Volterra Semiconductor Corporation v. Primarion, Inc. et al

Filing 1889

ORDER RE 1772 VOLTERRA'S MOTION TO PRECLUDE DEFENDANTS FROM OFFERING EVIDENCE REGARDING THE SECOND PRONG OF THE SEAGATE TEST RE WILLFUL INFRINGEMENT. Signed by Judge Joseph C. Spero on April 3, 2013. (jcslc1, COURT STAFF) (Filed on 4/3/2013)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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VOLTERRA SEMICONDUCTOR
CORPORATION,
Plaintiff,

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v.

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PRIMARION, INC., et al.,

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United States District Court
Northern District of California

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Defendants.

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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

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Case No. 08-cv-05129-JCS

I.

INTRODUCTION
Volterra filed this motion to prevent Primarion from offering evidence regarding the

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subjective prong of the Seagate test on willful infringement. See In re Seagate Technology, LLC

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497 F.3d 1360 (Fed. Cir. 2007). Volterra argues that Primarion’s Seventh Supplemental

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Responses to Volterra’s Interrogatory No. 7 demonstrate that the willfulness witnesses identified

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by Primarion (Sandro Cerato, Arun Mittal and Ken Ostrom) may offer testimony at trial that

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Primarion’s decision to continue to market and produce infringing devices after receiving

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Volterra’s cease and desist letter was based, in part, on an investigation undertaken by counsel.

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According to Volterra, although Primarion asserts that it does not intend to waive attorney-client

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privilege, it is impermissibly using the privilege as both a sword and a shield by seeking to

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present evidence of counsel’s investigation to show that it took the cease and desist letter seriously

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while also refusing to allow discovery as to that investigation on the basis of privilege.

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Volterra asks the Court to issue an order excluding at trial all testimony, evidence or

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argument relating to: 1) Primarion’s actions after receiving the cease and desist letter, including

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that they conducted an investigation, consulted with counsel or took the cease and desist letter

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seriously; 2) Primarion’s decision to continue to produce the products, given it was based on

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Primarion’s beliefs as to infringement and validity that were formed after consultation with

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counsel; and 3) the witnesses’ beliefs about infringement and validity formed after consultation

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with counsel. Docket 1772 at 1. Alternatively, Volterra seeks an order that, by disclosing

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witnesses that relied on the advice of counsel, Defendants have waived the attorney-client

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privilege. In that case, Volterra asserts, the Court should also order that the witnesses answer

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questions in their depositions regarding their communications with counsel, that Primarion

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provide full and complete Rule 30(b)(6) testimony and that Volterra be permitted to subpoena

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documents and obtain testimony from Defendants’ counsel.

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II.

ANALYSIS
Because willful infringement and the scope of waiver accompanying the advice of counsel

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United States District Court
Northern District of California

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defense invoke substantive patent law, the law of the Federal Circuit applies to Volterra’s motion.

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In re Seagate, 497 F.3d at 1367. The Federal Circuit has held that “[o]nce a party announces that

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it will rely on advice of counsel . . . in response to an assertion of willful infringement, the

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attorney-client privilege is waived.” In re EchoStar Communications Corp., 448 F.3d 1294, 1299

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(Fed. Cir. 2006). Here, however, Primarion has repeatedly claimed that it is not asserting an

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advice of counsel defense and that its disclosures in response to Volterra’s interrogatory were not

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a voluntary waiver but rather, a compelled response to the Court’s order. Primarion further

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asserts that its witnesses will not offer any testimony at trial that gives rise to a waiver of attorney-

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client privilege. In this context, the Court concludes that it is inappropriate to find a waiver of

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attorney-client privilege based on Primarion’s interrogatory response. Therefore, the Court

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DENIES Volterra’s motion to the extent that it asks the Court to find a waiver of attorney-client

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privilege at this stage of the case. Similarly, the Court declines to issue an order permitting the

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requested discovery of privileged communications.

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With respect to Volterra’s request for an order precluding testimony, arguments and

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evidence relating to Primarion’s response to its cease and desist letter, the Court GRANTS

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Volterra’s request in part for the reasons stated below.

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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
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defense on a timely basis; otherwise, any advice of counsel defense can only be asserted pursuant

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to a stipulation by the parties. See Patent L.R. 3-7. Here, the time for Primarion to elect to assert

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an advice of counsel defense is long past. Indeed, Primarion has confirmed that it is not asserting

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such a defense and it would be manifestly unfair to allow Primarion to waive the privilege at trial,

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having declined to assert reliance on advice of counsel and having prevented discovery into

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privileged matters.

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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

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not waive attorney-client privilege merely by denying that it acted willfully. See Genentech, Inc.

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v. Insmed Inc., 236 F.R.D. 466, 469 (N.D. Cal. 2006) (holding that attorney client privilege was

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United States District Court
Northern District of California

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not waived by testimony that did not do anything more than deny intent and did put any attorney-

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client communication in issue). On the other hand, if it relies on counsel’s advice in order to

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defend itself at trial it will impliedly waive attorney client privilege. See Laser Industries, Ltd. v.

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Reliant Technologies, Inc., 167 F.R.D. 417, 446 (N.D. Cal., 1996). An implied waiver occurs

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when “(1) [t]he party asserting the privilege acts affirmatively (2) to place the privileged

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communications in issue between the party seeking discovery and itself (3) such that denying

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access to the communication becomes manifestly unfair to the party seeking discovery.” Id.,

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(quoting Principle Business Enterprises, Inc. v. United States, 210 U.S.P.Q. 26, 27 (Ct.Cl.1980)).

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While Primarion suggests that a privileged communication is only put “in issue” if its

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contents are specifically identified or quoted, it has not cited any authority for that proposition,

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which the Court finds to be incorrect. A similar issue was addressed in Claffey v. River Oaks

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Hyundai, 486 F.Supp.2d 776 (N.D.Ill., 2007), which the Court finds instructive. There, a

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defendant sought to establish that it acted in good faith by introducing evidence that it followed

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reasonable procedures to ensure compliance with the law, including documents showing that its

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usual process included consultation with counsel. Id. at 778. Though the court deferred ruling on

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the motion, it opined that the defendant’s “introduction of such documents would leave a fact

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finder with the distinct impression that [it] relied on advice by counsel on the matters at issue in

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this case.” Id. The Court further found that if the defendant were “allowed to create this
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imp
pression but still maintain its attorne
t
ey-client priv
vilege, it wo
ould in effect be using th privilege
t
he

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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
]

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doc
cuments or other evidenc that woul tend to sug
o
ce
ld
ggest that its procedures included co
s
s
onsultation

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wit counsel, it [would] be deemed to have waived its attorney
th
t
e
h
d
y-client privi
ilege.” Id. This Court

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finds the same reasoning ap
pplies here. In particula the introd
ar,
duction of an evidence t
ny
that

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Pri
imarion’s inv
vestigation included seek
king advice of counsel w
would be suf
fficient to pu that advice
ut
e

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in issue and fur
i
rther, would result in unfairness to V
d
Volterra to th extent it w
he
would leave the jury

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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

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testimony, evid
dence and ar
rguments req
quested in Volterra’s mo
otion, it will not permit, a a
at

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United States District Court
Northern District of California

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min
nimum, any evidence that Primarion investiga
n’s
ation in respo
onse to the c
cease and des letters
sist

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inc
cluded consu
ultations with counsel. Further restri
h
F
ictions may b appropria dependin on the
be
ate
ng

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spe
ecific testimo given by the witness at deposi
ony
y
ses
ition.

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III
I.

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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

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wa
aiver of attorney-client pr
rivilege base on Primar
ed
rion’s interro
ogatory resp
ponses. The Court

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GR
RANTS in pa Volterra’s motion to the extent th Court pro
art
he
ohibits the in
ntroduction o any
of

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evi
idence, testim
mony or argu
uments that Primarion’s investigatio in respons to the cea and desist
s
on
se
ase

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lett included consultatio with coun
ters
d
ons
nsel. To the extent that Volterra req
e
t
quests broad
der

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pre
eclusion of evidence, the motion is DENIED wit
e
e
D
thout prejudi to raising that issue i a motion
ice
g
in

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in limine.
l

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IT IS SO ORDERE
ED.
Da
ated: April 3, 2013
,

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__
___________
__________
____
Jos
seph C. Sper
ro
Un
nited States M
Magistrate J
Judge

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