When it comes to privilege disputes, an argument that the opposing party is "wielding privilege as both a sword" and a shield tends to be pretty effective. But it has its limits. As visiting Judge Murphy found in a decision last month, the opposing party actually has to be doing something more than simply using privilege as a shield.
In A.L.M. Holding Co. v. Zydex Industries Private Ltd., C.A. No. 25-155 (D. Del.), the defendant asserted an equitable estoppel defense to patent infringement, arguing that it reasonably relied on plaintiff's conduct, which misled them to believe that they were safe from an infringement claim:
In this patent litigation, Zydex has advanced an equitable estoppel defense. Essentially, that means Zydex will have to show that ALM misled Zydex to believe that it would not be sued, and that Zydex reasonably relied on ALM’s conduct to its detriment.
A.L.M. Holding Co. v. Zydex Industries Private Ltd., C.A. No. 25-155, at 1 (D. Del. Apr. 29, 2026).
That defense requires that the defendant actually believe that it wasn't going to be sued. But the defendant in this case was apparently talking to its lawyers about the infringement issued during the period when it argues it believed it wouldn't be sued:
[D]uring the time that Zydex says it was reasonably relying on ALM’s silence, Zydex’s privilege log suggests that Zydex was talking to its lawyers about ALM’s patents.
Id. The plaintiff argued that unless the defendant is willing to disclose it's privileged communications with counsel during the relevant time, it should be precluded from arguing that it actually believed the plaintiff would not sue. The Court disagreed:
Understandably, ALM finds [Zydex's communications with counsel during the relevant period] a bit suspicious. How reasonable can Zydex’s reliance be if it was busy in the meantime seeking and collecting legal advice about the situation? In its motion, ALM asks us hold that Zydex cannot assert its equitable estoppel defense unless it waives privilege for the relevant communications. . . .
The fundamental principle at work here “is grounded in principles of fairness and serves to prevent a party from simultaneously using the privilege as both a sword and a shield; that is, it prevents the inequitable result of a party disclosing favorable communications while asserting the privilege as to less favorable ones.” . . . And that’s where ALM’s argument starts and stops. What, exactly, is the sword here? Zydex has not waived privilege as to “favorable communications” or sought to benefit from some otherwise privileged information. In the willfulness context, plaintiffs are free to try to prove willfulness without waiving privilege as to whatever their lawyers may have been saying behind closed doors about the strength of the case; and defendants are free to tell juries that they did not think they were infringing without relying on a lawyer, if the admissible evidence allows. So too, here. ALM says that “Zydex wields the privilege as a sword by asserting that its course of conduct was consistent with innocent reliance,” . . . but that way of thinking about waiver knows no limits. You don’t get to see the other side’s legal communications just because you suspect that they will contradict other evidence.
Id. at 1-2. The Court did not stop there—it also held that the defendant was bound by its decision not to disclose its counsel's advice, and pointed out that the privilege log itself was not privileged:
This denial comes with two caveats. First, Zydex is bound by its decision to try to prove equitable estoppel with no help from the lawyers or their advice. Second, although the legal communications are privileged, the privilege log itself, of course, is not. None of this predecides any particular evidentiary issues that may arise for trial.
Id. at 2-3. I have to wonder how this may play at trial, with the defendant's witnesses testifying that they believed the plaintiff wouldn't sue, and the plaintiff potentially attempting to rebut that using the privilege log—but unable to ask about what was actually said.
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