En banc Federal Circuit scraps affirmative duty of care to avoid infringement

Tue, 21 Aug 2007 11:07:00-0500

In a unanimous en banc decision issued late yesterday afternoon, the Federal Circuit granted a petition for mandamus requested by a party who was ordered by a district court to produce attorney-client privileged and work product protected material of its trial counsel, and to permit deposition of its trial counsel. The order was entered after the defendant disclosed it would rely upon an opinion of counsel as a defense to willful infringement; the district court held that the waiver of attorney-client privilege and work product protection extended to the work trial counsel performed relevant to the opinions (a full recitation of the underlying facts can be found in this post.)

The Federal Circuit disagreed, and held that in most circumstances, such material will remain protected assuming trial counsel and opinion counsel are different. The court went a step further, however, and decided to overrule its 1983 decision in Underwater Devices Inc. v. Morrison-Knudsen Co., which established that once a party had notice of a patentee's rights, that party had an affirmative duty of care to avoid infringement of the patent. One way companies could comply with this duty was to obtain a competent opinion of counsel that the patent was either invalid or not infringed.

The Federal Circuit unanimously abrogated the affirmative duty of care. The court adopted a recklessness standard for willful infringement, holding that to act "willfully," an infringer must act "despite an objectively high likelihood that its actions constituted infringement of a valid patent." The risk must also be "known or so obvious that it should have been known to the accused infringer."

More detail of In re Seagate Tech., LLC after the jump.

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En banc Federal Circuit scraps affirmative duty of care to avoid infringement