IP News

Federal Circuit Clarifies Scope of Waiver of Attorney-Client Privilege
and Work-Product Immunity

In In re EchoStar Commc'ns Corp., Misc. Nos. 803, 805, 2006 WL 1149528 (Fed. Cir. May 1, 2006), the U.S. Court of Appeals for the Federal Circuit clarified the extent to which a party waives its attorney-client privilege and work-product immunity when it asserts the advice-of-counsel defense in response to a charge of willful patent infringement. The Federal Circuit directed a Texas district court to vacate an order compelling EchoStar Communications Corp. to produce certain Merchant & Gould law firm documents that were never communicated to EchoStar.

In this case, TiVo Inc. sued EchoStar for willful infringement of U.S. Patent 6,233,389. In response to the allegation of willful infringement, EchoStar relied on the advice-of-counsel defense based on advice provided by in-house counsel prior to the filing of the lawsuit. After the action was filed, EchoStar obtained additional advice from Merchant & Gould, but did not rely on it. TiVo sought production of documents in the possession of EchoStar and Merchant & Gould. The district court found that EchoStar had waived its attorney-client privilege and work-product immunity relating to advice of any counsel, including Merchant & Gould. The district court also indicated that the scope of the waiver included communications made either before or after the filing of the complaint and any work product, whether or not the product was communicated to EchoStar. In response, Echostar petitioned the Federal Circuit for a writ of mandamus.

The Federal Circuit first found that the district court was correct that EchoStar waived its attorney-client privilege with respect to advice of outside counsel as well as advice of in-house counsel.

The Federal Circuit then recognized three categories of work product that are potentially relevant to the advice-of-counsel defense: 1) documents that embody a communication between the attorney and client concerning the subject matter of the case, such as a traditional opinion letter; 2) documents analyzing the law, facts, trial strategy, and so forth that reflect the attorney's mental impressions, but were not given to the client; and 3) documents that discuss a communication between attorney and client concerning the subject matter of the case, but are not themselves communications to or from the client.

The Federal Circuit found that categories (1) and (3) were discoverable, but (2) was not. The Federal Circuit stated that attorney work product immunity cannot be waived for 'documents analyzing the law, facts, trial strategy, and so forth that reflect the attorney's mental impressions but were not given to the client,' unless such documents refer to a communication with the client.

This decision will be the subject of a more detailed article in the July edition of The IP Strategist.

Congress Approves Versions of Trademark Dilution Bill

Different versions of the Trademark Dilution Revision Act of 2006 have passed both houses of Congress. A final bill is expected to reach President Bush's desk later this year. (The House of Representatives and the Senate each passed their own versions of the bill in April 2005 and March 2006, respectively.) The bill is a direct response to the Supreme Court's decision in Moseley v. V. Secret Catalogue, Inc., 537 U.S. 418 (2003). In Moseley, the Court interpreted the Federal Trademark Dilution Act of 1995 ('FTDA') and held that in order to have a dilution claim, trademark owners must show actual dilution, rather than just a likelihood of dilution. In addition, the Court, while recognizing dilution by 'blurring,' cast doubt on whether the FTDA also encompassed dilution by 'tarnishment.'

According to the new bill, the owner of a famous mark 'shall be entitled to an injunction against another person who, at any time after the owner's mark has become famous, commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.'

The bill also clarifies other terms and definitions in the statute. For example, the bill defines the term 'famous' as 'widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark's owner.' Marks can be considered famous even if they are not inherently distinctive, so long as they have acquired distinctiveness. 'Dilu-tion by blurring' is defined as the 'association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.' 'Dilution by tarnishment' is defined as the 'association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark.'

The bill will now proceed to a conference committee of legislators from both houses of Congress to work out differences in the two versions.

Research in Motion Sued Again for Patent Infringement Involving BlackBerry Technology

On April 28, 2006, Visto Corp. filed a complaint for patent infringement in the U.S. District Court for the Eastern District of Texas against rival Research in Motion Ltd ('RIM'). The complaint asserts four patents: 6,085,192 ('System and Method for Securely Synchronizing Multiple Copies of a Workspace Element in a Network'); 6,151,606 ('System and Method for Using a Workspace Data Manager to Access, Manipulate and Synchronize Network Data'); 6,023,708 ('System and Method for Using a Global Translator to Synchronize Workspace Elements Across a Network'); and 6,708,221 ('System and Method for Globally and Securely Accessing Unified Information in a Computer Net-work'). This lawsuit comes after Research in Motion agreed to pay $612.5 million earlier this year to settle its widely publicized patent dispute with NTP, Inc.

Visto recently prevailed in a patent infringement action (also in the U.S. District Court for the Eastern District of Texas) against rival Seven Networks Inc. A jury found that Seven willfully infringed Visto's patents and awarded $3.6 million in damages to Visto. This amount was calculated based on a 19.75% royalty rate. The case against RIM involves the same three patents that were at issue in the Seven case, as well as a new one.

On May 3, RIM filed a declaratory judgment action in the U.S. District Court for the Northern District of Texas, in Dallas, against Visto, asserting that it doesn't infringe Visto's patents. With this filing, RIM seeks to shift the litigation away from the Eastern District of Texas. RIM's headquarters in the United States is located in Dallas.

Eric Agovino is an associate in the New York office of Kenyon & Kenyon LLP. He can be reached at 212-908-6858. 

Federal Circuit Clarifies Scope of Waiver of Attorney-Client Privilege
and Work-Product Immunity

In In re EchoStar Commc'ns Corp., Misc. Nos. 803, 805, 2006 WL 1149528 (Fed. Cir. May 1, 2006), the U.S. Court of Appeals for the Federal Circuit clarified the extent to which a party waives its attorney-client privilege and work-product immunity when it asserts the advice-of-counsel defense in response to a charge of willful patent infringement. The Federal Circuit directed a Texas district court to vacate an order compelling EchoStar Communications Corp. to produce certain Merchant & Gould law firm documents that were never communicated to EchoStar.

In this case, TiVo Inc. sued EchoStar for willful infringement of U.S. Patent 6,233,389. In response to the allegation of willful infringement, EchoStar relied on the advice-of-counsel defense based on advice provided by in-house counsel prior to the filing of the lawsuit. After the action was filed, EchoStar obtained additional advice from Merchant & Gould, but did not rely on it. TiVo sought production of documents in the possession of EchoStar and Merchant & Gould. The district court found that EchoStar had waived its attorney-client privilege and work-product immunity relating to advice of any counsel, including Merchant & Gould. The district court also indicated that the scope of the waiver included communications made either before or after the filing of the complaint and any work product, whether or not the product was communicated to EchoStar. In response, Echostar petitioned the Federal Circuit for a writ of mandamus.

The Federal Circuit first found that the district court was correct that EchoStar waived its attorney-client privilege with respect to advice of outside counsel as well as advice of in-house counsel.

The Federal Circuit then recognized three categories of work product that are potentially relevant to the advice-of-counsel defense: 1) documents that embody a communication between the attorney and client concerning the subject matter of the case, such as a traditional opinion letter; 2) documents analyzing the law, facts, trial strategy, and so forth that reflect the attorney's mental impressions, but were not given to the client; and 3) documents that discuss a communication between attorney and client concerning the subject matter of the case, but are not themselves communications to or from the client.

The Federal Circuit found that categories (1) and (3) were discoverable, but (2) was not. The Federal Circuit stated that attorney work product immunity cannot be waived for 'documents analyzing the law, facts, trial strategy, and so forth that reflect the attorney's mental impressions but were not given to the client,' unless such documents refer to a communication with the client.

This decision will be the subject of a more detailed article in the July edition of The IP Strategist.

Congress Approves Versions of Trademark Dilution Bill

Different versions of the Trademark Dilution Revision Act of 2006 have passed both houses of Congress. A final bill is expected to reach President Bush's desk later this year. (The House of Representatives and the Senate each passed their own versions of the bill in April 2005 and March 2006, respectively.) The bill is a direct response to the Supreme Court's decision in Moseley v. V. Secret Catalogue, Inc. , 537 U.S. 418 (2003). In Moseley, the Court interpreted the Federal Trademark Dilution Act of 1995 ('FTDA') and held that in order to have a dilution claim, trademark owners must show actual dilution, rather than just a likelihood of dilution. In addition, the Court, while recognizing dilution by 'blurring,' cast doubt on whether the FTDA also encompassed dilution by 'tarnishment.'

According to the new bill, the owner of a famous mark 'shall be entitled to an injunction against another person who, at any time after the owner's mark has become famous, commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.'

The bill also clarifies other terms and definitions in the statute. For example, the bill defines the term 'famous' as 'widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark's owner.' Marks can be considered famous even if they are not inherently distinctive, so long as they have acquired distinctiveness. 'Dilu-tion by blurring' is defined as the 'association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.' 'Dilution by tarnishment' is defined as the 'association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark.'

The bill will now proceed to a conference committee of legislators from both houses of Congress to work out differences in the two versions.

Research in Motion Sued Again for Patent Infringement Involving BlackBerry Technology

On April 28, 2006, Visto Corp. filed a complaint for patent infringement in the U.S. District Court for the Eastern District of Texas against rival Research in Motion Ltd ('RIM'). The complaint asserts four patents: 6,085,192 ('System and Method for Securely Synchronizing Multiple Copies of a Workspace Element in a Network'); 6,151,606 ('System and Method for Using a Workspace Data Manager to Access, Manipulate and Synchronize Network Data'); 6,023,708 ('System and Method for Using a Global Translator to Synchronize Workspace Elements Across a Network'); and 6,708,221 ('System and Method for Globally and Securely Accessing Unified Information in a Computer Net-work'). This lawsuit comes after Research in Motion agreed to pay $612.5 million earlier this year to settle its widely publicized patent dispute with NTP, Inc.

Visto recently prevailed in a patent infringement action (also in the U.S. District Court for the Eastern District of Texas) against rival Seven Networks Inc. A jury found that Seven willfully infringed Visto's patents and awarded $3.6 million in damages to Visto. This amount was calculated based on a 19.75% royalty rate. The case against RIM involves the same three patents that were at issue in the Seven case, as well as a new one.

On May 3, RIM filed a declaratory judgment action in the U.S. District Court for the Northern District of Texas, in Dallas, against Visto, asserting that it doesn't infringe Visto's patents. With this filing, RIM seeks to shift the litigation away from the Eastern District of Texas. RIM's headquarters in the United States is located in Dallas.

Eric Agovino is an associate in the New York office of Kenyon & Kenyon LLP. He can be reached at 212-908-6858.