Federal Circuit Finds Opinion Letter Does Not Provide Defense To Charge Of Willful Infringement Where Important Technical Document Is Withheld From Legal Counsel

In nCube Corp. v. SeaChange International, Inc., 436 F.3d 1317; 77 U.S.P.Q.2D (Fed. Cir. 2006), a panel of the Court of Appeals for the Federal Circuit affirmed the trial court’s upholding of the jury’s finding of infringement, damages and partial attorney’s fees and granting infringer’s JMOL motion on infringement under the doctrine of equivalents.  J. Rader, writing the opinion for the Court, found the trial court correctly construed the claims of nCube’s patent (U.S. Patent No. 5,805,804, hereinafter referred to as the ‘804 patent) to encompass SeaChange’s systems used by cable TV networks. 

Infringement supported by the record

On the issue of claim construction, the Federal Circuit upheld the District Court’s interpretation.  Specifically, the ‘804 patent claims a particular server for connecting a client to a multimedia experience.  The server accomplishes this by using an upstream manager to send requests from the client, a downstream manager to send the requested multimedia content to the client, and a service to maintain connections across networks to accomplish the delivery of the upstream and downstream communications.  According to the Federal Circuit, the District Court’s claim construction correctly did not require all communications to go through the upstream manager since the specification suggested another embodiment.  The District Court was also upheld in not requiring all communications to use a logical address to route the packets of information in the communications across various non-uniform networks even though the logical address was the only embodiment in the specification since the requirement for the logical address was in the depending claims, thereby implying that the independent claim was broader.  Based on evidence including one expert’s testimony, the jury found SeaChange’s systems infringed the ‘804 patent.

Willfulness supported by record since defendants did not provide known relevant document

The jury also found willful infringement which, “hinges on when the defendants had actual knowledge of plaintiff’s patent rights, and their actions after that time.” nCube, pg. 10.  The willful infringement took place after nCube filed suit giving Seachange actual knowledge of the ‘804 patent and thus triggering an affirmative duty of due care to avoid infringement on the part of SeaChange.  Rolls-Royce Ltd. v. GTE Valeron Corp., 800 F.2d 1101, 1109 (Fed.Cir.1986).  In order to show compliance with this duty of care, Seachange relied (ultimately to its detriment) on an opinion letter obtained after suit was filed, which counsel shared with SeaChange management.  The Federal Circuit found in the record that SeaChange failed to supply at least one important technical document to SeaChange’s opinion counsel.  Thus, “the best information [was] intentionally not made available to counsel during the preparation of the opinion, [so that] the opinion can no longer serve its prophylactic purpose of negating a finding of willful infringement.” Comark Commc’ns, Inc. v. Harris, Corp., 156 F.3d 1182, 1191 (Fed. Cir. 1998).  Willfulness was thus properly found since the infringer, having received notice when the suit was filed, obtained an opinion upon of noninfringement which the infringer could not reasonably rely upon in continuing to infringe.

A copy of the case is available at nCube Corp. v. SeaChange International, Inc., 436 F.3d 1317; 77 U.S.P.Q.2D (Fed. Cir. 2006).

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