Impact of the CAFC’s Knorr-Bremse Decision And Answers to Japanese Companies’ Most Important Questions About Opinions of Counsel in U.S. Patent Litigation

Dec 2004Intellectual Property Management, Vol. 54, No. 13

ABSTRACT

Since 1986, the Federal Circuit had consistently ruled that when an accused infringer who had actual notice of a patent fails to offer evidence at trial that it relied upon an opinion of counsel regarding the non-infringement or invalidity of the patent, the judge or the jury could draw the adverse inference that the accused party either failed to obtain any opinion, or that if an opinion was received, it was unfavorable. This has been known as the "adverse inference rule." On September 13, 2004, the U.S. Court of Appeals for the Federal Circuit, in the case of Knorr-Bremse Systeme Fuer Nutzfahrzeuge GMBH v. Dana Corp., eliminated the adverse inference rule. This article analyzes the impact of the Knorr-Bremse case on opinions in general and their use in U.S. patent litigation. In addition, Japanese companies were consulted by Mr. Tadashige Itoh, translator of this article, regarding what are the most important questions that they have concerning opinions of counsel. This article responds to those questions.<--break->1 The damages awarded may be increased "up to three times the amount found or assessed."2 When a patent is found to have been willfully infringed, courts frequently exercise their power to enhance the damages awarded to the patentee up to three times the actual damages. In addition to the potential for significantly increased damages when willful infringement is found, U.S. courts also have the power to award the patentee its attorney fees.

The importance of opinions of counsel to the issue of willful infringement was first articulated by the Federal Circuit in 1983 in Underwater Devices, Inc. v. Morrison-Knudson Co.3 In that case, the Federal Circuit concluded that when "a potential infringer has actual notice of another's patent rights, the potential infringer has an affirmative duty to exercise due care to determine whether or not he is infringing . . ."4 This "duty of care" included the duty to seek and obtain competent legal advice from counsel before the initiation of any possible infringing activity.

In 1986, the Federal Circuit in Kloster Speedsteel AB v. Crucible Inc.,5 upheld a finding of willfulness based upon the accused infringer's failure to offer any evidence that it had received or relied upon an exculpatory opinion of counsel. The Federal Circuit concluded that the infringer's "silence on the subject [of opinions of counsel] . . . . would warrant the conclusion that it either obtained no advice of counsel or did so and was advised that its importation and sale of the accused products would be an infringement of valid U.S. patents."6 The "adverse inference" rule was born.

For the past 18 years, the Federal Circuit's adverse inference rule has created a dilemma for accused infringers. If the accused party withholds its opinion, it risks having the jury or the judge draw an adverse inference that no opinion was received or that the opinion was unfavorable. This resulted in significantly increasing the risk that the judge or jury will find willful infringement under the totality of the circumstances. On the other hand, if the accused party relies upon the opinion, it loses the attorney-client privilege for the opinion itself and, potentially, other privileged communications.

BACKGROUND

Willful patent infringement is an issue of great importance to patentees and accused infringers who are involved in United States patent litigation. When a patentee proves that its patent is infringed, it is entitled to receive monetary "damages adequate to compensate for the infringement, but in no event less than a reasonable royalty . . ."1 The damages awarded may be increased "up to three times the amount found or assessed."2 When a patent is found to have been willfully infringed, courts frequently exercise their power to enhance the damages awarded to the patentee up to three times the actual damages. In addition to the potential for significantly increased damages when willful infringement is found, U.S. courts also have the power to award the patentee its attorney fees.

The importance of opinions of counsel to the issue of willful infringement was first articulated by the Federal Circuit in 1983 in Underwater Devices, Inc. v. Morrison-Knudson Co.3 In that case, the Federal Circuit concluded that when "a potential infringer has actual notice of another's patent rights, the potential infringer has an affirmative duty to exercise due care to determine whether or not he is infringing . . ."4 This "duty of care" included the duty to seek and obtain competent legal advice from counsel before the initiation of any possible infringing activity.

In 1986, the Federal Circuit in Kloster Speedsteel AB v. Crucible Inc.,5 upheld a finding of willfulness based upon the accused infringer's failure to offer any evidence that it had received or relied upon an exculpatory opinion of counsel. The Federal Circuit concluded that the infringer's "silence on the subject [of opinions of counsel] . . . . would warrant the conclusion that it either obtained no advice of counsel or did so and was advised that its importation and sale of the accused products would be an infringement of valid U.S. patents."6 The "adverse inference" rule was born.

For the past 18 years, the Federal Circuit's adverse inference rule has created a dilemma for accused infringers. If the accused party withholds its opinion, it risks having the jury or the judge draw an adverse inference that no opinion was received or that the opinion was unfavorable. This resulted in significantly increasing the risk that the judge or jury will find willful infringement under the totality of the circumstances. On the other hand, if the accused party relies upon the opinion, it loses the attorney-client privilege for the opinion itself and, potentially, other privileged communications.

THE KNORR-BREMSE DECISION

In the Knorr-Bremse decision, the Federal Circuit eliminated the adverse inference rule. The court concluded that when an accused infringer obtains an opinion of counsel but refuses to produce the opinion, invoking the attorney-client privilege, it is not appropriate for the judge or jury to draw an adverse inference with respect to willful infringement. The court further ruled that when an accused infringer has not received any opinion of counsel, it is also not appropriate for the judge or jury to draw an adverse inference of willfulness.7

The Federal Circuit in Knorr-Bremse also considered whether an accused party's substantial defense to infringement at trial was sufficient to defeat willful infringement even if no opinion of counsel had been obtained. The court ruled that it was not. The Federal Circuit explained that willful infringement is determined based on a consideration of "the totality of the circumstances." The court refused to adopt a "per se" rule that any single factor - including an infringer's substantial defense at trial - is determinative of the issue of willfulness. Although the court in Knorr-Bremse did not list all of the factors that can be considered in evaluating the totality of the circumstances, it cited to its previous precedent for what some of those factors are, including its 1992 decision inRead Corp. v. Portec, Inc.8

The court also instructed that all of the willfulness factors are to be "evaluated and weighed" by the fact finder.9 The existence of a substantial defense is but one factor that the judge or jury can consider under the "totality of the circumstances." The Federal Circuit reiterated that the "theme" for willful infringement continues to be "whether a prudent person would have sound reason to believe that the patent was not infringed or was invalid or unenforceable, and would be so held if litigated."10

A final significant aspect of the Knorr-Bremse decision was what the Federal Circuit did not do. Specifically, the court refused to answer the question of "whether the trier of fact, particularly a jury, can or should be told whether or not counsel was consulted (albeit without any inference as to the nature of the advice received) as part of the totality of the circumstances relevant to the question of willful infringement."11 The court stated that this question had not been properly raised in this case. Because the Federal Circuit did not address this question, it remains an open issue. It remains to be seen in future cases whether the courts will permit evidence as to whether the accused infringer did or did not receive an opinion of counsel. Such evidence, if allowed at trial, could conceivably have a bearing on the fact-finder's evaluation of the totality of the circumstances, even without any formal adverse inference ruling.

PRACTICAL QUESTIONS ABOUT OPINIONS

In light of the Knorr-Bremse decision, Japanese companies have raised many practical questions about how this case will affect future opinions practice in the United States. The following discussion addresses those most common questions received from Japanese companies about this subject.

A. OPINIONS IN THE AFTERMATH OF KNORR-BREMSE

  • Now that the CAFC has abolished the adverse inference rule, is it no longer necessary for my company to obtain an opinion of patent counsel to defend against willful patent infringement?

It would be incorrect to interpret the Knorr-Bremse decision as saying that companies need not obtain opinions of counsel or are now free to ignore opinions. Both before and after Knorr-Bremse, the test for willful infringement has remained the same - under the totality of the circumstances, "whether a prudent person would have sound reason to believe that the patent was not infringed or was invalid or unenforceable, and would be so held if litigated."

Although the Federal Circuit has never required a party to obtain an opinion of counsel as a means for avoiding willful infringement, an opinion of counsel was, and it remains today, part of an overall strategy to limit the risk of significantly increased exposure to damages that may result from a finding of willful infringement. A thorough, timely-received, opinion of counsel, relied upon in good faith, continues to be an important part of that totality of the circumstances, even without the adverse inference rule.

Although the adverse inference jury instruction is no longer permitted in patent trials, the elimination of that instruction does not mean that a patentee will not be able to introduce evidence at trial regarding whether the infringer consulted with counsel. We may find that the Federal Circuit's refusal to answer this particular question in Knorr-Bremse will open a back door through which skilled trial counsel will be able to persuade a judge or a jury to make, in essence, aninformal adverse inference, even without a formal adverse inference ruling. Only time will tell how trial courts and the Federal Circuit will handle this issue in future cases.

    • How does the Knorr-Bremse decision change the practice of obtaining opinions about U.S. patents?

The non-willfulness opinion is but one type of opinion that U.S. patent practitioners normally provide to their clients. For example, patent counsel frequently provide product clearance and design-around opinions. The purpose of those kinds of opinions is to avoid potential patent infringement liability altogether, and not necessarily to avoid a willful infringement allegation. For those other types of opinions, the Knorr-Bremse decision should have no impact.

For opinions that are prepared to defend against the possibility of a willful infringement allegation, the Knorr-Bremse decision can give those companies greater flexibility in deciding whether it is necessary to have such an opinion prepared. What likely will not change in the future is that the more important a patent is or becomes in terms of potentially impacting significant sales of a company's products, the more likely it will be that the company will want to have an opinion prepared regarding that patent.

  • Is an opinion necessary to avoid willful infringement?

As stated above, the Federal Circuit has never stated that an opinion is "necessary" to avoid willfulness. The test is whether, under the totality of the circumstances, a prudent person would have sound reason to believe that the patent was not infringed or was invalid or was unenforceable. And while the Federal Circuit has also made clear that no one factor will necessarily be conclusive of the issue of willfulness, there have been many Federal Circuit cases over the past 20 years that have identified the opinion as an important, if not the most important, factor to consider. Thus, an opinion of counsel can be a critical part of an overall strategy to limit the risk of willful infringement.

  • Can my company avoid treble damages even without an opinion of counsel based on its own in-house analysis of the patent?

The willfulness issue is not decided by any absolute rules. Just as there is no absolute rule that an opinion is necessary to avoid willfulness, there is also no absolute rule that a company is or is not a willful infringer based on its own in-house opinion. The issue is whether, under all of the circumstances, a "prudent" business person would have "sound reason" to believe that the patent was not infringed, or was invalid, or was unenforceable.

As discussed more fully below, there have been many Federal Circuit cases that have discussed the standards that an opinion must meet for that opinion to be considered competent and reliable evidence of non-willful infringement. One important factor concerns the qualifications of the person writing the opinion. If the in-house person who conducts the analysis is not a trained U.S. patent lawyer, then his or her opinion on U.S. patent law issues, such as claim interpretation, infringement (including infringement under the doctrine of equivalents and literal infringement), and validity, is going to be much more easily attacked at trial by skilled patentee counsel as incompetent. Ultimately, the issue is whether a judge or jury would believe that an in-house analysis on patent issues prepared by someone who is not trained as a U.S. patent lawyer is the type of information that a "prudent" business person would "reasonably" rely upon? There is a significant risk that the judge or jury, ultimately, would answer this question "no."

  • What is the difference between an opinion of counsel defense and a substantial defense for purposes of willful patent infringement?

The Federal Circuit made clear in the Knorr-Bremse decision that raising a substantial defense to infringement at trial does not automatically defeat a charge of willfulness. Rather, a substantial defense is one factor in the willfulness assessment. The court reiterated that the "theme" for willful infringement is "whether a prudent person would have sound reason to believe that the patent was not infringed or was invalid or unenforceable, and would be so held if litigated." An opinion of counsel is another factor that the trier of fact may consider in assessing the infringer's willfulness. While there are no automatic rules, many Federal Circuit decisions have focused on the presence or absence of an opinion in assessing the totality of evidence. An accused infringer who has both an opinion of counsel and who puts on a substantial defense to infringement at trial should have a significantly better chance at defeating a willfulness allegation than a party who has neither an opinion nor a substantial defense.

  • Can an accused infringer always avoid treble damages by raising an opinion of counsel defense?

No. An opinion of counsel is but one factor that the judge or jury may consider in assessing willfulness under the totality of the circumstances standard. The opinion may or may not be the deciding factor. And there are other factors besides an opinion that the judge or jury may consider. These factors include: evidence of deliberate copying; litigation behavior; the infringer's size and financial condition; closeness of the issues; duration of the infringer's misconduct; remedial action by the infringer; motive to harm the patentee; and concealment of misconduct by the infringer. These additional factors are also a part of the totality of circumstances that judges or juries may consider when deciding willfulness.

B. STANDARDS FOR OPINIONS - TIMING, SUBSTANCE, RELIANCE AND COST

  • My company has just learned about a patent and is concerned about possible infringement. How long can it wait before obtaining an opinion?

There are no strict rules about how long is too long. However, as a general rule, as the length of delay in obtaining the opinion increases, the opinion's exculpatory value decreases. Thus, the sooner the opinion is sought, the more likely that the opinion will be found to be timely. Ideally, the opinion should be obtained before the commencement of possibly infringing activity.12 As a practical matter, an infringer often does not receive notice of the patent until after it has committed an act of infringement. In such instances, the opinion should be obtained promptly after receipt of the notice.13

  • It is not economical for my company to obtain an opinion every time it learns about a patent. What standard should my company use in determining whether an opinion is warranted for a particular patent?

This is a very common problem faced by large corporations. Some companies may learn about hundreds of patents each year. A good quality opinion of U.S. patent counsel can cost $20,000, $30,000, or much more depending on the complexity of the issues, timing and other factors. Legal departments in large organizations may view opinions as an unnecessary expense, especially if they are pressured by management to keep down legal costs.

Although cost is certainly a factor companies must consider, companies should not lose sight of the fact that willful patent infringement is a serious matter. A finding of willfulness is often the basis for U.S. courts to award increased damages (up to three times actual damages). Furthermore, a willful infringer may also be required to pay the patentee its attorney fees, which itself can cost millions of dollars. U.S. patent attorneys are highly skilled at analyzing patents in light of the ever-changing patent laws of the United States, and they are well-suited to provide advice that will meet the Federal Circuit's requirements for a legally sufficient and competent opinion.

Companies can measure the value that an opinion provides by doing a cost-benefit analysis. While there is no set formula for conducting such an analysis, the company can consider a number of factors:

(1) Who is the patentee? What is its reputation for litigation? Is it a competitor? Have there been any communications about this patent with that other company? Has the patent ever been litigated? Has the patent ever been licensed? How long has your company been aware of the patent?;

(2) How important to the company's business are the products that are potentially covered by the patent?;

(3) Would the company be harmed if it were no longer permitted to market or sell the product in question in the U.S.?;

(4) How much revenue and profit has the company received during the previous six years for its U.S. sales of the products that are implicated by the patent (or, if the patent issued less than six years before the analysis is conducted, since the date the U.S. patent issued)?; and

(5) What future revenues and profits does the company anticipate making for U.S. sales of the concerned product over the remaining life of the U.S. patent?

Once it has considered these factors, the company should have at least a general sense of the type of financial harm it may face if it is found liable for infringement. Of course, for a company to get an accurate picture of its potential exposure, it must do much more than simply consider these factors. The company needs to be able to analyze the patent in issue in terms of the company's commercial activities and products. Do the company's products infringe the patent? And if so, is the patent valid?

To answer these questions accurately, the company needs to have specialized expertise in substantive U.S. patent law. Most non-U.S. companies do not have any in-house legal experts who are qualified to interpret and apply the maze of U.S. patent laws on issues such as patent claim interpretation, infringement, validity, enforceability or damages. For those companies who do not have qualified in-house U.S. patent expertise, it would be extremely difficult, if not impossible, to conduct a meaningful and realistic analysis of the company's exposure when it becomes aware of a U.S. patent. And while there is obviously a cost involved in obtaining a competent opinion when a company learns about a U.S. patent, the company should also consider the cost of not getting such an opinion.

  • What must the opinion say for it to be legally sufficient?

For an opinion to satisfy the Federal Circuit's sufficiency standards, the opinion must be thorough enough to "instill a belief in the infringer that a court might reasonably hold the patent is invalid, not infringed, or unenforceable."14 The opinion should be based on the best factual information available to the company. Written opinions are inherently more reliable than oral opinions, and consequently, Federal Circuit case law reflects a strong preference for opinions of counsel to be in writing.

An opinion on infringement or invalidity will ordinarily require the opinion writer to interpret the patent claims. Claim interpretation requires consideration of the claims, the specification, and the patent's prosecution history. The opinion should thoroughly discuss those issues. An opinion on non-infringement must fully address both literal infringement and infringement under the doctrine of equivalents.15 An invalidity opinion should include a "diligent and thorough" review of the prior art.16

The opinion must not be conclusory. A conclusory opinion is one that lacks specific factual or legal analysis, fails to specifically link prior art and other information to the legal analysis of the patent claims, and/or shows a "studied ignorance of obvious factual or legal shortcomings."17 The opinion must be objective and honest, and the opinion writer should not be subjected to "undue influence" from the client in rendering the opinion.18

  • Must my company rely upon the opinion for the opinion to be a defense to willful infringement?

Yes. "Good faith" reliance is an important requirement for the opinion to serve as a defense to willful infringement. There are a number of circumstances where the Federal Circuit has found that an accused infringer's reliance on the opinion of counsel was not in good faith. These include:

(1) When the client provides the opinion writer with false information or withholds material information;

(2) When the client tells the opinion writer what the opinion should say or what ultimate opinion should be reached;

(3) When the facts or the law has changed after the opinion was provided;

(4) When the client "shops" for an opinion until it finds one that is favorable to it; and

(5) When the opinion is ignored or is not followed by the client.

  • Is there any relationship between the quality of an opinion and its cost?

Generally, yes. The Federal Circuit has set forth rigorous standards regarding what is, and what is not, a thorough opinion. An opinion that cuts corners and does not meet those requirements will be prone to attack at trial by the patentee's counsel. It takes more time to prepare an opinion that is consistent with the Federal Circuit's standards than it does to write an opinion that fails to meet those standards. That additional time is typically reflected in the ultimate cost of the opinion.

  • Should a second opinion be requested if new evidence is found or if the law changes in a way that affects the first opinion?

Yes. Because willfulness is based on the infringer's state of mind at the time of the infringement, the infringer's state of mind may have to be reevaluated at different periods of time. If the facts or the law have changed after a first opinion was prepared (for example, the company's product was redesigned), then the first opinion should be supplemented to consider the changed circumstances.

C. COMMON LITIGATION ISSUES RELATING TO WILLFUL INFRINGEMENT AND OPINIONS OF COUNSEL

  • Can my company defend against a charge of willful patent infringement without relying upon an opinion of counsel defense?

Yes. The question is - should it? Obviously, cost is a factor in deciding whether to obtain an opinion. The Federal Circuit has identified other factors that may also be considered in assessing willfulness under the totality of the circumstances. Keep in mind, however, that under the Knorr-Bremse decision, a potential infringer with actual notice of another's patent has an "affirmative duty to exercise due care to determine whether or not he is infringing." Although there is no rule requiring an opinion to defend against willfulness, a thorough opinion would be very helpful in proving that the company has satisfied its duty of care.

  • What is the relationship between the attorney-client privilege and opinions of counsel?

An opinion of counsel is one type of privileged communication. Under U.S. law, such privileged communications are ordinarily not discoverable, and the courts cannot typically require the client to reveal the substance of the privileged communication either in discovery or at trial. However, if the client decides to rely upon the opinion in litigation or to give it to a third party, then in most circumstances the communication is no longer privileged; the privilege is deemed to have been lost by the disclosure.

  • How can my company preserve the attorney-client privilege regarding an opinion of counsel?

One of the key requirements of a privileged communication is that it is confidential between the lawyer and the client. To preserve the privilege, keep the communication confidential. Do not reveal the opinion to anyone outside of the company. If your company voluntarily discloses the opinion to someone outside of the company, then there is a good chance that a court in the U.S. will conclude that the attorney-client privilege has been lost. Moreover, within corporations themselves, privileged communications ordinarily should not be widely distributed to general employees. In order to maintain the corporate privilege, communications with counsel should only be disclosed to company executives and other persons who are deemed to have management responsibilities.

  • My company has received an opinion of counsel regarding a patent. One of our most important customers wants to see a copy of the opinion. How should we respond to such a request?

This is a complex and delicate situation. How your company should respond to the request depends, in part, on the importance of the customer. If your company reveals the opinion, there is a chance that it will lose the attorney-client privilege as to that opinion and possibly other privileged communications. On the other hand, if you provide only the conclusion of the opinion without revealing its substance (i.e., "our patent counsel advised us that the patent is not infringed"), there is a better chance that a court would find that the privilege has not been lost.

There are exceptions, however, that may apply to the general rule that the disclosure of a privileged communication to a third party waives privilege. For example, in some circumstances, courts will permit different companies to share their privileged communications with one another if doing so is in furtherance of a joint legal defense effort or a common legal interest.

If your company decides to disclose the opinion to its customer, it would be prudent for you to consult first with counsel to determine if that disclosure would waive privilege or it an exception to the waiver may apply under the circumstances. Of course, if the customer is important enough to your company and demands to see the opinion, then ultimately your company may be forced to decide that, for business reasons, it is better to risk losing the privilege than losing the customer.

  • If my company is accused of willful infringement and asserts an opinion of counsel defense, what impact will that have on discovery? What is discoverable? How can we limit what is discoverable?

How much discovery will be permitted will depend upon the scope of the waiver of privilege found by the court. Different courts will decide the scope of the waiver differently - unfortunately, there is currently no single, uniform standard in the U.S. on this issue. Generally speaking, the patentee will be entitled to discovery on the opinion itself and all attachments to the opinion. Discovery most likely will be permitted regarding communications between the author and the recipient of the opinion relating to the subject of the opinion, its creation, earlier drafts, and any of the facts or conclusions set forth in the opinion. All documents provided to the opinion-writing attorney, or that the opinion writer provided to the client, will probably be discoverable as well, as will be the opinion writer's drafts and notes regarding the opinion. And the company will likely be required to provide discovery as to when it received the opinion, what it advised its counsel in connection with the opinion, and whether and how it relied on the opinion.

The company can help to limit discovery of documents by keeping careful control over its records and communications. This includes limiting e-mails, memos and correspondence regarding the opinions, limiting the number of individuals who interface with opinion-writing counsel, and limiting the number of people who are involved in the opinion-preparation process. Finally, the implementation and enforcement of a document retention and destruction policy (at least prior to the initiation of litigation) can be an effective way to reduce the number of documents that may be subject to discovery should litigation later ensue.

  • My company received an unfavorable oral opinion about a patent. We then went to a different law firm and we received a favorable opinion. We want to rely upon only the favorable opinion and not disclose the unfavorable one. Can we?

No. Your company is deemed to have knowledge of both the favorable and the unfavorable opinions. If your company decides to rely upon an opinion of counsel defense, it will be obligated to produce in discovery all opinions that it received on the same subject, both favorable and unfavorable, whether oral or written. If the accused party raises an opinion of counsel defense at trial, the jury or judge will be able to consider both opinions as part of the assessment of the totality of the circumstances.

  • If a Japanese patent attorney drafts an opinion for a Japanese company regarding infringement or invalidity of a U.S. patent, is that opinion still privileged?

There are only a few U.S. district court published decisions that have ever addressed this particular issue, and no cases from the Federal Circuit. Thus, it is very difficult to predict how a U.S. court would rule. Answering this question requires a consideration of two different questions.

The first question is whose law of privilege should be applied - U.S. law or Japanese law. This is not a straightforward question. Different courts in the U.S. apply different tests in determining the appropriate "choice of law." If the court finds that Japanese law applies, it would then have to consider whether, under Japanese law, the communication in question would be subject to the attorney-client privilege. At least one U.S. district court has interpreted Japanese law as recognizing a kind of evidentiary privilege for confidential communications between a client and a benrishi. Although it is possible that other U.S. courts will reach the same conclusion in the future, it is not possible to predict how a U.S. court would rule on this issue given the very few cases that have been decided.

CONCLUSION

By ending the adverse inference rule, the Federal Circuit's decision in Knorr-Bremse has provided potential infringers with added flexibility in deciding whether to obtain an opinion of counsel in defense of willfulness. However, the adverse inference issue has not been completely resolved. The judge or jury may still learn at trial that the accused infringer did or did not seek an opinion of counsel. It is unclear what affect such evidence might have in future patent cases.

Even though it has ended the adverse inference rule, the Federal Circuit has reaffirmed the principle that companies that learn about U.S. patents have an affirmative duty to avoid infringement. Furthermore, presenting a substantial defense to infringement at trial is not necessarily sufficient to discharge that duty. The test for willfulness remains whether, under the totality of the circumstances, a "prudent person would have sound reason to believe that the patent was not infringed or was invalid or unenforceable, and would be so held if litigated." Companies should consider all of these issues when determining whether to obtain an opinion of counsel.

ENDNOTES:


1 35 U.S.C. § 284.

2 35 U.S.C. § 284.

3 717 F.2d 1380 (Fed. Cir. 1983).

4 717 F.2d at 1389-90.

5 793 F.2d 1565 (Fed. Cir. 1986).

6 793 F.2d at 1580.

7 The Federal Circuit's opinion in Knorr-Bremse is publicly available on the court's web site at: http://www.fedcir.gov/opinions/01-1357.doc. Citations to the court's decision are referenced herein to the page numbers from the document available on the court's web site as "slip opinion at p. ___."

8 970 F.2d 816, 826-27 (Fed. Cir. 1992). In Read, the Federal Circuit held that "[t]he paramount determination in deciding to grant enhanced damages is the egregiousness of the defendant's conduct based on all the facts and circumstances." The court listed the following factors as relevant to the determination: (1) deliberate copying; (2) whether the infringer received a good faith opinion of counsel; (3) the accused infringer's behavior in the litigation; (4) the infringer's size and financial condition; (5) the closeness of the legal and factual questions; (6) the duration of the infringer's misconduct; (7) remedial action taken by the infringer; (8) the infringer's motivation to harm the patentee; and (9) whether the infringer concealed its misconduct. Id. at 826.

9 Knorr-Bremse slip opinion at p. 6.

10 Knorr-Bremse slip opinion at 11-12, quoting L.A. Gear Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, 1127 (Fed. Cir. 1993).

11 Knorr-Bremse slip opinion at 13-14.

12 Electro Med. Sys., S..A. v. Cooper Life Sciences, Inc., 34 F.3d 1048 (Fed. Cir. 1994).

13 Jurgens v. CBK, Ltd., 80 F.3d 1566 (Fed. Cir. 1991).

14 Johns Hopkins Univ. v. CellPro, Inc., 152 F.3d 1342 (Fed. Cir. 1998).

15 Datascope Corp. v. SMEC, Inc., 879 F.2d 820 (Fed. Cir. 1989).

16 Jurgens v. CBK, Ltd., 80 F.3d 1566 (Fed. Cir. 1991).

17 Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253 (Fed. Cir. 1997).

18 Westvaco Corp. v. Int'l Paper Co., 991 F.2d 735 (Fed. Cir. 1993).

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