New Decision Changes Law on Attorney-Client Privilege in Patent Cases

On September 13, 2004, the United States Court of Appeals for the Federal Circuit, sitting en banc, overruled almost 20 years of its own precedent and held that it was improper for a judge or jury to draw an adverse inference of "willful" infringement against a party accused of infringing a patent, where the party claims an attorney-client (or work product) privilege and withholds an opinion of counsel, or where the party has not obtained legal advice at all. The Federal Circuit’s decision in Knorr-Bremse Systeme Fuer Nutzfahrzeuge GMBH v. Dana Corp. is an important one for at least two reasons: For one, it may cause changes in the way that corporations approach intellectual-property issues and anticipate litigation. For another, the separate opinion of one of the Federal Circuit’s judges may be the first step toward other important changes in the rules governing patent litigation in the future, especially where the treble-damages provision in the patent laws is concerned.