Technology: 7 tips for reviewing a competitor’s patents without increasing liability

How to ensure that lawyers do not create bad evidence

In our previous article, we examined how legal departments often grapple with reviewing a competitor’s patents without stepping into a hornet’s nest of increased liability. Reading a patent and realizing your company potentially may be infringing it can lead to a finding of willful infringement in court, whereby the judge can triple any damages award against your company. It also can establish the knowledge element of inducement of infringement and contributory infringement.

So how do you ensure that lawyers do not create bad evidence? Here are some best practices for you to follow:

  1. Minimize the number of people involved. Ideally, only one or two attorneys should do the analysis. If you need an engineer to help you understand how your company’s products work, you can ask pointed questions to determine if the products practice the patent. However, in most situations, there is no need for an engineer to read, study or give advice regarding the patent.
  2. Assume that all emails and documents you create will be discoverable. Privilege and work product protection are never ironclad. Privileges can be waived. Courts can order production of documents listed on a privilege log. In this regard, whiteboards can be your best friend.
  3. Do not mix your attorney hat with your business hat. If you draft anything, make sure you are doing so solely as an attorney and not as a business person (i.e., discuss only legal issues and not business issues). Maximize the chance that the work product protection will survive.
  4. Use outside counsel. The work product protection will be harder to pierce for outside counsel. In-house attorneys often have many different responsibilities and there is always a risk that an email you sent was for business reasons and not to provide legal advice.
  5. If you conclude that you may have an infringement problem, hire someone to search for prior art. Believing that a patent is invalid in light of specific prior art can negate any willfulness issues.
  6. If litigation seems likely, get the written opinion of counsel. The lack of an opinion letter no longer serves as a basis for willfulness or inducement by itself. However, having an opinion letter still can negate such a finding.
  7. Go on the offensive. If you conclude that a patent is a significant problem, you can initiate an ex parte or inter partes reexamination proceeding based on invalidity by written prior art. Starting on September 16, the new post-issuance and inter partes review process (which will replace inter partes reexamination) will kick in and will make it easier to ask the Patent Office to reconsider the validity of a patent. If the claims are cancelled, then the threat will be gone. And if some of the claims are not cancelled, in the interim your company can point to a lack of willfulness as the Patent Office  has agreed that there is a validity issue that warrants re-examination.

No approach or company policy can remove risk completely. However, with these suggestions in mind, you can review a competitor’s patents while minimizing  the chance that an unsuspecting engineer—or worse, a lawyer in your department—will be placed in the unenviable position of being cross-examined at trial regarding a casual email he or she sent years before without realizing a smoking gun had been placed in the company’s email server.

 

Contributing Author

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Brent Yamashita

Brent K. Yamashita is a partner at DLA Piper, and a patent litigator with experience in computer hardware and software, semiconductors, storage systems and devices, communication...

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Co-managing Partner

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Andrew Valentine

Andrew Valentine is co-managing partner of the Silicon Valley office of DLA Piper.

 

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