Protecting Intellectual Property Assets
MCLE, Inc. 1998

© 1998 by Robert L. Kann

When a client receives a letter containing accusations of patent infringement, the client has a number of critical decisions to make. Among the most important issues which must be addressed are: whether to obtain an opinion of counsel, who should render the opinion of counsel, whether a “design around” is feasible, whether to engage in settlement negotiations, what are the range of settlement outcomes which are acceptable, and whether to file suit for a declaratory judgment of non-infringement and invalidity of the patent asserted. The earlier the client confronts these issues and decides on a comprehensive strategy to address them, the more likely the client will obtain a favorable resolution.

1. Opinion of Counsel: Selecting Counsel

Obtaining an opinion of counsel that the accused product or process either does not infringe the patent asserted or that the patent is invalid is important if an accused is to avoid liability for willful infringement and exposure to treble damages and attorneys’ fees. In addition, it may be important to corporate managers, directly involved with decision making concerning the accused product, to obtain an opinion of counsel in order to avoid personal liability. The opinion of counsel may also guide the client in the other decisions which must be made relating to the possibility of designing around the patent and whether to file suit for declaratory relief.

Before obtaining the opinion of counsel, the client has a preliminary decision to make. Who will render the opinion of counsel? In-house patent counsel is not disqualified from rendering an opinion upon which the accused client may rely. Use of in-house counsel to prepare the opinion of counsel has the benefit of avoiding the cost of outside patent counsel. In addition, in-house counsel has familiarity with the client’s products and technology. On the other hand, in-house counsel may have had discussions with the accused’s personnel concerning litigation strategy prior to rendering his opinion. Under ordinary circumstances such discussions are subject to attorney client privilege and/or the work product doctrine. However, attorney client privilege and work product doctrine protections are waived in relation to an opinion of counsel upon which a party relies for purposes of avoiding liability for willful infringement. In addition, the opinion of outside patent counsel is likely to appear more objective to the jury than the opinion of counsel employed by the accused.

The client must also decide if the opinion of counsel will be rendered by an attorney associated with the firm whom the client has already selected or is likely to select as trial counsel. Again, there may be significant cost savings associated with having trial counsel or members of his firm render the opinion of counsel. The time that counsel and his firm expend learning, for purposes of rendering an opinion of counsel, the patent in suit and its prosecution history, the prior art (which may be quite extensive), and the various iterations of the client’s accused products and processes, will not have to be fully expended again in connection with the litigation if the opinion rendering counsel also serves as trial counsel. In addition, clients often have longstanding relationships with patent counsel who may have years of experience and accumulated knowledge concerning the client’s accused products and technology, the industry and the relevant field of patents.

However, the discoverability of counsel’s work product developed in connection with rendering the opinion of counsel, the likelihood that counsel will have to submit to deposition concerning the opinion and the possibility that the author of the opinion of counsel may have to testify at trial all militate against selection of trial counsel or a member of his firm to write the opinion of counsel.

In addition, the “witness-advocate rule” has a bearing on this decision. That rule prohibits an attorney or a member of the attorney’s firm from acting as an advocate and a witness in a client’s case. Code of Professional Responsibility Rules 5-102(A), 5-102(B) and 5-101(B).

Rule 5-102 provides:

1. If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that he or a lawyer in his firm ought to be called as a witness on behalf of his client, he shall withdraw from the conduct of the trial and his firm, if any, shall not continue representation in the trial, except that he may continue the representation and he or a lawyer in his firm may testify in the circumstances enumerated in DR 5-101(B)(1) through (4).
2. If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that he or a lawyer in his firm may be called as a witness other than on behalf of his client, he may continue the representation until it is apparent that his testimony is or may be prejudicial to his client.The exceptions to Rule 5-102(A), listed under Rule 5-101(B), include:
   1. If the testimony will relate solely to an uncontested matter.
   2. If the testimony will relate solely to a matter of formality and there is no reason to believe that substantial evidence will be offered in opposition to the testimony.
   3. If the testimony will relate solely to the nature and value of legal services rendered in the case by the lawyer or his firm to the client.
   4. As to any matter, if refusal would work a substantial hardship on the client because of the distinctive value of the lawyer or his firm as counsel in the particular case.

   One of the few courts to address the issue of whether the opinion-rendering counsel is disqualified to serve as trial counsel stated

   [g]iven the defense at issue, it is not at all clear that if one of defendant’s counsel were called as a witness, the resultant testimony would be prejudicial to defendant. It would seem that such testimony would relate to the question of whether an opinion on validity or infringement was sought and offered rather than the correctness of the opinion itself. As such disqualification or withdrawal would not be required under Rule 5-102(B).

Ristvedt-Johnson, Inc. v. Brandt, Inc. No. 88 C 3834, 1990 U.S. Dist. LEXIS 9297 *8 (N.D. Ill. E.D. July 25, 1990). ¹

Motions to disqualify trial counsel have also been addressed in related cases. In SMI Industries Canada, Ltd. v. Caelter Industries, Inc. 586 F. Supp. 808 (S.D.N.Y. 1984), the adverse party moved to disqualify the patentee’s counsel under Rule 5-102. The adverse party argued, in part, that members of the patentee’s firm “ought to be called as witnesses at trial,” because the patentee’s firm had prosecuted the patents in issue. Id.at 813. However, the court found that the exception under Rule 5- 101(B)(4) applied where the patentee’s counsel had represented the patentee for nearly twenty years, the representation in the present action involved “a complex set of legal and factual issues which the firm has been familiar with for many years”, and the “late juncture [of the action]²would work a substantial hardship upon the patentee to require it to retain new counsel.” Id. at 817. See also Personalized Mass Media Corp. v. The Weather Channel, Inc., 899 F. Supp. 239, 242-244 (E.D. Va. 1995) (firm disqualified under Rule 5-102(B) where counsel’s advice is relevant, necessary on the issue of inequitable conduct and would be prejudicial to the attorney’s client if the attorney were called by the opposing party);Gauli, M.D. v. Wyeth Laboratories, Inc. 687 F. Supp. 77, 80 (S.D.N.Y. 1988) (court denied motion to disqualify patentee’s counsel under Rule 5-102(B) where testimony of the patent holder’s counsel was not necessary on the question of inequitable conduct and both parties would be prohibited from calling the patent holder’s counsel as a witness at trial);Pain Prevention Law, Inc. v. Electronic Waveform Labs, Inc. 657 F. Supp. 1486, 1498 (N.D. Ill. E.D. 1987) (motion to disqualify under Rule 5-102(A) and 5-102(B) denied where it was not clear counsel who had knowledge regarding the marketing and development of the technology at issue “ought to be called as a witness” or that, if called, his testimony would have any “prejudicial effect” on his client).

The issue of whether trial counsel or his firm may render an opinion of counsel and then testify in support of the opinion at trial is largely unresolved. The cost savings to the accused of proceeding in this manner, particularly where it is uncertain as to whether the matter will actually go to trial, are appealing. In addition, there is a real benefit in obtaining an opinion of counsel from trial counsel or his firm who have a longstanding relationship with the client and who have special knowledge of the client’s technology and the relevant field of patents.

On the other hand, where there is a high likelihood that a matter will go to trial, the appearance of trial counsel or his firm both advocating and testifying at trial may affect, in the eyes of the jury, the credibility of the witness sponsor of the opinion of counsel and the image of trial counsel. In addition, there is a serious impact on the accused in terms of cost and disruption of the defense if a court decides late in the litigation that the trial counsel’s firm is disqualified because a member of the firm is also the author of the opinion of counsel upon which the accused relies. Thus, the decision as to whether to employ counsel both for purposes of rendering an opinion of counsel and as trial counsel must be carefully considered.

2. Opinion of Counsel: Obligations of Counsel and Client

Reasonable, good faith reliance upon an opinion of counsel leads to the conclusion that infringement was not willful. See e.g., Transmatic, Inc. v. Gulton Indus. Inc., 53 F.2d 1270, 1279 (Fed. Cir. 1995); Sensonics, Inc. v. Aerosonic Corp. 81 F.3d 1566, 1571 (Fed. Cir. 1996); Ortho Pharmaceutical Corp. 959 F.2d 936 (Fed. Cir. 1992).

The obligations that the accused must fulfill in order to avoid liability for willful infringement are well established. “One who has actual notice of another’s patent rights has an affirmative duty to respect those rights. . . . That affirmative duty normally entails obtaining advice of legal counsel although the absence of such advice does not mandate a finding of willfulness. . . . Those cases where willful infringement is found despite the presence of an opinion of counsel generally involve situations where opinion of counsel was either ignored or found to be incompetent.” The Read Corp. v. Portec, Inc. 970 F.2d 816, 828 (Fed. Cir. 1992).

Opinion letters should be reviewed to determine whether they evidence an adequate foundation based on a review of all necessary facts or whether they are conclusory on their face . . . . ‘[C]ounsel’s opinion must be thorough enough, as combined with other factors, to instill a belief in the infringer that a court might reasonably hold the patent is invalid, not infringed, or unenforceable.’ Ortho Pharmaceutical Corp. v. Smith 959 F.2d 936, 944, 22 USPQ2d 1119, 1126 (Fed. Cir. 1992). In considering the reasonableness of the accused infringer’s reliance on an opinion of counsel, the opinion letter should be reviewed for its ‘overall tone, its discussion of case law, its analysis of the particular facts and its reference to inequitable conduct.’ Id.at 945, 22 USPQ2d at 1126.

Westvaco Corp. v. International Paper Co. 991 F.2d 735, 743-44 (Fed. Cir. 1993).

The opinion set forth in the opinion of counsel need not be correct to protect the accused from liability for willful infringement. Graco Inc. v. Binks Mfg. Co. 60 F.3d 785, 793 (Fed. Cir. 1995) (infringer reasonably relied on opinion letter that provided a detailed infringement analysis and a well-supported, believable conclusion). “That the district court disagreed with [the attorney] and concluded [defendant] did infringe does not render [the attorney], or his opinion, incompetent. Whether or not an opinion was ‘legally’ correct is not the proper focus.” Id. The Read Corp. v. Portec Inc., 970 F.2d 816, 830 (Fed. Cir. 1992). Rather, the “primary focus” is the accused’s intent and reasonable beliefs. Ortho Pharmaceutical Corp. 959 F.2d at 944.

It is extremely important that the accused provide truthful and complete information to counsel preparing the opinion of counsel. In obtaining an opinion letter, the accused has a duty to provide relevant information and to refrain from knowingly and intentionally misleading his or her attorney.See e.g., Amsted Indus. Inc. v. Buckeye Steel Castings Co., 24 F.3d 178, 182-83 (Fed. Cir. 1994) (willful infringer knew that his attorney, who opined that the patent was invalid based on obviousness, was unaware of all the functions of the patented invention but failed to correct him and failed to communicate objective evidence of nonobviousness); Goodwall Constr. Co. v. Beers Constr. Co. 991 F.2d 751, 758 (Fed. Cir. 1993) (client attempted to conceal information from its patent attorney when seeking an infringement opinion); Minnesota Mining and Mfg. Co. v. Johnson & Johnson Orthopaedics, Inc. 976 F.2d 1559, 1580-81 (Fed. Cir. 1992) (defendant’s in-house counsel’s opinion held unreliable where defendant knew that counsel was relying on false information); c.f. Braun Inc. v. Dynamics Corp of America, 975 F.2d 815, 823 (Fed. Cir. 1992) (defendant did not conceal relevant information from its patent lawyer and properly relied on opinion letter). If the client makes a good faith effort to provide its attorney with the correct and complete facts, the law does not require more. The accused is not required to provide its attorney with information that is not in its possession.

It is important that counsel press the client to disclose all information that is damaging to the client’s position. It is likely that the information will be uncovered by adverse counsel in the course of the litigation. If damaging information is not considered in connection with the opinion of counsel, the opinion may be found to be incompetent and the client will be deprived of an important defense to charges of willful infringement.

3. Reliance on Opinion of Counsel to Avoid Personal Liability

An employee of the accused company may be held individually liable for inducement of infringement if the patentee can prove that the employee specifically intended to encourage the company’s infringement and that he actively and knowingly intended to aid and abet infringement by the company. 5 U.S.C. sec. 271(b); Manville Sales Corp. v. Paramount Systems, Inc. 917 F.2d 544, 553 (Fed. Cir. 1990)³ (“It must be established that the defendant possessed specific intent to encourage another’s infringement and not merely that the defendant had knowledge of the acts alleged to constitute inducement”); Hoover Group, Inc. v. Custom Metalcraft, Inc. 84 F.3d 1408 (Fed. Cir. 1996) (same); Orthokinetics, Inc. v. Safety Travel Chairs 806 F.2d 1565, 1578-1579 (Fed. Cir. 1986) (an officer may be personally liable for inducement if he “actively” aids and abets the infringement).

The courts are divided as to whether an opinion of counsel insulates an employee from personal liability. One court has held that an opinion of counsel does provide such protection. The court stated “For an opinion of counsel to be a defense to personal liability for inducement, the opinion must be both reasoned and competent.” Century Wrecker Corp. v. E.R. Buske Mfg. Co., Inc. 913 F. Supp. 1256, 1274 (N.D. Iowa 1996). On the other hand, at least one court believes that advice of counsel may be relevant to the issue of willfulness for purposes of sec.284 increased damages, but “has no relevance here in determining whether [an officer] induced infringement under sec. 271(b).” Symbol Technologies, Inc. v. Metrologic Instruments, Inc. 771 F. Supp. 1390, 1405 (D.N.J. 1991) (specific intent to infringe not necessary for finding inducement).

Managers are increasingly being joined with their corporations as individual defendants on charges of inducement of infringement. Many patent owners view these charges as strategically important to pressure the accused corporation even where joinder of the individuals is otherwise unnecessary (e.g. where the corporation has sufficient assets to cover any foreseeable judgment). Notwithstanding the division of authority recounted above, the possibility that an opinion of counsel may protect managers from individual liability makes obtaining such an opinion imperative.

4. The Accused’s Right to “Design Around”

It is not patent infringement for a person to “design around” a patent claim. Indeed, that “is the stuff of which competition is made and is supposed to benefit the customer.” State Industries Inc. v. A.O. Smith Corp, 751 F.2d 1226, 1236 (Fed. Cir. 1985). The purpose of a patent is to tell the general public what the claimed invention is so that the general public can avoid infringing it. Indeed, it is entirely proper for a person to attempt to make changes in his processes or products in order to avoid infringing a patent. Dolly, Inc. v. Spaulding & Evenflo Cos. 16 F.2d 394, 400 (Fed. Cir. 1994); Magnesystems Inc. v. Nikken Inc. 34 U.S.P.Q.2d 1112, 1113 n.1 (C.D. Calif. 1994) (“A patent claim defines in words the boundaries of an invention. The claim advises the public what the invention is, so that the public can avoid infringing upon it”), aff’d, 61 F.3d 919 (Fed. Cir. 1995) (unpublished). In addition, successful attempts at designing around may be admissible on the issue of infringement. Hilton Davis Chem Co. v. Warner-Jenkinson Co. 62 F.2d 1512, reversed and remanded 117 S.Ct. 1040 (1997).

A product or process cannot infringe if it is entirely missing an element of the claims of the patent. Dolly, Inc. v. Spaulding & Evenflo Cos. 16 F.2d at 398 (Fed. Cir. 1994). In addition, where the design around substitutes an element which is structurally different from the element claimed, then there is no infringement. Slimfold Mfg. v. Kinkead Ind. 932 F.2d 1453 (Fed. Cir. 1991) (no infringement found where the accused’s styrofoam wedge operated in a substantially different way from the claimed latching means).

Patent counsel has an important role in strategizing with the client to determine whether design alternatives to the accused product run afoul of the claims of the patent. In addition, to avoiding prospective liability, a successful design around, particularly an easily accomplished one, may suggest to the jury that the claimed invention is of little merit and value. However, it is often the case that the patent owner will accuse the design-around of infringement. Once the client and counsel have determined that an alternative design is technically, cost-wise and otherwise feasible, counsel should prepare an opinion of counsel addressing the issues of non-infringement and the patent’s validity if applied to the newly designed product or process. If in the course of preparing the opinion of counsel it becomes evident that the design around does not avoid the claims of the patent, then the client can decide not to pursue that design. On the other hand, if the opinion of counsel confirms patent counsel’s preliminary view that the design around does not infringe the patent, then the client can proceed with the design around and the opinion of counsel may be relied upon when the patentee accuses the design around of infringement.

5. Settlement negotiations

Settlement negotiations prior to litigation are often not fruitful because the patent owner has ulterior motives in bringing suit (e.g. pressuring a competitor and/or learning the competitor’s business strategies) or because the patent owner is not in possession of sufficient information to evaluate its prospects or the monetary value of the accused’s infringement. On the other hand, there may be circumstances where early settlement negotiations may lead to a resolution of the accusations of patent infringement. Such circumstances particularly are likely where the patentee is not a direct competitor of the accused. Mechanisms to facilitate such discussions and to allow the parties to evaluate each others’ confidential technical and financial information include confidentiality agreements limiting access to such information to trial counsel and designated experts.

Where negotiation of a settlement is possible, it is often the case that some sort of license of the patented technology must be negotiated. Typically, the most hotly disputed term will be the royalty amount. In order to evaluate a case to determine an acceptable royalty to be paid, it is often helpful to consider the royalty that is likely to be awarded if the matter was to go to trial. In that context, there are a number of factors which the courts utilize in determining a “reasonable royalty.”

The goal of patent infringement damages under the law is to put the patent owner, in the same financial position it would have been in had there been no infringement. 35 U.S.C. sec. 284; Oiness v. Walgreen Co.774 F. Supp. 1277, 1286 (D. Colo. 1991), remanded 980 F.2d 742 (Fed. Cir. unpub. 1993), cert. denied 113 S. Ct. 742 (1994), aff’d in part, vac’d in part, rev’d in part and remanded 88 F.3d 1025 (Fed. Cir. 1996).

A reasonable royalty is the amount of money that a hypothetical willing patent owner and a willing prospective licensee would have agreed upon at the time of the infringement for a license to make, use, or sell the invention. The determination of a reasonable royalty does not depend upon the actual willingness of the parties to the lawsuit to engage in such negotiations. One must assume that there is both a “willing” licensor and a licensee who negotiate a license for use of the patent, and that neither party is acting under financial distress or other compulsion to enter into the agreement. Radio Steel & Mfg. Co. v. MTD Prods., Inc. 788 F.2d 1554, 1557 (Fed. Cir. 1985); Georgia-Pacific Corp. v. United States Plywood Corp. 318 F. Supp. 1116, 1121 (S.D.N.Y. 1970), modified, 446 F.2d 295, 299 (2d Cir. 1971), cert. denied, 404 U.S. 870 (1971); Unisplay, S.A. v. American Electronic Sign Co., Inc. 69 F.3d 512, 517 n.7 (Fed. Cir. 1995);Hughes Tool Co. v. Dresser Indus., Inc. 816 F.2d 1549, 1558 (Fed. Cir. 1987), cert. denied, 484 U.S. 914 (1987).

The following factors have been considered by the courts in determining a reasonable royalty:

1. Whether there was an established royalty before the date of infringement. An established royalty might be based on what the patentee received from actual licensees for making, using, or selling the product, for example.
2. Royalty rates paid for comparable patented inventions, if any.
3. The nature and scope of the license (for example, whether it is exclusive or non-exclusive, whether it is restricted or non-restricted as to territory or with respect to whom the product may be sold).
4. Whether the patentee had a policy and marketing practice of refusing to grant licenses or granting licenses under special conditions.
5. The commercial relationship between the patentee and the accused, such as whether they are competitors in the same territory in the same line of business.
6. The value of the invention as a source of additional sales of related products.
7. The duration of the patent period remaining.
8. The established profitability of the product made under the patent, its commercial success, and its current popularity.
9. Any advantages of the patented invention over modes or devices previously used.
10. The nature of the invention and any benefits to users of the invention.
11. The extent to which the accused has made use of the invention, and any evidence tending to prove the value of that use.
12. The portion of the profit or selling price normally allowed for use of the invention or similar inventions in comparable businesses.
13. The portion of the profit credited to the patented invention, as distinguished from non-patented elements, the manufacturing process, business risks, significant features or improvements added by the accused.

Georgia-Pacific Corp. v. United States Plywood Corp. 318 F. Supp. 1116, 1120 (S.D. N.Y. 1970), modified and aff’d, 466 F.2d 295 (2d Cir. 1971);Nickson Indus. v. Rol Mfg. Co. 847 F.2d 795, 799 (Fed. Cir. 1988);Smithkline Diagnostics, Inc. v. Helena Laboratories Corp 926 F.2d 1161, 1165 (Fed. Cir. 1991).

Use of the above factors will assist the parties in arriving at a negotiated royalty. The client may have a wealth of information concerning the factors to be considered, particularly information concerning royalties paid for comparable technology. In addition, experts in royalty and damages determination are almost always retained by parties for trial. Such experts can assist the parties in evaluating their settlement positions.

In addition, other important terms of a negotiated settlement which the parties are likely to consider include a period for the accused to “run out” a product which he has agreed to discontinue, change of the design of the accused product to a design that the parties can agree does not infringe the patent in suit, and cross-licensing of the accused’s proprietary technology. The run-out period may be determined based on the prior experience of the accused in selling the product. It is important that, if the parties agree to a design around, its details, including the actual blue prints or technical specifications and a specimen of the design around, be incorporated into the settlement agreement. Finally, the possibility of cross-licensing the accused’s technology gives the accused powerful leverage in negotiating a favorable resolution and mitigates the patentee’s leverage derived from the accusations of infringement.

6. Considerations in Filing Suit for Declaratory Judgment of Non-Infringement or Invalidity

Of course, in addition to the foregoing, the accused must give serious consideration to filing suit for a declaratory judgment of non-infringement or invalidity of the patent which is the subject of the accusations. There is long-standing authority for filing such a suit. 28 U.S.C. Secs. 2201, 2202. It is imperative that counsel to the accused evaluate the demand letter to ascertain if the accusations contained therein rise to the level necessary for the filing of a declaratory judgment action. B.P. Chemicals v. Union Carbide Corp, 4 F.3d 975 (Fed. Cir. 1993); EMC Corp. v. Norand Corp. 89 F.3d 807 (Fed. Cir. 1996), cert. denied 117 S. Ct. 789 (1997). An offer to grant a license is not a sufficient basis for declaratory judgment jurisdiction. The accused must show that patent infringement litigation was threatened and the patentee had the intent to institute such a suit.

One consideration militating against a decision to file suit is that the dispute is escalated and litigation may have been unnecessarily initiated against a patentee who had not otherwise planned to litigate the issue. The filing of suit also may cause the patentee to “dig in” where, in the absence of suit, the patentee may have been more amenable to settlement discussions. For example, the patentee may have accused several parties of infringement and may not have decided yet which one to sue first. (A patentee may not be subject to a laches defense where he sues accused infringers one at a time).

On the other hand, the benefits of filing suit for a declaratory judgment in almost all circumstances outweigh the somewhat speculative benefits of a foregone settlement opportunity. First and foremost, the benefit of filing suit for declaratory relief is that the accused is able to select his home forum for the litigation. Thus, the accused has the benefit of a home town jury, a familiar judiciary, and the cost savings attributable to litigating close to company headquarters. Of course, filing a declaratory judgment action puts pressure on the accused’s counsel to get on top of the litigation quickly and to some extent front loads the expense for the accused. However, the strategic benefit to the accused of being in the forum of his choice would seem to outweigh any such considerations under normal circumstances.

In addition, the accused should review his own patent portfolio in relation to the products and processes used by the adverse party. It may be possible to affirmatively assert such patents against the adversary and seek affirmative relief in addition to a declaration of non-infringement and invalidity of the adverse party’s patents. There is no prerequisite of notice prior to the filing of such affirmative claims.

Conclusion

Important decisions must be made by the accused shortly after he receives notice of accusations of infringement. In most circumstances, the accused infringer should incur the cost of obtaining an opinion of counsel since such an opinion may protect the accused from claims of willful infringement. The opinion of counsel also may protect the accused’s managers from personal liability. Moreover, an early obtained opinion of counsel will guide the accused in the other important decisions he will need to make as the matter progresses.

¹ “The moving party bears the substantial burden of demonstrating specifically how and as to what issues in the action the prejudice exists or is likely to occur.” Personalized Mass Media Corp. v. The Weather Channel, Inc. 899 F. Supp. 239, 243 (E.D. Va. 1995) (citing Lamborn v. Dittmer 873 F.2d 522, 531 (2d Cir. 1989); Summagraphics Corp. v. Sanders Assocs., Inc. 19 U.S.P.Q.2d 1859, 1861 (D. Conn. 1991); Tessier v. Plastic Surgery Specialists, Inc. 731 F. Supp. 724, 729 (E.D. Va. 1990).

² At the time of this opinion, the complaint and counterclaim had been filed and a preliminary injunction motion was pending along with the motion to disqualify.

³ As more fully explained in Manville, “It must be established that the defendant possessed specific intent to encourage another’s infringement and not merely that the defendant had knowledge of the acts alleged to constitute inducement.” Manville, 917 F.2d at 553.

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