendered opinions on which the client relied.

Did Novartis Open the Door?

Some commentators have argued that a recent district court decision has opened the door to disqualifying opinion counsel as trial counsel. In Novartis Pharm. Corp. v. Eon Labs Mfg., 206 F.R.D. 396, 396-97 (D. Del. 2002), the patentees requested that the alleged infringer produce all written and oral legal advice it received from its counsel with respect to the infringement, invalidity, and unenforceability of the patent, including all documents underlying that advice. Subsequently, the patentees requested that the alleged infringer supplement its production to include all documents and communications that were considered by counsel in rendering its advice. Id. at 397. Although the alleged infringer argued that the supplemental materials were protected as work product, the court concluded that the alleged infringer expressly waived its privilege with respect to attorney-client communications and work product documentation by relying on the advice of counsel defense. Id. at 398. Thus, everything with respect to the subject matter of counsel's advice was discoverable. Id. The court further stated, “it is critical for the patentee to have a full opportunity to probe, not only the state of mind of the infringer, but also the mind of the infringer's lawyer upon which the infringer so firmly relied.” Id. at 399. Some commentators have argued that since this decision places “the state of mind of opinion counsel directly at issue for purposes of discovery,” a patentee is presumably free to seek testimony from opinion counsel.

However, the Novartis case dealt with scope of waiver, not disqualification. Scope of waiver is disputed among the circuits, and the Federal Circuit has not weighed in on the issue. Lakewood Engineering and Mfg. Co. v. Lasko Products, Inc., 2003 WL 1220254, at *9 (N.D. Ill. March 14, 2003). The Delaware court is free to reach its own conclusion regarding waiver. The Federal Circuit has made clear that when evaluating opinion of counsel, the relevant factors are competence and reasonable reliance. Ortho 959 F.2d at 944; Read Corp. 970 F.2d at 828; Westvaco Corp. 991 F.2d at 744. Thus, applying the Delaware court's reasoning to whether opinion counsel need testify at trial would be inconsistent with Federal Circuit precedent.

Finally, even if a court erroneously disqualifies trial counsel who authored a pre-litigation opinion, the attorney's law firm is still eligible to serve as trial counsel. There is no reported decision where a court disqualified a law firm simply because one of its attorneys prepared an opinion of counsel for the alleged infringer. This is not surprising because Model Rule 3.7(b) expressly allows such representation.

Should Waiver Be a Concern?

Although the District of Delaware's decision in Novartis does not impact the disqualification analysis, it does raise a potential issue regarding waiver.

In Novartis, the alleged infringer's opinion counsel and trial counsel were both partners in the same law firm. Novartis, 206 F.R.D. at 396. The court held that the alleged infringer should produce all legal advice it received from any member of the firm with regard to the subject matter of the opinion. Id. Thus, the court continued, “[b]ecause the Court cannot differentiate between opinion and trial counsel, the Court will grant [patentees'] Motion To Compel to the extent it seeks the production of all legal advice [the alleged infringer] received from the … law firm relating to the subject matter of [the] opinion.” Id.

Similarly, in a recent Northern District of Illinois case, the court held that reliance on opinion of counsel waived attorney-client privilege and work-product protection with respect to opinion counsel, as well as trial counsel. Beneficial Franchise Co., Inc. v. Bank One, N.A., 205 F.R.D. 212, 218 (N.D. Ill. 2001). However, the court held that the waiver of trial counsel work product protection was limited “to documents in trial counsel's file that contradict or cast doubt on the opinions that were revealed” regardless of whether the documents were conveyed to the client or their contents discussed with the client. Id.

It is important to note that in Beneficial the alleged infringer's opinion counsel and trial counsel were members of different law firms. Id. at 219. Thus this broad waiver of attorney-client privilege and work-product protection occurs regardless of whether opinion counsel and trial counsel are from the same firm. Of course when opinion counsel serves as trial counsel, the court may well require the alleged infringer to produce all legal advice relating to the subject matter of the opinion because it cannot differentiate between opinion and trial counsel, just as the Novartis court did.

The fact is that, in practice, experienced trial attorneys do not memorialize negative opinions. Even in the case of complete waiver, the client will not produce negative trial-counsel work product because none will exist. When a client puts an opinion of counsel at issue by reliance on it, the client waives attorney-client privilege and possibly work-product protection with respect to the opinion. This can occur regardless of whether the same or different attorneys act as opinion and trial counsel. Since experienced trial attorneys do not memorialize negative opinions, the client will not be more adversely impacted by employing the same attorney or law firm than by using separate attorneys or law firms.

There are numerous advantages to employing the same attorney or law firm as opinion counsel and trial counsel. These advantages outweigh the risk that a dual role will result in disqualification of trial counsel, because the opining attorney is neither “likely to be a necessary witness” nor “ought to be” a witness. Furthermore, the risk associated with waiver of attorney-client privilege and work-product protection is realistically no greater for the client that uses the same attorney or law firm for opinion and litigation work than the client that uses separate attorneys or law firms.