In September, the U.S. Court of Appeals for the Federal Circuit in a 10-1 decision overturned the rule that allowed the jury to draw an "adverse inference" against the patent infringement defendant if the defendant did not offer a patent legal opinion into evidence. Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337 (Fed. Cir. 2004). The jury was permitted to infer that no patent opinion was obtained at all, or that an opinion was obtained but it was unfavorable.
The court held that "no adverse inference shall arise from the invocation of the attorney-client and/or work product privilege" or from a defendant’s failure to obtain a patent opinion; however, the obligation to respect the law and not to infringe valid patents remains unchanged.
A defendant can avoid a finding of willful patent infringement (and thus avoid the risk of an award of treble damages and attorney fees) by entering into evidence a patent legal opinion that stated the defendant is not infringing the patent. The defendant, however, waives the attorney-client privilege as to the opinion that is introduced into evidence. The Knorr ruling has been hailed by many because it fosters obtaining candid opinions from patent counsel. Businesses relying on such opinions no longer need to be as concerned that an adverse inference will be drawn if they are later sued and decide to withhold disclosure of the opinion. Nevertheless, there is still some residual concern until the actual effect of the Knorr decision is known. For example, if the plaintiff is permitted to raise the existence of the opinion, the jury may take a negative view of the defendant’s failure to disclose the opinion even though the judge instructs the jury not to do so.
This article does not constitute legal or other professional advice or services by JORDEN BURT LLP and/or its attorneys.
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