For 24 years, the most effective way to defend against a charge of willful infringement has been to rely on the “advice-of-counsel” defense; i.e., to assert that you consulted with, and relied upon, a competent opinion of counsel finding that there was no infringement of any valid claim of the patent at issue. Underwater Devices, Inc. v. Morrison-Knudsen Co., 717 F.2d 1380 (Fed. Cir. 1983) (setting forth the duty-of-care standard).
The advice-of-counsel defense to willful infringement led to a harsh reality — an accused infringer had two choices: 1) produce a written opinion and waive the attorney-client privilege and attorney work product related to the subject matter of the opinion; or 2) not produce an opinion so as not to waive the privilege and work product, but be virtually defenseless to willful infringement, because no opinion is produced. Until three years ago, the choice not to waive the privilege or to forgo an opinion also subjected an accused infringer to an adverse inference that an opinion was unfavorable. See Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337 (Fed. Cir. 2004) (en banc decision rejecting the adverse inference rule). The Federal Circuit’s ruling in Knorr-Bremse seemed to be an attempt to temper the harsh result of the duty-of-care standard. Interestingly, Judge Timothy B. Dyk, as the lone dissenter in Knorr-Bremse, called for eliminating the duty-of-care requirement as a factor in the willfulness and enhanced damages analysis, calling it a “relic of the past.” Id. at 1352.
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