navigating the patent maze

Under United States patent law, if you are found to be a ‘willful infringer’(infringing a patent while knowing that you are infringing), liability can include up to triple damages and in exceptional cases, payment of the prevailing party’s attorney fees. The severity of the penalty spurs many companies to obtain a legal opinion about whether or not the company is infringing because a well-done opinion that concludes non-infringement will protect the company from a finding of willful infringement. In a recently-decided critical case, Knorr-Bremse, the Federal Circuit examined several issues about willful infringement. (See … recent post discussing one of the holdings in this case.) One of the issues decided was about the legal obligation to respect valid patent rights.

A duty to avoid infringement is based in policy – widespread disregard of patent rights can undermine the incentive motivation of awarding patent rights. Articulation of this duty was strongly annunciated in 1983 (Underwater Devices, Inc. v. Morrison-Knudsen Co., 717 F.2d 1380 (Fed. Cir. 1983)), when the Federal Circuit ruled that:

“where, as here, a potential infringer has actual notice of another’s patent rights, he has an affirmative duty to exercise due care to determine whether or not he is infringing, [including] the duty to seek and obtain competent legal advice from counsel before the initiation of any possible infringing activity.”

It appears that the Federal Circuit in Knorr-Bremse has not disturbed this rule, although no adverse inference of willful infringement can be drawn from an alleged infringer’s refusal to present a legal opinion or failure to obtain a legal opinion. While a determination of willful infringement has always been fact-specific, it seems to me that with the holdings in Knorr-Bremse, it will be even more difficult to prove willful infringement. Thus, the duty to avoid infringement may now become stripped of its clout.