Lawyers will be weeping. For 24 years patent attorneys in the US have had a lucrative business in writing "non-infringement" opinions with the object of defeating claims for punitive triple damages for willful patent infringement. Each opinion had to involve substantial work or it could be attacked as superficial. However, in In re Seagate the Federal Circuits Court of Appeal has just overturned those happy years. The CAFC decided that the test for such punitive damages is a much higher threshold: the infringement must be reprehensible. This requires that: (1) there was "an objectively high likelihood that [the infringer's] actions constituted infringement of a valid patent", and (ii) this was known or so obvious that it should have been known to the infringer. And incidentally there is no requirement to obtain counsel's opinion to this effect to avoid liability for punitive damages. (For the full text see http://www.patentlyo.com/patent/2007/08/in-re-seagate-t.html).
This could have a major benefit. For years in the electronics and software sectors, where doubtful patents abound (as well as other areas) businesses have steered clear of carrying out patent searches or looking at published patent resources, for fear that, if they find something relevant, they run the risk of triple damages, or the cost of an infringement opinion -- running at US$10,000 and upwards -- or worse still both if the opinion is not unequivocal. Now, with a second chip out of the US pro-patentee stance -- in May 2007, the Supreme Court ruled in the KSR v Teleflex decision that that there is some level of inventive threshold for US patents (http://www.supremecourtus.gov/opinions/06pdf/04-1350.pdf)-- businesses can take a peek at competitor patents, and rely on their own common sense views (with guidance from patent specialists) on whether they are likely to be valid and whether they are likely to be infringed.
Of course it is unlikely that the lawyers will really be impoverished.
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