IP News

Federal Circuit Invites Briefs On Extent of Waiver Following Advice of Counsel Defense

In the case of In Re Seagate Tech., Misc. Docket No. 830, 2007 U.S. App. LEXIS 2457, *1 (Fed. Cir. Jan. 26, 2007), the Federal Circuit decided, sua sponte, to hear en banc, a petition for writ of mandamus seeking to vacate an Order of the Southern District of New York compelling defendant Seagate to produce trial counsel's privileged advice. The district court's order came after Seagate invoked the advice of counsel defense to allegations of willful infringement.

In its petition for mandamus, Seagate argued that the district court's decision contradicted controlling legal principles set forth in Federal Circuit precedent and allowed the plaintiffs to invade the most sacred of attorney-client communications ' those directed to trial strategy and preparation ' even though Seagate had at all times maintained separate and independent opinion and trial counsel. The respondents, Convolve Inc. and Massachusetts Institute of Technology, argued that under Federal Circuit precedent, the district court was within its discretion in determining the scope of the privilege waiver, and that the district court had provided for in camera review, which allowed for the proper balance of competing concerns on a document-by-document basis.

After granting the writ of mandamus, the Federal Circuit invited the parties to address three questions:

1) Should a party's assertion of the advice of counsel defense to willful infringement extend waiver of the attorney-client privilege to communications with that party's trial counsel? See In re EchoStar Commc'n Corp., 448 F.3d 1294 (Fed. Cir. 2006)?

2) What is the effect of any such waiver on work product immunity?

3) Given the impact of the statutory duty of care standard announced in Underwater Devices, Inc. v. Morrison-Knudsen Co., 717 F.2d 1380 (Fed. Cir. 1983), on the issue of waiver of attorney-client privilege, should this court reconsider the decision in Underwater Devices and the duty of care standard itself?

Federal Circuit Denies Supplemental Jurisdiction to Infringement Claims of Foreign Patents

In Voda v. Cordis, No. 05-1238, 2007 U.S. App. LEXIS 2134, *49 (Fed. Cir. Feb. 1, 2007), the Federal Circuit, upon an interlocutory appeal from the Western District of Oklahoma, held that a district court may not exercise supplemental jurisdiction pursuant to 28 U.S.C. '1367 over infringement claims based on foreign patents. The plaintiff Voda sued Cordis, a U.S.-based entity, for infringement of three U.S. patents related to guiding catheters for use in interventional cardiology. After Cordis answered by asserting non-infringement and invalidity of the U.S. patents, Voda moved to amend his complaint to add claims of infringement of numerous foreign patents, which all issued from a common PCT application. After the district court ruled that it had supplemental jurisdiction over the foreign patent claims, Cordis appealed. On appeal, Cordis alleged that it would assert invalidity as a defense to the foreign infringement claims.

Applying Federal Circuit (and not regional circuit) law, the court held that while the Constitution and '1367 authorized district courts to hear infringement claims based on foreign patents when they formed part of the same case or controversy under Article III, the district court abused its discretion under '1367(c) because considerations of comity, judicial economy, convenience, fairness, and other exceptional circumstances constituted compelling reasons to decline jurisdiction.

Although the district court failed to make sufficient findings to allow a determination of whether the foreign claims formed part of the same case or controversy, the court reasoned that exercise of supplemental jurisdiction could undermine the obligations of the United States under the Paris Convention, the Patent Cooperation Treaty, and TRIPS to the issuing countries of the asserted foreign patents. Additionally, the court reasoned that interests of comity, judicial economy, convenience, and fairness weighed heavily against the exercise of supplemental jurisdiction. Finally, the court declined to consider, because Voda did not adequately plead it, whether diversity jurisdiction provides an alternative and independent basis for the district court to hear Voda's claims of foreign patent infringement.

Judge Pauline Newman dissented, opining that courts routinely apply foreign law, that the district court exercised its sound discretion in receiving the amended complaint, and that it was not the role of an appellate court to remove that discretion.

Matt Berkowitz is an associate in the New York office of Kenyon & Kenyon LLP. He can be reached at 212-908-6462.

Federal Circuit Invites Briefs On Extent of Waiver Following Advice of Counsel Defense

In the case of In Re Seagate Tech., Misc. Docket No. 830, 2007 U.S. App. LEXIS 2457, *1 (Fed. Cir. Jan. 26, 2007), the Federal Circuit decided, sua sponte, to hear en banc, a petition for writ of mandamus seeking to vacate an Order of the Southern District of New York compelling defendant Seagate to produce trial counsel's privileged advice. The district court's order came after Seagate invoked the advice of counsel defense to allegations of willful infringement.

In its petition for mandamus, Seagate argued that the district court's decision contradicted controlling legal principles set forth in Federal Circuit precedent and allowed the plaintiffs to invade the most sacred of attorney-client communications ' those directed to trial strategy and preparation ' even though Seagate had at all times maintained separate and independent opinion and trial counsel. The respondents, Convolve Inc. and Massachusetts Institute of Technology, argued that under Federal Circuit precedent, the district court was within its discretion in determining the scope of the privilege waiver, and that the district court had provided for in camera review, which allowed for the proper balance of competing concerns on a document-by-document basis.

After granting the writ of mandamus, the Federal Circuit invited the parties to address three questions:

1) Should a party's assertion of the advice of counsel defense to willful infringement extend waiver of the attorney-client privilege to communications with that party's trial counsel? See In re EchoStar Commc'n Corp., 448 F.3d 1294 (Fed. Cir. 2006)?

2) What is the effect of any such waiver on work product immunity?

3) Given the impact of the statutory duty of care standard announced in Underwater Devices, Inc. v. Morrison-Knudsen Co. , 717 F.2d 1380 (Fed. Cir. 1983), on the issue of waiver of attorney-client privilege, should this court reconsider the decision in Underwater Devices and the duty of care standard itself?

Federal Circuit Denies Supplemental Jurisdiction to Infringement Claims of Foreign Patents

In Voda v. Cordis, No. 05-1238, 2007 U.S. App. LEXIS 2134, *49 (Fed. Cir. Feb. 1, 2007), the Federal Circuit, upon an interlocutory appeal from the Western District of Oklahoma, held that a district court may not exercise supplemental jurisdiction pursuant to 28 U.S.C. '1367 over infringement claims based on foreign patents. The plaintiff Voda sued Cordis, a U.S.-based entity, for infringement of three U.S. patents related to guiding catheters for use in interventional cardiology. After Cordis answered by asserting non-infringement and invalidity of the U.S. patents, Voda moved to amend his complaint to add claims of infringement of numerous foreign patents, which all issued from a common PCT application. After the district court ruled that it had supplemental jurisdiction over the foreign patent claims, Cordis appealed. On appeal, Cordis alleged that it would assert invalidity as a defense to the foreign infringement claims.

Applying Federal Circuit (and not regional circuit) law, the court held that while the Constitution and '1367 authorized district courts to hear infringement claims based on foreign patents when they formed part of the same case or controversy under Article III, the district court abused its discretion under '1367(c) because considerations of comity, judicial economy, convenience, fairness, and other exceptional circumstances constituted compelling reasons to decline jurisdiction.

Although the district court failed to make sufficient findings to allow a determination of whether the foreign claims formed part of the same case or controversy, the court reasoned that exercise of supplemental jurisdiction could undermine the obligations of the United States under the Paris Convention, the Patent Cooperation Treaty, and TRIPS to the issuing countries of the asserted foreign patents. Additionally, the court reasoned that interests of comity, judicial economy, convenience, and fairness weighed heavily against the exercise of supplemental jurisdiction. Finally, the court declined to consider, because Voda did not adequately plead it, whether diversity jurisdiction provides an alternative and independent basis for the district court to hear Voda's claims of foreign patent infringement.

Judge Pauline Newman dissented, opining that courts routinely apply foreign law, that the district court exercised its sound discretion in receiving the amended complaint, and that it was not the role of an appellate court to remove that discretion.

Matt Berkowitz is an associate in the New York office of Kenyon & Kenyon LLP. He can be reached at 212-908-6462.