ClearstoneIP Successfully Completes SOC 2 Type II Audit

We are thrilled to announce that ClearstoneIP Inc. has successfully completed a System and Organization Controls (SOC) 2 Type II audit, performed by Sensiba San Filippo LLP. This is a major accomplishment by our team and demonstrates our proactive and complete dedication to cybersecurity and the protection of our customers’ data.

Developed by the American Institute of Certified Public Accountants (AICPA), the SOC 2 information security standard is an audit report on the examination of controls relevant to the trust services criteria categories covering security, availability, processing integrity, confidentiality and privacy. A SOC 2 Type II report describes a service organization’s systems and whether the design of specified controls meets the relevant trust services categories, and assesses the effectiveness of those controls over a specified period of time. Our SOC 2 Type II report did not have any noted exceptions and therefore was issued with a “clean” audit opinion from SSF.

For more information, contact us at

The Federal Circuit’s Give-and-Take in Cisco’s Willful Infringement

The first time at the Court of Appeals for Federal Circuit, Cisco was able to slice its damages penalty in half by eliminating the extra $23.6 million awarded by the trial court for enhanced damages due to willful infringement. On its second visit to the court of appeals, it was not so lucky.

In SRI International v. Cisco Systems (Fed. Cir. Sept. 28, 2021), once again the main and critical question that dominated the willfulness inquiry was whether Cisco had a reasonable belief that it did not infringe the patents in suit or that the patents were invalid. In its defense, Cisco presented an invalidity argument based on a prior art reference that was twice considered and twice rejected by the Patent Office. It also presented a non-infringement argument that was inconsistent with the court’s claim construction as well as one that was directly contradicted by its own evidence. The appeals court found these arguments unreasonable, held that Cisco’s infringement was willful as a result, and reinstated the original willfulness finding as well as the original damages enhancement.

What changed since the first appeal?

The relevant facts were essentially the same, but the Federal Circuit acknowledged that the standard it applied in the first appeal was erroneous and, importantly (though relegated to a footnote), the original jury did in fact consider behavior during the correct time period as opposed to what the court understood to be the case at the time.

Indeed, trial courts have been confused since the issuance of the first SRI v. Cisco decision as to the proper standard to apply to the threshold question of willfulness before looking at enhanced damages. Was it the higher “wanton, malicious, and bad-faith” behavior that was stated in the first SRI case, or was it the “deliberate or intentional,” “knew or should have known of the risk” standard that was set forth in Eko Brands v. Adrian Rivera Maynez Enters. and Arctic Cat v. Bombardier and others? See, for example, the trial court decisions Bos. Scientific Corp. v. Nevro Corp., 415 F.Supp.3d 482 (D. Del. 2019) and VLSI Tech. v. Intel Corp. (D. Del. 2020), both of which include the explanation: “All three of these [Federal Circuit] cases [following the Arctic Cat standard] were decided before SRI, and, in my view, cannot be reconciled with Halo. I will therefore follow SRI.” See also Schwendimann v. Stahls’, Inc., 510 F.Supp.3d 503, 512-513 (E.D. Mich. 2021) (“a debate has emerged at the district court level concerning whether a patentee, in order for its complaint to survive a motion to dismiss willful infringement claims, must allege ‘egregious infringement behavior.'”).

So the Federal Circuit in this second SRI case made clear that, as far as the initial question of willfulness, the standard is as set forth in Eko Brands and Arctic Cat, which is “no more than deliberate or intentional infringement,” (Eko Brands, at 1378) and which can be established by showing that the risk of infringement “was either known or so obvious that it should have been known” (Arctic Cat, at 1371).


  • This case clarifies that there is no heightened standard for willfulness. Only a showing of deliberate or intentional infringement is required. Eko Brands v. ARM.
  • Deliberateness or intentionality can be met when the defendant knew or should have known of the risk. Arctic Cat v. Bombardier.
  • When considering the defendant’s state of mind, the factor that typically carries the most weight is the second Read factor: whether the infringer, when it knew of the other’s patent protection, investigated the scope of the patent and formed a good-faith belief that the patent was invalid or not infringed.
  • For manufacturers and product companies, this case reinforces the need to establish noninfringement and invalidity positions as early as possible.

Review Claims and Capture Analysis in Multiple Languages

The latest Clearstone FTO upgrade brings powerful functionality for reviewing patent claims and capturing analysis in multiple languages. With this major architecture overhaul, users can now select claim sets from among several languages that may be available and perform deep analysis, including claim text highlighting and commenting, in any one or more languages.

These enhancements will benefit international users and teams in several ways:

  • Configure your preferred default language in which to view patent claims.
  • Review claims in your native language wherever it is available.
  • Cross-border teams can collaborate on patent reviews more effectively by reviewing claims in the language in which they are most comfortable.
  • Store work product in connection with each claim language set to preserve the integrity of the analysis.
  • Designate one claim language set as the “active” set for tracking, analytics, and accountability purposes.
  • And more.

Give these new claim language features a try by registering for a free Clearstone FTO account here, or contact for additional information.

Willfulness Case at the Federal Circuit: Eko Brands v. ARM — An Erroneous Jury Instruction Survives Challenge and Defeats Willfulness Claim

In a recent Federal Circuit case, Eko Brands, LLC v. Adrian Rivera Maynez Enters., the court narrowly upheld a jury instruction that may have been rejected had the defendant raised its objections differently at trial. The case generally stands to reinforce the division of duties between the jury and the court (namely that the jury decides intention/deliberateness while the court decides degree of punishment based on egregiousness), but the opinion’s dicta underscores an important practice point that should not be disregarded.

At trial, the plaintiff Eko challenged a jury instruction that read:

Eko argues that ARM willfully infringed the Eko 855 patent. For purposes of this case only, you are to assume direct infringement of amended claim 8 of the Eko 855 patent. Therefore, you must go on and address the additional issue of whether or not this infringement was willful. Willfulness requires you to determine whether Eko proved that it is more likely than not that the infringement was especially worthy of punishment. You may not determine that the infringement was willful just because ARM knew of the Eko 855 patent and infringed it. Instead, willful infringement is reserved for only the most egregious behavior, such as where the infringement is malicious, deliberate, consciously wrongful, or done in bad faith.

Eko objected to the highlighted language on the basis that it improperly referred to the higher standard that applies to the court, not the jury, in determining an amount of enhanced damages after a jury finding of willfulness. The trial court partly agreed, but only removed the phrase “only the most” (indicated by blue highlighting in the above quote) from the instruction. Eko appealed the ruling based on its preserved objection.

The Federal Circuit also agreed with Eko to some extent: “It is at this second stage at which the considerations of egregious behavior and punishment are relevant. Questions of whether an accused patent infringer’s conduct was “egregious behavior” or “worthy of punishment” are therefore not appropriate for jury consideration…. the inclusion of the phrases “especially worthy of punishment” and “reserved for egregious behavior” in Jury Instruction 40 was erroneous….”

But then came a twist. Even though the objected-to language in isolation was erroneous, the court nevertheless looked to the instruction as a whole to determine whether it provided “reasonable clarity as to the correct test for willful infringement.” The court noted that the same sentence suggests that “deliberate” behavior can qualify as “egregious,” thus providing sufficient clarity to the jury and holding that the instruction was not legally erroneous … “given the limited nature of Eko’s objection.

And there’s the rub. The court zigged and zagged from finding that the jury instruction contained erroneous language to nevertheless upholding it. The reason was because of the limited nature of Eko’s objection. In order to sustain an objection to an instruction based on legal error, the court noted, the party must establish that the proposed instruction would have remedied the error. The court said that it was “significant” that deletion of the only two phrases to which Eko objected would not have cured the problem that Eko identified since the instruction would still include the terms “malicious,” “consciously wrongful,” and “bad faith” conduct. Since the alleged error was that the instruction improperly went beyond mere intentionality and deliberateness to notions of egregiousness and bad faith, the fact that these terms would still have been present if Eko’s objections were upheld means that the error would not have been remedied.

It stands to reason, then, that if Eko had objected to each of the terms that went beyond mere intentionality and deliberateness, it would have presented a stronger case for rejecting the instruction. It follows that it would have been more likely that the jury would have found willfulness.

Clearstone FTO’s Enhanced Sharing Capabilities Make Collaboration Seamless and Smart

We’re excited to announce that Clearstone FTO has been recently enhanced with powerful new features to greatly improve collaboration between patent counsel and R&D. These changes are already having a tremendous impact on our users’ ability to organize and share carefully curated information with numerous stakeholders in the patent clearance process, and have been referred to as “life-saving.”

The Clearstone FTO platform has always provided an efficient way for patent counsel to solicit and capture input from subject matter experts by using status indicators, comments, and review sharing functionality. Now, that capability goes further by utilizing the status indicators as a basis to define the scope of review by collaborators. Share recipients (“sharees”) now only see the patent documents for which their input is desired, and no others.

There are two new access-control profiles available within Clearstone FTO’s sharing functionality: Technical Review and Counsel Review.

Enhanced user access levels.

With Technical Review, users can limit access within a particular patent review so that the sharee only sees patents that have at least one claim that is marked with status “Need Technical Info.” Any patent that does not have this status indicator among its claims will not be visible to the sharee. This access profile has been extremely useful for streamlined collaboration between attorneys and engineers, for example, so that engineers are not exposed to any more information than they need to see.

With Counsel Review, users can limit access within a particular patent review so that the sharee only sees patents that have at least one claim that is marked with status “Counsel Review.” Any patent that does not have this status indicator among its claims will not be visible to the sharee. This access profile has been helpful to identify and limit the patents that are sent to outside counsel for review (or from outside counsel to in-house counsel), for example, or when non-attorneys perform some part of the clearance process and wish to limit the scope of review by counsel.

These enhanced access profiles are available to all users with Professional or Team/Enterprise accounts and may be used with any collaborator, including sharees with Standard (free) accounts.

For more information, reach out to us at

ClearstoneIP Selected by LexisNexis for 2019 Accelerator Cohort

ClearstoneIP is proud to announce that it has been selected from a record number of applicants to participate in this year’s LexisNexis Legal Tech Accelerator.

“The Legal Tech Accelerator is an extension of the company’s long-standing support of the legal startup community worldwide and helps power legal market innovation, whether inside or outside its business. The program leverages the industry-leading market expertise and deep knowledge of LexisNexis’ and Lex Machina™ in the legal, technology and startup domains. Participants receive hands-on mentoring and guidance throughout the program, which is based in the Menlo Park, CA offices of Lex Machina and at the Raleigh Technology Center for LexisNexis on the Centennial Campus of North Carolina State University.” (press release)

With a growing user community that includes startups and Fortune 500 companies, ClearstoneIP is pioneering the modern industry standard for patent clearance management. The LexisNexis Accelerator is a significant opportunity to gain insight, experience, and best practices from some of the legal tech industry’s most innovative and accomplished thinkers.

ClearstoneIP is excited to work with LexisNexis as it takes the next step in its growth and continues to develop the first commercial platform dedicated to the patent clearance and freedom-to-operate process.

How An Early Patent Investigation Helped CalAmp Avoid $6 Million in Enhanced Damages

A recent Federal Circuit case, Omega Patents v. CalAmp, underscores the importance of conducting early patent investigations and how they can help avoid enhanced damages due to willful patent infringement.

CalAmp entered the appeal owing $9 million in compensatory and enhanced damages for willful patent infringement after a jury trial ($15 million total after attorney’s and additional fees). The Federal Circuit vacated the entire willfulness judgment and its associated enhanced damages and remanded for a new trial in part because of technical issues relating to the jury verdict.

But before sending the case back to trial, the Federal Circuit made a point to note the importance of CalAmp’s early pre-suit patent investigation efforts and the associated evidentiary errors committed by the district court. When the district court properly considers the evidence, CalAmp will stand a much better chance of escaping the $6 million in enhanced damages.

The Federal Circuit found that the district court erred in two ways when it considered the willfulness issue:

  1. The court improperly excluded testimony by a CalAmp senior director, Gallin Chen, relating to CalAmp’s state of mind prior to the alleged infringing acts. Despite being allowed to testify that he “was the ‘main person’ tasked with investigating the patent landscape,” “discussed his findings with his superior . . . who was part of CalAmp’s executive team,” conducted searches to “see the lay of the land,” Chen was not permitted to state his conclusions as to whether the asserted patent claims were infringed or invalid. The appeals court rejected the trial court’s application of expert witness (FRCP 26) and hearsay rules and held that “Chen’s testimony on this issue was clearly relevant.”
  2. The district court also erred in excluding testimony by CalAmp’s outside counsel, David Bailey, as to the analysis he provided and conveyed to CalAmp executives regarding noninfringement and invalidity of the asserted patents. The Federal Circuit said that Bailey should have been allowed to present a reasonable explanation as to how he arrived at his conclusions in order to demonstrate CalAmp’s mental state as to these issues. The appeals court drew a noteworthy line, however, with respect to Bailey’s post-suit written opinions – opinions performed after the suit was filed were properly excluded since they were not contemporaneous with the infringing activity.


  • Patent analysis by non-attorneys, including conclusions of non-infringement and invalidity, is probative and relevant to an accused infringer’s state of mind at the time of the alleged activity. Chen was not an attorney but had responsibility for freedom to operate analysis. The Federal Circuit held that his conclusions, which indicated a subjective state of mind on the part of CalAmp, were relevant to willfulness under Halo.
  • Testimony regarding prior verbal opinions of non-infringement or invalidity can be relevant and admissible, but it is usually better to document these positions. Although the Federal Circuit rejected a hearsay objection that the district court sustained to exclude testimony about conversations, documentary evidence of such opinions would have avoided the issue altogether and is almost always more credible.
  • The exclusion of Bailey’s post-suit written opinions as to non-infringement and invalidity reinforces the criticality of performing and documenting patent investigations as early as possible in a product’s development and launch cycle. Opinions and patent analysis conducted at the beginning of alleged activity are admissible to show good faith non-infringement and invalidity positions, while after-the-fact opinions usually are not relevant.

Federal Circuit Vacates Enhanced Damages Award Against Cisco Because No Willfulness Before Knowledge of Patent

The Federal Circuit issued an interesting decision involving willful infringement last week, in particular relating to evidence needed to support a period of time during which the alleged willful activity took place. In SRI International, Inc. v. Cisco Systems, Inc., the appeals court found that SRI had not presented sufficient evidence to support a willfulness finding for activity that took place before Cisco had become aware of the patent-in-suit. The court vacated the district court’s award of enhanced damages (which doubled the $23 million damages verdict). The Federal Circuit remanded for further consideration as to whether substantial evidence supported willfulness after knowledge had been acquired.

The district court relied on two primary pieces of evidence asserted by SRI in finding Cisco’s infringement to be willful: (1) “key” Cisco employees did not read the patents-in-suit until their depositions; and (2) Cisco designed the products and services in an infringing manner and that Cisco instructed its customers to use the products and services in an infringing manner.

The fact that “key” Cisco employees did not read the patents-in-suit did not persuade the Federal Circuit that the conduct was willful because the identified individuals were engineers without legal training. The court suggested that its conclusion would have been different if Cisco’s lawyers had behaved in the same way: “[g]iven Cisco’s size and resources, it was unremarkable that the engineers—as opposed to Cisco’s in-house or outside counsel—did not analyze the patents-in-suit themselves.”

As to the second of SRI’s willfulness arguments, that Cisco designed products in an infringing manner, the appeals court noted that this point simply amounts to proof that the products infringed. That is, there is nothing further to show that Cisco had knowledge of the patents prior to 2012 and otherwise acted egregiously.

However, it was undisputed that Cisco was aware of the patents-in-suit as of May 2012 (when SRI sent a notice letter to Cisco) and that Cisco could still face enhanced damages based on its behavior after that date upon remand. But two impediments may make this determination on remand rather difficult: (1) as the Federal Circuit noted, JMOL proceedings are not the ideal mechanism to evaluate when, if ever, willful infringement began; and (2) the jury trial took place prior to the Supreme Court’s Halo decision, which critically changed the willfulness standard. As a result, it appears unlikely that the factual record in the case will sufficiently support a finding of willful infringement under current law, without further proceedings.

Deloitte Survey Highlights Value of Legal Tech for In-house Legal Departments

Deloitte recently published a survey of 300 in-house legal department executives in nine different countries about their transformations in making better use of advances in technology to maximize efficiency, reduce cost and free up lawyers’ time to work more closely with the organization as a trusted business partner.

Risk management functions lead the way in readiness and adoption, which aligns well with our mission at ClearstoneIP to bring efficiencies and insight in patent risk management (i.e., freedom-to-operate and patent clearance).

The entire survey is worth a read, but here are a few interesting snippets:

  • “Legal’s core missions of risk management and compliance involve a number of time consuming, repetitive tasks that leave little time to focus on innovation, strategy and value creation. These can often be alleviated through legal technology solutions that leverage process automation, artificial intelligence and advanced analytics.”
  • “Between 50-68% of respondents, depending on the sector, say automation and process design could help reduce costs significantly and create efficiencies.”
  • “As a whole, legal will become strategic, replacing rigid silos with more fluid structures so that in-house lawyers can transition to “business partnering,” which allows Legal to participate in the achievement of the organization’s objectives.”

Key Takeaways From AIPLA Panel on Halo

Last week at the AIPLA Annual Meeting I had the pleasure of participating in a panel discussion on the topic of Defending Against Willful Infringement Post-Halo. Moderated by Jesse Adland, in-house counsel at AMD, and joined by Natalie Morgan of Wilson Sonsini, Sarah Guske of Baker Botts and the Honorable Judge Kewalramani of the Central District of California, each of the panel members presented a different aspect of life after Halo v. Pulse.

Natalie started us off with an excellent historical summary of the willful infringement doctrine. I followed with a look at pre-suit considerations to best position ourselves to defend against willfulness. Sarah then discussed various things to keep in mind and plan for during litigation, citing various data-based findings. Judge Kewalramani concluded with a unique from-the-bench perspective of pleadings trends and how recent plaintiffs have survived or failed on motions to dismiss.

Here are some of the most important takeaways I gleaned from the discussion:

Doctrinal Trends ― The Uncertain Scope of Waiver

From Natalie’s historical summary it was evident that one of the most uncertain areas in the current doctrine is the scope and treatment of waiver of the attorney-client privilege. For example, did Halo have any impact on Seagate’s exclusion of trial counsel from waiver? Will there be a mechanism to allow defendants to waive privilege for purposes of defending against willful infringement while maintaining privilege for the underlying infringement case?

The waiver issue bears heavily on both pre- and post-litigation considerations as attorneys try to understand the circumstances under which privilege will be protected. For now, we know that trial bifurcation is available at the courts’ discretion to resolve the Quantum dilemma, but it remains to be seen whether it is something that counsel can rely upon.

Pre-Suit Considerations ― Create a Record of Diligence As Early As Possible

In my presentation on pre-suit considerations, I emphasized the important underlying theme of creating a record of diligence as early as possible. Timing matters. Whether the infringer, when they knew of the other’s patent, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed is one of the most important factors in determining willful infringement.

The best way to demonstrate compliance with this factor is to make sure that known patents are reasonably investigated as soon as possible. That includes whether the patents become known through routine clearance efforts or upon notice from the patentholder. A reasonable investigation does not require a formal counsel opinion or even an attorney in some situations, as some post-Halo cases have declined to enhance damages when the investigation was performed by a competently trained engineer. It is important to show that a designated decision-maker has reviewed the patent and its claims in relation to the accused product and has arrived at non-infringement or invalidity positions, or both.

Litigation Strategy ― Bifurcation is Best

Sarah followed up on the concerns that Natalie raised about privilege waiver, bifurcation, and general trial strategy. She highlighted the significant impact that willful infringement has when it is heard in the same trial as the underlying infringement case.

Sarah’s data showed that, in bifurcated trials, juries found willful infringement only 33% of the time, while willfulness in trials that were not bifurcated jumped up to an 81% occurrence rate. This data underscores the undue impact that willfulness-related issues (which involve a lot of derogatory characterizations of behavior and motive) can have on pure infringement issues (which are predominantly technical).

Pleadings ― Provide Facts That Support More Than Mere Knowledge

Judge Kewalramani concluded the panel presentations by providing unique insight into some of the issues that district courts are wrestling with in Halo’s aftermath. He touched on pleading requirements for willful infringement and the unclear importance of addressing the Read factors when assessing enhanced damages, among others.

A key observation that the Judge noted, and which has been a frequent subject of motions to dismiss, is that complaints are more likely to pass muster when they allege facts beyond mere knowledge of the asserted patent. To survive dismissals, complaints should provide a factual basis to suggest that the defendant ignored or otherwise failed to take reasonable action despite repeated attempts to engage by the patentholder.


If you’d like a copy of my presentation, please contact us.