One important change in the AIA for patent litigants is the addition of a new section in Chapter 29 of the patent statutes. Newly-enacted 35 U.S.C. § 298 purports to codify the Federal Circuit’s recent string of decisions that have largely eviscerated the “adverse inference” and “advice of counsel” fights when a patent defendant is charged with willful infringement.
The new statute 35 U.S.C. § 298 (pdf) simply does away with the patent holder’s ability to force an “adverse inference” when the (accused) infringer either failed to obtain advice of counsel or failed to present such advice in court, essentially asking the jury to assume that the (accused) infringer was acting willfully or intentionally by ignoring or hiding what the lawyers had said.
Several aspects of this new codification remain to be fleshed out as federal courts grapple with new Section 298.
First, the new statute speaks of the failure of an “infringer” but not of a merely “accused” defendant. This raises the open question of whether the statute applies only after a finding of infringement. In other portions of the AIA, Congress uses the term “accused infringers” and defendants interchangeably to refer to litigants. Compare new 35 U.S.C. § 299 (pdf) (added by Section 19 of the AIA). Defendants may seek to use this nomenclature to argue that bifurcation may be appropriate when willful infringement is still an issue to be decided at trial.
Second, as with other evidentiary bars, the statute describes specific reasons that the failure cannot be introduced (to prove willfulness or intentional inducement) but it does not say that the defendant’s failure cannot be introduced for some other reason that a creative litigant might conjure up.
Third, the statute is silent on the procedures to be followed where an accused infringer (ignoring the Section 298 safe harbor) affirmatively asserts reliance on advice of counsel as a defense to willfulness or inducement. Thus, fights over the dreaded “scope of waiver” may still flare up in future cases.
New Section 298 may be especially helpful to parties defending infringement claims at the discovery phase of the case to erect potential boundaries on discovery related to opinions of counsel, but the defendant, er, excuse me, the “infringer,” may need to make an election not to waive privilege in order to erect such boundaries.