What were they thinking?

Nicole Keenan Jun. 17, 2010, 8:47am

An interesting strategic decision by Alston & Bird LLP turned out to be very costly for their clients, E-Z-EM Inc. and ACIST Medical Systems Inc. ("Defendants"), and serves as a cautionary tale.

After the defendants were sued for patent infringement in the Eastern District of Texas, they hired the law firm of Alston & Bird LLP to provide an opinion letter.

Walter Scott is the attorney who prepared the opinion, which was ultimately produced to plaintiffs in the case since defendants intended to rely on the opinion to defeat a willful infringement charge. Defendants also proceeded to hire Alston & Bird LLP to represent it at trial in the same case, with Philippe Bennett as the lead trial counsel.

But then the firm made an interesting staffing decision that ultimately proved costly for their clients – not long after Mr. Scott had authored the opinion letter, he joined the trial team and actively participated in trial strategy.

This is significant because when a party is relying on an opinion as a defense, waiver of privilege is ordinarily not extended to trial counsel because opinion counsel and trial counsel typically serve separate and distinct functions – opinion counsel's role is to provide an objective assessment for making informed business decisions and trial counsel's role focuses on litigation strategy and the most successful way of presenting the case.

In this case, as U.S. District Judge T. John Ward astutely points out in his opinion, with Mr. Scott joining the trial team, the distinction between opinion counsel and trial counsel had been blurred, and Mr. Scott was no longer limited to an objection assessment function.

Because of this, the court held that defendants had waived attorney-client privilege for all communications on the same subject matter included in the opinion letter - covering claim construction, invalidity, non-infringement and unenforceability of the patent in suit.

These waived communications include those between Mr. Scott and the client, Mr. Scott and the rest of the trial team, and the trial team and the client. Defendants had also waived immunity for all work product on the same subject matter.

This broad waiver could have major implications for the defendants (especially depending on what is included in the communications).

A hard lesson learned for Alston & Bird LLP, but one that other firms can take to heart – is that every detail matters in litigation, and more specifically, take care that you do not include opinion counsel on the trial team in the same case or you could run the risk of a broad waiver.

Nicole Keenan is a partner at McDonnell Boehnen Hulbert & Berghoff LLP, an intellectual property firm in Chicago, Ill. She can be contacted at 312-935-2372 (direct)or keenan@mbhb.com.

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