We provide opinion letters and analyze the validity and scope of patent and trademark rights in contemplation of various transactions. In doing patent due diligence, it is critical for us to understand the purpose and objectives of the pending transaction, so we can focus to provide the most useful evaluation and information to corporate decision-makers and negotiators.
Patent Noninfringement Opinions Remain Desirable
Given the Federal Circuit’s In re Seagate Technology decision finding enhanced infringement damages are avoided by objectively reasonable business conduct, and there may be no affirmative duty to search for and analyze relevant patents, arguably patent noninfringement opinions are less necessary than before. Nevertheless, willful infringement in patent cases can result in treble damages, and thus to avoid such enhanced damages defendants may produce written advice of counsel that a particular technology is non-infringing. Previously, asserting a patent search and advice of counsel defenses to demonstrate non-willful infringement waived the attorney-client privilege for all communications relevant to the defense, but Seagate relaxes both the waiver rule and the standard for willful infringement.
Seagate lowered the standard for enhanced damages to a showing of “objective recklessness” by the accused infringer. To meet the standard, patent holders must now show that an infringer acted despite knowledge of an objectively high likelihood that its actions were infringing. The court also addressed attorney-client communications and found that accused infringers waive neither the attorney-client privilege, nor the attorney work product rule by disclosing an infringement opinion. With the new “objective recklessness” standard, proving willful infringement is more difficult, but accused infringers must no longer chose between waiving attorney-client privilege and risking enhanced damages. For this reason, accurate and informed infringement opinions are still of value when adopting a potentially patented technology.