Since the Supreme Court’s Halo decision, we have seen some interesting decisions from district courts regarding opinion practice and willful infringement. Though it doesn’t appear that we are headed back to the pre-Seagate era, the pendulum is at least starting to swing slowly in that direction. Provided below are just a few interesting changes we have seen based on the district court cases we have been tracking.
Large Corporations Are Being Held To A Higher Standard
- Large Companies Are Expected To Be Abreast of Opinion Practice – Absence of opinion of counsel has been found “surprising” by some district courts, especially in light of a company’s size and IP portfolio, and indicates a lack of good faith belief on invalidity. See Barry v. Medtronic, Inc., No. 1:14-cv-104, 2017 U.S. Dist. LEXIS 64403, at *15-16 (E.D. Tex. Apr. 20, 2017).
- Size of Defendant Relative to Plaintiff Matters– Enhanced damages have been found particularly warranted when Defendant is a large enterprise acting in bad faith and Plaintiff is a smaller company. See Arctic Cat Inc. v. Bombardier Rec. Prods., 198 F. Supp. 3d 1343, 1351-52 (S.D. Fla. 2016).
Obtaining An Opinion Is Good / Not Obtaining An Opinion Can Hurt The Case
- Formal Opinion of Counsel Works – Consulting with outside counsel and obtaining a noninfringement opinion before litigation shows good faith. See Loggerhead Tools, LLC v. Sears Holding Corp., No. 12-cv-9033, 2016 U.S. Dist. LEXIS 158435, at *7 (N.D. Ill. Nov. 15, 2016); of Bos. Univ. v. Everlight Elecs. Co., Ltd., 212 F. Supp. 3d 254, 257-58 (D. Mass. 2016); Trs. of Bos. Univ. v. Everlight Elecs. Co., Ltd., 212 F. Supp. 3d 254, 257-58 (D. Mass. 2016); and Sprint Communs. Co. L.P. v. Time Warner Cable, Inc., No. 11-2686-JWL, 2017 U.S. Dist. LEXIS 37191, at *43 (D. Kan. Mar. 14, 2017) (investigation of patents by in-house counsel that are brought to their attention by Plaintiff found to support a good faith belief of non-infringement and does not support a finding of egregiousness for enhanced damages).
- Many Cost-Saving Alternatives Being Scrutinized –
- Late Opinions – Consulting with in-house and outside counsel post-suit and failing to obtain a formal opinion shows lack of good faith, supporting enhanced damages. See PPC Broadband, Inc. v. Corning Optical Communs. RF, LLC, No. 5:11-cv-761 (GLS/DEP), 2016 U.S. Dist. LEXIS 152450, at *20-21 (N.D.N.Y. Nov. 3, 2016). Seeking formal opinion by competent counsel after having knowledge for eight years is too long to wait. See Arctic Cat Inc. v. Bombardier Rec. Prods., 198 F. Supp. 3d 1343, 1348 (S.D. Fla. 2016).
- Short-Changing Analysis – Exclusive reliance on one conclusory sentence summarizing analysis See Arctic Cat Inc. v. Bombardier Rec. Prods., 198 F. Supp. 3d 1343, 1348 (S.D. Fla. 2016). Invalidity analysis to portion of claims in patent insufficient. See Arctic Cat Inc. v. Bombardier Rec. Prods., 198 F. Supp. 3d 1343, 1351 (S.D. Fla. 2016); Polara Eng’g, Inc. v. Campbell Co., No. SA CV 13-00007-DFM, 2017 U.S. Dist. LEXIS 27304, at *44-46 (C.D. Cal. Feb. 27, 2017).
- Oral Opinions – Obtaining oral opinions from patent counsel without a pre-suit written opinion may show lack of good faith in some jurisdictions. Omega Patents, LLC v. CalAmp Corp., No. 6:13-cv-1950-Orl-40DCI, 2017 U.S. Dist. LEXIS 55846, at *14-16 (M.D. Fla. Apr. 6, 2017) (obtaining oral opinions from patent counsel with no record and only obtaining written opinions post-suit is insufficient and viewed skeptically).
Defendants May Be Imputed To Have “Knowledge” Of Infringement
- Knowledge Of An Application, Imputed To Knowledge Post-Issuance – Knowledge of a patent application that later issued as a patent has been found in some cases to constitute knowledge of infringement of the patent. See Blitzsafe Tex., LLC v. Volkswagen Grp. of Am., Inc., 2016 U.S. Dist. LEXIS 124144, at *24-26 (E.D. Tex. Aug. 19, 2016) (deciding not to reward Defendants for willful blindness of issued patent when had knowledge of application); Idenix Pharm. LLC v. Gilead Scis., Inc., Civil Action No. 13-1987-LPS, 2016 U.S. Dist. LEXIS 167064 at *7 (D. Del. Dec. 4, 2016) (stating that the law does not definitively preclude pre-patent conduct from supporting a finding of willful infringement); See Malibu Boats, LLC v. MasterCraft Boat Co., LLC, No. 3:16-CV-82-TAV-HBG, 2016 U.S. Dist. LEXIS 183202, at *12-14 (E.D. Tenn. Oct. 28, 2016) (finding that Defendant’s knowledge of patent pre-issuance via Notice of Allowance and Issue Notification may support a finding of willfulness); see also Innovention Toys, LLC v. MGA Entm’t, Inc., 611 F. App’x 693, 699 (Fed. Cir. 2015).
- Knowledge of Infringement Generally Not Found When Reference Only Cited during Prosecution – Defendant has traditionally not been found to have knowledge of infringement of references cited, but not asserted, during prosecution by Defendant or USTPO. See Radware, Ltd. v. F5 Networks, Inc., No. 5:13-cv-02024-RMW, 2016 U.S. Dist. LEXIS 112504, at *11-12 (N.D. Cal. Aug. 22, 2016) (finding that when patent is cited with Notice of Allowance to defendant during prosecution, defendant does not have knowledge of infringement); DermaFocus LLC v. Ulthera, Inc., 201 F. Supp. 3d 465, 471 (D. Del. 2016) (finding it implausible to infer Defendant’s pre-suit knowledge of infringement only by inclusion of Plaintiff’s patent as one of seven references for determining patentability in Defendant’s Information Disclosure Statement).