Key Takeaways From AIPLA Panel on Halo

Last week at the AIPLA Annual Meeting I had the pleasure of participating in a panel discussion on the topic of Defending Against Willful Infringement Post-Halo. Moderated by Jesse Adland, in-house counsel at AMD, and joined by Natalie Morgan of Wilson Sonsini, Sarah Guske of Baker Botts and the Honorable Judge Kewalramani of the Central District of California, each of the panel members presented a different aspect of life after Halo v. Pulse.

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Natalie started us off with an excellent historical summary of the willful infringement doctrine. I followed with a look at pre-suit considerations to best position ourselves to defend against willfulness. Sarah then discussed various things to keep in mind and plan for during litigation, citing various data-based findings. Judge Kewalramani concluded with a unique from-the-bench perspective of pleadings trends and how recent plaintiffs have survived or failed on motions to dismiss.

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Here are some of the most important takeaways I gleaned from the discussion:

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Doctrinal Trends ― The Uncertain Scope of Waiver

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From Natalie's historical summary it was evident that one of the most uncertain areas in the current doctrine is the scope and treatment of waiver of the attorney-client privilege. For example, did Halo have any impact on Seagate's exclusion of trial counsel from waiver? Will there be a mechanism to allow defendants to waive privilege for purposes of defending against willful infringement while maintaining privilege for the underlying infringement case?

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The waiver issue bears heavily on both pre- and post-litigation considerations as attorneys try to understand the circumstances under which privilege will be protected. For now, we know that trial bifurcation is available at the courts' discretion to resolve the Quantum dilemma, but it remains to be seen whether it is something that counsel can rely upon.

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Pre-Suit Considerations ― Create a Record of Diligence As Early As Possible

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In my presentation on pre-suit considerations, I emphasized the important underlying theme of creating a record of diligence as early as possible. Timing matters. Whether the infringer, when they knew of the other’s patent, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed is one of the most important factors in determining willful infringement.

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The best way to demonstrate compliance with this factor is to make sure that known patents are reasonably investigated as soon as possible. That includes whether the patents become known through routine clearance efforts or upon notice from the patent holder. A reasonable investigation does not require a formal counsel opinion or even an attorney in some situations, as some post-Halo cases have declined to enhance damages when the investigation was performed by a competently trained engineer. It is important to show that a designated decision-maker has reviewed the patent and its claims in relation to the accused product and has arrived at non-infringement or invalidity positions, or both.

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Litigation Strategy ― Bifurcation is Best

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Sarah followed up on the concerns that Natalie raised about privilege waiver, bifurcation, and general trial strategy. She highlighted the significant impact that willful infringement has when it is heard in the same trial as the underlying infringement case.

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Sarah's data showed that, in bifurcated trials, juries found willful infringement only 33% of the time, while willfulness in trials that were not bifurcated jumped up to an 81% occurrence rate. This data underscores the undue impact that willfulness-related issues (which involve a lot of derogatory characterizations of behavior and motive) can have on pure infringement issues (which are predominantly technical).

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Pleadings ― Provide Facts That Support More Than Mere Knowledge

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Judge Kewalramani concluded the panel presentations by providing unique insight into some of the issues that district courts are wrestling with in Halo's aftermath. He touched on pleading requirements for willful infringement and the unclear importance of addressing the Read factors when assessing enhanced damages, among others.

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A key observation that the Judge noted, and which has been a frequent subject of motions to dismiss, is that complaints are more likely to pass muster when they allege facts beyond mere knowledge of the asserted patent. To survive dismissals, complaints should provide a factual basis to suggest that the defendant ignored or otherwise failed to take reasonable action despite repeated attempts to engage by the patent holder.

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If you'd like a copy of my presentation, please contact us.