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How many actors does it take to infringe a patent? At least in the case of a U.S. patent, the answer is "One — and only one." This question is more than just a not especially amusing riddle. Rather, it calls attention to an issue that is likely to assume much greater importance in coming years: the need, as a prerequisite to showing infringement of a U.S. patent, to identify a single legal "actor" to whom each and every of the infringing elements of an accused system or process may be attributed.

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The Federal Circuit Court of Appeals has just issued an opinion that changes precedent in U.S. patent law, namely, <i>Knorr-Bremse Systeme Fuer Nutzfahrzeuge GMBH v. Haldex,</i> __ F.3d __ (Fed. Cir. 2004). Previously, for a company that was accused of patent infringement, the general law was that the company had "an affirmative duty to exercise due care" to avoid infringement, including "the duty to obtain competent legal advice from counsel before initiation of any possible infringing activity." <i>Underwater Devices, Inc. v. Morrison-Knudsen Co.,</i> 717 F.2d 1380, 1389-90 (Fed. Cir. 1983). Failure to obtain such legal advice was considered a key factor in determining whether infringement is willful. A finding of willful infringement can be devastating, as it can subject a defendant to enhanced damages (up to three times actual damages) and/or the payment of the plaintiff's attorneys' fees. 35 U.S.C. &sect;&sect;284 and 285.

Your client has an invention. He tells you he came up with the invention 18 months ago and that he hasn't offered the invention for sale and hasn't publicly disclosed it. He's meeting with you today because he has evaluated his prototype and finally decided to direct financial resources toward obtaining a patent. He asks you to prepare a patent application. Everything seems fine, right? Maybe not. A bar date might have been purchased along with the prototype.

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In Part One of this article, we examined the risks to intellectual property (IP) value that would most preoccupy IP professionals, including: third-party risks for infringement liability, first-party risks to IP assets, and Directors &amp; Officers (D&amp;O) risks arising out of relevant valuation and disclosure. However, as IP specifically accounts for a higher ratio of market capitalization and shareholder value for publicly traded corporations, strategic choices relating to IP impact the firm's financial fortunes in more subtle ways, commensurate with that increased value. To cite one salient example: For IP-rich companies, tax planning is increasingly intertwined with Intellectual Asset Management (IAM) strategy.

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Highlights of the latest franchising news from around the country.

Highlights of the latest franchising cases from around the country.