Circuit Court Poised to Decide an Important Privilege Issue

December 23, 2003

Every court agrees that the attorney-client privilege advances important societal interests. For this reason, most courts in most circumstances prohibit a litigant from arguing to the jury that an adversary asserting the privilege is trying to “hide something.” An exception to this general rule developed in patent infringement cases, but the Federal Circuit is about to address this issue again.

For the past two decades, federal courts have indicated that parties generally should seek a lawyer’s advice before undertaking activity that might infringe someone else’s patent. The Federal Circuit later invited judges to instruct juries that they could infer willful infringement if a defendant had not obtained a lawyer’s advice, or declined to waive the attorney-client privilege that protected the advice from disclosure. The Federal Circuit has now decided—sua sponte—to reconsider this doctrine, in a case decided by Judge Ellis of the Eastern District of Virginia. Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 133 F. Supp. 2d 843, 862 (E.D. Va. 2001). The Federal Circuit’s invitation for public comment has prompted a barrage of amicus briefs—most of which have criticized the “adverse inference rule.” Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 344 F.3d 1336 (Fed. Cir. 2003)

It will be interesting to see if the Federal Circuit abandons the “adverse inference rule,” which contrasts with most courts’ refusal to let litigants advance such arguments.