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Sea Change

For the past several years MIT and its licensee, Convolve Inc., have been slogging it out in court with one of the world's biggest computer disc makers--Seagate Technology--for allegedly infringing on three MIT patents for quieter and more energy-efficient disc drives. There are millions of dollars at stake in the case.

However, neither the plaintiff nor the defendant has spent much time on substantive patent issues. Instead, hefty amounts of time and attorneys' fees have been spent wrestling over attorney-client privilege.

In other words, the patentee now must prove that, at the time the defendant acted, there was a high probability the defendant's actions constituted infringement. If there was a reasonable argument that the defendant's actions might not be infringing, this objective test for willfulness is not met. Moreover, even if this objective test is met, there is no willful infringement unless a patentee proves that either the defendant knew there was a high probability of infringement or this risk of infringement was so apparent that the defendant should have known of it.

"[T]he Seagate case raises significant new challenges for patent holders who are seeking punitive damages for willful patent infringement," says Richard Gruner, an IP professor at John Marshall Law School in Chicago.

The economics are further enhanced by that fact that the decision will significantly cut companies' legal costs because they'll need fewer costly opinion letters.

The upside for all companies, though, is that the decision may slash the time and expense of infringement suits.


Steven Seidenberg

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