Brief Fact Summary.The trial court held Seagate Technology, LLC (Seagate) (Defendant) waived its attorney-client privilege and work product protection for in-house, trial, and opinion counsel communications concerning the infringement, invalidity, and enforceability of Convolve patents.Â Defendant sought a writ of mandamus to vacate the trial court’s order for document production.
Synopsis of Rule of Law. A patentee must show objective recklessness to recover enhanced damages on proof of willful infringement and a defendant no longer has an affirmative duty to acquire a legal opinion prior to action.
The decision to grant or deny permanent injunctive relief is an act of equitable discretion by the district court.View Full Point of Law
Issue. Must a patentee show objective recklessness to recover enhanced damages on proof of willful infringement and does a defendant still have an affirmative duty to acquire a legal opinion prior to action?
Held. (Mayer, J.)Â Yes and no.Â A patentee must show objective recklessness to recover enhanced damages on proof of willful infringement and a defendant no longer has an affirmative duty to acquire a legal opinion prior to action.Â A writ of mandamus is appropriate for a party who has not other way to get the relief requested and the right to the writ is â€œclear and indisputable.â€Â In a discovery dispute about claims of privilege, mandamus is appropriate when: (1) an important issue of first impression is raised; (2) a delay until final judgment means the loss of the privilege; (3) immediate resolution avoids doctrine development that would undermine the privilege.Â This case meets the criteria.Â Onvolve can only get receive enhanced damages upon showing willful infringement.Â Underwater Devices Inc. v. Morrison-Knudsen Co., 717 F.2d 1380 (Fed. Cir. 1983), set for the analysis for willful infringement and enhanced damages.Â A potential infringer on actual notice of another’s patent rights has the affirmative duty to obtain legal advice before initiating a potentially infringing action.Â Therefore developed the advice of counsel defense where alleged infringers claim reliance on legal opinions.Â â€œWillfulâ€ in Underwater Devices, however, is less stringent, more like negligence, than â€œwillfulâ€ in the civil context and therefore does not comply with Supreme Court precedent.Â Underwater Devices is overruled, a showing of objective recklessness is required, and the alleged infringer has no affirmative duty of due care. There is no existing duty to obtain legal opinion.Â Convolve argues it is improper to consider â€œwillfulnessâ€ here but the proper legal standard informs the discovery scope, so this opinion is not advisory or hypothetical.Â Next, this court considers the attorney â€“client privilege waiver.Â The attorney-client privilege waiver is meant to encourage frank communication and can only be waived by the client.Â The scope of a client’s waiver has no bright-line rule.Â In this case, trial counsel and opinion counsel serve very different functions and the Supreme Court has recognized the need to protect trial counsel’s thoughts and strategy. In addition, a claim of willfulness requires a good faith basis that the alleged infringer’s pre-filing conduct was willful infringement.Â Therefore, trial counsel’s communications are not relevant to the pre-litigation willfulness.Â A claim of post-litigation willfulness can be addressed with a motion for preliminary injunction.Â Finally, a similar analysis applies to the waiver of work production protection.Â In some circumstances the waiver may be extended to trial counsel, but the general rule should be that waiver for reliance on opinion counsel work product as a defense to willful infringement does not extend to trial counsel.Â Writ granted.
Concurrence. (Gajarsa, J.)Â The court should end the grafting of a willfulness standard onto 35 U.S.C. Â§ 284.Â Even though the court itself has grafted such a standard onto the statute, the language of the statute unambiguously omits such a standard, and there is no principled reason for continuing to engraft a willfulness standard onto Â§ 284.Â Instead, the plain meaning of the statute should be given effect, and the discretion to enhance damages should be left with the district courts, minus a willfulness standard.
Discussion. This case nullified the affirmative duty to act with due care in willfulness cases and set off waves in the patent litigation community.Â Prior to this opinion, defendants often waived the attorney-client privilege to establish the advice-of-counsel defense and the scope of the waiver was highly litigated.Â Now the prosecution of willful infringement becomes more difficult and the waiver issue less complicated.