Patent exculpatory opinions post-Halo

Until the target of a patent infringement claim has obtained from patent counsel a well-reasoned exculpatory opinion on the meaning and scope of the subject patent and whether the patent’s claims “read upon” the accused product or conduct, business and strategy decisions affecting how to respond must be held in check. To do otherwise risks helping the patent owner and its counsel in a lawsuit.

It is possible that the opinion sought will confirm that the accused conduct does in fact infringe a patent. At that point, it may be desirable for the infringement target to authorise patent counsel to render an opinion on whether the patent whose claims read on the accused conduct is valid and enforceable.

One cannot infringe an invalid patent. Therefore, a counsel’s opinion of non-infringement may be based on grounds for invalidating the claims of the patent being asserted. Whether based on non-infringement or invalidity grounds, these opinions can be quite expensive, if properly performed.

The question of whether to release an opinion to one’s opponents, thereby waiving the attorney-client opinion, represents a very significant decision. The weight given to such opinions has been the subject of conflicting decisions of US courts. Having an opinion that can be shown to a jury during a patent infringement trial gives the infringement target a powerful weapon in its efforts to avoid a finding of wilful infringement.

For years, patent litigators treated the admissibility of opinions as essential, based upon a 1983 decision called Underwater Devices v Morrison Knubsen. Then, in 2007, the US Court of Appeals for the Federal Circuit’s decision in the case In Re Seagate Technology changed the legal landscape by requiring patent owner plaintiffs to establish “objective recklessness” in order to obtain a finding of wilful infringement. This, effectively, eliminated the need for the evidentiary admission of opinions.

A subjective state of mind

In June 2016 the US Supreme Court issued its decision in Halo Electronics v Pulse Electronics. The “objective recklessness” test to establish wilful infringement was unanimously eliminated. The court emphasised that an infringer’s subjective state of mind at the time of the accused conduct is what matters most. We are thus in a post-Halo world that, in the opinion of this author, strongly recommends that targets of patent infringement claims obtain an opinion and, if it is strong enough, release it so that it can be introduced into evidence before a jury at trial.