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David Donoghue: Should You Get an Opinion Letter for Indirect Infringement?

by R. David Donoghue on August 7, 2012

This post originally appeared here on July 10, 2012, and is reposted here with the author’s permission.

I recently attended and spoke at the Rocky Mountain IP Institute in Denver.  It was the second year in a row I have attended and spoken at the Institute.  In my opinion, the Rocky Mountain IP Institute is one of the two best IP CLE events (and destinations) in the country.    As evidence of that, the following is one of a series of posts from the excellent presentations over the two days of the conference.  I encourage you to consider joining me at next year’s Rocky Mountain IP Institute.

This post discusses Heidi Keefe of Cooley’s presentation regarding the state of indirect infringement law.  Here are the key points:

  • Indirect infringement includes inducement and contributory and is the codification of pre-1952 case law.
  • Indirect infringement requires intent and was created to prevent a party from knowingly acting and avoiding direct infringement by carving out one or two elements for another to perform.
  • Inducement requires that the accused intended for the end user to infringe.
    • Accused has to have had knowledge in the form of actual knowledge or willful blindness that the end user would be infringing.
    • Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011) rejected the Federal Circuit’s “deliberate indifference” test for knowledge, in favor of willful blindness drawn from criminal law.  It is an open question whether willful blindness applies to contributory infringement.  Willful blindness was found where defendant’s freedom to operate opinion was procured without providing opinion counsel key patent information.
    • Contributory infringement requires knowing the product is “especially made or especially adapted” for infringement.
      • As with inducement, there must be (at least) a single, direct infringement.
      • The component cannot have any substantial, noninfringing use.
      • Knowledge of the patent and that the component is especially made or adapted for infringement.
      • Pleading indirect infringement
        • Twombly/Iqbal generally require additional pleading for the intent element of either indirect infringement claim.
        • Inducement – Must plead sufficient facts to plausibly infer the specific intent to induce the infringing acts (knowledge of the patent and of the infringing acts may be enough).
        • Contributory – Must plead sufficient facts to infer there are no substantial noninfringing uses, as well as knowledge of the patents.
        • Trading Tech. Int’l, Inc. v. BCG Partners, Inc., No. 10 C 715, 2011 WL 3946581 (N.D. Ill. Sep. 2, 2011) intent was sufficiently shown where defendants allegedly advertised their products and taught their customers how to commit the allegedly infringing acts.
        • Some case law in Delaware suggests that accusations in a complaint regarding expected continued infringement after the complaint creates knowledge of the patents could be sufficient.
        • McRee v. Goldman, No. 11 CV 991, 2012 WL 929825 (N.D. Cal. Mar. 19, 2012) indirect infringement claims dismissed without prejudice because all of the allegedly knowing acts pre-dated the alleged knowledge of the patent in suit.
        • Should you get an opinion letter to protect against inducement?
          • Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683 (Fed. Cir. 2008) held that failure to secure an opinion “may be probative of intent in this context.”  But that potential inference appears to have been abrogated by the America Invents Act (“AIA”).  Of course, the opinion letter is a powerful story for a jury.
          • Global-Tech Appliances, Inc. v. SEB, S.A., 131 S. Ct. 2060 (2011) had a similar holding.
          • The AIA seems to abrogate the holdings in Broadcom and Global-Tech with clear language.  But the legislative history of the AIA says that it was codifying law, which should have included Broadcom and Global-Tech.  So, there is some tension between the clear language of the statute and its legislative intent.
          • Best practices when deciding whether to get an opinion letter for indirect infringement:
            • Look at the cost/benefit analysis.  The opinion can be valuable before a jury, but also costly.  So, more likely to get them in important or close cases.
            • There is little value in post-filing opinion letters.
            • Best practices for avoiding indirect infringement:
              • Teach non-infringing uses
              • Teach multiple uses
              • Tell users that how they use a device is up to them

R. David Donoghue, a partner at Holland & Knight, was a faculty member at the 2012 IP Institute. He blogs regularly at the Chicago IP Litigation Blog and the Retail Patent Litigation Blog.


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