Volterra Semiconductor Corporation v. Primarion, Inc. et al

Filing 1889


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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 VOLTERRA SEMICONDUCTOR CORPORATION, Plaintiff, 8 v. 9 PRIMARION, INC., et al., 11 United States District Court Northern District of California 10 Defendants. 14 ORDER RE VOLTERRA'S MOTION TO PRECLUDE DEFENDANTS FROM OFFERING EVIDENCE REGARDING THE SECOND PRONG OF THE SEAGATE TEST RE WILLFUL INFRINGEMENT Re: Dkt. No. 1772 12 13 Case No. 08-cv-05129-JCS I. INTRODUCTION Volterra filed this motion to prevent Primarion from offering evidence regarding the 15 subjective prong of the Seagate test on willful infringement. See In re Seagate Technology, LLC 16 497 F.3d 1360 (Fed. Cir. 2007). Volterra argues that Primarion’s Seventh Supplemental 17 Responses to Volterra’s Interrogatory No. 7 demonstrate that the willfulness witnesses identified 18 by Primarion (Sandro Cerato, Arun Mittal and Ken Ostrom) may offer testimony at trial that 19 Primarion’s decision to continue to market and produce infringing devices after receiving 20 Volterra’s cease and desist letter was based, in part, on an investigation undertaken by counsel. 21 According to Volterra, although Primarion asserts that it does not intend to waive attorney-client 22 privilege, it is impermissibly using the privilege as both a sword and a shield by seeking to 23 present evidence of counsel’s investigation to show that it took the cease and desist letter seriously 24 while also refusing to allow discovery as to that investigation on the basis of privilege. 25 Volterra asks the Court to issue an order excluding at trial all testimony, evidence or 26 argument relating to: 1) Primarion’s actions after receiving the cease and desist letter, including 27 that they conducted an investigation, consulted with counsel or took the cease and desist letter 28 seriously; 2) Primarion’s decision to continue to produce the products, given it was based on 1 Primarion’s beliefs as to infringement and validity that were formed after consultation with 2 counsel; and 3) the witnesses’ beliefs about infringement and validity formed after consultation 3 with counsel. Docket 1772 at 1. Alternatively, Volterra seeks an order that, by disclosing 4 witnesses that relied on the advice of counsel, Defendants have waived the attorney-client 5 privilege. In that case, Volterra asserts, the Court should also order that the witnesses answer 6 questions in their depositions regarding their communications with counsel, that Primarion 7 provide full and complete Rule 30(b)(6) testimony and that Volterra be permitted to subpoena 8 documents and obtain testimony from Defendants’ counsel. 9 II. ANALYSIS Because willful infringement and the scope of waiver accompanying the advice of counsel 11 United States District Court Northern District of California 10 defense invoke substantive patent law, the law of the Federal Circuit applies to Volterra’s motion. 12 In re Seagate, 497 F.3d at 1367. The Federal Circuit has held that “[o]nce a party announces that 13 it will rely on advice of counsel . . . in response to an assertion of willful infringement, the 14 attorney-client privilege is waived.” In re EchoStar Communications Corp., 448 F.3d 1294, 1299 15 (Fed. Cir. 2006). Here, however, Primarion has repeatedly claimed that it is not asserting an 16 advice of counsel defense and that its disclosures in response to Volterra’s interrogatory were not 17 a voluntary waiver but rather, a compelled response to the Court’s order. Primarion further 18 asserts that its witnesses will not offer any testimony at trial that gives rise to a waiver of attorney- 19 client privilege. In this context, the Court concludes that it is inappropriate to find a waiver of 20 attorney-client privilege based on Primarion’s interrogatory response. Therefore, the Court 21 DENIES Volterra’s motion to the extent that it asks the Court to find a waiver of attorney-client 22 privilege at this stage of the case. Similarly, the Court declines to issue an order permitting the 23 requested discovery of privileged communications. 24 With respect to Volterra’s request for an order precluding testimony, arguments and 25 evidence relating to Primarion’s response to its cease and desist letter, the Court GRANTS 26 Volterra’s request in part for the reasons stated below. 27 28 The Patent Local Rules require that a party who intends to rely upon advice of counsel as part of a patent-related claim or defense for any reason must make its election to assert such a 2 1 defense on a timely basis; otherwise, any advice of counsel defense can only be asserted pursuant 2 to a stipulation by the parties. See Patent L.R. 3-7. Here, the time for Primarion to elect to assert 3 an advice of counsel defense is long past. Indeed, Primarion has confirmed that it is not asserting 4 such a defense and it would be manifestly unfair to allow Primarion to waive the privilege at trial, 5 having declined to assert reliance on advice of counsel and having prevented discovery into 6 privileged matters. 7 Turning to the question of what types of evidence and arguments would give rise to a waiver of attorney-client privilege, the Court notes, as a preliminary matter, that Primarion does 9 not waive attorney-client privilege merely by denying that it acted willfully. See Genentech, Inc. 10 v. Insmed Inc., 236 F.R.D. 466, 469 (N.D. Cal. 2006) (holding that attorney client privilege was 11 United States District Court Northern District of California 8 not waived by testimony that did not do anything more than deny intent and did put any attorney- 12 client communication in issue). On the other hand, if it relies on counsel’s advice in order to 13 defend itself at trial it will impliedly waive attorney client privilege. See Laser Industries, Ltd. v. 14 Reliant Technologies, Inc., 167 F.R.D. 417, 446 (N.D. Cal., 1996). An implied waiver occurs 15 when “(1) [t]he party asserting the privilege acts affirmatively (2) to place the privileged 16 communications in issue between the party seeking discovery and itself (3) such that denying 17 access to the communication becomes manifestly unfair to the party seeking discovery.” Id., 18 (quoting Principle Business Enterprises, Inc. v. United States, 210 U.S.P.Q. 26, 27 (Ct.Cl.1980)). 19 While Primarion suggests that a privileged communication is only put “in issue” if its 20 contents are specifically identified or quoted, it has not cited any authority for that proposition, 21 which the Court finds to be incorrect. A similar issue was addressed in Claffey v. River Oaks 22 Hyundai, 486 F.Supp.2d 776 (N.D.Ill., 2007), which the Court finds instructive. There, a 23 defendant sought to establish that it acted in good faith by introducing evidence that it followed 24 reasonable procedures to ensure compliance with the law, including documents showing that its 25 usual process included consultation with counsel. Id. at 778. Though the court deferred ruling on 26 the motion, it opined that the defendant’s “introduction of such documents would leave a fact 27 finder with the distinct impression that [it] relied on advice by counsel on the matters at issue in 28 this case.” Id. The Court further found that if the defendant were “allowed to create this 3 1 imp pression but still maintain its attorne t ey-client priv vilege, it wo ould in effect be using th privilege t he 2 as both a shield and a swor and there b d rd” efore held th if the defe hat fendant “actu ually relie[d] on any ] 3 doc cuments or other evidenc that woul tend to sug o ce ld ggest that its procedures included co s s onsultation 4 wit counsel, it [would] be deemed to have waived its attorney th t e h d y-client privi ilege.” Id. This Court 5 finds the same reasoning ap pplies here. In particula the introd ar, duction of an evidence t ny that 6 Pri imarion’s inv vestigation included seek king advice of counsel w would be suf fficient to pu that advice ut e 7 in issue and fur i rther, would result in unfairness to V d Volterra to th extent it w he would leave the jury 8 wit the impres th ssion that Pr rimarion relied on the ad dvice of coun nsel. Accord dingly, while the Court declines, at th time, to p e d his prohibit intro oduction of a of the all 9 testimony, evid dence and ar rguments req quested in Volterra’s mo otion, it will not permit, a a at 11 United States District Court Northern District of California 10 min nimum, any evidence that Primarion investiga n’s ation in respo onse to the c cease and des letters sist 12 inc cluded consu ultations with counsel. Further restri h F ictions may b appropria dependin on the be ate ng 13 spe ecific testimo given by the witness at deposi ony y ses ition. 14 III I. 15 CONCLUSION The Co DENIES in part Vol ourt S lterra’s Moti to the ext that the Court declin to find a ion tent nes 16 wa aiver of attorney-client pr rivilege base on Primar ed rion’s interro ogatory resp ponses. The Court 17 GR RANTS in pa Volterra’s motion to the extent th Court pro art he ohibits the in ntroduction o any of 18 evi idence, testim mony or argu uments that Primarion’s investigatio in respons to the cea and desist s on se ase 19 lett included consultatio with coun ters d ons nsel. To the extent that Volterra req e t quests broad der 20 pre eclusion of evidence, the motion is DENIED wit e e D thout prejudi to raising that issue i a motion ice g in 21 in limine. l 22 23 IT IS SO ORDERE ED. Da ated: April 3, 2013 , 24 __ ___________ __________ ____ Jos seph C. Sper ro Un nited States M Magistrate J Judge 25 26 27 28 4

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