PATENT LAW
Randy Canis
CLASS 11
Infringement pt. 1
1
Infringement (Ch. 11)
• So now you have a patent, what
comes next?
• Make money!!!
– Sell the invention
– License the invention and let others sell
it…
– Sell the patent
– Sue others for patent infringement
2
Quick Review of the Statute
• 271(a)-(i)
3
Infringement
Sec. 271. - Infringement of patent
(a) Except as otherwise provided in this title, whoever without authority
makes, uses, offers to sell, or sells any patented invention, within the
United States, or imports into the United States any patented invention
during the term of the patent therefor, infringes the patent.
(b) Whoever actively induces infringement of a patent shall be liable as an
infringer. [Active Inducement]
(c) Whoever offers to sell or sells within the United States or imports into
the United States a component of a patented machine, manufacture,
combination, or composition, or a material or apparatus for use in
practicing a patented process, constituting a material part of the
invention, knowing the same to be especially made or especially
adapted for use in an infringement of such patent, and not a staple
article or commodity of commerce suitable for substantial
noninfringing use, shall be liable as a contributory infringer.
[Contributory Infringement]
4
Infringement
(d) No patent owner otherwise entitled to relief for infringement or
contributory infringement of a patent shall be denied relief or deemed
guilty of misuse or illegal extension of the patent right by reason of his
having done one or more of the following:
(1) derived revenue from acts which if performed by another without his consent
would constitute contributory infringement of the patent;
(2) licensed or authorized another to perform acts which if performed without his
consent would constitute contributory infringement of the patent;
(3) sought to enforce his patent rights against infringement or contributory
infringement;
(4) refused to license or use any rights to the patent; or
(5) conditioned the license of any rights to the patent or the sale of the patented
product on the acquisition of a license to rights in another patent or purchase
of a separate product, unless, in view of the circumstances, the patent owner
has market power in the relevant market for the patent or patented product
on which the license or sale is conditioned.
5
Infringement
(e)(1) It shall not be an act of infringement to make, use, offer to sell, or sell within the
United States or import into the United States a patented invention (other than a
new animal drug or veterinary biological product (as those terms are used in the
Federal Food, Drug, and Cosmetic Act and the Act of March 4, 1913) which is
primarily manufactured using recombinant DNA, recombinant RNA, hybridoma
technology, or other processes involving site specific genetic manipulation
techniques) solely for uses reasonably related to the development and submission
of information under a Federal law which regulates the manufacture, use, or sale
of drugs or veterinary biological products.
(2) It shall be an act of infringement to submit – (A) an application under section 505(j) of the Federal Food, Drug, and
Cosmetic Act or described in section 505(b)(2) of such Act for a drug claimed
in a patent or the use of which is claimed in a patent, or
– (B) an application under section 512 of such Act or under the Act of March 4,
1913 (21 U.S.C. 151 - 158) for a drug or veterinary biological product which
is not primarily manufactured using recombinant DNA, recombinant RNA,
hybridoma technology, or other processes involving site specific genetic
manipulation techniques and which is claimed in a patent or the use of which
is claimed in a patent, if the purpose of such submission is to obtain approval
under such Act to engage in the commercial manufacture, use, or sale of a
drug or veterinary biological product claimed in a patent or the use of which is
claimed in a patent before the expiration of such patent.
6
Infringement
(3) In any action for patent infringement brought under this section, no injunctive or other relief may be
granted which would prohibit the making, using, offering to sell, or selling within the United States or
importing into the United States of a patented invention under paragraph (1).
(4) For an act of infringement described in paragraph (2)(A) the court shall order the effective date of any approval of the drug or veterinary biological product
involved in the infringement to be a date which is not earlier than the date of the expiration of the
patent which has been infringed,
(B) injunctive relief may be granted against an infringer to prevent the commercial manufacture, use,
offer to sell, or sale within the United States or importation into the United States of an approved
drug or veterinary biological product, and
(C) damages or other monetary relief may be awarded against an infringer only if there has been
commercial manufacture, use, offer to sell, or sale within the United States or importation into the
United States of an approved drug or veterinary biological product. The remedies prescribed by
subparagraphs (A), (B), and (C) are the only remedies which may be granted by a court for an
act of infringement described in paragraph (2), except that a court may award attorney fees
under section 285.
(5) Where a person has filed an application described in paragraph (2) that includes a certification under
subsection (b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) of section 505 of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 355), and neither the owner of the patent that is the subject of the certification nor the
holder of the approved application under subsection (b) of such section for the drug that is claimed by
the patent or a use of which is claimed by the patent brought an action for infringement of such patent
before the expiration of 45 days after the date on which the notice given under subsection (b)(3) or
(j)(2)(B) of such section was received, the courts of the United States shall, to the extent consistent
with the Constitution, have subject matter jurisdiction in any action brought by such person under
section 2201 of title 28 for a declaratory judgment that such patent is invalid or not infringed.
7
Infringement
(f)
(1) Whoever without authority supplies or causes to be supplied in or from the
United States all or a substantial portion of the components of a patented
invention, where such components are uncombined in whole or in part, in
such manner as to actively induce the combination of such components
outside of the United States in a manner that would infringe the patent if such
combination occurred within the United States, shall be liable as an infringer.
(2) Whoever without authority supplies or causes to be supplied in or from the
United States any component of a patented invention that is especially made
or especially adapted for use in the invention and not a staple article or
commodity of commerce suitable for substantial noninfringing use, where
such component is uncombined in whole or in part, knowing that such
component is so made or adapted and intending that such component will be
combined outside of the United States in a manner that would infringe the
patent if such combination occurred within the United States, shall be liable
as an infringer.
8
Infringement
(g) Whoever without authority imports into the United States or offers to sell, sells, or uses
within the United States a product which is made by a process patented in the United
States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the
product occurs during the term of such process patent. In an action for infringement of a
process patent, no remedy may be granted for infringement on account of the
noncommercial use or retail sale of a product unless there is no adequate remedy under
this title for infringement on account of the importation or other use, offer to sell, or sale
of that product. A product which is made by a patented process will, for purposes of this
title, not be considered to be so made after (1) it is materially changed by subsequent processes; or
(2) it becomes a trivial and nonessential component of another product.
(h) As used in this section, the term "whoever" includes any State, any instrumentality of a
State, any officer or employee of a State or instrumentality of a State acting in his official
capacity. Any State, and any such instrumentality, officer, or employee, shall be subject
to the provisions of this title in the same manner and to the same extent as any
nongovernmental entity.
(i) As used in this section, an "offer for sale" or an "offer to sell" by a person other than the
patentee or any assignee of the patentee, is that in which the sale will occur before the
expiration of the term of the patent.
9
Where do we start with
infringement?
• We must construe the claims…
• Biggest cases on claim construction
– Markman
– Phillips v. AWH Corporation
10
Literal Infringement
Chapter 15.1
• Inquiry - Does a device or method
literally infringe one or more claims of
a patent?
11
Markman v. Westview Instruments, Inc.
• Procedural Background
– Federal Circuit en banc decision;
Supreme court unanimously affirms this
decision.
• Factual Background
• Issue:
– Who determines claim construction—a
jury or the court?
12
Markman v. Westview Instruments, Inc.
• “To ascertain the meaning of claims,
we consider three sources: The
claims, the specification, and the
prosecution history. … Expert
testimony, including evidence of how
those skilled in the art would interpret
the claims, may also be used.”
13
Markman v. Westview Instruments, Inc.
• “Claims must be read in view of the specification,
of which they are apart.”
• “For claim construction purposes, the
[specification] may act as a sort of dictionary, which
explains the invention and may define terms used
in the claims.”
• “… [A] patentee is free to be his own lexicographer
… [but] any special definition must be clearly
defined in the specification.”
• Court may also consider:
– Prosecution history (if in evidence)
14
Markman v. Westview Instruments, Inc.
• “Extrinsic evidence may demonstrate the
state of the prior art at the time of the
invention.”
• “Extrinsic evidence consists of all evidence
external to the patent and prosecution
history, including expert and inventor
testimony, dictionaries, and learned
treatises … and may demonstrate the state
of the art at the time of the invention.”
15
Markman v. Westview Instruments, Inc.
• “An infringement analysis entails two steps.
The first step is determining the meaning
and scope of the patent claims asserted to
be infringed. The second step is comparing
the properly constructed claims to the
device accused of infringing.”
• “… [I]n a case tried to a jury, the court has
the power and obligation to construe as a
matter of law the meaning of language used
in the patent claim.”
16
Markman v. Westview Instruments, Inc.
• Ruling
– Affirmed the judgment of the noninfringement.
• Holding
– “… [W]e conclude that the interpretation and
construction of patent claims, which define the
scope of the patentee’s rights under the patent,
is a matter of law exclusively for the court.”
• Dicta
17
Markman v. Westview Instruments, Inc.
• Supreme Court
– Judges are better suited to interpret the
patents
– Uniformity of interpretation
18
Trial procedure effect of
Markman?
• Resolution of meaning of disputed
patent terms by use of a Markman
hearing and ruling by judge can be
binding on litigants and may have
effect of a final determination so that a
full-blown trial before a jury may never
occur.
19
Markman v. Westview Instruments, Inc.
• This means JUDGE not JURY will
construe the language of claims.
• Can have major effect on the way
patent infringement trials are
conducted
• Before case is presented to jury,
which must decide issues of FACT
• Judge may decide issues of LAW by
construing claim language.
20
Trial procedure changed by
Markman
• Or effect of Markman will leave a clearer set of
issues of fact which are to be decided by jury at
trial. But ...
• Ultimately the jury factually determines whether
there is infringement unless the claims have been
so construed by judicial ruling after Markman
hearing as to preclude an infringing interpretation.
he overall effect of Markman v. Westview
Instruments has had the practical effect of making
patent infringement suits a multistage affair in
which the Markman hearing often determines the
outcome of the litigation before trial before jury
occurs.
21
Claim Construction
• Intrinsic
– Claims
– Specification
– Prosecution History
• Extrinsic
– Inventor testimony
– Dictionaries
– Learned treatises
22
Additional Claim Interpretation Notes
• “To literally infringe, an accused product or
process must include each and every
limitation of a claim. Therefore the
omission of any limitation is fatal to literal
infringement.”
• “… [W]here the patent documents are
unambiguous, expert testimony regarding
the meaning of a claim is entitled to no
weight.”
23
Phillips v. AWH Corporation
• Procedural Background
• Factual Background
• Issue(s):
– To what extent should the specification
be relied on when ascertaining the scope
of the claims? How should dictionaries
be used in claim interpretation?
24
Phillips v. AWH Corporation
• Invention
– Modular steel panels that are welded together to
form walls
– Specification described baffled deployment at
an angle other than 90 degrees to wall face to
create interlocking
• D.C. – no infringement b/c at 90 degrees
• Panel – affirmed; baffles at non 90 angle
enable deflection of bullets
25
Phillips v. AWH Corporation
• Claims
– define invention to which the patentee is
entitled the right to exclude
– “…the words of a claim ‘are generally
given their ordinary and customary
meaning.’” …
26
Phillips v. AWH Corporation
• “We have made clear, moreover, that
the ordinary and customary meaning
of a claim term is the meaning that the
term would have to a person of
ordinary skill in the art in question at
the time of the invention, i.e., as of the
effective filing date of the patent
application.”
27
Phillips v. AWH Corporation
• “[T]he person of ordinary skill in the art
is deemed to read the claim term not
only in the context of the particular
claim in which the disputed term
appears, but in the context of the
entire patent, including the
specification.”
28
Phillips v. AWH Corporation
• Apply well-accepted meaning of
commonly understood words
• Examine terms that have a particular
meaning in a field of art
29
Phillips v. AWH Corporation
• “Quite apart from the written description
and the prosecution history, the claims
themselves provide substantial guidance as
to the meaning of particular claim terms. …
• “To begin with, the context in which a term
is used in the asserted claim can be highly
instructive. …
• “Other claims of the patent in question, both
asserted and unasserted, can also be
valuable sources of enlightenment as to the
meaning of a claim term.”
30
Phillips v. AWH Corporation
• “[T]he presence of a dependent claim
that adds a particular limitation gives
rise to a presumption that the
limitation in question is not present in
the independent claim.”
31
Phillips v. AWH Corporation
• Claims must be read in terms of the specification
• “Our cases recognize that the specification may
reveal a special definition given to a claim term by
the patentee that differs from the meaning it would
otherwise possess. In such cases, the inventor’s
lexicography governs. … In other cases, the
specification may reveal an intentional disclaimer,
or disavowal, of claim scope by the inventor. In that
instance as well, the inventor has dictated the
correct claim scope, and the inventor’s intention, as
expressed in the specification, is regarded as
dispositive. …
32
Phillips v. AWH Corporation
• Prosecution history
– evidence of how the PTO and the inventor
understood the patent
– “lacks the clarity of the specification and thus is
less useful for claim construction purposes.”
33
Phillips v. AWH Corporation
• “[W]e have also authorized district courts to
rely on extrinsic evidence, which ‘consists
of all evidence external to the patent and
prosecution history, including expert and
inventor testimony, dictionaries, and
learned treatises.’
• “[W]hile extrinsic evidence ‘can shed useful
light on the relevant art,’ we have explained
that it is “less significant than the intrinsic
record in determining ‘the legally operative
meaning of claim language.’”
34
Phillips v. AWH Corporation
• Extrinsic evidence
– Less reliable
– What five reasons did the court give?
– “unlikely to result in a reliable
interpretation of patent claim scope
unless considered in the context of the
intrinsic evidence”
35
Phillips v. AWH Corporation
• What happened in Texas Digital?
– Too much reliance on dictionaries (and
other extrinsic sources)
36
Phillips v. AWH Corporation
• “Moreover, we recognize that the
distinction between using the
specification to interpret the meaning
of a claim and importing limitations
from the specification into the claim
can be a difficult one to apply in
practice.”
37
Phillips v. AWH Corporation
• Ruling
– Reverse finding of infringement
• Holding
– Reaffirms Markman.
• Dicta
38
Phillips v. AWH Corporation
• What is the effect of this ruling on
claim construction and claim drafting?
39
Claim Differentiation
• Why should you care?
• Is it the panacea?
• When you review the proposed
claims…
40
Indirect Infringement
41
Other Types of Infringement
INDIRECT INFRINGEMENT
• Active Inducement (§271(b))
– “Whoever actively induces infringement of a patent shall be
liable as an infringer.”
• Contributory Infringement (§271(c))
– “Whoever offers to sell or sells within the United States or
imports into the United States a component of a patented
machine, manufacture, combination or composition, or a
material or apparatus for use in practicing a patented process,
constituting a material part of the invention, knowing the same to
be especially made or especially adapted for use in an
infringement of such patent, and not a staple article or
commodity of commerce suitable for substantial noninfringing
use, shall be liable as a contributory infringer.”
42
DSU Medical Corporation v. JMS Company, LTD.
• 2006 Federal Circuit (Panel + en
banc)
– Affirmed D.C. finding of infringement
• JMS NA and JMS directly and contributorily
infringed
• JMS actively inducted JMS NA to infringe
• Invention
– guarded, winged-needle assembly
43
DSU Medical Corporation v. JMS Company, LTD.
• How did the Platypus sets come into
the United States?
44
DSU Medical Corporation v. JMS Company, LTD.
• “[T]he patentee always has the burden
to show direct infringement for each
instance of indirect infringement.”
• What must DSU show to prevail on
contributory infringement?
45
DSU Medical Corporation v. JMS Company, LTD.
• “The plaintiff has the burden of
showing that the alleged infringer’s
actions induced infringing acts and
that he knew or should have known
his actions would induce actual
infringements.”
46
DSU Medical Corporation v. JMS Company, LTD.
• “[I]nducement requires evidence of
culpable conduct, directed to
encouraging another’s infringement,
not merely that the inducer had
knowledge of the direct infringer’s
activities.”
47
Process Patents
Chapter 15.7
• Let’s look at an application of 271(g)…
48
Eli Lilly & Co. v. American Cyanamid
Co.
• “Prior to the enactment of the 1988 statute, a patentee
holding a process patent could sue for infringement if others
used the process in this country, but had no cause of action if
such persons used the patented process abroad to
manufacture products, and then imported, used, or sold the
products in this country. In that setting, the process patent
owner's only legal recourse was to seek an exclusion order
for such products from the International Trade Commission …
By enacting the Process Patent Amendments Act, the
principal portion of which is codified as 35 U.S.C. § 271(g),
Congress changed the law by making it an act of infringement
to import into the United States, or to sell or use within the
United States ‘a product which is made by a process
patented in the United States . . . if the importation, sale, or
use of the product occurs during the term of such process
patent.’”
49
Eli Lilly & Co. v. American Cyanamid
Co.
• “A concern raised during Congress's
consideration of the process patent
legislation was whether and to what extent
the new legislation would affect products
other than the direct and unaltered products
of patented processes -- that is, whether
the new statute would apply when a product
was produced abroad by a patented
process but then modified or incorporated
into other products before being imported
into this country.”
50
Eli Lilly & Co. v. American Cyanamid
Co.
• “Congress … [provided] that a product
that is ‘made by’ a patented process
within the meaning of the statute ‘will .
. . not be considered to be so made
after -- (1) it is materially changed by
subsequent processes; or (2) it
becomes a trivial and nonessential
component of another product.’ 35
U.S.C. § 271(g).”
51
Eli Lilly & Co. v. American Cyanamid
Co.
• “We cannot accept the argument that the question
whether one compound is ‘materially changed’ in
the course of its conversion into another depends
on whether there are other products of the first
compound that have economic value. We therefore
do not adopt Lilly's proposed construction of
section 271(g). We look instead to the
substantiality of the change between the product of
the patented process and the product that is being
imported.”
52
Eli Lilly & Co. v. American Cyanamid
Co.
• “In the chemical context, a ‘material’ change in a
compound is most naturally viewed as a significant
change in the compound's structure and
properties. Without attempting to define with
precision what classes of changes would be
material and what would not, we share the district
court's view that a change in chemical structure
and properties as significant as the change
between compound 6 and cefaclor cannot lightly
be dismissed as immaterial.”
53
Jazz Photo Corp. v. International Trade Comm.
• 2001 Federal Circuit Panel
• Invention
– Disposable “single-use” cameras
54
Jazz Photo Corp. v. International Trade Comm.
• Who is the commission?
• What did the commission decide?
– Repair or reconstruction?
55
Jazz Photo Corp. v. International Trade Comm.
• What is the nature of the invention?
• How are casings acquired?
• What does the claim protect?
56
Jazz Photo Corp. v. International Trade Comm.
• “While the ownership of a patented
article does not include the right to
make a substantially new article, it
does include the right to preserve the
useful life of the original article.”
57
Jazz Photo Corp. v. International Trade Comm.
• “Mere replacement of individual
unpatentable parts, one at a time,
whether of the same part repeatedly
or different parts successively, is not
more than the lawful right of the owner
to repair his property.”
58
Jazz Photo Corp. v. International Trade Comm.
• “Precedent has classified as repair the
disassembly and cleaning of patented
articles accompanied by replacement
of unpatented parts that had become
worn or spent, in order to preserve the
utility for which the article was
originally intended.”
59
Jazz Photo Corp. v. International Trade Comm.
• “’Reconstruction,’” precedent shows,
requires a more extensive rebuilding
of the patented entity…”
60
Jazz Photo Corp. v. International Trade Comm.
• “The unrestricted sale of a patented
article, by or with the authority of the
patentee, ‘exhausts’ the patentee’s
right to control further sale and use of
that article by enforcing the patent
under which it was first sold.”
61
Patent Opinions
62
Who Should Obtain an
Opinion?
• (Non)Infringement Opinions should be
obtained by both patent owner and
the product developer (accused)
• Why?
• Rule 11
• Willfulness (Knorr Bremse)
• Substantive
63
Patent Opinions
• Knorr-Bremse Systeme v. Dana Corp.
(Fed. Cir. 2004)(en banc)
• In re Seagate (Fed. Cir. 2007)(en
banc)
• Broadcom v. Qualcomm
64
Opinion Basics
•
•
•
•
Description of subject matter
Interpretation of claim terms
Literal analysis
Doctrine of equivalents analysis
65
Competent Opinion
Summary
• Kinds
– (Non)infringement, (in)validity
– For owner or for alleged infringer
• By outside counsel
• Well reasoned
– Discuss law, claim interpretation, facts,
application of interpretation to facts
– (Non-infringement) Consider literal and doctrine
of equivalents
– Address all claims
66
Knorr-Bremse Systeme v. Dana Corp.
• Invention – Disk Brake for Vehicles
Having Insertable Actuator
• E.D.VA – Dana and Haldex liable for
infringement and willful infringement
• “Air disk brake technology is superior
to the previously dominant technology
of hydraulically or pneumatically
actuated drum brakes…”
67
Knorr-Bremse Systeme v. Dana Corp.
• Dana and Haldex collaborated to sell
air brakes in the United States
• D&H imported about 100 units of Mark
II model into the US
• Between 1997 and 1999, Mark II
installed in approximately 18 trucks of
Dana and potential customers
68
Knorr-Bremse Systeme v. Dana Corp.
• Dec ‘98 – KB orally notified Dana of patent
applications pending in US and infringement
litigation against Haldex in Europe
• Aug ’99 – KB similar notification in writing along
with notification of issuance of ‘445 patent in US
• May ’00 – filed infringement suit
• Sept ‘00 – Haldex presented a modified device
(i.e., Mark III) and moved for summary judgment of
noninfringement
• Nov ’00 – summary judgment of infringement of
Mark II and trial on Mark III
• Jan ’01 – DC found literal infringement by Mark III
69
Knorr-Bremse Systeme v. Dana Corp.
• Haldex – declined to produce a legal
opinion
• Dana – did not consult counsel but
relied on Haldex
70
Knorr-Bremse Systeme v. Dana Corp.
• “… [T]he Federal Circuit ruled that ‘where,
as here, a potential infringer has actual
notice of another’s patent rights, he has an
affirmative duty to exercise due care to
determine whether or not he is infringing,’
including ‘the duty to seek and obtain
competent legal advice from counsel before
the initiation of any possible infringing
activity.’”
71
Knorr-Bremse Systeme v. Dana Corp.
• “The adverse inference that an
opinion was or would have been
unfavorable, flowing from the
infringer’s failure to obtain or produce
an exculpatory opinion of counsel, is
no longer warranted.”
72
Knorr-Bremse Systeme v. Dana Corp.
• Four questions presented for en banc
review:
73
Knorr-Bremse Systeme v. Dana Corp.
• Q1 - When the attorney-client privilege
and/or work-product privilege is
invoked by a defendant in an
infringement suit, is it appropriate for
the trier of fact to draw an adverse
inference with respect to willful
infringement?
• Answer - no
74
Knorr-Bremse Systeme v. Dana Corp.
• “A defendant may of course choose to
waive the privilege and produce the
advice of counsel. However, the
assertion of attorney-client and/or
work-product privilege and the
withholding of the advice of counsel
shall no longer entail an adverse
inference as to the nature of the
advice.”
75
Knorr-Bremse Systeme v. Dana Corp.
• Q2 - When the defendant had not
obtained legal advice, is it appropriate
to draw an adverse inference with
respect to willful infringement?
• Answer - no
76
Knorr-Bremse Systeme v. Dana Corp.
• “Although there continues to be ‘an
affirmative duty of due care to avoid
infringement of the known patent rights of
others,’ L.A. Gear Inc. v. Thom McAn Shoe
Co., 988 F.2d 1117, 1127 (Fed. Cir. 1993),
the failure to obtain an exculpatory opinion
of counsel shall no longer provide an
adverse inference or evidentiary
presumption that such an opinion would
have been unfavorable.”
77
Knorr-Bremse Systeme v. Dana Corp.
• Q3 - If the court concludes that the law should
be changed, and the adverse inference
withdrawn as applied to this case, what are the
consequences for this case?
• Answer – “Because elimination of the adverse
inference as drawn by the district court is a
material change in the totality of the
circumstances, a fresh weighing of the
evidence is required to determine whether the
defendants committed willful infringement. This
determination is the primary responsibility and
authority of the district court.”
78
Knorr-Bremse Systeme v. Dana Corp.
• Q4 - Should the existence of a
substantial defense to infringement be
sufficient to defeat liability for willful
infringement even if no legal advice
has been secured?
• Answer – no, no per se treatment
79
Knorr-Bremse Systeme v. Dana Corp.
• “We now hold that no adverse
inference that an opinion of counsel
was or would have been unfavorable
flows from an alleged infringer’s failure
to obtain or produce an exculpatory
opinion of counsel.”
80
In re Seagate
• Decided 8/20/07
• En Banc 12-0 decision
• “[W]e clarify the scope of the waiver of
attorney-client privilege and work
product protection that results when
an accused infringer asserts an advice
of counsel defense to a charge of
willful infringement.”
81
81
In re Seagate
• Background
• Convolve sued on 3 patents – ‘635 patent,
‘267 patent, and ‘473 patent
• Seagate obtained opinions from opinion
counsel on the three patents
• Seagate notified trial court of intent to rely
on opinions
• Convolve moved for discovery on patent
counsel and trial counsel
82
82
In re Seagate
• Trial court ruled all communications
between any counsel relating to the
subject matter of the opinions was
waived
83
83
In re Seagate
Questions for en banc review on writ of mandamus
1. Should a party’s assertion of the advice of counsel defense to
willful infringement extend waiver of the attorney-client privilege
to communications with that party’s trial counsel? See In re
EchoStar Commc’n Corp., 448 F.3d 1294 (Fed. Cir. 2006).
2. What is the effect of any such waiver on work-product immunity?
3. Given the impact of the statutory duty of care standard
announced in Underwater Devices, Inc. v. Morrison-Knudsen
Co., 717 F.2d 1380 (Fed. Cir. 1983), on the issue of waiver of
attorney-client privilege, should this court reconsider the
decision in Underwater Devices and the duty of care standard
itself?
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In re Seagate
Court analysis
• Enhanced damages requires a showing of willful
infringement
• Underwater Devices – “Where . . . a potential
infringer has actual notice of another’s patent
rights, he has an affirmative duty to exercise due
care to determine whether or not he is infringing.
Such an affirmative duty includes, inter alia, the
duty to seek and obtain competent legal advice
from counsel before the initiation of any possible
infringing activity.”
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In re Seagate
Echostar
• relying on in-house counsel’s advice to refute a charge
of willfulness triggers waiver of the attorney-client
privilege
• asserting the advice of counsel defense waives work
product protection and the attorney-client privilege for
all communications on the same subject matter, as well
as any documents memorializing attorney-client
communications.
• waiver did not extend to work product that was not
communicated to an accused infringer.
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In re Seagate
• Willfulness includes reckless behavior
• Duty of care in Underwater Devices is more like
negligence
• “[W]e overrule the standard set out in Underwater
Devices and hold that proof of willful infringement
permitting enhanced damages requires at least a
showing of objective recklessness. Because we
abandon the affirmative duty of due care, we also
reemphasize that there is no affirmative obligation
to obtain opinion of counsel.”
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In re Seagate
• “[T]o establish willful infringement, a
patentee must show by clear and
convincing evidence that the infringer
acted despite an objectively high
likelihood that its actions constituted
infringement of a valid patent.”
• State of mind not relevant
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In re Seagate
• “[F]airness counsels against disclosing trial counsel’s
communications on an entire subject matter in response to an
accused infringer’s reliance on opinion counsel’s opinion to
refute a willfulness allegation.”
• “[A]s a general proposition, that asserting the advice of
counsel defense and disclosing opinions of opinion counsel
do not constitute waiver of the attorney-client privilege for
communications with trial counsel. We do not purport to set
out an absolute rule. Instead, trial courts remain free to
exercise their discretion in unique circumstances to extend
waiver to trial counsel, such as if a party or counsel engages
in chicanery. “
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In re Seagate
• “[R]elying on opinion counsel’s work product does not
waive work product immunity with respect to trial
counsel. Again, we leave open the possibility that
situations may arise in which waiver may be extended
to trial counsel, such as if a patentee or his counsel
engages in chicanery. And , of course, the general
principles of work product protection remain in force, so
that a party may obtain discovery of work product
absent waiver upon a sufficient showing of need and
hardship, bearing in mind that a higher burden must be
met to obtain that pertaining to mental processes.”
• Also applies to making attorneys available
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In re Seagate
•
What is objective recklessness? CAFC says:
– A person is reckless who acts in the face of unjustifiably high risk of
harm that is either known or so obvious it should have been known.
– To establish willful infringement, a patentee must show by clear
and convincing evidence that the infringer acted despite an
objectively high likelihood that its actions constituted infringement
of a valid patent.
– The state of mind of the accused infringer is not relevant to this
objective inquiry.
– We leave it to future cases to further develop this standard.
– In a footnote by Judge Newman the CAFC stated that the
standards of commerce would be among factors a court may
consider.
– Standards of fair commerce – including reasonableness of the
actions taken in particular circumstances.
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Broadcom v. Qualcomm
•
Background
– Broadcom alleged Qualcomm infringed 3 patents related to
chipsets for cell phones.
– Qualcomm obtained invalidity opinions on all 3 patents, but
elected not to rely on those opinions as a defense in order to
preserve attorney-client privilege.
– Qualcomm did not obtain non-infringement opinions.
• Why not? They already paid for 3 invalidity opinions.
• Would an infringement opinion say you didn’t trust your
invalidity opinion?
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Broadcom v. Qualcomm
• Procedure
– Jury found Qualcomm infringed on 3 patents, including induced
infringement. Jury also found willful infringement.
– Seagate issued 10 days later.
– Trial Court vacates willfulness verdict.
– Damages awarded on 2 of 3 patents based solely on indirect
inducement.
– Qualcomm appeals to the Fed. Cir.
– Qualcomm contends that the pre-Seagate jury instructions, which
led the district court to set aside the willfulness verdict based
essentially on Qualcomm’s not having obtained non-infringement
opinion letters, also requires [the CAFC] to overturn the indirect
inducement verdict predicated on the intent necessary to find
inducement.
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Broadcom v. Qualcomm
• Analysis
– CAFC says the inducement standard was clarified in DSU Medical
Corp. v. JMS Company, 471 F.3d 1293(Fed. Cir. 2006).
– Inducement requires evidence of culpable conduct, directed to
encouraging another’s infringement, not merely that the inducer had
knowledge of the direct infringer’s activities.
•
Trial Court’s Jury Instruction on Inducement:
– When considering whether Qualcomm knew or should have known
that the induced actions would constitute infringement, in the totality
of the circumstances, you may consider all of the circumstances,
including whether or not Qualcomm obtained the advice of a
competent lawyer.
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Broadcom v. Qualcomm
•
Trial Court’s Jury Instruction on willfulness:
– In considering whether Qualcomm acted in good faith, you should
consider all the circumstances, including whether or not Qualcomm
obtained and followed the advice of a competent lawyer with regard
to infringement. The absence of a lawyer’s opinion, by itself, is
insufficient to support a finding of willfulness, and you may not
assume that merely because a party did not obtain an opinion of
counsel, the opinion would have been unfavorable. However, you
may consider whether Qualcomm sought a legal opinion as one
factor in assessing whether, under the totality of the circumstances,
any infringement by Qualcomm was willful.
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Broadcom v. Qualcomm
•
Qualcomm argues:
– The district court erred in its instruction to consider failure to obtain
an opinion of counsel as a factor in determining whether Qualcomm
had the requisite level of intent to induce infringement.
– Seagate altered the standard for establishing the intent of
inducement, because after Seagate there is no affirmative duty of
due care to avoid infringement, and there is no affirmative obligation
to obtain opinion of counsel.
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Broadcom v. Qualcomm
• Result
– CAFC disagrees with Qualcomm that opinion-of-counsel evidence is
no longer relevant in determining the intent of an alleged infringer in
the inducement context.
– CAFC find’s no legal error in Jury’s finding of induced infringement.
– The affirmative intent to cause inducement is a two-prong test:
• First – the plaintiff must show that the defendant intended to cause the
acts that constitute the direct infringement.
• Second – the defendant knew or should have know that its actions would
cause another to directly infringe.
– Opinion-of-counsel evidence remains relevant to the second prong
of the analysis.
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Broadcom v. Qualcomm
• Result (cont.)
– A patentee may prove direct infringement or inducement of
infringement by either direct or circumstantial evidence.
– The totality of the circumstances presented in the evidence supports
the jury’s findings:
•
•
•
•
A failure to investigate
A failure to explore design around approaches
A failure to take remedial steps, and
A failure to seek legal advice.
– Qualcomm conceded that evidence of its invalidity opinions were
properly excluded.
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Broadcom v. Qualcomm
• Qualcomm has filed a Petition for en banc
rehearing.
• Issues
– Did the Panel improperly resurrect the duty of care rejected
in Seagate to evaluate intent to induce infringement?
– Does the result contradict Knorr-Bremse?
– Should inferences inappropriate to support the recklessness
standard of willful infringement be permitted to support the
knowing standard of the second prong of the inducement
test?
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Willfulness and the Opinion Defense
• Conclusions
– Opinions remain important just as they were pre-Knorr but
the reasons underlying the importance have changed.
– Knorr-Bremse
• No adverse assumption when defendant fails to get an
opinion or asserts attorney-client privilege regarding the
opinion.
– Seagate
• No affirmative duty to get opinions
– Broadcom v. Qualcomm
• Opinion is a defense for induced infringement
• A jury should consider that the defendant did not get an
opinion letter
• In many circumstances, Broadcom contradicts Knorr and
Seagate
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Program
Completed
All course materials - Copyright 2002-12 Randy L. Canis, Esq.
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