Proving Willful Infringement: In re Seagate Technology, LLC

For many years, Federal Circuit precedent following Underwater Devices, Inc. v. Morrison-Knudsen Co., 717 F.2d 1380 (Fed. Cir. 1983), placed on a potential infringer with actual notice of another's patent an affirmative duty to determine whether infringement is occurring. The affirmative duty included the duty to seek competent legal advice from counsel before starting the possibly infringing activity. If a defendant did not disclose an exculpatory counsel's opinion, Federal Circuit precedent allowed an adverse inference to be drawn, namely that no opinion had been obtained, or that the opinion was adverse. A party defending an allegation of willful infringement would thus face a difficult decision ' maintain the attorney/client privilege as to counsel's advice and opinions on infringement and validity and risk a finding that it had failed to exercise due care, or rely on the advice but waive privilege as to the opinion, the communications with opinion counsel, and that counsel's work product.

In 2004, the Federal Circuit reversed the rule allowing an adverse inference to be drawn from not producing an exculpatory opinion, recognizing the inordinate burden the rule placed on the attorney/client relationship. Nevertheless, in cases in which the defendant relied on advice of counsel, the scope of the waiver of privilege remained a problem and some district courts permitted discovery of all counsel's opinions and work product, not just those of opinion counsel.