Knorr-Bremse Systeme v. Dana Corp.

Knorr-Bremse Systeme (Knorr) (plaintiff) owned a patent for air-disk brakes used in large trucks. A Swedish company named Haldex Brake Products Corporation (Haldex) (defendant) manufactured Mark II brakes. Dana Corporation (defendant) imported the Mark II brakes and installed them into a number of trucks. Knorr notified Dana both orally and in writing of ongoing infringement disputes with Haldex involving the Mark II brakes. Knorr sued Dana and Haldex for infringement. Haldex moved for summary judgment, arguing that the newly modified Mark III brake model was non-infringing. Knorr moved for summary judgment of infringement. The district court granted Knorr’s motion in connection with the Mark II brake, but set the Mark III infringement issue for trial. Despite the judgment, Dana continued to operate trucks incorporating the Mark II brakes. At trial, the issue of willful infringement was raised. Haldex stated that it had consulted counsel regarding Knorr’s patent. Haldex refused to disclose the substance of the legal opinion, citing attorney-client privilege. Dana did not consult counsel, but instead relied upon Haldex to do so. The district court inferred that the withheld opinion was likely unfavorable to Dana and Haldex, and that Dana’s continued used of the Mark II brakes in the face of the unfavorable opinion constituted willful infringement. On that basis, the court awarded Knorr attorney fees under 35 U.S.C. § 285. Dana and Haldex appealed.