Federal Circuit Refines Law of Willful Infringement

En Banc Decision Changes Evidence Required to show Willfulness

In In re Seagate Technology, LLC, 83 U.S.P.Q.2d 1865 (Fed. Cir. 2007), the Federal Circuit, sitting sua sponte en banc, overruled established doctrine to establish that “proof of willful infringement permitting enhanced damages requires at least a showing of objective recklessness”.  83 U.S.P.Q.2d at 1870. 


On July 13, 2000, Convolve, Inc. and the Massachusetts Institute of Technology (hereinafter “Convolve”) sued Seagate Technology, LLC (“Seagate”) alleging patent infringement of U.S. Patent Nos. 4,916,635 (the ‘635 patent) and 5,638,267 (the ‘267 patent).  On January 25, 2002, Convolve amended its complaint to include U.S. Patent No. 6,314,473 (the ‘473 patent), which issued on November 6, 2001. 

Before litigation began, Seagate retained Gerald Sekimura to provide possible infringement analysis with regard to Convolve’s patents.  On July 24, 2000, Seagate received the first of three opinions.  The first opinion analyzed the ‘635 and ‘267 patents and an international application containing similar disclosure to the application which resulted in the ‘473 patent.  The first opinion concluded that many of the claims were invalid and that Seagate’s products did not infringe.  On December 29, 2000, and February 21, 2003, Seagate received updated opinions containing similar conclusions. 

Seagate notified Convolve that Seagate, in defending against willful infringement, intended to rely on the opinions of Sekimura, disclosed his entire work product, and made him available for deposition.  Convolve moved to compel discover of any communications and work product with regard to the formal opinions, including communications between Seagate and any attorneys. 

The trial court determined that, in reliance on Sekimura’s opinions, Seagate waived attorney-client privilege for all communications between Seagate and any counsel regarding Sekimura’s opinions.  As such, the trial court ordered production of the requested documents.  Also, the trial court determined that protection afforded to work product communicated to Seagate was waived.

Seagate was denied a motion for stay and certification of an interlocutory appeal, and petitioned for a writ of mandamus. 

Willful Infringement

“Given the impact of the statutory duty of care standard announced in Underwater Devices, Inc. v. Morrison-Knudson Co., 717 F.2d 1380 (Fed. Cir. 1983), on the issue of waiver of attorney-client privilege, should this court reconsider the decision in Underwater Devices and the duty of care standard itself?”  83 U.S.P.Q.2d at 1867.

In Underwater Devices, the Federal Circuit, in determining a standard for willful infringement, held that a potential infringer having actual notice of another’s patent rights has an affirmative duty to exercise due care to determine whether the pursued activities would amount to infringement.  Further, such affirmative duty includes seeking and obtaining competent legal  advice from counsel before pursing any potentially infringing activity.  Analysis of willfulness and Underwater Devices’s affirmative duty of due care evolved into a totality of the circumstances analysis including factors to indicate the state of mind of the accused.  See The Read Corp. v. 



Portec Inc., 23 U.S.P.Q.2d 1426 at 1435-1436 (Fed. Cir. 1992) (listing nine factors and stating: “Willfulness is a determination as to a state of mind.”).

However, the Federal Circuit determined that the standard for willful infringement of Underwater Devices was not in line with established law for enhancing damages in the civil context.  For example, under the Copyright Act, trial courts have discretion to enhance damages for willful infringement, which has been consistently defined as including reckless behavior despite there being no statutory basis for such definition.  Also, the Supreme Court determined willfulness for punitive damages for civil liability to include reckless behavior.  “Significantly, the Court said that this definition comports with the common law usage, which ‘treated actions in ‘reckless disregard’ of the law as ‘willful violations.””  83 U.S.P.Q.2d at 1870 quoting Safeco Ins. Co. of Am. v. Burr, 127 S. Ct. 2201;167 L. Ed. 2d 1045 (2007).

Here, the Federal Circuit determined that duty of care standard of Underwater Devices provides a lower threshold for willful infringement than the established definition of willfulness requires.  “Accordingly, we overrule the standard set out in Underwater Devices and hold that proof of willful infringement permitting enhanced damages requires at least a showing of objective recklessness.”  83 U.S.P.Q.2d at 1870.  In order to establish willful infringement, a patentee must now show by clear and convincing evidence that the alleged infringer “acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.”  Id.  Upon such a showing, the patentee must also “demonstrate that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer.”  Id. 

Attorney-Client Privilege

As the trial court held attorney-client privilege waived with respect to all communications regarding the Sekimura opinions between all counsel, the Federal Circuit next addressed the appropriate scope of such waiver resulting from an advice of counsel defense asserted in response to a charge of willful infringement.  The Federal Circuit noted the “significantly different functions” of trial counsel and opinion counsel and “advise[s] against extending waiver to trial counsel”.  83 U.S.P.Q.2d at 1871.  As a general proposition, the Court held that the assertion of the defense of advice of counsel and disclosure of opinions by opinion counsel does not constitute waiver of the attorney-client privilege with respect to communications with trial counsel regarding such opinions.  However, the Court does not “purport to set out an absolute rule” such that waiver may occur in exceptional circumstances as determined at the discretion of the trial court.   

Work Product Protection

As the trial court also determined that protection of work product communicated to Seagate was waived, the Federal Circuit addressed the extent of waiver with regards to an advice of counsel defense asserted to refute a charge of willful infringement and whether any waiver extends to work product of the trial counsel.  The Federal Circuit generally maintained the state of the current law in that in order to discover factual work product, the movant needs show substantial need and undue hardship while “mental process work product is afforded even greater, nearly absolute, protection.”  Slip op. at 19.  Thus, the mere reliance on an opinion does not automatically waive any work product with respect to the trial counsel.

Impact on Patent Owners

It is important to note two changes that this new willfulness test makes to the establishment of willful infringement.  First, the standard for enhancing damages with a finding of willful infringement has been raised from a negligence-type reasonable duty of care standard to an objective reckless standard.  Second, such objective reckless standard does not take into account the state of mind of the accused.  As such, the new test may be summarized as: an alleged patent infringer may be held to enhanced damages as a willful infringer if he knew or should have known that his activities had an objectively high likelihood of constituting infringement of a valid patent. 

Moreover, in regard to the effect of relying on an opinion of counsel as a defense to willfulness, the rule that disclosure of opinions by opinion counsel does not constitute waiver of the attorney-client privilege is not absolute.  Therefore, while accused infringers may rely on In re Seagate to help shield attorney client confidences where trial and opinion counsel are the same, it may be best practice, in an attempt to avoid such issues, to maintain minimal, if any, communications between opinion and trial counsel.  In thus manner, if such communications are required to be produced, any damaging effects may be limited


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