Free Letter - District Court of Delaware - Delaware

Case 1:04-cv-00343-JJF Document 415 Filed O1/26/2007 Page 1 of 4
Rrcrianms, Lavronr & Finrorzn
A PROFESSIONAL ASSOCIATION
ONE RODNEZY SQUARE
Fnzsoaratcua I.. C0r·rRi;i.n.. Ill 9*-EO NORTH KING STREET D¤F¤E¤T DML
orawea Wiuaaworom, Dauawanz tenor ¤¤¤2¤ eel-7509
(302) S5 I-7 700 corn=u:r.r.@F1LF“ COM
mer {soar ent-vvor
WWWrRLF',COM
Jarruary 26, 2007
BY E—·I\/IAIL & HAND DELIVERY
The Honorable Vincent J. Poppiti
BLANK ROME. LLP
Chase Manhattan Center
1201 Market Street, Suite 800
Wilmington, DE. l980l
Re: LG.Philip,r LCD Co., Ltd. v. ViewSonic Corp., et ol., CA. No. 04-343-JJF
Dear Special Master Poppiti:
At the January 19, 2007 telephonic hearing, Your Honor requested that the Tatung
Defendants provide additional briefing regarding whether "advice of counsel" has to be aflirmatively
pled by an accused intiinger as a defense in order for the accused inliinger to potentially rely on
opinion of counsel. For the reasons set forth below, the 1`atung Defendants are not required to plead
"advice of counse1" as an affirmative defense, and therefore, need not move to amend their answers
before potentially relying on opinion of counsel to rebut the allegation of willtirl inhringernent.
A. Reliance On Advice Of Counsel ls Not An Affirmative Defense.
Rule 8(c) of the Federal Rules of Civil Procedure requires a party to set forth "aftirrnatively”
in a responsive pleading certain defenses. The Rule specifies a number of afhrrnative defenses,
including laches, res judicata, statute of limitations, and "any other rnatter constituting an avoidance
or affirmative defense? See Fed. R. Civ. P. 8(c) In determining whether a particular theory or
contention constitutes an affirmative defense, courts have considered the following factors: (l)
whether the defense is one which, if true, would wholly defeat the plaintiffs claim or otherwise
excuse the defendant from liability, or whether the defense simply controverts an element ofthe
plaintiffs prima facie case; and (2) whether failure to plead the defense would unfairly surprise the
plaintiff Kenncrn v. Dow Client Co., 717 F. Supp. 799, 807 (l\/LD. Fla. 1989), accord Sonden v.
Mayo Clinic, 495 F.2d 221, 224 (Sm Cir. 1974); see also Wilson Group, Inc. v. Qrrorrnn. Health
Resorrrces, Inc., 880 li`. Supp. 416, 425 (DSC. 1995). An affirmative defense is a defendant’s
assertion raising new facts and argument that, if true, will defeat the plaintiffs claim, even if all
allegations in the conrplrzint are true. See Saks v. Frrrrrklin Covey Co., 3l6 F.3d 337, 350 (2d Cir.
.2003), cirir-rg Black’s Law Dictionary 430 (7th ed. 1999). Put another way, the "concept of an
affirmative defense under Rule S(c) ‘requires a responding party to crdrnit a cornplaint’s allegations
but then permits the responding party to assert that for sonre legal reason it is nonetheless excused
iiorn liability (or perhaps from full liability)."’ Reis Robotics USA, Inc. v. Concept Indus., Inc., _ F.
RLFl—3l09lJ48-l

Case 1:04-cv-00343-JJF Document 415 Filed O1/26/2007 Page 2 of 4
The Honorable Vincent J. Poppiti
January 26, 2007
Page 2
Supp. 2d ld, 2006 WL 3198934, at * 5 (ND. Ill. 2006), citing Meiiclzacn v. Am. Med. Resp. oflll.,
Inc., 6 F. Supp. 2d 97}., 972 (ND. lll. l998) (emphasis in original). Thus, a defense that "merely
negates some element of plaintiff’s prima facie case is not a true aftirrnative defense and need not be
pleaded." Sanden, 495 F.2d at 224.
The case law analyzing the nature of affirmative defenses clearly shows that reliance on
opinion of counsel is not an affirmative defense to a claim of willlhl infringement within the meaning
of Rule 8(c). First, an accused infringer’s reliance on opinion ofcounsel is not a defense which, if
true, would necessarily defeat a claim ofwillful infringernent. Rather, reliance on opinion of counsel
is merely one factor, among many, that may controvert an element ofthe patentee’s prima facie case
regarding willful infringement. The burden of proving willful inlringement by clear and convincing
evidence is on the patentee. See nCnbe Corp. v. Seczclznnge Int'}., Inc., 436 l?.3d 1317, l319 (Fed.
Cir. 2006) Courts have long held that whether a defendant willfully infringed is a question that must
necessarily contemplate the "contributions of several factors," and that must he made upon a
consideration of the "totality of circurnstancesf See, cg., Gtrstcrfson, Inc. v. Inter1.sjyste:ii.s Indus.
Proulx., Inc, 897 F.2d 508, 510 (Fed. Cir. 1990); see also Rolls-Royce Ltd. v. GTE Vnleron Corp.,
800 F.2d 110l, 1109-l0 (Fed. Cir. 1986). In Knon·-Bremre, the Federal Circuit abolished the so-
called “adverse inference rule," and held that a defendant’s failure to obtain or produce an
exculpatory legal opinion cannot lead to an adverse inference that the opinion was or would have
been unfavorable Krioi·i"~Br·e:tz.se Slysteme Fll€l'Nlt[Z_]?1}lI"Z€I!g€ GMBH v. Donn Corp., 383 F.3d
1337, 134I (Fed Cir. 2004) As a result of Knorn-Brem.se, patent infringement defendants are no
longer required to obtain an opinion of counsel to rebut williulness, and in the event a defendant
chooses to procure and rely on an opinion, that opinion is only one factor under the totality of
circumstances test. Id. at l347. These factors include: 1) Whether the accused infringer made
efforts to redesign the allegedly infringing product or method; 2) whether the accused infringer
engaged in bad faith litigation conduct; 3) whether the accused inhringer deliberately copied the
product or method ofthe patentee; 4) whether upon learning ofthe patent, the accused infringer
investigated the scope of the patent and formed a good faith belief that it was not infringed or invalid;
and 5) whether the accused infringer obtained an opinion of counsel. See Read Corp. v. Portec, Inc.,
970 F.2d 816, 826427 (Fed. Cir. 1992); R0lls··Royce, 800 F.2d at 1110. Because reliance on opinion
of counsel is merely one factor that may negate the patentee’s prima facie case, it need not be pled as
an affirmative defense under Rule 8. Indeed, there is no requirement (and LPL has not suggested
otherwise) that an accused infringer plead as affirmative defenses each of the many factors that are
considered in the totality of circumstances analysis.
Second, reliance on advice of counsel is not an admission that the allegations in the
complaint are true but that liability should excused for other reasons. See Reis, 2006 WL 3198934, at
* 5 (stating that an affirmative defense is one that admits the allegations of the complaint and asserts
that for other legal reasons liability should be excused). Accordingly, advice of counsel is not an
afiirmative defense that must be pled
at ria 109048-1

Case 1:04-cv-00343-JJF Document 415 Filed O1/26/2007 Page 3 of 4
The Honorable Vincent J. Poppiti
January 26, 2007
Page 3
B. The Tatung Defendants’ Denial Of Willfuiness In Their Answers Provided Sufficient
Notice To LPL.
The purpose of requiring affirmative defenses to be pleaded is to notify the other party ofthe
existence of certain issues. See Wilson Group, 880 F.Supp. at 425; see also Ultm—Pr·eci.siorr
Ltd. v. Ford Motor Co., 41 1 F.3d 1369, 1376 (Fed. Cir. 2005), citing Smith v. Srrshko, ll? F 3d 965,
969 (6th Cir. 1997) (stating that the purpose of Rule 8(c) is to "give the opposing party notice of the
afiirmative defense and a chance to respond"). "{Vlf]hat matters is not whether magic words
‘affirmative defense’ appear in pleadings but whether court and parties were aware of issues
involved? Boker v. City of Detroit, 483 F. Supp. 919, 921 (ED. Mich. 1979).
Here, the Tatung I)efendants’ answers to the complaint expressly denied that they willfully
infringed the patents at issue. The Tatung Delendants’ denial of willfulness provided sufficient
notice to LPL ofthe issues involved. LPL’s allegations of willlul infringement and the Tatung
Defendants’ denial of willlirlness placed into issue all of the factors for the totality of circumstances
test for willfulncss. Indeed, LP},. knew that advice ol counsel was an issue because it tiled a motion
to compel the production of opinions of counsel. The lack of an "advice of counsel" affirmative
defense has not caused any surprise or prejudice to l,l?l.. Accordingly, the Tatung Defendants are
not required to amend their answers to aftinnatively plead ‘°advice of counsel" before potentially
relying on opinion of counsel.
C. Discovery Regarding Advice Of Counsel Should Be Postponed Until After Claim
Construction.
As explained in the Tatung Defendants’ Opposition to LPL’s Motion to Compel Discovery
Regarding Advice of Counsel, the decision of whether to rely on opinion of counsel is monumental
because it irnplicates waiver of the attorney client privilege. Consequently, courts have ruled that
accused infringers are not required to make this election until after the Marirmurr proceedings and
air dispositive motions have been considered. See, ag., AL. Hansen Mfg. v. Bauer Prods., Inc.,
.2004 WL ll259ll, at *6 (N. D. Ill. 2004) ("In this way, Bauer can at least maintain attorney—client
privilege throughout the pre—trial phase, including the Marianna hearing and until the filing of
summary judgment motions However, expedited discovery on Bauer’s opinion ofcounsel will begin
immediately if Bauer relies on its opinion of counsel earlier for any reason.").
Accordingly, the Tatung Defendants respectfully request that the Special Master postpone
discovery on the advice of counsel issue until alter the Morfanon and summary judgment
proceedings. At that time, the Tatung Defendants will inform LPL as to whether they are relying on
advice of counsel. lf advice of counsel is asserted, the Tatung Defendants will respond to discovery
expeditiously.
nt.r1-210904s-t

Case 1:04-cv-00343-JJF Document 415 Filed O1/26/2007 Page 4 of 4
The Honorable Vincent J. Poppiti
January 26, 2.097
Page 4
Respectfully,
W L, 5(=’>·@,V»`5·`·
Frederick L. Cottrell, lll (#2555)
FLC,lIlfafg
cc: Clerk of the Court (By Electronic Filing)
Richard Kirk, Esquire (via electronic mail)
Cormac T. Connor, Esquire (via electronic mail)
Lora Brzezynski, Esquire (via electronic mail)
Mark Krietzman, Esquire (via electronic mail)
Scott R. Miller, Esquire (via electronic mail)
Jefhey B. Bove, Esquire (via electronic mail)
Tracy Roman, Esquire (via electroriic mail)
arr:-$r090»ss-1

Case 1:04-cv-00343-JJF

Document 415

Filed 01/26/2007

Page 1 of 4

Case 1:04-cv-00343-JJF

Document 415

Filed 01/26/2007

Page 2 of 4

Case 1:04-cv-00343-JJF

Document 415

Filed 01/26/2007

Page 3 of 4

Case 1:04-cv-00343-JJF

Document 415

Filed 01/26/2007

Page 4 of 4