## Facts

- Knorr-Bremse owned a patent covering an air disc brake for heavy commercial vehicles and sued Dana and Haldex for infringement in the Eastern District of Virginia.
- The district court found the patent valid, found infringement, and found willful infringement, awarding enhanced damages.
- Dana did not obtain an opinion of counsel before selling the accused product and later asserted attorney–client privilege regarding any legal advice.
- Haldex obtained an opinion of counsel but did not introduce it at trial and asserted attorney–client privilege; the district court inferred the opinion was unfavorable.
- The district court relied in part on Dana’s lack of an opinion and on an adverse inference from Haldex’s privilege assertion to support willfulness and enhancement.
- On appeal, the Federal Circuit took the case en banc to address whether such adverse inferences are proper in the willfulness analysis.

## Issues

1. Whether an adverse inference of willfulness may be drawn from an accused infringer’s failure to obtain an exculpatory opinion of counsel.
2. Whether an adverse inference may be drawn from an accused infringer’s assertion of attorney–client privilege or work-product immunity to withhold an opinion of counsel.
3. Whether any such adverse inference may be used as substantive proof supporting a willfulness finding.
4. Whether prior Federal Circuit precedent permitting or encouraging these inferences should be modified or overruled.

## Decision

- The en banc Federal Circuit held that no adverse inference arises from an accused infringer’s failure to obtain or produce an opinion of counsel.
- The court held that no adverse inference may be drawn from an accused infringer’s invocation of attorney–client privilege or work-product immunity concerning opinions of counsel.
- The court vacated the willfulness finding and the enhanced damages award and remanded for reconsideration of willfulness without reliance on any adverse inference tied to opinions of counsel or privileged silence.
- The court left the underlying infringement and validity determinations undisturbed.

## Legal Principles

- There is no affirmative duty for an accused infringer to obtain an opinion of counsel upon learning of a patent.
- A party’s assertion of attorney–client privilege or work-product immunity regarding counsel’s advice is not evidence of willful infringement and cannot support an adverse inference.
- Willfulness must be determined under the totality of the circumstances based on affirmative evidence, not on compelled inferences from the absence or nondisclosure of privileged legal advice.
- To the extent earlier Federal Circuit decisions approved adverse inferences from failure to obtain or disclose counsel opinions, those decisions were overruled or modified.

## Conclusion

The Federal Circuit rejected opinion-of-counsel-based adverse inferences in patent willfulness determinations, vacated the willfulness and enhanced damages rulings that relied on such inferences, and required reconsideration of willfulness without penalizing the accused infringers for not obtaining, producing, or disclosing privileged legal advice.


Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337 (Fed. Cir. 2004) (en banc)