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Standard for Wilful Infringement in Patent Suits Raised
Companies facing patent litigation may breathe a little easier following a recent en banc decision of the U.S. Federal Circuit Court of Appeals. The decision makes it more difficult for plaintiffs to obtain enhanced damage awards for wilful infringement. Defendants who are found to have wilfully infringed a patent may be ordered to pay enhanced damages up to three times the amount of damages otherwise payable under the US Patent Act.
Under the Federal Circuit’s prior rulings, when notified of another’s patent, a potential infringer had a duty of care to determine whether or not the party infringed that patent. If sufficient care were not taken and infringement followed, the possibility of treble damages came into play. Such a risk often skewed litigation strategies for many plaintiffs and defendants. A common practice emerged whereby potential defendants sought to obtain a favourable opinion from legal counsel to offer in defence of a wilful infringement allegation to show they took due care.
Following the appellate court’s recent decision of In re Seagate, the burden upon defendants has been eased and the burden on plaintiffs increased with respect to proving wilfulness. Plaintiffs now must show at least objective recklessness with regard to infringement by the defendant. Moreover, there is no affirmative obligation for defendants to obtain an opinion.
The decision also provided that when defendants waive attorney-client privilege and offer opinions of counsel in defence of a wilfulness allegation, the waiver of privilege surrounding its infringement opinions does not generally include attorney-client communications with trial counsel or trial counsel’s work product.
For a copy of the opinion, visit: