Your company has just been sued by a competitor for patent infringement, deceptive advertising, unfair competition, or any number of other business torts. The news spreads quickly across industry publications and blogs, leading to a flood of inquiries from concerned customers wanting to know if the stories have any merit. You feel compelled to issue a press release to reassure them and challenge the claims against your company.

While a press release can be an effective way to communicate your position, it’s crucial to consider the potential risks to your attorney-client privilege. A poorly worded press release can inadvertently waive this privilege, exposing confidential communications to your legal opponents.

Here’s how to navigate this situation carefully, focusing on two key considerations: the content of your press release and the involvement of third parties in its creation.

The Content of the Press Release

Courts determine whether attorney-client privilege has been waived by assessing if the actual substance or a “significant part” of a privileged communication has been disclosed to persons outside the attorney-client relationship. If the press release discloses any significant part of privileged communication, it could result in a waiver.

For instance, if Company A, a computer components manufacturer, is sued for patent infringement by competitor Company B, it may consider issuing one of the following three press releases to reassure customers and investors:

1. Safe Approach

“We have been sued by Company B for patent infringement. We dispute the allegations, intend to vigorously defend against this lawsuit, and expect to prevail.”

This type of statement is unlikely to waive attorney-client privilege, as it contains no details about privileged communications. Of course, a company may want its press release to contain more detail, especially if addressing an unpleasant accusation in a complaint.

2. Riskier Approach

This statement, though more detailed, might still avoid waiving attorney-client privilege. The press release certainly could be worded more carefully (not expressly mentioning the opinion of the company’s attorneys, for instance), but Courts have found that the detail added in the second press release does not result in waiver because it is similar to the type of general denial that would be contained in an answer to a complaint.

3. High-Risk Approach

“We have been sued by Company B for patent infringement. We dispute the allegations, intend to vigorously defend against this lawsuit, and expect to prevail. Our attorneys have informed us that we have not infringed any valid patent of Company B. Specifically, our attorneys have advised us that, although there is a small possibility we have technically infringed the patent, the patent is unenforceable due to fraudulent conduct by Company B.”

The third press release provides the most detail and is the most likely to waive attorney-client privilege. While it’s unlikely a company would admit to even a “small possibility” of infringement, this example illustrates how a poorly crafted release can significantly impact the lawsuit. Company B could request documents, including communications with Company A’s attorneys about the potential infringement, using them against Company A. A court may allow this request due to the waiver of privilege.

Third-Party Involvement in Creating a Press Release

Communications between an attorney and client that involve a third party are typically not privileged, as the client cannot reasonably expect confidentiality when others are present. Even privileged communications can lose protection if disclosed to someone outside the attorney-client relationship. However, the privilege may still apply for communications shared with third parties assisting the attorney, such as legal assistants and investigators.

Preparing a press release often involves third parties like public relations firms. Whether their involvement waives attorney-client privilege depends on specific circumstances, but the claim that they are “assisting the lawyer in the rendition of legal services” is unlikely to hold.

Therefore, if you hire a public relations firm, avoid including them in any communications you want to keep privileged. And before engaging a public relations firm, discuss the following with your attorney:

Who hires the firm: If the company, rather than the attorney, hires the PR firm, it may affect the privilege claim.
Scope of involvement: Limit the public relations firm’s exposure to privileged communications.
Necessity of disclosure: Avoid sharing privileged information unless absolutely necessary.
Prior relationship: Consider whether the firm has an existing relationship with your company that could influence privilege claims.

Each of these factors could affect whether involving a public relations firm in privileged communications impacts your ability to assert attorney-client privilege.

Moreover, even without third parties in discussions with your attorney about media strategy or a press release, those communications may not be fully protected. Some courts may analyze individual communications to see if the attorney is applying legal principles to the client’s specific circumstances, potentially concluding that media strategy discussions are more business advice than legal advice and, thus, not protected.

The simple message here is to think twice when commenting publicly on any threatened or active litigation. If you decide to issue a press release, make sure you have consulted with your attorney to ensure that a press release will not impede your ability to assert the attorney-client privilege in the future.

January 6, 2025/by Litigation