Commercial Litigation and Arbitration

Is Advice of Counsel an Affirmative Defense that Must be Pled to be Asserted?

The issue initially presented to the Court in L.G. Philips LCD Co. v. Tatung Co., 2007 U.S. Dist. LEXIS 50822 (D. Del. July 13, 2007) was one of discovery — whether, on plaintiff’s motion, the defendants were obliged to furnish discovery on their advice of counsel defense. That led to the pleading question whether the advice of counsel defense must be pled as an affirmative defense pursuant to Rule 8(c). A special master concluded that the discovery issue was not ripe for consideration because the defendants had not raised the affirmative defense of reliance on the advice of counsel in the pleadings and could not do so without leave of Court. As a result, the master denied the discovery as unripe because it was not related to any claim or defense.

Examining the issue in the context of this patent infringement action, District Judge Joseph J. Farnan, Jr., reversed the master’s determination, stressing that reliance on advice of counsel is a means of showing good faith, but is not dispositive of the issue.

In contrast, a genuine affirmative defense has been defined as "[a] defendant's assertion raising new facts and arguments that, if true, will defeat the plaintiff's or prosecution's claim, even if all allegations in the complaint are true." [Citations omitted.] A defense which "merely negates some element of plaintiff's prima facie case is not truly an affirmative defense and need not be pleaded." [Citation omitted.]

Although concluding that advice of counsel is not an affirmative defense that must be pled, the Court observed that a party ‛does not have an unfettered right to determine when to raise the advice of counsel defense, and there is a point in litigation when it becomes too late to raise the defense. In deciding when the defense must be offered considerations of fairness, notice and/or surprise to the plaintiff claiming willful infringement may begin to weigh more heavily than the attorney-client privilege policy considerations which typically favor the accused infringer.“

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