Eye on IP

Vol. No. 2008 - Issue No. 6
December 2008

FIVE REASONS TO OBTAIN AN ATTORNEY'S OPINION IN
POTENTIAL PATENT INFRINGEMENT SITUATIONS

When faced with a patent that may create an infringement problem, it makes sense to invest in an attorney's written opinion regarding the scope and/or validity of the patent. Here's why:

1. Avoid willful infringement: If the court determines that infringement was willful, the damages can be tripled and the patentee awarded attorney fees. Although the Federal Circuit recently made it more difficult to prove willful infringement (In re SeagateTechnology, LLC, 497 F.3d 1360 (Fed. Cir. 2007)), it did not change the fact that a competent attorney's opinion of non-infringement and/or invalidity is a good defense against a charge of willful patent infringement. In Seagate, the Court said there is no affirmative obligation to obtain an opinion from counsel; the Court did not comment on whether an opinion of counsel can be used to reduce the possibility of a finding of willful infringement. It makes good sense to have a competent attorney's opinion before litigation to document care and lack of intent.
2. Avoid a finding of inducing infringement: Liability for inducing infringement can occur when the defendant knew, or should have known, that its actions would cause another, such as a customer, to infringe. In patent suits, it's common for there to be an allegation against the defendant of inducing infringement. The Federal Circuit recently held that a defendant's failure to obtain an attorney's opinion regarding infringement is admissible to show intent to induce another to infringe. (Broadcom v. Qualcom (Fed. Cir. 2008))
3. Calming customer concerns: Sophisticated customers are often aware of potential infringement situations; some actually receive threats from patent holders. A clear and well-crafted attorney's opinion will usually alleviate customer concerns.
4. Obtain investments: Knowledgeable investors are often concerned about a company's right to sell its products. A patent clearance letter from an attorney usually satisfies this concern and can result in needed capital investment.
5. Avoid the cost of patent litigation: Litigating a patent case through trial can easily exceed $1M. If the case is lost, there can be substantial damages and a permanent injunction. Consulting with a patent attorney before the manufacturing plans are set can result in a "design around" that avoids infringement and provides comfort when proceeding forward.

"Eye on IP" is a trademark of Sheldon Mak & Anderson. Information provided in the "Eye on IP" newsletter is not intended to be a comprehensive summary of recent developments in the law, treat exhaustively the subjects covered, provide legal advice or render a legal opinion.