Court holds opinions of counsel relevant to determining whether a defendant had intent to induce patent infringement

A recent Federal Circuit decision illustrates that opinions of counsel are still important when defending against a claim of patent infringement, despite the Court’s earlier decision in In re Seagate.

In its August 2007 Seagate decision, the Court overruled its earlier “due care” standard for proving willful infringement.  In Seagate, the Court held that willful infringement requires a showing of “objective recklessness”, and that a defendant accused of willful infringement has “no affirmative obligation to obtain an opinion of counsel.” 

In the new case, Broadcom v Qualcomm, the Court noted that to succeed in a claim of inducement of patent infringement, a plaintiff must prove that the defendant intended to either (i) induce the the specific infringing acts, or (ii) cause an infringement.  In the case, the accused infringer (Qualcomm) objected to a jury instruction stating “you may consider all of the circumstances, including whether or not Qualcomm obtained the advice of a competent lawyer.”  Qualcomm argued that Seagate abandoned the duty to obtain an opinion, so opinion-of-counsel evidence would not be relevant to determine the intent of an accused infringer in the inducement context. 

The Court, however, disagreed and held “that the failure to produce such an opinion may be probative of intent in [the inducement] context.”  Although the Court explained that the opinion of counsel was only “one factor” to consider when establishing intent, the Court also noted that it would be “manifestly unfair to allow opinion-of-counsel evidence to serve an exculpatory function . . . yet not permit patentees to identify failures to procure such advice as circumstantial evidence of intent to infringe.”

Because Qualcomm declined to produce the opinion, the court found the jury instruction proper.

Many patent attorneys viewed Seagate as eliminating — or at least significantly eroding — the value of opinions of counsel in patent infringement matters.  However, others noted that opinions could have value in other contexts, such as due diligence proceedings, and in situations where a charge of inducement of infringement is likely.  The new Broadcom case confirms that opinions of counsel can be very valuable in situations where a claim of inducement may arise.

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