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The Federal Circuit's recent call for amicus curiae briefing on the subject of how patent willfulness is proven drew an astonishing twenty-four responses, all of them urging the court to revise its precedent. In particular, amici unanimously urged that the court abandon its current rule allowing an adverse inference of willful infringement when an accused patent infringer asserts the attorney-client privilege.

Amici were near-unanimous on a second question also, urging the Federal Circuit to reject an adverse inference against an infringer who failed to obtain advice of counsel at all. Even the minority view supported an adverse inference only where the patentee had provided the infringer with actual notice, or where the infringer's pre-litigation conduct gave rise to a duty to seek legal advice.

Morrison & Foerster LLP submitted an amicus brief signed by patent eminence Donald S. Chisum on behalf of clients BEA Systems, Inc. and Novell, Inc. (available online). The Morrison & Foerster brief opposed an adverse inference against an accused infringer who asserts the attorney-client privilege or who fails to obtain advice of counsel at all.

The Federal Circuit had taken the unusual step of sua sponte granting en banc review to reconsider its precedent on adverse inferences as they relate to willful infringement, and the court expressly invited amicus curiae briefing. The bar's overwhelming response to the Federal Circuit's invitation demonstrates that these questions are ripe for reconsideration. The Federal Circuit received more amici responses in this case, Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp. than it did in the earlier Festo Corp. v. Shoketsu Kinzoku Kogyu Kabushiki Co. and Johnson & Johnson Assocs. v. R.E. Serv. Co. cases.

Many amici addressed a third question involving willful infringement but not adverse inferences: whether the existence of a substantial defense to infringement suffices to defeat liability for willful infringement, even if the infringer has not sought legal advice. The briefs were almost evenly split on this issue, with nine out of seventeen favoring such a defense.

Because a finding of willful infringement can result in a court's trebling the damages awarded, accused infringers frequently seek an opinion of counsel regarding their potentially infringing activities. An accused infringer can rely on such an opinion, if favorable, to rebut a charge of willful infringement. Existing Federal Circuit case law permits an adverse inference that the opinion was or would have been unfavorable, if the accused infringer asserts the privilege to avoid producing the opinion or failed to obtain an opinion at all. The uniformity with which amici curiae recommended change now suggests that the Federal Circuit will use this case to overturn its precedent.

Knorr Question No. 1 for Amici Curiae: When the attorney-client privilege and/or work product privilege is invoked by a defendant in an infringement suit, is it appropriate for the trier of fact to draw an adverse inference with respect to willful infringement?

The amici curiae unanimously responded to this question by opposing this adverse inference. The Morrison & Foerster brief explained that both the duty to obtain the advice of counsel and this adverse inference are unique to patent law. Such a negative inference exists nowhere in the areas of copyright, tax, and property law, for example. Several amici curiae articulated similar views.

The Morrison & Foerster brief also noted that the duty to obtain the opinion of counsel, coupled with the threat of an adverse inference of willfulness for failing to disclose such an opinion, leads infringers to seek only exculpatory opinions. The Federal Circuit's current precedent therefore discourages candid communications between clients and their attorneys. The Morrison & Foerster brief further explained that engineers and scientists must be competent to provide advice regarding infringement, as patent claims are directed toward those skilled in the art.

Several amici identified reasons why a client might assert the privilege over an opinion of counsel besides wanting to hide its unfavorable conclusion. Revealing a favorable opinion also might: (1) reveal the client's trial strategy, and thus place it at a disadvantage relative to the patentee; (2) result in the disqualification of the client's preferred trial counsel, who also authored the opinion; (3) expose conflicts between positions taken in the opinion and during litigation; and (4) result in the disclosure of ancillary, but still commercially valuable, information to a direct competitor. Faced with these unsavory alternatives, a client possessing a favorable opinion might well decide to assert the privilege.

Other amici presented policy justifications for rejecting the adverse inference. For example, some amici explained that the adverse inference often predetermines the issue of willfulness, and thus improperly shifts the burden to the accused infringer of rebutting a charge of willfulness. amici also emphasized the unfairness of requiring that a small business obtain a costly opinion of counsel in response to the patentee's inexpensive act of providing notice. Such small businesses, which may possess valid defenses but be unable to afford the expense of retaining opinion counsel, may opt to settle with the patentee for less than the cost of such an opinion. Finally, some amici noted the perverse incentives that result from the current adverse inference rules. Engineers and scientists often avoid reading patents to avoid being imputed with knowledge of a patent, which would give rise to a need to seek a costly opinion of counsel. This intentional ignorance, in turn, fosters unintentional infringement.

Still other amici criticized the lack of uniformity in the courts' pronouncements of the scope of the waiver of privilege. Although some courts have limited the waiver to direct communications between client and counsel, other courts have held that even uncommunicated work product falls within the scope of the waiver. This uncertainty regarding the breadth of the waiver creates uncertainty as to whether to waive the privilege or draw the adverse inference. Some amici doubted whether bifurcating the willfulness question could avoid the strategic advantage provided to the patentee by the defendant's waiver of the privilege, as courts do not always allow such bifurcation.

Knorr Question No. 2 for Amici Curiae: When the defendant has not obtained legal advice, is it appropriate to draw an adverse inference with respect to willful infringement?

For many of the same reasons described above, all but three of the twenty-two amici curiae that addressed this second question opposed the adverse inference. Morrison & Foerster's brief explained that, because there should be no duty to obtain an opinion of counsel in the first place, there also should be no adverse inference from failing to obtain an opinion. The great majority of amici curiae shared this view.

Briefs submitted by the New York Bar Association and the Intellectual Property Owners Association favored an adverse inference if the patentee gave actual notice of infringement, but the infringer still failed to seek the advice of counsel. The New York Intellectual Property Law Association similarly recommended an adverse inference if the totality of the circumstances surrounding the defendant's pre-litigation activities gave rise to an obligation to seek legal advice.

The San Diego Intellectual Property Law Association suggested that these proposals could lead to odd results, however. For example, if the court adopts the amici's unanimous recommendation that asserting the privilege should not lead to an adverse inference, then an alleged infringer who receives an unfavorable opinion, but still continues to infringe, will be better off than an infringer who never seeks an opinion at all, and thus draws the adverse inference of willful infringement.

Knorr Question No. 3 for Amici Curiae: Should the existence of a substantial defense to infringement be sufficient to defeat liability for willful infringement even if no legal advice has been secured?

The final Knorr question is the most far-reaching of the three. Unlike the other two Knorr questions (the answers to which may resolve conflicts between the patent laws and other legal fields), the last Knorr question ponders the wisdom of ratifying, en banc, a "substantial defense" bar to liability for willful infringement.

The seventeen amici that addressed this issue were sharply divided. Trade and industry organizations, such as the Biotechnology Industry Organization and the Generic Pharmaceuticals Association, generally favored en banc confirmation of this defense. The majority of the bar associations, by contrast, recommended that a substantial defense to infringement should be but one factor in the "totality of the circumstances" analysis for willfulness.

Some amici focused on the timing of the infringer's recognition of the substantial defense. If recognition came after the lawsuit was filed, these amici believed that a good faith belief in a substantial defense should not suffice to defeat liability. Others suggested that the existence of a substantial defense should bar liability for willful infringement regardless of the timing of the infringer's recognition. The Federal Circuit Bar Association, while favoring the recognition of this defense to liability, recommended that the judge, and not the jury, decide the existence of a "substantial defense."

Below is a chart summarizing the amici curiae's positions on each of the three Knorr questions:

Amicus Curiae	Question 1	Question 2	Question 3
ABA	No	No	n/a
AIPLA	No	No	Depends on timing & circumstances of actual knowledge
Ass'n Corp. Counsel	No	No	n/a
Ass'n Patent Law Firms	No (unless no legitimate reason for withholding opinion)	No	One factor.
BEA & Novell	No	No	n/a
Biotech. Industry Org.	No	No	Yes
City of Chicago	No	No	One factor
Computer Assocs. Int'l et al	No (only prospective application)	No (only prospective application)	n/a
Conejo Valley Bar Ass'n	No	No	One factor
D.C. Bar Ass'n	No	No	One factor
Fed. Cir. Bar Ass'n	No	No	Yes (but by judge); timing unimportant.
Generic Pharm. Ass'n	No	No	Yes
Houston IPLA	No	No	n/a
Intellectual Prop. Owners Ass'n	No	Yes (if written notice)	Yes
Lexington Patent Policy Group	No	No	One factor
Microsoft	n/a	No (ltd. to situation where complaint provides 1st notice)	Yes (ltd. to situation where complaint provides 1st notice
NY Bar Ass'n	No	Yes (if notice provided)	One factor; timing important
NYIPLA	No	No (but duty to investigate if notice or copying)	n/a
Public Knowledge	n/a	No (but duty to investigate if notice or copying)	n/a
Public Patent Found	No	No	Yes
SDIPLA	No	No	Yes
Sec. Indus. Ass'n	No	No	Yes (but also refers to totality of circum. for good faith)
Semiconductor Indus. Ass'n	No	No	n/a
U.S. Council Int'l Bus. et al.	No	No	Yes (non-willfulness presumed, but may be rebuttable)