The Opinion Of Counsel
As Defense To Willful Infringement
Robert L. Baechtold, Esq.
FITZPATRICK, CELLA, HARPER & SCINTO
30 Rockefeller Plaza
New York, NY
“[The] affirmative duty
includes, inter alia, the duty to
seek and obtain competent
legal advice from counsel
before the initiation of any
possible infringing activity.”
Underwater Devices, Inc. v. Morrison-Knudsen Co., Inc., 717 F.2d 1380, 1390 (Fed. Cir. 1983)
(emphasis in original).
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2
The Duty to obtain competent
advice arises before initiating
infringement or when
infringer has knowledge of
patent, if later.
Jurgens v. McKasy, 927 F.2d 1552, 1562 (Fed. Cir. 1991).
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3
Stryker v. Intermedics
• Infringer got opinion 3-1/2 months after
product launch
• USPTO initiated reexamination and rejected
all claims
• Infringement held willful
• Double damages for 3 years
Stryker Corp. v. Intermedics Orthopedics, Inc., 891 F.Supp. 751, 813-18 (E.D.N.Y. 1995);
affirmed 96 F.3d 1409 (Fed. Cir. 1996).
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Robert L. Baechtold, Esq.
4
PUTTING ON A GOOD DEFENSE
IS NOT GOOD ENOUGH.
“Gustafson did not hold, as a matter of
law, that a party that continues its
accused infringing activity after a
patentee files suit cannot be guilty of
willful infringement as long as that party
presents a non-frivolous defense to
infringement.”
Crystal Semiconductor Corp. v. Tritech Microelecs. Int’l, Inc., 246 F.3d 1336, 1351-52 (Fed.
Cir. 2001) (discussing Gustafson, Inc. v. Intersystems Indus. Prods., Inc., 897 F.2d 508 (Fed.
Cir. 1990)).
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www.fitzpatrickcella.com
Robert L. Baechtold, Esq.
5
THE FEDERAL CIRCUIT DID NOT DECIDE IF
INFRINGEMENT COULD CEASE TO BE
WILLFUL AFTER AN OPINION IS OBTAINED
“We need not decide whether
infringement can ever be purged by
subsequent legal advice, for we have
affirmed the district court’s conclusion
that the counsel opinions of record did not
merit a reasonable confidence in the
noninfringement or invalidity or
unenforceability of the [patent in suit].”
SRI Int’l Inc. v. Advanced Tech. Labs., Inc., 127 F.3d 1462, 1468 (Fed. Cir. 1997).
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Robert L. Baechtold, Esq.
6
ADVERSE INFERENCE FROM ASSERTING
ATTORNEY CLIENT PRIVILEGE
“Stora’s silence on the subject, in
alleged reliance on the attorney-client
privilege, would warrant the
conclusion that it either obtained no
advice of counsel or did so and was
advised that its importation and sale
of the accused products would be an
infringement of valid U.S. patents.”
Kloster Speedsteel AB v. Crucible, Inc., 793 F.2d 1565, 1580 (Fed. Cir. 1986).
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Robert L. Baechtold, Esq.
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Compare:
“The privilege was created to protect the
right to effective counsel. ‘[A]n individual
in a free society should be encouraged to
consult with his attorney whose function is
to counsel and advise him and he should be
free from apprehension of compelled
disclosures by his legal advisor.’ To protect
that interest, a client asserting the privilege
should not face a negative inference about
the substance of the information sought.”
Parker v. Prudential Ins. Co., 900 F.2d 772, 775 (4th Cir. 1990) (internal citations omitted).
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Robert L. Baechtold, Esq.
8
With:
“Where the infringer fails to introduce
an exculpatory opinion of counsel at
trial, a court must be free to infer that
either no opinion was obtained or, if an
opinion were obtained, it was contrary to
the infringer’s desire to initiate or
continue its use of the patentee’s
invention.”
Fromson v. Western Litho Plate & Supply Co., 853 F.2d 1568, 1572-73 (Fed. Cir. 1988).
Fitzpatrick, Cella, Harper & Scinto
www.fitzpatrickcella.com
Robert L. Baechtold, Esq.
9
CONSEQUENCES:
• In reality, who bears the burden of proof on
willfulness?
• Anyone who foresees litigation will get an
opinion
• When pressed, they will disclose it and waive
privilege to avoid the inference
Fitzpatrick, Cella, Harper & Scinto
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Robert L. Baechtold, Esq.
10
WHAT PROBLEMS DOES THIS RAISE?
• When do you have to waive?
• What is the scope of the waiver?
–Other opinions
–Work-product before suit
–Work-product after suit
–Implications for trial counsel
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Robert L. Baechtold, Esq.
11
THE FEDERAL CIRCUIT SUGGESTED
BIFURCATION FOR LATER TRIAL
“An accused infringer, therefore, should not, without the
trial court’s careful consideration, be forced to choose
between waiving the privilege in order to protect itself from
a willfulness finding, in which case it may risk prejudicing
itself on the question of liability, and maintaining the
privilege, in which case it may risk being found to be a
willful infringer if liability is found. Trial courts thus
should give serious consideration to a separate trial on
willfulness whenever the particular attorney-client
communications, once inspected by the court in camera,
reveal that the defendant is indeed confronted with this
dilemma.”
Quantum Corp. v. Tandon Corp., 940 F.2d 642, 643-44 (Fed. Cir. 1991).
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Robert L. Baechtold, Esq.
12
MOST COURTS DECLINE TO DO THAT
IPPV Enterprises v. Cable/Home Comm. Corp., 26 U.S.P.Q.2d 1714 (S.D. Cal. 1993) .
Spectra-Physics Lasers, Inc. v. Uniphase Corp., 144 F.R.D. 99 (N.D. Cal. 1992).
THK America, Inc. v. Nippon Seiko K.K., 141 F.R.D. 463 (N.D. Ill. 1991).
Johns Hopkins Univ. v. Cellpro, Inc., 160 F.R.D. 30 (D. Del. 1995).
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Robert L. Baechtold, Esq.
13
SOME INDICATION OF
BUCKING THAT TREND
“The court recognizes that the scope of
discovery allowed at bar is relatively broad
and potentially prejudicial to plaintiffs.
Therefore, rather than requiring disclosure
consistent with this order at this time, the
court will bifurcate the issue of willfulness,
stay discovery relating to willfulness, and
conduct a separate trial with a new jury in the
event plaintiffs are found to infringe valid
patents.”
Allergan v. Pharmacia, 2001 U.S. Dist. LEXIS 23952 (D. Del. 2001) (citing Novartis Pharms.
Corp. v. Eon Labs Mfg. Inc., 206 F.R.D. 396 (D. Del. 2002)).
Fitzpatrick, Cella, Harper & Scinto
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Robert L. Baechtold, Esq.
14
SCOPE OF WAIVER
GENERAL AGREEMENT
• All opinions obtained pre-complaint (including
trial counsel)
• All “work-product” that is communicated to
client
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Robert L. Baechtold, Esq.
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SCOPE OF WAIVER
AREAS OF NON-UNIFORMITY
• Post-complaint advice from trial counsel
• Post-complaint advice from others
• Work-product not communicated to client
Fitzpatrick, Cella, Harper & Scinto
www.fitzpatrickcella.com
Robert L. Baechtold, Esq.
16
WORK-PRODUCT NOT COMMUNICATED
TO CLIENT NEED NOT BE PRODUCED
• Test is good faith of client, not opinion counsel
• Things not disclosed are not relevant to client’s good
faith
Thorn EMI North America Inc. v. Micron Tech. Inc., 837 F. Supp. 616 (D. Del. 1993).
Micron Separations, Inc. v. Pall Corp., 159 F.R.D. 361 (D. Mass 1995).
Steelcase Inc. v. Haworth Inc., 954 F. Supp. 1195 (W.D. Mich. 1997).
Thermos Co. v. Starbucks Corp., 1998 U.S. Dist. LEXIS 17753 (N.D. Ill. 1998).
Solomon v. Kimberly-Clark Corp., 1999 U.S. Dist. LEXIS 1594 (N.D. Ill. 1999).
Nitinol Med. Techs., Inc. v. AGA Med. Corp., 135 F. Supp.2d 212 (D. Mass. 2000).
Fitzpatrick, Cella, Harper & Scinto
www.fitzpatrickcella.com
Robert L. Baechtold, Esq.
17
WORK-PRODUCT THAT FORMED FACTUAL
BASIS FOR OPINION
MUST BE PRODUCED
• Whether or not communicated to client
• But legal analysis need not be
• Rationale: Competency of opinion is based on factual
predicates and client is able to (should?)
evaluate them
Matsushita Elecs. Corp. v. Loral Corp., 1995 U.S. Dist. LEXIS 12880 (S.D.N.Y. 1995).
Cordis Corp. v. SciMed Life Systems, Inc., 980 F. Supp. 1030 (D. Minn. 1997).
D.O.T. Connectors, Inc. v. J.B. Nottingham & Co., Inc., 2001 U.S. Dist. LEXIS 739 (N.D.
Fla. 2001).
Fitzpatrick, Cella, Harper & Scinto
www.fitzpatrickcella.com
Robert L. Baechtold, Esq.
18
ALL WORK-PRODUCT OF OPINION COUNSEL
MUST BE PRODUCED
• Whether or not communicated to client
• Whether factual or legal
• Rationale: Necessary to test competence
• They could reflect things communicated orally to
client (especially if contradictory)
• Otherwise encourage counsel to hide bad facts
Mushroom Assocs. v. Monterey Mushrooms,Inc., 24 U.S.P.Q.2d 1767 (N.D. Cal. 1992).
Frazier Indus. Co. Inc. v. Advance Storage Prods., 33 U.S.P.Q.2d 1702 (C.D. Cal. 1994).
Hoover Universal, Inc. v. Graham Packaging Corp., 44 U.S.P.Q.2d 1596 (C.D. Cal. 1996).
Electro Scientific Indus. Inc. v. General Scanning, Inc., 175 F.R.D. 539 (N.D. Cal. 1997).
Dunhall Pharms., Inc. v. Discus Dental, Inc., 994 F. Supp. 1202 (C.D. Cal. 1998).
Mosel Vitelic Corp. v. Micron Tech. Inc., 162 F. Supp.2d 307 (D. Del. 2000).
Chiron Corp. v. Genentech, Inc., 2001 U.S. Dist. LEXIS 22408 (E.D. Cal. 2001).
Novartis Pharms. Corp. v. Eon Labs Mfg. Inc., 206 F.R.D. 396 (D. Del. 2002).
Michlin v. Canon, Inc., 2002 U.S. Dist. LEXIS 8079 (E.D. Mich. 2002).
Fitzpatrick, Cella, Harper & Scinto
www.fitzpatrickcella.com
Robert L. Baechtold, Esq.
19
WHAT ABOUT TRIAL COUNSEL WORK-PRODUCT
WHEN TRIAL COUNSEL IS NOT OPINION COUNSEL?
• Still must give up all pre-complaint opinions on same
subject and work-product communicated to client
Allergan Inc. v. Pharmacia Corp., 2001 U.S. Dist. LEXIS 23952 (D. Del. 2001).
Frazier Indus. Co. Inc. v. Advance Storage Prods., 33 U.S.P.Q.2d 1702 (C.D. Cal. 1994).
D.O.T. Connectors, Inc. v. J.B. Nottingham & Co., Inc., 2001 U.S. Dist. LEXIS 739 (N.D.
Fla. 2001).
Fitzpatrick, Cella, Harper & Scinto
www.fitzpatrickcella.com
Robert L. Baechtold, Esq.
20
MUST GIVE UP TRIAL COUNSEL WORK-PRODUCT TO
THE EXTENT IT CONTRADICTS OR CASTS DOUBT
ON OPINION COUNSEL’S OPINION
(BUT NOT IF CONSISTENT)
Clintec Nutrition Co. v. Baxa Corp., 1996 U.S. Dist. LEXIS 4001 (N.D. Ill. 1996).
Micron Separations, Inc. v. Pall Corp., 159 F.R.D. 361 (D. Mass 1995).
Thermos Co. v. Starbucks Corp., 1998 U.S. Dist. LEXIS 17753 (N.D. Ill. 1998).
Fitzpatrick, Cella, Harper & Scinto
www.fitzpatrickcella.com
Robert L. Baechtold, Esq.
21
MUST GIVE UP TRIAL COUNSEL’S PRE-COMPLAINT
DOCUMENTS BEARING ON ANY ISSUE ADDRESSED
IN OPINION COUNSEL’S OPINION (INFRINGEMENT,
VALIDITY, ENFORCEABILITY)
• But not “strategy” documents and with procedural
limitations
• Outside counsel eyes only
• Only usable on showing of inconsistency with
opinion counsel’s opinion
Electro Scientific Indus. Inc. v. General Scanning, Inc., 175 F.R.D. 539 (N.D. Cal. 1997).
Fitzpatrick, Cella, Harper & Scinto
www.fitzpatrickcella.com
Robert L. Baechtold, Esq.
22
PRE-COMPLAINT V. POST-COMPLAINT
• Courts are especially sensitive about invading postcomplaint advice and strategy
• If criterion is state of mind before initiating
infringement, why is later advice relevant?
Fitzpatrick, Cella, Harper & Scinto
www.fitzpatrickcella.com
Robert L. Baechtold, Esq.
23
SOME COURTS DRAW BRIGHT LINE
PROTECTING POST-COMPLAINT
WORK-PRODUCT
Micron Separations, Inc. v. Pall Corp., 159 F.R.D. 361 (D. Mass 1995).
Dunhall Pharms., Inc. v. Discus Dental, Inc., 994 F. Supp. 1202 (C.D. Cal. 1998).
Carl Zeiss Jena GmbH v. Bio-Rad Labs., Inc., 2000 U.S. Dist. LEXIS 10044 (S.D.N.Y. 2000).
Hoover Universal, Inc. v. Graham Packaging Corp., 44 U.S.P.Q.2d 1596 (C.D. Cal. 1996).
OTHERS DON’T RECOGNIZE THAT
AS A GENERAL RULE
Chiron Corp. v. Genentech, Inc., 2001 U.S. Dist. LEXIS 22408 (E.D. Cal. 2001) (but did not ask
for trial counsel’s documents).
D.O.T. Connectors, Inc. v. J.B. Nottingham & Co., Inc., 2001 U.S. Dist. LEXIS 739 (N.D. Fla.
2001).
Fitzpatrick, Cella, Harper & Scinto
www.fitzpatrickcella.com
Robert L. Baechtold, Esq.
24
POST-COMPLAINT DISCOVERY MAY BE
JUSTIFIED BY CHANGE IN ACCUSED
INFRINGER’S POSITION
• Client discontinued manufacture of accused compound in
U.S.
• Client discontinued use of another accused compound in
research
• Court held that might implicate change in reliance on
earlier opinion
• But - discovery limited to advice, analysis and reasoning of
counsel on whom executive relied for change in position
Bristol Myers Squibb, v. Rhone-Poulenc Rorer, Inc., 52 U.S.P.Q.2d 1908 (S.D.N.Y. 1999).
Fitzpatrick, Cella, Harper & Scinto
www.fitzpatrickcella.com
Robert L. Baechtold, Esq.
25
OTHER UNIQUE FACTS (USUALLY INVOLVING
TRIAL COUNSEL) MAY JUSTIFY POSTCOMPLAINT DISCOVERY
• Trial counsel consulted with opinion counsel on opinion
rendered after complaint
Mosel Vitelic Corp. v. Micron Tech. Inc., 162 F. Supp.2d 307 (D. Del. 2000).
• Trial counsel rendered the opinion relied on after
complaint
Michlin v. Canon, Inc., 2002 U.S. Dist. LEXIS 8079 (E.D. Mich. 2002).
Fitzpatrick, Cella, Harper & Scinto
www.fitzpatrickcella.com
Robert L. Baechtold, Esq.
26
WHAT EFFECT ON POST-COMPLAINT DISCOVERY IF
TRIAL COUNSEL IS ALSO OPINION COUNSEL?
“Eon has not only elected to engage in the unconventional and risky arrangement of having opinion and
trial counsel from the same law firm, but Eon’s opinion
counsel, Mr. Pontani, has actually entered an
appearance in this matter. Because the Court cannot
differentiate between opinion and trial counsel, the
Court will grant Novartis’ Motion To Compel to the
extent it seeks the production of all legal advice Eon
received from the Cohen, Pontani law firm relating to
the subject matter of Mr. Pontani’s opinion.”
Novartis Pharms. Corp. v. Eon Labs Mfg. Inc., 206 F.R.D. 396, 399 (D. Del. 2002).
But see Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., 52 U.S.P.Q.2d 1908 (S.D.N.Y.
1999) (although trial counsel rendered the pre-complaint opinion relied on, discovery of postcomplaint, possibly inconsistent advice was limited to the (in-house) attorney who gave that
advice).
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Robert L. Baechtold, Esq.
27
ANOTHER COMPLICATION WHEN OPINION COUNSEL
BECOMES TRIAL COUNSEL - DISQUALIFICATION
DR 5-101(b)1
DR 5-102(a)2
(b) A lawyer shall not act, or accept
employment that contemplates the lawyer's acting,
as an advocate before any tribunal if the lawyer
knows or it is obvious that the lawyer ought to be
called as a witness on behalf of the client, except
that the lawyer may act as an advocate and also
testify:
(1) If the testimony will relate solely to an
uncontested issue.
(2) If the testimony will relate solely to a matter
of formality and there is no reason to believe that
substantial evidence will be offered in opposition
to the testimony.
(3) If the testimony will relate solely to the
nature and value of legal services rendered in the
case by the lawyer or the lawyer's firm to the
client.
(4) As to any matter, if disqualification as an
advocate would work a substantial hardship on the
client because of the distinctive value of the lawyer
as counsel in the particular case.
(a) If, after undertaking employment in
contemplated or pending litigation, a lawyer learns
or it is obvious that the lawyer ought to be called
as a witness on behalf of the client, the lawyer shall
withdraw as an advocate before the tribunal,
except that the lawyer may continue as an
advocate and may testify in the circumstances
enumerated in DR 5-101(b)(1) through (4).
DR 5-102(b)3
(b) If, after undertaking contemplated or
pending litigation, a lawyer learns or it is obvious
that the lawyer or a lawyer in his or her firm may
be called as a witness other than on behalf of the
client, the lawyer may continue the representation
until it is apparent that the testimony is or may be
prejudicial to the client at which point the lawyer
and the firm must withdraw from acting as an
advocate before the tribunal.
(These are New York Rules, but typical)
Fitzpatrick, Cella, Harper & Scinto
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Robert L. Baechtold, Esq.
1. Recently changed to 5-102(a).
2. Recently changed to 5-102(c).
3. Recently changed to 5-102(d).
28
WHEN IS IT A LAWYER
“OUGHT TO BE CALLED”
OR IS “LIKELY TO BE NECESSARY”
AS A WITNESS
•
Client can testify as to request for opinion,
receipt and reliance
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Robert L. Baechtold, Esq.
29
Rohm & Haas Co. v. Lonza
• Opinion counsel disqualified
• Adverse party intended to call them to examine on
qualifications and objectivity
• As trial counsel, they will urge the jury
to accept the opinions
Rohm & Haas Co. v, Lonza, Inc., 1999 U.S. Dist. LEXIS 13919 (E.D. Pa. 1999).
• Recall Novartis v. Eon:
“Unconventional and risky arrangement”
• Rationale would create automatic disqualification in all
cases where opinion counsel is trial counsel
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Robert L. Baechtold, Esq.
30
Compare Bristol Myers v. RPR:
• Long delay in raising issue
• Client has committed not to call opinion
counsel/trial counsel as a witness
• No prejudice to adverse party if they are precluded
from calling him
• Did not show his testimony would be adverse to his
client
• Disqualification is disfavored and heavy burden
Bristol Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., 55 U.S.P.Q.2d 1662 (S.D.N.Y. 2000).
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Robert L. Baechtold, Esq.
31
Fitzpatrick, Cella, Harper & Scinto
www.fitzpatrickcella.com
Robert L. Baechtold, Esq.
32