Article by William S. Ramsey, P.C.

ADVISE OF COUNSEL – WHEN DO YOU NEED IT?

When worse comes to worse, it is good to be able to say, "But your Honor, I told my lawyer all the relevant facts and acted on her advice. What more could I have done?" This position is always desirable as it demonstrates good faith. In some areas of the law the role of advice is formally developed, especially in intellectual property law.

When Advice of Counsel is Important.

Patent, trademark, and copyright laws provide for the award of monetary damages to a person whose intellectual property has been infringed. In addition, the statutes allow the judge to award additional sums in "exceptional" cases. The exceptional cases occur when the defendant "knowingly", "intentionally" or "willfully" commits the infringement. In these exceptional cases the plaintiff may be awarded attorney fees, and up to three times the amount of actual damages. The concept of willful infringement is most highly developed in the patent law.

Patent law defines "willful" infringement as committing patent infringement with actual knowledge of the existence of a patent which covers the infringing activity. When a potential infringer has actual knowledge of anotherıs patent rights, he has an affirmative duty of due care. When willful infringement is found the judge can award to the injured party (the plaintiff) his reasonable attorney fees and damages up to three times the actual damages. This can be a lot of money. Consequently, the issue of willful infringement is part of virtually all patent infringement cases.

What is a person to do? No one can avoid paying damages if found to have been infringing a patent. How then can one avoid the high cost of willful infringement? The answer is to obtain and follow competent advice of counsel before infringing activities are initiated. Advice of counsel will not protect against actual damages for infringement, but advice of counsel is "insurance" against a finding of willful infringement.

What To Look For In Competent Advice of Counsel.

It is not necessary that the lawyer providing the advice be a patent lawyer or be an outside (as opposed to in-house) lawyer, but these factors are taken in account in examining the competence of the advice. Using a patent attorney who is not a regular company employee is favored. The advice should be written and based on a study of the relevant facts and law. A casual "Donıt worry about the Jones patent" during a golf afternoon will not qualify.

There are three statutory defenses to patent infringement, "I didnıt do it", "I did it, but I had a license to do it", and "I did it but the patent is invalid or unenforceable so it doesnıt matter." Advice of counsel can conclude that any one or more of these defenses apply.

The lawyer determines the features of the proposed product or service and compares the proposed project to the claims of the patent. He or she analyzes the file developed during the examination of the patent application at the Patent and Trademark Office. The file (termed "file wrapper") may be several inches to several feet thick. It contains copies of all the papers in the case including all the patents and other evidence of prior invention (prior art) used in the examination of the application. The file wrapper is regarded as part of the patent and contains arguments and amendments which clarify the meaning of the patent claims. After these steps the attorney may initiate a validity search, that is, a search for prior art which was not discovered and used during the patent application examination. Such prior art, if found, would render the patent invalid. The patent examiner, while expert in the technical field of the invention, can spend only a limited amount of time searching for prior art, less than 7 hours, so it is not surprising when prior art may is found.

There are several types of patent infringement and the advice of counsel should analyze the proposed project in terms of each type.

Competent advice of counsel should describe what the lawyer did to arrive at his or her conclusion, the relevant law, application of the law to the facts, and the lawyerıs opinion as to whether the proposed project will infringe the patent. The opinion must not simply state the lawyerıs opinion without supporting discussion. It is not necessary that the conclusions be absolute, but can be phrased in terms of probabilities "The patent probably will be found invalid because...." or "It is likely that the product will be found not to infringe because...."

Advice of counsel enjoys the same confidentiality as any other protected attorney-client communication. Confidentiality is lost, of course, if the advice is introduced in court to avoid a finding of willful infringement. This does not suggest that opinion shopping is a good tactic. True, a client can claim confidentiality in a lawyerıs opinion which the client intends to ignore. But if a second opinion is obtained and introduced into a court, confidentiality of the first opinion is forfeited.

In summary, a person can infringe a patent even if he doesnıt know of its existence. A person who knows of a patent has an absolute duty to determine if the patent will be infringed to avoid a finding of willful infringement. This duty may be met by obtaining and following competent advice of counsel.


William S. Ramsey is a local attorney who may be reached at 410-740-2225 or email: billramsey1@comcast.net Not Legal Advice.