Does Seagate Signal The End of Bifurcated Patent Trials, And Caution Against Procuring Opinions of Counsel?
An IP360 email notice last week commented about a pending Central District of California case--Applied Medical Resources Corp. v. U.S. Surgical Corp., No. 03-cv-01267--in which the court (Judge Carney, in this case) reconsidered a defendant's summary judgment motion in view of In Re Seagate Technology, LLC, 83 USPQ2d 1 (Fed. Cir. 2007) (en banc) (Newman, J., Garjarsa, J., concurring). Upon reviewing the motion under the Seagate standard, Judge Carney again denied the defendant's motion, deciding to allow the issue of willful patent infringement to be heard by a jury despite the higher burden on the patentee to establish willfulness under Seagate.
One of the interesting aspects of Judge Carney’s decision is that the jury will consider willfulness at the same time it considers evidence of infringement liability because “some of the same evidence that supports of finding of infringement supports of a finding of willfulness.” To illustrate, Judge Carney noted that a jury may use evidence regarding whether the structure of an accused product is equivalent to a claimed element in the patent-in-suit “not only to decide whether infringement occurred but whether the structures are so similar that there was an objectively high likelihood of infringement (the first prong of the willfulness analysis).”
This is not the first case, of course, in which issues of liability and willfulness will not be bifurcated (a decision within the discretion of the court), but it suggests that other courts may also find it better to try the two issues together because the first prong of Seagate’s two-part willfulness analysis requires the patentee to establish by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent, which is clearly related to the question of liability.
One of the other interesting aspects of Judge Carney's decision relates to opinions of counsel. If the first prong of Seagate is satisfied, the patentee must then demonstrate that the objectively-defined risk was either known or so obvious that it should have been known to the accused infringer (this also involves evidence related to liability, which some could argue further cuts against bifurcating issues of liability and willfulness). Judge Carney noted that, while Seagate rejected the view that alleged infringers have an affirmative obligation to obtain opinions of counsel, he did note that evidence of the defendant’s procurement of opinion letters from independent counsel, at least in the case at hand, “lends support to the argument that [defendant] was aware of the objectively high risk of infringement posed by the sale of the [accused product].” That seems to suggest that defendants would not wish to procure opinions of counsel if doing so helps the other side establish the state of mind of the defendant with regard to what was known about the likelihood of infringement.
The case, again, is Applied Medical Resources Corp. v. U.S. Surgical Corp., No. 03-cv-01267 (C.D. Cal. Dec. 11, 2007). The Judge's comments are in a “minutes” entry in the record. If you have access through PACER, the minutes entry is Docket No. 344.
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