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Advice of counsel evidence still relevant to intent to induce infringement

By McKee, Voorhees & Sease, P.L.C.

In a recent decision, the Federal Circuit affirmed a jury's finding of infringement of two patents and the related injunction, but reversed the district court's claim construction and the concomitant finding of infringement regarding a third patent.  The court affirmed the district court's injunction despite the fact that the patentee licensed, rather than manufactured, the claimed inventions.  The injunction was affirmed largely due to the "structural nature of a design win market" typified in nascent technology designs where there are multiple standards competing for market domination, and the fact that the injunction did not take effect for 20 months after the jury verdict to permit time to develop and implement a design-around.  

In addition, the Federal Circuit rejected the defendant's contention that In re Seagate changed the evidentiary burden for proving intent in the context of inducing infringement.  The defendant argued that after Seagate, opinion of counsel evidence was no longer relevant to the question of intent for inducing or contributory infringement.  The court held the intent necessary for an inducement finding may still be inferred from "all the circumstances."  This has two requirements, as described in DSU Medical:  (1) the defendant intended to cause the acts that constitute direct infringement, and (2) the defendant knew or should have known its action would cause the direct infringement.  The court observed opinion of counsel evidence may reflect what the accused infringer knew or should have known, it remains relevant to the second prong of this analysis.  Further, the court stated it would be "unfair to allow opinion-of-counsel evidence to serve an exculpatory function . . . and not yet permit patentees to indentify failures to procure such advice as circumstantial evidence of intent to infringe."  

Here, the accused infringer obtained an invalidity opinion, but declined to waive privilege.  The Federal Circuit held it was not error for the district court to instruct the jury that the lack of an opinion could be relevant to the issue of intent.  The court also instructed the jury, consistent with Knorr-Bremse, that the lack of opinion was not grounds to assume the opinion would be unfavorable.  As such, the instructions as a whole comported with Federal Circuit precedent, and the instructions were proper.

More detail of Broadcom Corp. v. Qualcomm Inc. after the jump.

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Full post as published by FileWrapper on October 06, 2008 (boomark / email).