District Court Orders Production of Attorney-Client Communications Between Opinion Counsel and Trial Counsel Based on Advice of Counsel Defense

Plaintiff Krausz Industries Ltd. (“Krausz”) filed a motion for an order compelling Defendants Smith-Blair, Inc. and Sensus USA, Inc. (collectively “Smith-Blair”) to allow discovery into various attorney-client communications and work product related to an advice of counsel defense.

Although the parties agreed that raising an advice of counsel defense can result in a waiver of the attorney-client privilege and work product doctrine, the parties disagreed about the scope of the waiver. Smith-Blair asserted that any waiver should be limited to communications and related work product between Smith-Blair and its opinion counsel on the issue of noninfringement that occurred before litigation began.

On the other hand, Kraus asserted that its allegation of ongoing willful infringement and Smith-Blair’s decision to involve its opinion counsel in the defense resulted in a broad waiver. As a result, Krausz claimed that it should be entitled to communications and related work product between Smith-Blair and any attorney on a vast array of patent-related topics, regardless of when the communications occurred.

The district court agreed with Krausz that its allegation of ongoing willful infringement “entitles it to discover communications and work product related to an advice of counsel defense that occurred after litigation began.” The district court also agreed that by “involving opinion counsel in the substantive defense of this lawsuit, Smith-Blair engaged in the type of conduct that justifies allowing discovery into any communications either involving or relaying information from opinion counsel to Smith-Blair, its trial counsel, or its in-house counsel.”

Nonetheless, the district court restricted the scope “of the waiver to the specific basis of Smith-Blair’s advice of counsel defense: whether Smith-Blair’s product infringes Krausz’s patent.”

Accordingly, the district court granted the motion to compel in part.

Krausz Industries Ltd. f/k/a Krausz Metal Industries Ltd. v. Smith-Blair, Inc. & Sensus USA, Inc., Case No. 5:12-CV-00570-FL (E.D.N.C. Dec. 13, 2016)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.