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Should You Get an Exculpatory Patent Opinion? Some Neglected Considerations

By Adam Sheehan
June 01, 2004

In general, when confronted with the threat of a patent infringement suit, companies undertake a simple calculation to determine whether to seek an exculpatory opinion of counsel. Specifically, the potential infringer determines the amount of damages likely to be assessed in the event infringement is found, and whether the enhancement of those damages exceeds the (often considerable) cost of a non-infringement opinion. Of course, the necessity of obtaining an opinion is likely to be affected by the pending en banc opinion from the Federal Circuit in Knorr-Bremse v. Dana Corp. However, assuming that exculpatory opinions will continue to have a role in the willfulness calculus, this simple cost-benefit analysis will remain in use.

Unfortunately, this simple calculation fails to incorporate all of the relevant factors in determining whether to obtain the opinion. An exculpatory opinion can provide ancillary benefits that should be considered. These benefits can be substantial, in certain circumstances even mandating the procurement of an opinion where the threat of litigation is remote. In particular, companies faced with the decision of whether to obtain an exculpatory opinion should consider:

  • The usefulness of an exculpatory opinion in settlement or licensing negotiations;
  • The usefulness of an exculpatory opinion to avoid future infringement or suggest a design-around; and
  • The effect of an exculpatory opinion on the jury in a patent infringement trial.

Each of these factors is discussed further below.

Using the Exculpatory Opinion in Settlement or Licensing Negotiations

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