Congress Proposes to Change Law Regarding Failure to Obtain Advice of Counsel

Both houses of Congress have passed their own versions of patent reform legislation (S.23 and H.R. 1249) in an effort to overhaul the United States patent system and bring it into closer conformity with international practices. While the Senate and House versions of the bill vary in some important aspects, they both propose to prevent a patent owner from proving willful infringement on the basis of the accused infringer’s failure to obtain advice of counsel. Both the Senate and the House bills state: “The failure of an infringer to obtain the advice of counsel with respect to any allegedly infringed patent or the failure of the infringer to present such advice to the court or jury may not be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent.”

Although the Federal Circuit has prohibited an adverse inference of willfulness to be drawn when an accused infringer fails to present an opinion of counsel, district courts are still free to instruct juries to consider whether the accused infringer obtained advice of counsel as part of the “totality of the circumstances” test used to determine whether infringement was willful. (See related post here.) Likewise, some district courts would permit a jury to consider a party’s failure to obtain advice of counsel in determining whether that party intended to induce another’s infringement of a patent in violation of 35 U.S.C. § 271(b). Both the Senate and House versions of the legislation would preclude a patent owner from ever using the fact that the accused infringer failed to obtain the advice of counsel (or decided not to present such advice to a judge or jury) to prove that infringement was willful or that the accused infringer intended to induce infringement.

So, does this mean that the value of obtaining advice of counsel is significantly decreased by the proposed legislation? Absolutely not. Neither bill affects the ability of the accused infringer to rely on advice of counsel as a defense to willful infringement. In fact, advice of counsel would remain one of the most effective defenses to either willful infringement or intent to induce infringement. Additionally, as we have noted in an earlier post, after a jury finds willful infringement, the judge may then still consider whether the infringer obtained advice of counsel when the judge determines the extent of enhanced damages and whether to award attorneys’ fees. See 35 U.S.C. §§ 284, 285.