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Your client is concerned that her new product name may infringe the intellectual property rights of another. She asks your advice. While your opinion will likely serve as an important educational tool for your client, she may not be its only reader. This article addresses some of the factors courts consider in determining the competency of an intellectual property opinion, especially in the context of patent rights. Before proceeding, it is helpful to note the context in which a court considers these opinions. After finding a party infringed upon the intellectual property of another, a court may determine whether that infringement was willful. A finding of willful infringement provides the basis for enhancing damages. In patent cases, the damages may be trebled.1 One common defense to a charge of willful infringement is the advice of counsel. This defense protects infringers that diligently sought the advice of their attorney and were advised that there was no infringement. Although their attorney's advice proved erroneous, the defense follows that the client may reasonably rely upon "competent" legal advice and should not be punished by enhanced damages when they do so. Courts use various indicia when determining the competency of an attorney's opinion. While this article focuses on patent opinions, similar factors apply to other types of intellectual property opinions. Disclosure and Investigation: A competent opinion begins with complete disclosure by the client and a thorough investigation by the attorney. As with any matter, a diligent client would expect that their attorney could give competent advice based only upon a complete record. A failure by the client fully to disclose related facts may itself evidence bad faith and support a later finding of willful infringement. Where the client's disclosure raises any questions, the attorney must investigate the underlying facts. The opinion should document both the client's disclosure and the attorney's investigation. In S.C. Johnson & Son v. Carter-Wallace, Inc.,2 the court found that Carter- Wallace had infringed a patent for shaving cream. The patent claimed a specific mixture of various compounds that produced an improved gel. Carter-Wallace attempted to defend themselves against a charge of willful infringement and enhanced damages by their reliance upon the advice of their attorney. To this effect, Carter-Wallace produced an earlier written opinion advising that there was no infringement of the patent at issue. Unfortunately for Carter-Wallace, the court found the attorney's opinion to be incompetent and an insufficient basis for a good-faith belief of non-infringement. In criticizing the attorney's opinion, the court noted that it did not include experimental data from the client's disclosure or from the attorney's own investigation showing the composition of Carter-Wallace's shaving cream. As a witness at trial that same attorney "did not recall any single specific facts (sic) relied upon to support his conclusion." A competent opinion requires factual support from the client's disclosure or the attorney's investigation. Written Advice Although oral advice may suffice in certain limited circumstances to show a good faith belief of no infringement, courts favor written advice. The passing of time often makes it difficult for the attorney and the client to recall what advice was actually communicated. For this reason, oral advice is disfavored. When oral advice is coupled with other indicia of unreliability or bad faith, courts are not hesitant to find willful infringement and award enhanced damages. In Minnesota Min. and Mfg. v. Johnson & Johnson Orthopaedics, Inc.,3 the defendant lost a charge of patent infringement. In defending against a charge of willfulness, they relied upon the oral opinion of their patent attorney. Based upon testimony at trial, the patent attorney had taken the position that the patent at issue was invalid because the same process claimed by the patent had been used by one of their suppliers. The court quickly discredited the value of that advice explaining that oral opinions "carry less weight, for example, because they have to be proved perhaps years after the event, based only on testimony which may be affected by faded memories and the forces of contemporaneous litigation." Other evidence in the record suggested that the supplier referred to by the attorney used the same process only after learning the teachings of the patent at issue. In these circumstances, the court did not hesitate to find willful infringement and award enhanced damages. Although written advice generally provides better support for a good faith belief of non-infringement, it is not without its own travails. For the very reason that a writing provides better evidence of an attorney's advice, it also opens the door to the critical eye of hindsight. While a detailed opinion would seem to provide more opportunities for criticism, conclusory opinions are greeted with great suspicion. A couple of cases illustrate this point. In Kori Corp. v. Wilco Marsh Bugges & Draglines, Inc.,4 the court found patent infringement and the defendant produced their attorney's opinion to defend against a charge that the infringement was willful. The attorney's opinion rested with the assertion that "I have every reason to believe that the validity of the aforesaid patent cannot be maintained and that it will be declared to be null and void by the court handling the litigation." The court chastised this assertion explaining that "a conclusory account of defense counsel's aspirations for winning an infringement suit without any supporting reasons does not amount to an 'authoritative opinion' upon which good faith reliance may be founded." The court found willful infringement and awarded enhanced damages. In Studiengesellschaft Kohle, m.b.H. v. Dart Industries, Inc.,5 the court likewise found patent infringement but also found that a written opinion of non-infringement supported the defendant's good faith belief of non-infringement. Unlike the opinion in Kori, the court noted the attorney's detailed written analysis of the chemical compounds at issue. While the written opinion proved erroneous, the court found that it supported a good faith belief of non-infringement. The attorney was knowledgeable about the chemical compounds at issue and produced detailed reasons supporting his position. The court noted that while the written opinion "may have made errors," it was sufficient to support a belief by corporate management that the patent was not infringed. Under these circumstances, the trial court reversed a magistrate's finding of willful infringement. Conclusion The possibility of having your advice scrutinized years after it has been given and only after it has proved erroneous would give pause to any attorney. Nonetheless, intellectual property opinions serve as important tools to educate a client; years later they can also serve as important tools to educate a court as to why the client mistakenly believed their new product did not infringe upon the rights of another. While a client may be satisfied with summary conclusions, a diligent evaluation requires a detailed analysis.
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