Every Lawyer’s Telephone Nightmare – Privilege Implications

June 30, 2004

Technologically-challenged lawyers often worry that their adversaries can hear what the lawyers intend to be private conversations — because the lawyers have somehow mishandled dropping conference call participants, incorrectly pressed the “mute” button, etc. One case describes the privilege implications of such an error.

In Jasmine Networks, Inc. v. Marvell Semiconductor, Inc., 12 Cal. Rptr. 3d 123, 125, 132 (Cal. Ct. App. 2004), Marvell was negotiating with the much smaller company Jasmine for a possible technology deal, but Jasmine worried that Marvell was using the negotiations as a ploy to learn about Jasmine’s technology. Three Marvell executives (including its general counsel and its in-house patent lawyer) used their speakerphone to leave a message on the voicemail of a Jasmine executive. However, the three Marvell executives “failed to hang up the speakerphone, and proceeded to have a conversation that was recorded on [the Jasmine’s executive’s] voicemail.” Among other things, the three Marvell executives discussed the possibility that their vice president “might go to jail,” and that Marvell might take Jasmine’s “IP on the pretense of just evaluating it, and put it in our product.” Not surprisingly, the Court found that the Marvell executives had waived the attorney-client privilege that would otherwise have covered their discussion. The Court also applied the crime-fraud exception.

In addition to causing professional and personal embarrassment, lawyers’ failure to properly use technology can also create privilege problems.