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September 28, 2004

What happens in Your Lawyers Office . . .

Stays in Your Lawyers Office!!

At least when it comes to willful infringement of a patent.  Admittedly, the news is a little old (The Invent Blog and Patently Obvious both reported the story weeks ago).  However, Knorr-Bremse Systeme Fuer Nutzfahrzeuge GMBH v. Dana Corp. seems to be an important decision.

In this case some infringers talked to their lawyer about the infringement.  My guess is that the lawyer told them that what they were doing was bad and that they should quit.  If the infringers knew that they were infringing, and didn't quit, willful infringement would be a proper judgment.  However, when the issue came up in an infringement lawsuit, the infringers asserted attorney-client privilege and the lawyer did not testify.

The question that arose was whether muzzling the lawyer could be construed to mean that the infringers knew they were infringing.  According to the Federal Circuit, in an en banc* decision, the answer is no. 

The court asserted that to make such an inference would inhibit communications between lawyers and clients, stating "[t]here should be no risk of liability in disclosures to and from counsel in patent matters; such risks can intrude upon full communication and ultimately the public interest in encouraging open and confident relationships between client and attorney."

So, with regard to patent infringement conversations:

What happens in your lawyers office stays in your lawyers office.

Note to criminals:  This rule does not apply to crime or fraud.  Lawyers have rules of ethics that permit or even require disclosure in certain circumstances.

* For the non-lawyers, en banc means that the whole court decided the case.  Most Federal Circuit decisions are decided by a panel consisting of 3 judges.  This decision was made by 11 of the 12 judges (1 recused himself).  The fact that the judges all took part in the case may indicate that they also thought it important.

10-1-2004 Update: The ABA Journal reports that PATENT RULING MAY BOOST IP BOUTIQUES.

Posted by at 10:43 AM.
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