Three factors converged in and around the ruling on the mandamus petition by Seagate to bar discovery of evidence related to its state of mind respecting willful infringement. First, the lack of any statutory constraints. Next, the ‘Scalia’ factor that urges this CAFC to start conforming its rulings with Supreme jurisprudence. Third, no mere pruning of the outgrowths and brambles from prior CAFC caselaw on willfulness and waiver would suffice.
Advocates of reforms to the Patent Act start with complaints about the cost associated with proving and defending willfulness claims. The better starting point would be to codify some provision on willfulness. Worrying over common law vagaries is needless, if there’s a Congress that can first write the basic principle into the statute. The CAFC in Seagate opens with the premise that the patent statute “is devoid of any standard” for increasing infringement damages. No wonder that this void bounds the Wonderland of willfulness.
Next, the CAFC challenges itself, and decides that it set an incorrect standard for willfulness. Prior rulings that impose an “affirmative duty” which sounds in “negligence” rather than comporting with the “general understanding of willfulness in the civil context.” Where does the CAFC turn to gain such an understanding – the same Supreme Court that has reversed it with some regularity of late. Let me digress on that. Working off recollection, not statistics, it may be that before 2005, for the CAFC to quote from non-patent rulings of the Supreme Court was as uncommon as a Papal encyclical quoting the Talmud. Today though, the CAFC looks up first, then decides. In this case it all but concedes that the standard for proving willfulness is not part of this appeal, more simply, the “dispute in this case is the proper scope of discovery.” To bridge that gap, the CAFC calls on Scalia’s statement in Arcadia v. Ohio Power, that a “court may consider …an issue the parties fail to identify and brief.” Cited along with that FERC case, is an abortion case over Medicaid, in which the Court refused to consider an extraneous issue. Show of hands, please: has anyone cited a FERC or abortion case in a patent appeal brief to the CAFC? Again, as rare as Talmudic cites in an encyclical.
If Scalia, et als. say that willful means “objective recklessness’, and that an appellate court can rule on “antecedent” issues beyond the point of the appeal, then that the CAFC says that you can take that to the en banc. It goes further in erasing CAFC precedent, to hold that the “state of mind of the accused infringer is not relevant to” the objective inquiry about recklessness.
Having reframed the threshold inquiry, the CAFC discourses about the underpinnings of the privilege and waiver doctrines. It casts a somewhat approving eye on the matter of whether the non-infringement opinion was authored by in-house counsel, or opinion counsel, which need to be disconnected from litigation counsel. The section on the privilege, again reminiscent of how the Supremes closed their opinions in Festo and KSR, closes with no “absolute rule” but only seeds sown in the “evolutionary” (imaginary) field where “privileges’ are developed.
The final section on work product waiver is almost an after thought, once they had changed the standard for willfulness, and ruled that the privilege between a client and opinion counsel can be selectively waived. With both privileges, the guiding light is the unfettered ability to tell your litigation counsel that you knew about the patent, and worried that you infringed, but worried more about being ‘left in the dust’ by your main competitor.
The concurrence takes the issue a measure further outside the box of a mandamus petition regarding discovery. It advocates taking the willfulness element away from enhanced damages altogether, since the statute does not mention that element.
Regrets go to all the infringers’ counsels, who between the ruling in Echostar and Seagate, had to open up their files for examination by opposing counsel. The scope of the ruling in Seagate was unexpected, just like when you take your car in to have the headlights adjusted, and the garage requires that you get a new battery and alternator.