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Best Practices in Proving Specific Intent and Malice. What Can Civil and Criminal Litigators Learn from One Another ? ABA Section of Litigation Annual Conference. What is Specific Intent?. Basic versus Specific Intent Model Penal Code Spectrum: Purposely, Knowingly, Recklessly, Negligently - PowerPoint PPT Presentation
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CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
Best Practices in Proving Specific Intent and Malice. What Can Civil and Criminal Litigators Learn from One Another?
ABA Section of Litigation Annual Conference
CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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What is Specific Intent?
• Basic versus Specific Intent• Model Penal Code Spectrum: Purposely,
Knowingly, Recklessly, Negligently• Arizona Model Jury Instructions
CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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EXAMPLES OF CRIMES AND CIVIL OFFENSES REQUIRING PROOF OF SPECIFIC INTENT
CrimesSolicitation Intent to have the person solicited commit the
crimeConspiracy Intent to have crime completedAttempt Intent to complete crimeAssault Intent to commit a batteryLarceny and Robbery Intent to permanently deprive another of his/her
interest in property Burglary Intent to a commit a felony in the dwellingForgery Intent to defraudTax Evasion Intent to violate the tax laws
CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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EXAMPLES OF CRIMES AND CIVIL OFFENSES REQUIRING PROOF OF SPECIFIC INTENT
TortsConversion Intent to exercise dominion and control over
another’s propertyTrespass to Land Intentional interference with land of anotherInducing Patent or Copyright Infringement
Intent to cause another to infringe
Fraud on the Patent Office/Inequitable Conduct
Intent to deceive the Patent and Trademark Office
CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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Types of Intent Evidence
• Direct Evidence• Circumstantial Evidence
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Circumstantial Character Evidence
• Evidence of crimes, wrongs, and other acts• Generally, circumstantial use of character evidence is not admissible
to infer that conduct on a particular occasion was in conformity with the past conduct.
• But Federal Rule of Evidence 404(b)(2) provides an exception: “This evidence [crimes, wrongs, or other acts] may be admissible for another purpose [other than to prove on a particular occasion the person acted in accordance with the character], such as proving motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident.” (emphasis added).
• This provision applies in both criminal and civil cases. • But remember Rule 403 balancing
CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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Individual versus Corporate Defendants
• A company is not a person, so it can only act vicariously through the people it employs as its agents
• Respondeat superior - In general, a corporation is liable for the actions of its agents whenever such agents act within the scope of their employment and at least in part to benefit the corporation.
• Individual is liable for her/his own tortious conduct even when acting for the benefit of another.
CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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Issues Related to Intent in a Federal Fraud Case
Jim Burke, Quarles & Brady LLP, Phoenix, Arizona
CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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Belief That Investors Will Eventually Be Repaid Is Not A Defense
Although an honest, good faith belief in the truth of a misrepresentation may negate intent to defraud, a good faith belief that an investor will eventually be repaid and will sustain no loss is no defense at all.‑ ‑ AUTHORITY:United States v. Molinaro, 11 F.3d 853, 863 (9th Cir. 1992) (holding that the following instruction “accurately stated the law”: “You may determine whether a defendant had an honest, good faith belief in the truth of the specific misrepresentations alleged in the indictment in determining whether or not the defendant acted with intent to defraud. However, a defendant’s belief that the victim of the fraud will be paid in the future or will sustain no economic loss is no defense to the crimes charged in the indictment.”).United States v. Benny, 786 F.2d 1410, 1414 (9th Cir. 1986) (“While an honest, good faith belief in the truth of the misrepresentations may negate intent to defraud, a good faith belief that the victim will be repaid and will sustain no loss is no defense at all‑ ‑ .”) (emphasis added)
CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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1. Two or more persons, in some way or manner, agreed to try to accomplish a common and unlawful plan to commit a fraud crime listed in Title 18 Chapter 63, as charged in the indictment 2. The Defendant knew the unlawful purpose of the plan and willfully joined in it Pattern Crim. Jury Instr. 11th Cir. C.1.54 (2010) The statute does not require an overt act. The Supreme Court has held that an overt act is not required for other similar statutes with similar wording. See United States v. Shabani, 513 U.S. 10, 11 (1994) (drug conspiracy); Whitfield v. United States, 543 U.S. 209, 214 (2005) (money laundering).
CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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Proving Intent in ProbateArizona Revised Statute (A.R.S.) § 14-1102(B)(2) provides that the underlying purposes and policies of the Arizona Probate Code are to discover and make effective the intent of a decedent in the distribution of his property. In the Arizona Trust Code, A.R.S. § 14-10415 provides that the court may reform the terms of a trust, even if unambiguous, to conform the terms to the settlor’s intention if it is proved by clear and convincing evidence that both the settlor’s intent and the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement.
CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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How to Prove Intent in Probate Context
Intent can be proved by the language of the will/trust and subsequent codicils/amendments.
• Intent can be proved by the testimony of witnesses:• The settlor of a trust • The attorney or financial planner who drafted the
document • The beneficiaries under the will or trust• The people who knew the decedent/settlor best and to
whom he may have expressed his/her intent, such as spouse, children, siblings, parents, and other family and friends.
CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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How to Prove Intent in Probate Context (Cont.)
Intent can be gleaned from reviewing prior estate planning documents.
Intent can be proved by reference to non-testamentary documents, such as life insurance policies, property deeds, joint tenancy, and payable on death financial accounts. Intent can be negated by the testator’s/settlor’s lack of capacity at the time the estate planning document was executed or if undue influence was exerted upon the testator/settlor at the time the document was executed.
CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
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PresumptionsA.R.S. § 14-2712(B) provides that it is a rebuttable presumption that a person who executes a governing instrument is presumed to have capacity to execute the governing instrument and to have done so free from undue influence and duress. A.R.S. § 14-2712(E) and (F) provide that a governing instrument is presumed to be the product of undue influence if either: A person who had a confidential relationship to the creator of the governing instrument was active in procuring its creation and execution and is a principal beneficiary of the governing instrument
The preparer of the governing instrument or the preparer’s spouse or parents or the issue of the preparer’s spouse or parents is a principal beneficiary of the governing instrument. The beneficiary of the governing instrument may overcome a presumption of undue influence by a preponderance of the evidence.
CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.
Fraud, Duress, or Undue InfluenceA.R.S. § 14-10406 provides that a trust is void, in whole or in part, to the extent its creation was induced by fraud, duress, or undue influence.
To prove lack of capacity and susceptibility to undue influence, medical records are useful as is the testimony of a medical provider who was the testator’s/settlor’s treating physician when the documents were executed, or a neuropsychological expert who can opine on these issues based upon a review of the medical records. The testimony of family and friends, who knew the testator/settlor well, may also be helpful.
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© 2013 Cooley LLP, Five Palo Alto Square, 3000 El Camino Real, Palo Alto, CA 94306 The content of this packet is an introduction to Cooley LLP’s capabilities and is not intended, by itself, to provide legal advice or create an attorney-client relationship. Prior results do not guarantee future outcome.
Post-Therasense Standard of Intent in Inequitable
Conduct
Heidi Keefe, Cooley LLPABA Litigation Panel
Scottsdale, AZ
www.cooley.com
DUTY OF CANDOR IN PATENT PROSECUTION
37 C.F.R. Section 1.56 (“Rule 56”)• (a) . . . Each individual associated with the filing and
prosecution of a patent application has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability as defined in this section. The duty to disclose information exists with respect to each pending claim until the claim is cancelled or withdrawn from consideration, or the application becomes abandoned. . . .
Accused patent infringers scour records to look for any failures to comply with Rule 56. When those failures rise to intentional and material misconduct, a court has the equitable power to hold the patent (and its patent family) unenforceable due to inequitable conduct in the prosecution of the application.
www.cooley.com
Therasense, Inc. v. Becton, Dickinson & Co.,649 F.3d 1276 (Fed. Cir. 2011) (en banc)
Therasense redefined the standard for Inequitable Conduct: Inequitable conduct now requires a party to separately prove specific
intent and but-for materiality. Materiality: New “but‐for" test: PTO would not have allowed a claim
had it been aware of the undisclosed prior art. Intent to deceive:
Intent requires knowledge and deliberate action. Intent and materiality are separate requirements. No sliding scale. Intent
may not be inferred solely from materiality. Specific intent to deceive must be "the single most reasonable inference
able to be drawn from the evidence.” – Thus, when multiple reasonable inferences may be drawn, intent to deceive cannot be found.
Gross negligence or negligence under a “should have known” standard does not satisfy the intent requirement.
www.cooley.com
Post-Therasense Federal Circuit Reversal of Inequitable Conduct
1st Media, LLC v. Electronic Arts, Inc. (Fed. Cir. 2012) Pre‐Therasense, D. Ct. found inequitable conduct:
Inventor and patent attorney: withheld material references. knew references were material. failed to provide a credible good faith explanation for nondisclosure of the
references. Therefore, D.Ct. found inference of intent to deceive was appropriate.
Fed. Cir. reversed: lack of evidence of deliberate decision to withhold. D.Ct. did not address whether there was a deliberate decision to
withhold. Knowledge of reference and its materiality alone are insufficient after
Therasense to show an intent to deceive. “[I]t is not enough to argue carelessness, lack of attention, poor
docketing or cross‐referencing, or anything else that might be considered negligent or even grossly negligent.”
www.cooley.com
Post-Therasense Federal Circuit Vacate Finding of Intent for Inequitable Conduct
Am. Calcar, Inc. v. Am. Honda Motor Co., 651 F.3d 1318 (Fed. Cir. 2011)
Inventors withheld knowledge and information regarding prior art Honda system installed in the Acura 96RL.
Pre-Therasense, the D. Ct. found inequitable conduct . District Court’s circumstantial evidence of deceptive intent:
Inventors had operated the 96RL navigation system and developed car manuals in prior business.
Patent specifications included description and figure from 96RL manual. Applied sliding scale for intent.
Federal Circuit vacated finding of intent: District Court used sliding scale. No holding that any of the inventors knew withheld information was in
fact material and made a deliberate decision to withhold it.
www.cooley.com
Post-Therasense Finding of Intent: Intellect Wireless v. HTC (Fed. Cir. 2013)
A rare instance of post-Therasense finding of inequitable conduct. Facts:
During the prosecution of the patent family, the inventor submitted a false declaration asserting that he had reduced to practice the claimed invention prior to the date of a prior art reference.
During prosecution of the patent family, Mr. Henderson submitted a misleading press release to the PTO stating that the Smithsonian acquired “prototypes” of the invention when the “prototype” was an imitation smartphone made of wood and plastic that was not capable of performing the claimed functions.
Intent: The Fed. Cir. affirmed finding of specific intent to deceive. In addition to the false statements made during prosecution, the inventor also made false statements about actual reduction to practice during the prosecution of other patents in the family.
The court emphasized a “pattern” of false and misleading statements combined with the submission of a false declaration containing fabricated examples of actual reduction to practice was sufficient to establish intent to deceive.
www.cooley.com
Proving Intent of Inequitable Conduct
Proving the requisite intent for inequitable conduct is much harder in a post-Therasense world.
It appears easier to prove an intent to deceive when an individual declares an incorrect statement to be true (i.e., false affidavit/declaration) to the PTO.
Inequitable conduct as it relates to the non‐submission of prior art is difficult to prove and may only be available in the most egregious of scenarios.
www.cooley.com
Decline in Inequitable Conduct Pleadings Post Therasense
As a result, inequitable conduct pleadings have declined:
Crouch, Dennis and Jason Rantanen. “Patent Law Analysis by Professors Dennis Crouch and Jason Rantanen.” 20 September 2013. http://www.patentlyo.com/patent/2013/09/trends-in-inequitable-conduct.html
April 11, 2014Presented by Lisa Kobialka
Areas Involving Intent
Willful Infringement A finding of willful infringement is a prerequisite to the
award of enhanced damages. Standard changed in 2007 Today it is a two prong test
Inducement Specific intent necessary – accused inducer must have knowledge
that the induced acts constitute patent infringement
Willful Infringement – Before Seagate
Due Care Standard Underwater Devices, Inc. v. Morrison-Knudsen Co., 717 F.2d 1380 (Fed. Cir. 1983)
If a potential infringer had actual notice of another’s patent rights, they had the “affirmative duty to exercise due care” to determine whether or not they were infringing
Measured by totality of circumstancesTotality of circumstances test was meant to indicate the state of mind of the accused
Willful Infringement – Seagate Standard
Two Prong Inquiry In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007)
The duty of care in Underwater Devices set a lower threshold for willful infringement more akin to negligence
Abandon the duty of care and established a two prong inquiry
Willful Infringement – Seagate Standard
Objective prong Patentee must show infringer acted despite a high likelihood
that actions infringed a valid patent State of mind is not relevant
Subjective prong Either knew or so obvious that it should have been known
“We leave it to future cases to further develop the application of this standard.” In re Seagate, 497 F.3d at 1371 (August 20, 2007).
Evidence of Willful Infringementat Trial
Software and hardware patent caseSpecific references to the patent holder’s company in defendant’s source code Example: “[Company] Buster” or “[Company Killer”]
Testing patent holder’s product which embodied the claimed inventionShowing the asserted patents were used as a roadmap to develop accused products
Subsequent Decisions Articulate Standard
Judge decides objective prong Issue is whether conduct was objectively reckless, such
as reliance on particular defense, opinion of counsel
Subjective prong Acted within standards of commerce for industry Intentionally copied product covered by patent Reasonable basis for non infringement or defense to
infringement Good faith effort to avoid infringement An attempt to cover-up infringement Opinion of counsel
Not Sufficient Evidence For Objective Prong
Inflammatory comments in documents or testimony “FU SON” Name calling in deposition
Dislike of competitor was not enough to suggest objectively reckless
Inducing Infringement
Must have knowledge that the induced acts constitute patent infringement Knowledge that actions induce others to infringe Knowledge of patent
Can be shown with willful blindnessGlobal-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011) Subjective belief that there is a high probability that patent exists
and the defendant’s acts infringe patent Took deliberate actions to avoid learning about those facts
Standard is stricter than deliberate indifference
In the Pharmaceutical Context
File New Drug Application (NDA) with FDAUndergo a rigorous FDA approval processFDA approves the drug which sets forth the parameters for how the drug is to marketed, prescribed and used
Inducing Infringement Example
Patent claims “a method to treat a patient for asthma with a particular compound…” Doctor or nurse completes the method If there is knowledge of the asserted patent, one
can use the FDA’s requirements to prove intent to induce doctor or nurse
QUESTIONS?