Caraway Home, Inc. v. Sensio Inc.

Background

Caraway Home, Inc. alleged that Sensio Inc. waived the attorney-client privilege. The dispute arose from a declaration by Sensio’s president stating that Sensio worked with legal counsel during the redesign of its BEAUTIFUL product line to ensure that it was not using protected designs.

Sensio argued that merely stating that a company consulted a lawyer for legal advice does not waive the privilege. The court agreed with that general principle. But the court also explained that a party puts legal advice at issue when it relies on that advice to support a claim or defense. The court further stated that asserting good faith can waive the privilege as to legal advice received about whether the party’s actions were lawful, even if the party says it does not intend to discuss the advice.

Sensio’s Defenses

Sensio stated in its answer that it did not willfully infringe and that this was not an exceptional case. Caraway also identified statements in Sensio’s court submissions that Sensio acted in good faith and had no intent to copy Caraway.

Order

Before deciding the privilege-waiver issue, the court ordered Sensio to file a letter on the electronic docket by May 17, 2024. Sensio must state unequivocally whether it intends to assert, as a defense to any patent- or trademark-infringement claim, willful-infringement claim, or exceptional-case allegation, both that it acted in good faith and that it received legal advice about the lawfulness of its actions at a relevant time.

The order did not itself decide whether Sensio waived attorney-client privilege. Judge P. Castel entered the order on May 2, 2024, and stated that it superseded and accelerated the election date provided by the applicable local patent rule and case-management order.