PROACTIVE LAWYERING - A BAD THING? Bill Heinze, an intellectual property attorney and author of the excellent blog "I/P Updates" has a very interesting thread on proactive lawyering. Specifically, Bill has provides clients with free patent and trademark watch services, where he e-mails alerts about new filings their competitors have entered with the U.S. Patent and Trademark Office:

"I use the free U.S. patent database at www.uspto.gov/patft/index.html and U.S. trademark database at http://tess2.uspto.gov," says Heinze. "I develop a search strategy 'watch list' using the names of the client's key competitors and the types of products that they sell." When a client has an intellectual property problem, the opposing party is added to the list, he explains.

Heinze's secretary runs the searches, and prints out paper summaries. After Heinze reviews the documents, his secretary sends electronic copies to key business and technical managers, whose names he stores in Microsoft Outlook
distribution lists. "I have already given these business leaders a free seminar on how to spot intellectual property problems, so they can quickly spot the ones that might affect current and/or future projects."

"Although various paid services offer additional information (such as unregistered 'common law' trademarks), and we use those sources when we need them, I like to stick with the free stuff when screening these monthly watch services," says Heinze. "The watch service helps me spot IP problems for clients early in the product-development process, while they're still relatively inexpensive to solve. I streamline searches for particular clients and try to find information that will affect their business," says Heinze. "I started doing this as a way to do preventative lawyering, to help clients avoid some of the last-minute crises I've seen them go through. It seems to work."

A fantastic idea. I personally believe that transparency is key to a properly-maintained patent regime. And in many cases, the more information a client has, the better equipped he/she will be in making well-educated and well-reasoned decisions.

However, there will be cases where knowledge is not, in the vernacular, "a good thing." Information that you acquire, and what you do with that information, is not just relevant to the client, but is also relevant to competitors and how they can use that information against you. If you know the identity of the shooter in a triple-homicide, your willingness to acknowledge and potentially divulge that information will greatly depend on whether the police are asking for that information, or whether Mafia enforcers are canvassing your neighborhood to see if anyone saw the shooting.

This can work the same way in patents. In Knorr-Bremse, the Federal Circuit upheld the principle that a potential infringer "has an affirmative duty to exercise due care to determine whether or not he is infringing" when he/she has knowledge of prior patents his/her product may infringe. While the court previously required defendants to consult legal counsel in order to satisfy their duty, the court currently only requires a defendant to consult legal counsel if the "totality of the circumstances" warrants it. Under the totality of the circumstances, one of the considerations will be whether the defendant reasonably investigated the validity of any infringement claims.

The problem with Knorr-Bremse is that federal jurisprudence currently has no "bright-line" definition of what a "reasonable investigation" is. Furthermore, the landmark case provided almost no guidance about the future role of opinion letters in patent litigation, and also failed to resolve the question of "whether the trier of fact, particularly the jury, can or should be told whether or not counsel was consulted (albeit without any inference as to the nature of the advice received) as part of the totality of the circumstances relevant to the question of willful infringement."

The court clearly stated that the existence of a substantial defense to infringement would not automatically bar a finding of willful infringement (see question 4 in Knorr-Bremse). And if willfulness is alleged, the defendant's state of mind will be highly relevant when considering willful infringement (and treble damages), and the information that the defendant had in his/her possession will certainly be a factor in establishing that state of mind. The problem here is that the more information you have, the more vigilant you have to be in determining what information is relevant and what isn't. And if the information is deemed relevant, what do you do with it? This is not only a legal question, but a business question as well - how much time and how many resources do you want to commit to investigating each potential claim against you or your suppliers/distributors/manufacturers?

In the same regard, the more references you acquire, the more prickly your IDS disclosures become. If you begin filing patents in areas where you have amassed a lot of prior art, you'd better make sure you keep on top of all the references, or you may be facing potential inequitable conduct claims in the future (and potential fines from the USPTO if the current legislation pending in Congress passes).