Patent Law. Patent lawyers and their clients spend a lot of time worrying about willfulnesss. If a patent is infringed and the infringement is “willful,” the consequences can include treble damages and liability for the patent owner’s attorneys fees. The idea of paying the other side’s legal fees can be a terrifying prospect for most patent infringement defendants. Think of it as writing a blank check to your opponent’s lawyers.
To avoid this fate, a lot of time and money is spent before the fact on “clearance opinions”, that is, an opinion of a patent lawyer that a particular item or process does not infringe pending or issued patents. A good opinion (meaning an opinion by competent counsel, who is given all relevant information, and who conducts the analysis in advance of any legal claim or threat) is often viewed as an insurance policy when it comes to wilfullness. After all, if reputable counsel has told you that your product doesn’t infringe a patent, what more could you possibly do to establish that you have not willfully infringed?
Of course, many infringement actions are brought against defendants who have not bothered to obtain such an opinion (either due to cost concerns or ignorance), in which case the risk of willfulness can be a major factor in the risk analysis of the lawsuit.
But just what is “willfulness”? Until just a few years ago, merely failing to obtain a legal opinion gave rise to an inference of willfulness. However, that presumption was eliminated by the Federal Circuit (the specialized appeals court that reviews all patent cases decided by the district courts) in 2004 in the case of Knorr-Bremse Systeme Fuer Nutzfahrzeuge Gmbh v. Dana Corporation.
Most recently, in August 2007, the Federal Circuit went a step farther in its en banc decision in In re Seagate Technology, LLC. In this case the court created a two part test for willfulness:
first, a patent owner must prove “by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent. . . . The state of mind of the accused infringer is not relevant to this objective inquiry. And second, the patent owner must prove 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.”
This presents a tough standard for a plaintiff claiming willful infringement. One might even read it to say that unless the alleged infringer knew of the patent it allegedly infringed, it hasn’t met the standard. Ignorance (at least sincere ignorance, rather than willful ignorance) is bliss. And, this standard is only the most recent move in a trend dating back at least 15 years in which the Federal Circuit has made it increasingly difficult for patent holders to establish willfulness.
The precise application of this “objective” standard will have to be worked out case-by-case by the trial courts and future decisions of the Federal Circuit, but it is clear that the pendulum continues to swing in the direction of safety for infringers in the realm of willfulness, just as it it does in other, more substantive, areas of patent law.