Important Considerations for Opinion Letters after Halo

By Maria Anderson, Mauricio Uribe, and Christie Matthaei

Knobbe Martens

Maria Anderson

Prior to 2007, a finding of patent infringement also carried a high risk of a finding of willful infringement absent some form of prior mitigation by the defendant. Accordingly, a vast majority of companies addressed the willful infringement risk by pro-actively seeking invalidity and non-infringement opinion letters.

The Federal Circuit’s 2007 Seagate decision effectively decreased the risk of a court finding willful infringement in patent infringement cases by eliminating the “affirmative duty of care.” This precedent was further supported in 2011 with the passage of 35 U.S.C. § 298, which stated that the failure to obtain or present advice of counsel could not be used to prove that the accused infringer willfully infringed. Under this legal and legislative landscape, the practice of obtaining opinion letters became much less common.

The legal tides shifted again in 2016 when the Supreme Court’s decision in Halo abrogated Seagate and renewed the emphasis on pre-litigation knowledge in a determination of willful infringement. In the post‑Halo legal atmosphere, opinion letters can be helpful but are not always necessary. Companies need to implement a comprehensive risk mitigation policy that balances the considerable costs and benefits associated with working with legal counsel to manage assertions of infringement and obtaining opinion letters.

How Does a Company Policy Determine Which Patents Warrant an Opinion Letter?

1. The Product at Issue

One major factor in deciding whether to pursue an opinion letter relates to the potential damage award related the product or method at issue. To the extent the product at issue is associated with substantial profits or is part of a larger, higher value product, the cost of an opinion letter may be very small in comparison to any potential risk of enhanced damages. On the other hand, if the product is associated with low projected profits or the value can be clearly apportioned, an opinion letter may not be justified.

High profile products also often necessitate an opinion letter regardless of potential profits. These products typically receive more attention from the media and consumers and may create a public relations concern if they are found to willfully infringe a patent.

2. The Patent at Issue

The nature of how knowledge of the asserted patent was communicated and the results of an initial investigation can often establish that need and extent of an opinion. If, after an initial review, the claims on their face include a limitation that is clearly missing from the accused product, it is probably sufficient to simply record the clear non-infringement position. Likewise, mere knowledge of the existence of a patent without any basis for how the product at issue could possibly infringe does not require a detailed analysis and generation of an opinion.

The same cannot be said for invalidity positions. Patents are legally presumed valid after issuance and the burden of invalidity shifts to the accused infringer. Because of this presumption, the more prudent company policy will usually require a more rigorous opinion letter if it involves theories of invalidity.

3. The Patent Owner

The patent owner or exclusive licensee may also have a bearing on the potential need for an opinion. For example, non-practicing entities (“NPEs”) often represent the highest threat of litigation and patents owned by NPE’s often warrant a higher level of scrutiny. The primary desired outcome for lawsuits filed by NPEs is damages and therefore the likelihood of NPEs seeking enhanced damages is much higher. NPEs also tend to be extremely litigious and are more apt to provide information indicating theories of infringement as part of pre-litigation communications.

Because past actions are the greatest predictor of future actions, an entities’ litigation history is extremely important in considering the risk they pose for future patent-infringement lawsuits.

Establishing a Risk Mitigation Strategy for Your Company

Although opinion letters written by in-house counsel are permitted (and may be sufficient for straightforward matters), it is often beneficial to obtain an opinion letter from outside counsel. First, courts have historically expressed a preference for opinions rendered by outside counsel. This may be because of the perception of a conflict of interest of the in-house counsel. This perceived conflict of interest does not exist, or is greatly lessened, with outside counsel. Second, although there is always a concern about waiving privilege when an opinion letter is relied on, the extent of that waiver may be more damaging if the opinion letter is drafted by in-house counsel. When the opinion letter is drafted by outside counsel, the letter and accompanying waiver can be more easily compartmentalized than when drafted by in-house counsel.

In addition to opinion letters, a risk mitigation policy should also consider eliminating the potential infringement and willfulness by considering licensing options rather than spending resources drafting an opinion letter. Alternatively, you may look to a licensing partner or network such as LOT Network for help.


Maria Anderson:

Maria Anderson has extensive experience in comprehensive, strategic client counseling in all aspects of intellectual property. She has been very active in the prosecution of patent applications in the computer science and ecommerce fields since 1993.

Mauricio Uribe:

Mauricio Uribe has wide-ranging experience in developing patent portfolios and intellectual property assets.  He also provides counsel on patentability, due diligence and infringement mitigation matters and comprehensive intellectual property programs including litigation and complex, global patent and technology licensing.

Christie Matthaei:

Christie Matthaei represents various clients in all aspects of intellectual property disputes, with a focus on patent litigation. She also counsels clients on pre-litigation matters, including analyzing patent infringement and validity.