2. Pitfalls and privilege in a post-halo World
A privilege refresher for
in-house and outside counsel
J. Thomas Vitt
Sanjiv P. Laud

3. topics Halo’s impact Reasons to consider an opinion of counsel
Practical considerations:
Timing
Choosing your witnesses
Managing your communications

4. Section 284 – treble ahead
District courts “may increase damages up to three times the amount found or assessed.” U.S.C. § 284
But only “where the injury is wanton or malicious.” - Seymour v. McCormick, 57 U.S. 480, 489 (1854)

5. Seagate Standard – 2007-16 (R.I.P.)
Objective: Infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.
Based on record developed during the case. No objective recklessness if the accused infringer had a substantial defense, even if the infringer was unaware of the defense when he acted.
Subjective: Risk was known or so obvious it should have been known to the infringer.
Plus: Clear and convincing evidence.

6. Halo electronics, inc. v. pulse electronics, inc. , 136 S. Ct
Halo overruled Seagate:
Objective: Infringer acted despite objectively high likelihood that its actions constituted infringement of a valid patent.
Subjective: Risk was known or so obvious it should have been known to the infringer.
Plus: Clear and convincing evidence.

7. the halo test
Enhanced damages available for “egregious infringement behavior willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or – indeed – characteristic of a pirate.”
Preponderance of the evidence.
District Court discretion whether to award enhanced damages, and how much.

8. Enhanced damages after halo
Two-part procedure:
Jury question: Has Plaintiff proved by a preponderance of the evidence that the Defendant is guilty of “egregious infringement behavior”?
Judge question: After jury finding, judge determines whether to award enhanced damages and the amount of the enhanced damages, often using the factors in Read v. Portec, 970 F.2d 816 (Fed. Cir. 1992).

9. Read v. portec factors Deliberate copying
Investigation, good-faith belief
Litigation tactics
Size and financial condition of infringer
Closeness of case
Duration of infringement
Remedial action
Motivation
Concealment

10. Opinions of counsel: a bridge over trebled water?
“On-going consultation with a patent lawyer is highly probative evidence of good faith.” - Braun v. Dynamics Corp., 975 F.2d 815, 822 (Fed. Cir )
“[C]onsulting counsel may help draw the line between infringing and noninfringing uses.” - Halo, 136 S. Ct. at 1937 (Breyer, J., concurring)

11. Reasons to consider an opinion of counsel
After Halo, an opinion of counsel is the best insurance policy against enhanced damages.
Although not risk-free, your opinion counsel’s testimony can help your defense.
An opinion of noninfringement can be a substantive defense to an inducement claim.

12. Reasons to consider an opinion of counsel
Downsides?
Cost.
Privilege waiver.
A poorly-supported opinion is MUCH WORSE than no opinion at all.

13. Escape hatch?
“The failure of an infringer to obtain the advice of counsel or the failure of the infringer to present such advice to the court or jury, may not be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent.” U.S.C. § 298

14. Practical considerations: timing
Discussion: Assuming a product with substantial sales potential, when should you obtain an opinion of counsel?
Before going to market?
When your company first learns of the patent?
When your company is first notified of a claim of infringement of the patent?
When your company is sued for patent infringement?
After an adverse Markman ruling?

15. Practical considerations: choosing your witnesses
Opinion counsel
Competence, judgment, discretion
In-house or outside counsel?
Reliance witness
Business authority

16. Practical considerations: SCOPE OF WAIVER
Using an opinion waives privilege as to communications that:
“concern the same subject matter” and
“ought in fairness to be considered together”
-FRE 502(a).

17. Practical considerations: SCOPE OF WAIVER
Which counsel?
In-house vs. outside
Trial vs. opinion
What subject matter?
Infringement vs. invalidity, enforceability
What time frame?
Pre-opinion vs. post-opinion

18. Practical considerations: MANAGING COMMUNICATIONS
Isolating opinion counsel from trial counsel:
Different lawyer
Different firm?
Different in-house lawyer?
Communicating result

19. Practical considerations: MANAGING COMMUNICATIONS
Minimizing written work product between:
In-house and opinion counsel
Early ideas, drafts, and bad news
In-house/opinion counsel and trial counsel
In-house counsel and reliance witness