Expert Commentary

Avoiding Willful Infringement in Intellectual Property Litigation (Part 2)

Willful infringement is best avoided by determining when the situation necessitates a "non-infringement opinion" and, if so, developing a good one. There are six key questions the opinion should address when seeking to instill a belief in the infringer that a court might reasonably hold the patent to be invalid, not infringed, or unenforceable.


Intellectual Property
May 2004

In Part 1 of this 3-part series on avoiding willful infringement in intellectual property litigation, we asked, What is willful infringement and how do I avoid it? We found that defining willful infringement is difficult, and that the best way to avoid it is to obtain a "non-infringement opinion" from an attorney. While we discussed what conditions should prompt you to obtain such an opinion, we did not address, What constitutes an effective "non-infringement opinion?" This article addresses that issue by focusing primarily on the question as it relates to patent law. Part 3 discusses the effect of Knorr-Bremse v Dana Corp.

In short, an effective opinion "must be thorough enough, as combined with other factors, to instill a belief in the infringer that a court might reasonably hold the patent is invalid, not infringed, or unenforceable." Ortho Pharmaceutical Corp. v Smith, 959 F2d 936, 944 (Fed Cir 1992). Keep this principle in mind as we address six key questions to ask in determining whether a non-infringement opinion will pass muster.

1. What Materials Should Be Analyzed in the Opinion?

Many managers simply want to know whether they can make their widget without being sued for patent infringement. Basically, details are not that important. Sound familiar? Let this serve as a word of caution: there is no such thing as a "big picture" non-infringement opinion. Good opinions deal with details, as well as the big picture, and are likely lengthy and not much fun to read. More specifically, a strong opinion should address several topics.

First, the opinion should deal with claims individually. Claims are one sentence descriptions, included in a patent, that describe what aspects of the invention are protected by law. There are independent claims and dependent claims. Dependent claims add details to independent claims and are consequently more "narrow" than their parent independent claim. Your product need only infringe one claim, independent or dependent, to "infringe the entire patent." If your product does not infringe an independent claim, it cannot infringe any claims that are dependent on the independent claim. Therefore, an opinion should touch on each claim or, on some occasions, at least on each independent claim. For example, an opinion stating "all of the claims" are invalid because the inventor was not the first to discover the invention could be painting too broadly. The better approach would be to address the validity of each claim or family of claims independently. See Johns Hopkins University v CellPro, Inc., 152 F3d 1342 (Fed Cir 1998).

Second, the opinion should address the patent’s prosecution history. An inventor usually has to engage in written arguments with the U.S. Patent and Trademark Office (PTO) when trying to obtain a patent. These written arguments constitute the patent’s "prosecution history" or "file wrapper," and influence how the patent will later be interpreted by a court. Consequently, the opinion should address the prosecution history and how it affects interpretation of the claims.

Third, the opinion should address (1) whether your product infringes a patent claim and (2) whether the patent is invalid or (3) unenforceable. The opinion does not have to address all three points, but a failure to do so may remove some arrows from your defense counsel’s quiver should you ever get sued for patent infringement.

Fourth, the Doctrine of Equivalents should be addressed even though there is no rule to that effect. This doctrine basically states that a small tweaking of a device to avoid a patent claim, if done in only a very superficial way, may not be enough to avoid infringement. Patentees routinely assert this "weapon" in patent infringement. Therefore, good sense dictates that your opinions address whether this doctrine may be used to "reach" your product.

Fifth, analyzing the file wrapper often leads to studying prior art that was cited against the patent during prosecution. This prior art and any other pertinent prior art may need to be examined as a precursor for evaluating infringement and validity of the patent. This prior art should be examined and then applied, in detail, against the claim limitations. See Johns Hopkins, 152 F3d 1342.

Sixth, as a corollary to the above points, the technical merits of the device in question must be considered if, for example, the claims are to be applied to the device in any meaningful way.

Finally, it goes without saying that withholding critical facts from counsel is an invitation for treble damages and attorney fees. See Braun, Inc. v Dynamics Corp. of America, 975 F2d 815 (Fed Cir 1992). As an additional example, do not rely on a letter from, for example, your supplier assuring you that the supplier has obtained a competent opinion without examining the opinion for yourself.

2. What Level of Analysis Should the Opinion Possess?

An opinion need not possess "perfect analysis." In fact, few opinions with perfect analysis will be examined by a court. If your lawyer says your product does not infringe a claim and he’s right, there is no infringement much less willful infringement. If your lawyer feels your product does infringe a claim, however, he likely will call you to give you a "heads up." At that point, prudent clients change their product design thus negating the need to write the initially conceived opinion. So, the fact that the opinion said "no infringement" when a court later felt otherwise does not deem the opinion to be faulty and necessitate a finding of willful infringement.

While the analysis need not be perfect, it must be sound. For example, an attorney arguing that the PTO "got it wrong" because it should have never granted the patent in light of certain prior art may not help an infringer. Competent counsel should know the burden for proving the PTO "got it wrong" in a court is a high one that is not easily circumvented. Consequently, the analysis must go beyond saying the PTO made a mistake. See SRI International, Inc. v Advanced Technology Laboratories, Inc., 127 F3d 1462 (Fed Cir 1997).

On a general note, the idea behind "proper analysis" is to avoid conclusory treatment of the subject. The general rule for good opinions is whether a person, often in the form of a manager, could have reasonably relied on the opinion. A jury will likely not believe a manager who claims to have relied on an off-the-cuff analysis. See Read Corp. v Portec. Inc., 970 F2d 816 (Fed Cir 1992). Along those same lines, a "manager" with significant patent experience will have a harder time arguing he could not "sniff out" what the jury or judge deems to be a marginally adequate opinion. See Johns Hopkins, 152 F3d 1342.

3. Who Should Author the Opinion?

Many commentators kill many trees delving into the nuances of who should write the opinion. In-house counsel versus outside counsel? Patent attorney versus patent agent? Foreign counsel versus domestic counsel? The academic answer might be that anyone can write the opinion. You obtain an opinion, however, because you might need to persuade a jury one day that you were not a bad actor. To achieve that goal, use a licensed U.S. patent attorney to render the opinion. Here’s why.

As set out above, a good opinion includes details about, for example, prosecution history and case law on claim construction and the Doctrine of Equivalents. You will have an easier time convincing a fact finder that these points were adequately addressed by having a licensed patent attorney handle the task. For example, a patent agent is a technically trained person that may pursue patents before the PTO but who is not an attorney and may not practice patent litigation in U.S. courts. Accordingly, some courts have dismissed opinions from patent agents outright. See Signtech USA Ltd. v Vutek Inc., 44 USPQ2d 1741, 1750 (WD Tex 1997).

In a similar vein, other courts have stated "Competent opinions are unlikely to come from a nonpatent counsel." Jepson v Makita USA Inc., 32 USPQ2d 1107 (CD Cal 1994). On the international front, an English patent agent who was not an attorney and was not registered to practice in the U.S. was not "competent to interpret or evaluate ... any patents under U.S. law." Ethyl Molded Products v Betts Package Inc., 9 USPQ2d 1001 (ED Ky 1988).

If a licensed patent attorney is chosen, that attorney can be in-house or outside counsel so long as the opinion is one that could be reasonably relied on. Using in-house counsel can be cost effective, but you should be prepared to show one day that the attorney was "free to think" without the CEO dictating what should be written. Some jurors may be hard to convince to vote along those lines. See Studiengesellschaft Kohle mbH v Dart Industries Inc., 4 USPQ2d 1817 (D Del 1987), affirmed, 9 USPQ2d 1273 (Fed Cir 1988). For that reason, many organizations "farm out" the opinion work when the question of infringement or validity is a close one.

4. Must the Opinion Be Written?

Oral opinions are fine in an academic sense but they fail to hold up when needed most: in court. In other words, an oral opinion could technically convey everything a 20-page written opinion conveys. The problem is, however, that the accused infringer has the burden of proof as to what the opinion contained and why the opinion was competent. As time goes on, memories fade, and eliciting testimony from a forgetful witness is just not as persuasive as showing a written opinion to the jury. See Minnesota Mining & Manufacturing v Johnson & Johnson Orthopaedics, Inc., 976 F2d 1559 (Fed Cir 1992).

5. How Unequivocal Must the Opinion Be?

A good opinion need not be "over the top" in asserting your product does not infringe a claim. In fact, language such as "the patent is probably invalid" has been deemed a sign of genuineness that a reasonable attorney should include in a letter. After all, most opinion letters are only asked for when the issue of infringement or validity is less than certain. See Read Corp., 970 F2d 816.

6. What Timing Concerns Should the Opinion Address?

The timing of the opinion is also important. If you change your product, subsequent to receiving an opinion in a way unanticipated by that opinion, your opinion shield may be damaged. Although having the opinion updated in light of the changes might be expensive, failure to do so might be more expensive. See Read Corp., 970 F2d 816.

In addition, assuming you now believe that good opinions must be thorough and not "cranked out" overnight, you may not want to delay production of a product while waiting for the opinion. In that case, a preliminary opinion may help provide some protection against willful infringement but only if it is followed up in a timely fashion by a thorough opinion.

Conclusion

Willful infringement is best avoided by determining when the situation necessitates your obtaining a "non-infringement opinion" and then ensuring the opinion is written by a U.S. patent attorney who delves into a detailed analysis as set out above.


E.E. ("Jack") Richards II is an associate with Winstead Sechrest Minick in Austin, Texas, where he specializes in intellectual property, technology, litigation, dispute resolution, and nanotechnology. He received his BS degree from Texas A&M and his JD degree, cum laude, from the University of Houston Law Center. Before entering law school, he worked as an engineer for a start-up company in the medical device industry, focusing on electronics and software related to cardiac data (electrophysiology and hemodynamics). Mr. Richards can be reached at


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