Willfulness opinions are legal opinions that a particular product does not infringe, or that a patent is invalid or unenforceable. The need for willfulness opinions arises from substantive patent law, which establishes treble damages for willful infringement and makes the existence of a legal opinion relevant in defending against a claim of willful infringement.
What obligations does a potential infringer have? Generally, a potential infringer with actual notice has an affirmative duty of care to obtain competent legal advice before engaging in any activity. However, it is often the case that a willfulness opinion is not prepared and situated before the start of manufacturing.
What can constitute actual notice? A cease-and-desist letter, a licensing letter, a lawsuit, or notice in the official gazette constitutes actual notice. Also, if someone in your business reviews the patent or knows of the patent, you have actual notice. However, a patent pending does not constitute actual notice.
When should the opinion be obtained? With all deliberate speed. If you have been threatened or sued, you should get that opinion expeditiously.
Should the opinion be written? Yes. Getting an oral opinion as a stop-gap may make sense, but it generally will not carry the day.
What's the effect of not disclosing the opinion? The jury will be instructed that an adverse inference may be drawn on the question of willfulness. The adverse inference is that no opinion was obtained or that if an opinion was obtained, it was unfavorable. If you have a substantial risk of damages, you have to get your opinion.
Waivers of Privilege
To present your opinion in litigation, you have to waive the attorney-client privilege and work product privilege. The scope of the waiver is less than clear, with courts equally divided on a number of important issues. Generally, the waiver extends to anything that opinion counsel has said to the client. The authorities are split on the question of what the opinion counsel thought about or put in notes but did not communicate to the client.
To whom does the waiver apply? The waiver definitely applies to opinion counsel. It probably also applies to other counsel consulted prior to suit being filed. If in-house counsel obtains an opinion from a trial lawyer on the likely outcome of litigation before suit is filed, that opinion may well be discoverable.
Generally, the waiver does not apply to trial counsel. However, in Novartis, the court held that the waiver applied to everything in the trial counsel's files, including memos of potential risks and defenses, because opinion counsel entered an appearance on behalf of the client. Because it could not differentiate between opinion counsel and trial counsel, the court opened all files as waived. For this reason, as well as the possibility that trial counsel could be disqualified from the litigation, opinion counsel and trial counsel should be separate.
How can an accused infringer protect against harmful waivers? If there is something in your company's files that you do not want plaintiff to see during the liability phase of trial because it could undermine your liability defense, case law indicates that you may be able to bifurcate liability from damages by demonstrating prejudice from having your privilege waived. However, federal district courts generally are not enthusiastic about bifurcation and some judges will not grant it because of the additional complexity and delays that may arise.
*article courtesy of John Englander of Goodwin Proctor.