Defending the Patent Case – The America Invents Act’s Advice of Counsel Provision

A key decision for many accused infringers is whether to rely on an opinion of counsel to rebut a claim of willful infringement.  A finding of willful infringement opens the door to the assessment of enhanced damages which can be as much as three times the actual damages.

At one time, the law imposed a standard of care which essentially required obtaining an opinion of counsel in order to avoid a finding of willfulness in patent cases.  Since then, cases such as Knorr-Bremse and Seagate have greatly diminished the impact of not obtaining an opinion on the issue of willfulness.  The America Invents Act has taken this a step further with the enactment of 35 U.S.C. §298, which reads as follows:

The failure of an infringer to obtain the advice of counsel with respect to any allegedly infringed patent, or the failure of the infringer to present such advice to the court or jury, may not be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent.

This provision diminishes a great deal of leverage that patent holders once had.  However, it would be naïve to suggest that they will not try to find a way to introduce argument or evidence regarding the absence of an opinion in some fashion.  Here are some important strategy considerations for accused infringers who wish to prevent patent holders from introducing evidence regarding the absence of an opinion to the jury:

Section 298 Only Applies Where the Patent-In-Suit Issued After September 16, 2012

This is an issue that will likely cause some difficulty.  The U.S. Code now includes Section 298.  However, the America Invents Act did not include an effective date specifically for the advice of counsel provision.  As a result, the default effective date that governs the statute applies.  The default provision states that unless otherwise specified, the act’s provisions are effective “upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to any patent issued on or after that effective date.”  Thus, even though the U.S. Code now includes Section 298, the new advice of counsel provision will not apply to cases involving patents issued before September 16, 2012.

Patent Holders May Try to Argue that The Absence of an Opinion is Not Conclusive of Willfulness But Nevertheless Admissible 

In theory Section 298 should prohibit patent holders from making any argument or eliciting any testimony that an opinion was not obtained or not introduced into evidence.  However, patent holders may argue that the new law merely prohibits a conclusive finding of willfulness based on the absence of an opinion.  One commentator has noted that an earlier version of the advice of counsel provision deemed the absence of an opinion “not relevant” to a determination of willful infringement. Lynda J. Oswald, “The Evolving Role of Opinions of Counsel in Patent Infringement Cases,” 52 IDEA 1 at *28.  Thus, patent holders could argue that the selection of the final language of the statute over this earlier proposal evidences an intent to make evidence and argument regarding the failure to obtain or introduce an opinion relevant (and admissible) but not conclusive.  To be safe and to best preserve this issue for appeal, it is advisable to file a motion in limine requesting that the court prohibit any argument or evidence relating to the accused infringer’s failure to offer an opinion of counsel.

Also, keep in mind that some lines of questioning may only implicate Section 298 in an indirect way and may nevertheless be allowed.  For example, would Section 298 bar a patent holder from asking an accused infringer’s witnesses what steps, if any, were taken to avoid infringement?   What if the patent holder asks whether any effort was taken before the litigation to determine if the patent was invalid or not infringed without asking specifically about an “opinion of counsel”?  How about subsidiary questions related to whether the accused product was compared to the claims or whether the accused infringer identified any claim limitations that it believed were not present in the accused product?

Seagate diminished the impact of such questions to some extent by requiring finding of objective recklessness before the accused infringer’s subjective intent becomes relevant.  However, if willfulness is not bifurcated from liability, questions about what steps the accused infringer took to avoid infringement may come in during the liability phase.  Thus, unless an accused infringer has a favorable opinion that it wishes to introduce into evidence, is advisable to seek bifurcation of willfulness from liability to prevent this from happening.

Patent Holders May Argue that the Absence of an Opinion is Admissible to Prove Entitlement to Enhanced Damages

Once willfulness is found, the patent statute allows the court to award “enhanced damages.”  While Section 298 affects the threshold determination of willfulness, it does not necessarily alter existing case law concerning the relevance of whether an opinion was obtained to the determination of enhanced damages.

This is important because accused infringers must seek bifurcation of enhanced damages issues to ensure that the jury does not consider the absence of an opinion in making its willfulness determination.  Many courts may resist such bifurcation in order to expedite resolution of the case.  In that case, they may simply give a curative instruction telling the jury that it should not consider whether an opinion was obtained or put in evidence in determining whether infringement was willful.  However, such an instruction will likely do little to prevent improper consideration of the issue.  Thus, it is important to at least attempt to bifurcate enhanced damages.

What if the Accused Infringer Opens the Door?

All of the foregoing may be for naught if an accused infringer opens the door to testimony concerning its failure to introduce an opinion that it did obtain.  One can imagine the temptation of witnesses to testify that they believed they would not infringe because they obtained and relied upon an opinion of counsel even if litigation counsel decides not to rely on the opinion for strategic reasons.  What happens then?

To allow an accused infringer to testify about its reliance on an opinion without introducing it would seem to convert Section 298 into both a shield and a sword for an infringer.  Thus, courts may well deem this as unfair and interpret the provision as merely prohibiting the use of the accused infringer’s failure to introduce an opinion to meet the patent holder’s prima facie burden of establishing willfulness.  Once the accused infringer puts an opinion at issue, a court may well interpret Section 298 in a way that allows the patent holder to then introduce evidence and argument regarding the failure to actually produce the opinion.  Accused infringers should take care to ensure that they do not inadvertently open the door to evidence and argument that would otherwise be prohibited by Section 298.