Lawyers give advice. It’s a big part of the job. Sometimes it’s legal advice and sometimes it’s business advice and sometimes (particularly for lawyers who focus on technology and intellectual property) it’s hard to tell. And that can be a problem. Because the conversations clients have with their lawyers are protected—until they aren’t. The idea that a client can talk freely and confidentially with her lawyer without fear that the conversation will be disclosed is fundamental to the American legal system. Lawyers and lay people alike understand that concept implicitly, and most probably assume that the protection is extremely broad, which in many cases it is.
But that common understanding conceals some very substantial pitfalls. The privilege is broad, but it is not absolute, and when it is lost the resulting inquiry can be highly invasive. Given how important the distinction between privileged and non-privileged communications can be, one might expect it to be well-defined and easy to recognize. But that is not always the case, especially where the lawyer’s work product itself becomes the subject of litigation. If a lawyer is providing advice and working on a document designed for public consumption (like a business plan or a patent application) and that document becomes the subject of a dispute, privilege issues can be particularly challenging.
In the Second Circuit, implied waiver of attorney-client privilege may be found where the privilege holder places a privileged communication at issue, for example by asserting a claim or defense based on that communication. See In re Grand Jury Proceedings, 219 F.3d 175, 182 (2d Cir. 2000). The classic example of this is the “advice of counsel” defense, in which a party relies on otherwise privileged communications to assert that it acted in good faith with the blessing of a lawyer. Under those circumstances, courts often find a limited waiver of the attorney-client privilege as to the underlying communications, holding that all communications on that subject must be disclosed and the privilege cannot be selectively applied. The privilege cannot be used as both a “sword” and a “shield.”
While waiver is perhaps most familiar to attorneys as it relates to the “advice of counsel” defense, it extends to other areas as well. A recent decision from the Eastern District of New York, NYU Winthrop Hosp. v. Microbion, 17-CV-6114 (LDH)(PK), 2019 WL 4535570 (E.D.N.Y. Sept. 19, 2019), looks at the issue in the context of a patent dispute. The decision is helpful, because it examines privilege issues relating to the role of an attorney in the preparation of public documents and provides good guidance as to the limits of privilege for lawyers providing that kind of advice.
This article first appeared in the New York Law Journal on November 25, 2019. Mark Brodt, a registered patent agent employed with the firm, provided substantial assistance with the preparation of this article.