Federal Circuit Rewrites Law on 'Advice of Counsel' Defense to Willful Infringement

To comply with the duty of due care, companies would typically obtain a written opinion of patent counsel advising the company, hopefully, that there is no infringement. If the company was later sued for patent infringement, the company would frequently disclose to the plaintiff the written opinion of non-infringement as a defense to willful infringement. The company would also argue to the fact-finder (judge or jury) that it could not have willfully infringed the patent because it reasonably relied upon the opinion of its counsel that it was not infringing. Thus the opinion of counsel often acted as a “shield” to a claim by the plaintiff of willful patent infringement. On the other hand, if no opinion was obtained by the company, or if an opinion was obtained but the company decided not to introduce it in evidence to the fact-finder, the judge or jury could be free to infer that either no opinion was obtained or, if an opinion was obtained, that it was unfavorable to the company. Kloster Speedsteel AB v. Crucible Inc., 793 F.2d 2565 (Fed. Cir. 1986); Fromson v. Western Litho Plate & Supply Co., 853 F.2d 1568 (Fed. Cir. 1988). This adverse inference substantially increased the possibility of an enhanced damages or attorneys' fees award against those companies that were sued for infringement but did not obtain a solid opinion of non-infringement. It also placed those defendants that did obtain an opinion of counsel in the difficult position of either producing the opinion ' and waiving the attorney-client privilege as to the opinion and related documents ' or risking the impact of the adverse inference.