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Ending Patent Law's Willfullness Game


Patent law turns the attorney-client privilege on its head. Patent law punishes willful infringers by subjecting them to treble damages. An odd set of legal rules stemming from patent law's effort to determine what constitutes willful infringement effectively requires companies confronted with a patent first to obtain a written opinion of counsel and then to disclose that opinion in court. To do that, the accused infringer will have to waive its attorney-client privilege in virtually every case. Even worse, the law puts the question whether an accused infringer will have to waive privilege in the hands of the patent owner, who can send a carefully crafted letter putting a potential defendant on notice of the patent. A patent owner thus triggers the obligation to obtain a written opinion of counsel without actually threatening to sue anyone. In turn, accused infringers who are aware of these rules respond to such letters by obtaining a sort of pseudo-legal advice that both they and their attorneys recognize to be a construct. Both plaintiffs and defendants are playing a costly game.

The rules of this game have perverse consequences for patent law. Some of these consequences affect litigation - lawyers and clients who know that the lawyer's advice will be disclosed to the other side will behave differently, withholding information and candid advice from each other. But other consequences extend beyond litigation. They infect pre-litigation advice, essentially making it impossible for a competent lawyer to advise a client that a competitor's patent should be avoided. The rules of the willful infringement game set traps for the unwary, who may not realize the consequences of failing to obtain the necessary written opinion of counsel. They interfere with a client's ability to choose counsel. And they discourage engineers and companies from reading a competitor's patents at all, thereby undermining the disclosure function that is at the foundation of the patent system.

One possibility is to abolish the willfulness rule entirely. We ultimately reject this approach because we worry that ordinary patent damages alone will be insufficient to deter infringement optimally in many cases. Another possibility is to abolish the rule that requiring disclosure of opinions of counsel. While a good idea, this option would not solve the problems created by the willfulness game, because many defendants will still need to rely on the opinion of counsel in order to disprove willfulness.

Instead, we think the better approach to willful infringement is first to redefine it as adopting a technology with knowledge that it was derived from the patentee, and second to adjust the premium charged for it. Many of the problems with the willfulness rules stem from the fact that willfulness is an ongoing inquiry. The ongoing nature of the inquiry adversely affects a defendant that develops or adopts a technology in good faith but later learns it is infringing a patent. Changing the focus of the inquiry to the time of adoption is consistent with the ordinary understanding of willfulness outside of patent law and would help end the willfulness game. An independent developer could never be a willful infringer, and thus would not need either to obtain or disclose in court a written opinion of counsel merely because it later learned of a patent. By contrast, an accused infringer would need advice of counsel if it was aware of a patent and affirmatively sought to design around the patent. Such an accused infringer therefore would have to waive privilege. But since only the accused infringer's intent at the time of adoption would matter, the scope of privilege waiver would be limited to communications at the time of adoption, and would not infect the advice given by litigation counsel.

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