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A Stamford, Conn.-based intellectual property boutique is at the center of alegal challenge involving the nondisclosure of attorney opinion lettersin patent infringement cases. Under case law set by a 1988 Federal Circuit court ruling, the assertionof the attorney-client privilege in such disputes can have negativeramifications, as it did for the defendants St. Onge Steward Johnston &Reens is representing in Knorr-Bremse Systeme Fuer Nutzfahrazeuge GMBHv. Dana Corp. and Haldex Brake Products Corp. Dana Corp. and Haldex were sued for allegedly infringing a Knorr-Bremsepatent for an air disk brake. In March 2001, Judge T.S. Ellis of theU.S. District Court for the Eastern District of Virginia found Haldexhad previously obtained an opinion letter but failed to turn it over indiscovery. Dana, the court found, never obtained an opinion letter atall. Ellis awarded no damages, but deemed the case to be exceptional byreason of the defendants’ willful infringement of the patent. The judgeordered Dana and Haldex to pay reasonable attorney fees to theplaintiff and enjoined them from further acts of infringement. Earlier this fall, the U.S. Court of Appeals for the Federal Circuit agreed to take up the defendants’ challenge of Ellis’ decision. Amongother grounds, the appeal contends it was unconstitutional for thedistrict court to draw an adverse inference — that the defendantswillfully infringed upon Knorr’s patent — from their refusal to waivetheir attorney-client and/or work product privileges. The outcome of the case “could mean a significant change in patent law,”said St. Onge Steward attorney Wesley W. Whitmyer Jr. So far, nearly 20 amicuscuriae briefs representing almost 30 organizations, including theAmerican Bar Association, the New York Intellectual Property LawAssociation and the Federal Circuit Bar Association, have been filed inthe matter. Universally, the briefs support the position that allowingsuch adverse inferences seriously undermines the attorney-clientprivilege by penalizing parties who invoke it, Whitmyer said. Dana Corp., headquartered in Ohio, markets products made by Haldex, aSwedish automobile parts manufacturer. Whitmyer said his firm hasrepresented both companies in trademark and patent disputes since DanaCorp.’s 1998 merger with Branford-based auto parts manufacturer EchlinInc. Knorr-Bremse’s attorney, Jeffrey Sanok of Washington, D.C.’s Crowell &Moring, is urging the Federal Circuit to stick with case law allowingsuch negative interferences. “Our view is that the inference is alogical inference that would flow from the facts of the case,” he said.”When an infringer invokes attorney-client privilege or otherwisedeclines to reveal counsel’s advice, it may be logical to infer that theadvice was unfavorable,” Knorr-Bremse argued in its opposing brief. Otherwise, “the infringer is likely to introduce it by way of defense.Therefore, concededly obtaining an opinion, but failing to produce it,suggests the opinion was not favorable.” The Federal Circuit will sit en banc to hear the case. Whitmyer said ithas yet to notify parties if oral argument will be allowed.

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