Creating a policy that encourages employees to search for and analyze patent information related to new products and innovations makes good business sense but is often rejected by attorneys fearing charges of willful infringement. In fact, many companies, especially tech companies maintain a policy of “willful blindness,” instructing employees to NOT review or search others’ patents. The doctrine of willful blindness applies when a person seeks to avoid civil or criminal liability for a wrongful act by intentionally keeping himself or herself unaware of facts that would render them liable or implicated.
Last week, in a lawsuit pending in the Eastern District of Texas, the Chief District Judge Rodney Gilstrap issued an opinion in the case (Motiva Patents LLC v. HTC Corporation) in which he wrote, “A well-pled claim for willful blindness is sufficient to state a claim for willful infringement.” Judge Gilstrap ruled that Motiva’s allegations of willful blindness (based on HTC’s policy instructing employees NOT to search for patents*) were sufficient to defeat HTC’s attempt to dismiss the claim of willful infringement.
* Motiva Patents LLC also has similar pending patent infringement lawsuits against Sony ( and Facebook (Occulus).
In both complaints, Motiva accuses the defendants, of having a “policy or practice of not reviewing the patents of others (including instructing its employees to not review the patents of others), and thus has been willfully blind of Motiva’s patent rights.”
This decision builds on a Supreme Court decision from 2010: Global-Tech Appliances, Inc. v. SEB S.A in which the court decided that the “willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known the critical facts.”
In other words, willful blindness is sufficient to accuse an alleged infringer with knowledge of a patent. And, maintaining a policy of willful blindness, is equivalent to subjectively believing that “there is a high probability that a fact exists” and then deliberately taking “actions to avoid learning of that fact.”
Both of these court cases reinforce the idea that burying your head in the sand has consequences. First, it deprives your engineers and scientists from being able to research others’ work to create differentiated technologies, thereby limiting their ability to innovate. And, it carries risks of willful infringement. Ironically, this is the same risk patent attorney’s point to when their employees search for patents and technical literature.
If the potential for risk is the same, then why not take benefits that come with searching, exploring and studying patents and published literature?
Since its inception over 15 years ago, IP Checkups has maintained that patent search is essential for technology focused organizations to stay ahead of competitors. Retired Chief Judge Paul Michel of the United States Court of Appeals for the Federal Circuit echoed this sentiment when he said, “…any chief patent counsel who advises the scientists and engineers in his company that they should never read patents is practically incompetent. There is no reason in my judgment why company researchers should have to ignore the patent literature. Hardly any damage awards are ever enhanced. In most cases, willfulness isn’t even established, and even when it is, enhanced damages are not automatic.”
IP Checkups offers services and software to help companies manage patent and technical literature search results, reducing the risk of having to defend themselves in expensive patent litigations. We developed a process for managing competitive information by categorizing, archiving, and monitoring it with our PatentCAM™ software.
One of the keys to establishing a successful competitive intelligence and patent monitoring program is to create an internal company-wide policy which says that any patents or technical information reviewed by employees, including any comments made about the information will be loaded into a centralized, searchable repository. This shared platform serves several purposes:
- It reduces the likelihood of engineers and scientists searching public patent databases, downloading spreadsheets directly to their computers and making comments that might be problematic for the organization if litigation occurs.
- It improves arguments to defend a company against charges of willful infringement or inequitable conduct. The software and associated process provides attorneys with a proactive system for reviewing inventor comments, managing and monitoring newly published information, and tracking the companies’ overall patent searching process.
- It reduces costs associated with discovery. When litigation occurs, having a single centralized and searchable database where counsel can quickly find all comments or activities subjected to employee comments, saves time and money.
We strongly believe that to be successful over the long-term, organizations will benefit from reviewing and analyzing competitive patent and technical information. This includes establishing a patent landscape analysis process, and a company-wide policy around how this information is collected and managed. This combination of process, software and policy eliminates many of the risks attorneys often associate with patent searching.
The decision from the courts in Motiva Patents v. HTC Corporation simply reinforces our recommendations and goes a step further by suggesting that organizations who create a policy of willful blindness may suffer the same risks as those who search for more knowledge.