Halo Electronics, Inc., v. Pulse Electronics, Inc., No. 2013-1472, -1656, 2015 U.S. App. LEXIS 4696 (Fed. Cir. Mar. 23, 2015) (Taranto, J.). Click Here for a copy of the opinion.
Halo moved for reconsideration or en banc rehearing of an earlier panel decision of the Court. The panel held inter alia that Pulse had not willfully infringed Halo's patents. The panel decision was discussed in Issue 32 of the Troutman Sanders Federal Circuit Review.
The Federal Circuit denied reconsideration and rehearing in a per curium order, issued without an opinion. Concurring and dissenting opinions were filed with the Court's order. These opinions discuss whether recent Supreme Court cases that modified the willfulness standard for awarding attorney's fees should be applied to modify the willfulness standard for awarding enhanced damages (up to three times the actual damages).
Previously, the Federal Circuit applied an objective/subjective test, which required that there be an objectively high likelihood that the defendant's product infringed a patent, and that the defendant subjectively knew or should have known the infringement was likely. This standard was based on the Federal Circuit's interpretation of the Supreme Court's decision in Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc, which interpreted willfulness in a non-patent context. In the last term, the Supreme Court issued the Octane Fitness and Highmark decisions, which overturned the Federal Circuit's willfulness standard for awarding attorney's fees. Octane Fitness was discussed in Issue 17 of the Troutman Sanders Federal Circuit Review. The concurring and dissenting opinions in Halo indicate a common view that the Federal Circuit's willfulness standard for enhanced damages should be revised to follow Octane Fitness and Highmark.
Judge O'Malley, joined by Judge Hughes, dissented from the denial to reconsider Halo. In her opinion, Octane Fitness and Highmark necessitated a change the Federal Circuit's willfulness standard, which should be less rigid in awarding enhanced damages. Neither the statute for attorneys fees (§ 285) nor enhanced damages (§ 284) uses the term "willfulness," and for this reason, the test for enhanced damages should mirror the totality of the circumstances standard for attorney's fee awards announced in Octane. Further, appellate review should be for abuse of discretion by the district court, in a manner consistent with Highmark.
Judge Taranto, joined by Judge Reyna, filed a concurring opinion. The concurrence agreed that there are significant unanswered questions in the Court's willfulness cases, but concluded that a rehearing was properly refused because Halo was not an appropriate vehicle for answering those questions.
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