In re Seagate

In Re Seagate Technology, L.L.C.
497 F.3d 1360 (Fed. Cir. 2007) (en banc)

Description: The Federal Circuit creates a new standard for willful infringement – making it more difficult for patentees to prove willful infringement.

• Seagate hired an attorney, Gerald Sekimura, to analyze the infringement, validity and enforceability of several patents owned by Convolve, Inc and the Massachusetts Institute of Technology (collectively “Convolve”).
• Sekimura provided Seagate with three written opinions in which Sekimura concluded that several of Convolve’s patents were either invalid or unenforceable.
• Convolve filed a complaint alleging that Seagate was willfully infringing the patents analyzed by Sekimura.
• Seagate informed Convolve that it was going to rely on the three opinion letters written by Sekimura in defending against the willful infringement allegations and produced all of Sekimura’s work product and made him available for deposition.
• Convolve moved to compel discovery of any communications and work product between Seagate and its other counsel, including Seagate’s trial counsel.

Procedural History
• The United States District Court for the Southern District of New York held that Seagate had waived its attorney-client privilege for all communications between it and all of its counsel, including in house counsel and trial counsel, involving Sekimura’s opinion letters.
• The United States District Court for the Southern District of New York denied Seagate’s motion for a stay and certification for interlocutory appeal.
• As a result, Seagate petitioned for a writ of mandamus.
• The Court of Appeals for the Federal Circuit stayed discovery and accepted en banc review of Seagate’s appeal.

• The Federal Circuit overrules Underwater Devices Inc. v. Morrison-Knudsen Co. by abandoning the affirmative duty of due care in favor of the recklessness standard.
• By asserting the advice of counsel defense and disclosing the opinions of Sekimura, Seagate did not waive its attorney-client privilege for communications with trial counsel.

Important Dicta
• In her concurring opinion, Garjasa wanted to overrule Beatrice Foods Co. v. New England Printing & Lithographing Co. as well as Underwater Devices. Garjasa does not want the court to continue to read a willfulness standard into § 284.

Critical Analysis
• New standard for willful infringement: “Accordingly, to establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.”
• The state of mind of the infringer is no longer relevant to the inquiry into willful infringement.

Importance of Decision or Unanswered Questions
• As noted in the concurring opinion by Newman, by switching to an objective standard for proving willful infringement, the Federal Circuit cannot mean that it will tolerate the intentional disregard of another’s property. Newman wants the infringers to be evaluated by the “standards of fair commerce.”

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