United States: Federal Circuit Adopts New "Objective Recklessness" Standard For Willful Patent Infringement

En banc Court also clarified the scope of privilege waiver (that arises when an infringement defendant relies on opinion of independent counsel), essentially eliminating trial counsel communications from the scope of the waiver. This decision should decrease costs for patent infringement defendants during litigation and affect the bargaining power during settlement discussions in favor of defendants (who will now be less fearful of treble damage awards).

The U.S. Court of Appeals for the Federal Circuit, sitting en banc, has held that willful patent infringement requires a minimum showing of "objective recklessness," in stark contrast to the now overruled Underwater Devices Inc. v. Morrison-Knudsen Co. "duty of due care" standard. This change in the law raises the bar for patentees claiming enhanced patent damages for willful infringement and lowers the costs of defending against such claims. The Court also held that the assertion of an advice-of-counsel defense to willful infringement does not waive privilege for trial counsel communications or work product. Thus, a patent defendant is no longer faced with the threat of forfeiting all privilege for trial counsel or communications as the price for reliance on an opinion by independent opinion counsel.

Because the Federal Circuit took the case en banc, it was positioned to reconsider and overrule its prior willfulness precedent as well as to address the privilege waiver issue of first impression. The unanimous Federal Circuit decision, issued on August 20, 2007, in In re Seagate Technology, LLC, fundamentally rewrites the law of willful patent infringement. The matter came to the Federal Circuit on a privilege-waiver issue arising from Seagate’s assertion of an advice-of-counsel defense to willful infringement. Seagate petitioned for a writ of mandamus to vacate district court orders granting discovery of Seagate’s privileged communications with its trial counsel concerning infringement, validity and unenforceability of the patents-in-suit. The Federal Circuit, sua sponte, ordered en banc review of the petition and took the opportunity to create a sea change in its jurisprudence regarding willful infringement.

The en banc order set forth the following questions:

  1. Should a party’s assertion of the advice of counsel defense to willful infringement extend waiver of the attorney-client privilege to communications with that party’s trial counsel?
  2. What is the effect of any such waiver on work-product immunity?
  3. Given the impact of the statutory duty of care standard announced in Underwater Devices v. Morrison-Knudsen, on the issue of waiver of attorney-client privilege, should this court reconsider the decision in Underwater Devices and the duty of care standard itself?


Starting its analysis by addressing the willfulness issue, the Court overruled its seminal 1983 decision in Underwater Devices Inc. v. Morrison-Knudsen Co., thus eliminating the duty of due care mandated by that decision in order to avoid a charge of willful infringement.

Under Underwater Devices and its progeny, willfulness was evaluated based on a potential infringer’s affirmative duty to determine whether or not he was infringing, which included "the duty to seek and obtain competent legal advice from counsel before the initiation of any possible infringing activity." A failure to seek and obtain legal advice, or a refusal to disclose the advice, was grounds for an adverse inference that the advice would have been or was unfavorable to the accused infringer. Patent law was unique in the law in allowing an adverse inference to be drawn from a refusal to waive attorney-client privilege. The court noted that three years ago, in Knorr-Bremse, it took a step back from that rule when it rejected the so-called adverse inference rule and the notion that special procedural rules apply to patent litigation.

But Knorr-Bremse reaffirmed the duty of due care. As Judge Dyk pointed out in his separate Knorr-Bremse opinion, this "willfulness" standard, which was similar to negligence, was in apparent conflict with Supreme Court jurisprudence that reserves punitive damages for "reprehensible" conduct. Moreover, as Judge Dyk also pointed out, the due care requirement had produced unintended and undesirable consequences. Companies had become reluctant to review others’ patents since mere awareness of a patent could lead to a de facto presumption of willful infringement in future litigation. Indeed, mere notice of a patent given to a potential defendant could set the stage for a later finding of willful infringement. While it cost the patentee little more than the value of a stamp to send a notice letter enclosing a copy of a patent, the recipient immediately was faced with the decision whether to obtain an opinion of counsel, which could cost tens of thousands of dollars. Meanwhile, all the patentee had to do was sit back and wait, and then sue at some later time. Multiply this scenario by the hundreds of such letters a large corporation might receive each year, and the problem is clear.

The Federal Circuit relied on Supreme Court and copyright law precedent to determine that the proper minimum standard for willfulness is "objective recklessness." To meet this standard, a plaintiff "must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent." The infringer’s state of mind is not relevant. In addition, the patentee must further show that "this objectively defined risk … was either known or so obvious that it should have been known" to the potential infringer. The Court indicated in a footnote that "standards of commerce" would be one factor to inform the court’s consideration. The Court left further development of this standard for future cases, but stated that "[b]ecause we abandon the affirmative duty of due dare, we also reemphasize that there is no affirmative obligation to obtain opinion of counsel."

Attorney-Client Privilege

Then, turning to the first enumerated en banc question, the Court held that waiver of attorney-client privilege triggered by the assertion of the advice-of-counsel defense does not extend to trial counsel. While this is not an absolute rule, it applies absent "unique circumstances," such as "chicanery." This holding should eliminate the confusion in the lower courts regarding the interpretation of the 2006 Federal Circuit decision in In re EchoStar Commc’ns Corp. In that case, a panel of the Federal Circuit held that the waiver which followed an accused infringer’s reliance on an opinion of counsel extended to all attorney communications and all work product communicated to the client that addressed the subject of the opinion in issue. Several district courts had interpreted this as extending to communications from trial counsel. The Federal Circuit in Seagate explained that EchoStar did not consider waiver as it relates to trial counsel. Rather, the Seagate Court reasoned that the functions of trial and opinion counsel are different and they give fundamentally different types of legal advice. Classic sword and shield concerns do not apply to trial counsel, and fairness dictates that trial counsel communications be protected against disclosure. "In most cases, the demands of our adversarial system will far outweigh any benefits of extending waiver to trial counsel." The Federal Circuit found strong support for this result in Hickman v. Taylor, in which the Supreme Court emphasized the importance of protecting counsel’s trial strategy from disclosure to the adversary. The Court also explained that allegations of willful infringement are based mainly in prelitigation conduct, so that trial counsel’s advice has little, if any, relevance.

In this case, Seagate asserted reliance on the advice of separate and independent opinion counsel. The advice-of-counsel defense triggered a subject-matter waiver of attorney-client privilege and work product for Seagate’s other communications with its opinion counsel. The plaintiffs, however, also sought discovery of communications with trial counsel, and noticed the depositions of all Seagate’s senior trial attorneys. Seagate argued that such discovery must be denied and that it would disclose Seagate’s trial strategy. The district court granted the plaintiffs’ motion to compel such discovery. This issue was remanded to the district court to be reconsidered in light of the present decision.

Work Product

Turning to the second enumerated en banc question, the effect of waiver on work product, the Court held that since under the rule pronounced in this case waiver does not extend to trial counsel, "absent exceptional circumstances," the same rule must apply to both tangible and intangible work product. The Court also restated the general rule that lawyers’ mental process work product is subject to "nearly absolute protection."

Seagate represents a sea change in the law of willful infringement and a clarification of the scope of waiver intended by EchoStar, but its full impact will only become clear as the case law develops further. The shift to the pre-filing "objective recklessness" standard should make it harder for patent owners to bring and succeed on a charge of willful infringement. Because the Court clarified that there is no affirmative duty to get opinion letters, the costs of doing business and defending against willful infringement should be reduced, and incentives to affirmatively avoid learning of others’ patents should be lessened. In addition, since privilege waiver will not extend to trial counsel absent exceptional circumstances, patent defendants no longer face a dilemma whether to assert an advice-of-counsel defense or risk loss of all privilege for patent litigation strategy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.