Friday, September 21, 2007
Seagate ruling raises the bar for infringement liability
Boston Business Journal - by Thomas Elkind

On Aug. 20, the Court of Appeals for the Federal Circuit issued a decision that substantially changes the law regarding the willful infringement of patents. In deciding In Re Seagate Technology LLC ("Seagate"), the court made three key rulings, all of which will make it more difficult to hold alleged willful infringers liable for multiple damages.

The federal statute covering patents has long provided that if infringement of a patent is proven, damages may be increased by up to three times the amount found or assessed. Prior to Seagate, the court had held that an award of enhanced damages required a showing of "willful infringement."

To avoid being found liable for willful infringement, when a business is accused of infringing a patent, it typically obtains an opinion of counsel. If this opinion concludes that the patent is invalid, unenforceable or not infringed, the accused infringer can then raise the defense that it relied on the advice of counsel and, therefore, did not willfully infringe the patent, even if it is later found to have infringed it.

As a consequence of raising this defense, however, the business must waive the attorney/client privilege and work product privilege -- a privilege that protects certain materials prepared by an attorney from discovery by the opposing party -- with regard to all communications and documents between the accused infringer and its opinion counsel.

Thomas I. Elkind is chairman of the Boston-office's intellectual property department for Foley & Lardner LLP.

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