Patent Litigation Treatise Gets Important Updates

The PLI Patent Litigation treatise edited by Laurence Pretty has just been updated and includes updates of five chapters, providing you with the information and strategies you need to litigate patent cases successfully. Contributors for this release are John M. Skenyon (chapter 2), Andrei Iancu, Lisa Partain, and Kenneth Weatherwax (chapter 3), Brian E. Ferguson (chapter 4), Patricia Martone (chapter 5), and Michael V. Ciresi, David W. Beehler, and Cole M. Fauver (chapter 12).

This update of the Patent Litigation treatise adds new material on the following topics and many others:

Rule 11 sanctions: The Federal Circuit in Antonious v. Spalding & EvenFlo Cos. made clear that Rule 11 requires an attorney to perform his or her own independent claim construction before filing a complaint alleging patent infringement; because claim construction is a matter of law, an attorney’s proposed claim construction is subject to the Rule 11(b)(2) requirement that all legal arguments be nonfrivolous. See § 2:1.1.

Pleading willful infringement: Recent changes in the law should be considered in deciding whether to plead willfulness on the part of an accused infringer. See § 3:2.1.

Pleading inequitable conduct: The defense of inequitable conduct must be alleged “with particularity.” For example, it is not sufficient to plead that the patentee “failed to disclose all of the relevant prior art known to it” without averring what known and relevant prior art was not disclosed. See § 3:3.2.

Jurisdiction-claims “arising under” federal patent laws: In Jim Arnold Corp., although the plaintiffs had added a claim for patent infringement to their contract claims for breach of an assignment and royalty agreement, the CAFC held that the federal courts never had jurisdiction to decide the case. See § 3:4.1[A].

Jurisdiction-declaratory judgment actions: In several recent decisions, the Federal Circuit continues to apply and clarify its SanDisk decision, which repudiated its “reasonable apprehension of suit” test but did not fully state the boundaries of declaratory judgment jurisdiction. See § 3:4.1[C].

Venue: How much power does the plaintiff have to select a federal forum remote from the accused infringer’s place of business? In addition to legislative proposals to amend the venue statute to make it easier to transfer cases to jurisdictions convenient to the accused infringers, there are signs that the courts are adding teeth to existing venue provisions. See § 3:4.3.

Opinions of counsel to rebut charges of willful infringement: Before the Federal Circuit’s 2007 In re Seagate decision, the court followed a duty-of-duecare test to assess willful infringement, and the duty of care encompassed seeking the advice of counsel before undertaking possibly infringing activity. When accused infringers then raised an advice-of-counsel defense against the charge of willfulness, they had to produce the opinion of counsel and waive the attorney-client privilege with respect to it. For some years, the lower courts struggled with the question of the scope of that waiver-did it extend to other attorneys than those who had prepared the opinion? In the en banc Seagate decision, the Federal Circuit found that opinion counsel and trial counsel perform significantly different functions, so that “fairness counsels against disclosing trial counsel’s communications on an entire subject matter in response to an accused infringer’s reliance on opinion counsel’s opinion to refute a willfulness allegation.” See § 4:11.5[A]; see also § 5:4.3[A].

Deposition objectives for accused infringer: Among other things, the accused infringer should attempt to obtain testimony that will help rebut the patentee’s request for an injunction, such as establishing that the patentee  (1) does not have sufficient capacity to meet market demand, (2) regularly licenses the patented technology to other competitors, or (3) delayed in bringing the suit. See § 4:8.3[D].

Discovery of electronically stored information: In 2006, Rule 34 of the Federal Rules of Civil Procedure was amended to specifically address the production of electronically stored information (ESI). See § 4:5.1. As the law and technology in this area continue to develop, patent practitioners are likely to face questions concerning the discovery of ESI in nearly every case. See § 4:5.2. Rule 37(e), also added in 2006, provides that, absent “exceptional circumstances,” a court may not impose sanctions on a party that fails to provide ESI lost as a result of the “routine, good-faith operation of an electronic information system.” But note that a party may not hide behind the provisions of this rule in order to deliberately delete discoverable material. See new § 4:13.3.

Attorney-client privilege-inadvertent waiver: Given the large number of documents typically produced in patent litigation, inadvertent waiver is a real concern. Under new Rule 502 of the Federal Rules of Evidence, added in September 2008, an inadvertent disclosure of privileged communications does not result in waiver if the party took reasonable steps to “prevent disclosure” and to “rectify the error.” See § 5:4.2.

Attorney-client privilege-waiver: In re Seagate rules that disclosure of opinions of opinion counsel under the advice-of-counsel defense does not waive attorney-client privilege for communications with trial counsel, but the court declined to create a absolute rule and gave trial courts the discretion to extend the waiver to trial counsel in “unique circumstances.” See § 5:4.3[A].

Enhanced damages under 35 U.S.C. § 244: According to the Federal Circuit in Liquid Dynamics Corp. v. Vaughan Co., nine factors are considered by courts when determining whether an infringer’s actions are in such bad faith that an award of enhanced damages is appropriate. See § 12:8.1[C].