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|Albert Minn is a patent attorney with 10 years of experience practicing before the United States Patent and Trademark Office.|
Protecting Business Activities with Opinions
Every business decision a company makes must be strategic and ensure that necessary measures and precautions are taken to minimize or avoid liability for its actions. When the decision involves potential patent infringement, and more specifically willful patent infringement, court decisions in the past several years have shifted the paradigms that determine which measures to take, and when to take them.
How to Avoid Willful Infringement
The Federal Circuit held in Underwater Devices Inc. v. Morrison-Knudsen Co., 717 F.2d 1380 (1983) that a potential infringer has an affirmative duty to exercise due care to determine whether or not he or she is infringing a patent. This placed the burden on the potential infringer to seek competent counsel and obtain either a non-infringement opinion or an invalidity opinion prior to undertaking any possible infringing actions. This would prevent a finding of willful infringement and treble damages.
The decision in Underwater Devices put an extremely heavy emphasis on obtaining non-infringement opinions and/or invalidity opinions in order to ensure that a court could not hold that any infringement was willful. However, in In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007), the Federal Circuit reversed its previous holding in Underwater Devices by adopting an “objective recklessness” standard, which discarded the potential infringer’s affirmative duty to obtain an opinion from counsel. As a result of the decision in In re Seagate, the burden of proof for demonstrating that the infringement was not willful was drastically and allowed for any argument of non-infringement or invalidity to be presented well after the infringing activities.
This standard remained in effect until the United States Supreme Court decided in Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016) that the In re Seagate decision was overly rigid. In doing so, the Court swung the pendulum back towards Underwater Devices by disregarding the Federal Circuit’s “objective recklessness” standard established in In re Seagate and by adopting a “subjective recklessness” standard. This encourages the Court to analyze the “particular circumstances” of each case on a case-by-case basis. While this decision does not put an absolute burden back on the potential infringer to provide an infringement opinion or validity opinion, as provided in Underwater Devices, it breathes life back into the importance of obtaining an infringement opinion at the outset of undertaking any potentially infringing activities instead of waiting to present such arguments at trial.
As a result of the Halo decision, it is critical for businesses to seek competent counsel and obtain a non-infringement and/or invalidity opinion sooner rather than later to successfully rebut any claims of willful infringement. But what about using competent in-house employees, such as legal counsel, patent attorney or other, patent agents, or engineers, to furnish such an opinion? Could it save costs? Is it self-serving and unreliable? Check back to see the answers to these questions and other best practices.
If you have other questions about patent infringement or the patent process, give Grell & Watson a call at (919) 825-3309 to talk to a patent attorney today!