United States: Update On Post-Halo Damages Enhancement

On June 13, 2016, the Supreme Court in Halo1 unanimously eliminated the rigid two-part Seagate test and returned discretion to district courts to enhance damages under 35 U.S.C. § 284 for egregious cases of culpable infringement. This article reprises the Seagate and Halo decision, and discusses courts' post-Halo treatment of willful infringement and enhanced damages.

The Seagate Test

The damages statute, 35 U.S.C. § 284, provides that "the court may increase the damages up to three times the amount found or assessed." In Seagate,2 the Federal Circuit adopted a two-prong barrier for patentees to clear before a district court could exercise its enhancement discretion under Section 284. First, a patent owner must "show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted an infringement of a valid patent." This first part of the test is not met if the infringer, during infringement proceedings, raises a substantial question as to the validity or non-infringement of the patent, regardless of whether the infringer's prior conduct was egregious (the so-called "after-arising defense"). Second, the patentee must demonstrate that the risk of infringement "is either known or so obvious that it should have been known to the accused infringer." On appeal, the Federal Circuit would review the first step of the test—objective recklessness—de novo; the second part—subjective knowledge—for substantial evidence; and the ultimate decision—whether to award enhanced damages—for abuse of discretion.

The Halo Decision

The Supreme Court held that the Seagate test was inconsistent with Section 284, primarily because the test requires a finding of objective recklessness in every case before district courts may award enhanced damages. This threshold requirement excludes from discretionary punishment many of the most culpable offenders, such as the "wanton and malicious pirate" who intentionally infringes another's valid patent for the sole purpose of stealing the patentee's business. The Supreme Court reasoned that enhanced damages had been left to the sound discretion of district courts for more than 180 years and had been generally reserved as a punitive punishment against the deliberate or willful infringer. Therefore, the Supreme Court held that Section 284 allows district courts to punish the full range of culpable behavior, except that "such punishment should generally be reserved for egregious cases typified by willful misconduct."

The Supreme Court additionally held that: (1) enhancement under Section 284 should be governed by a preponderance of the evidence standard, and (2) enhancement decisions should be reviewed on appeal for an abuse of discretion, rather than the tripartite framework developed by the Federal Circuit in Seagate.

Courts' Post-Halo Treatment of Willfulness and Damages Enhancement

Since Halo, the Federal Circuit and several district courts have addressed the issues of willful infringement and damages enhancement. While the caselaw is still developing, a few common threads have developed:

  • Willfulness is a question of fact that may now be decided in full by a jury;
  • Damages enhancement is left to the court's discretion; and
  • A finding of willful infringement does not necessitate enhancing damages.

The following are a handful of cases that illustrate these threads:

On remand from the Supreme Court, the Federal Circuit, in Halo, vacated the district court's determination of no willful infringement and unenhanced damages award because it applied the "unduly rigid" Seagate test.3 In the original proceeding, the jury found that Seagate's subjective prong was met, but the judge determined that the objective prong was not. Because the defendant did not challenge on appeal the subjective prong, and in light of the Supreme Court's Halo decision, the Federal Circuit "vacate[d] the district court's decision of no willful infringement," and "remand[ed] for the district court to exercise its discretion and to decide whether, taking into consideration the jury's unchallenged subjective willfulness finding as one factor in its analysis, an enhancement of the damages award is warranted."4

The Federal Circuit likewise, in Innovention Toys, found that a jury's prior finding by clear and convincing evidence that Seagate's subjective prong was met "is more demanding than needed" after Halo.5 Because "willful misconduct has already been established by a verdict that Halo does not warrant disturbing," the Federal Circuit "remand[ed] . . . for the district court to exercise its discretion to determine whether its discretion in accordance with Halo, including the emphasis on egregiousness."6

District courts have reached similar decisions.

Four days after Halo, Judge Huff of the Southern District of California addressed the question of Halo's impact of a pre-Halo jury verdict of willful infringement.7 The jury found, by clear and convincing evidence, that Seagate's subjective prong was met. (The jury, according to the court's instructions, did not address Seagate's objective prong.) In post-trial briefing, the defendant moved for a finding of no willful infringement, arguing that the jury's verdict is void and should be disregarded. Judge Huff disagreed, noting that "there is no language in Halo holding that a finding as to whether the infringement was willful must be made by the Court . . . [n]or . . . any language . . . that a jury may not make a finding as to subjective willfulness . . . [which] . . . [t]he Federal Circuit has historically held . . . is a question of fact."8

Judge Reindinger of the Western District of North Carolina, addressing Halo's impact on a jury's finding of Seagate's subjective prong, found that, "in Halo, the Supreme Court has overruled the objective prong of Seagate, leaving the issue of willfulness as solely a factual issue which can readily be addressed by the jury."9 Judge Reindinger determined that the jury's pre-Halo "finding standing alone is sufficient to support a finding of willfulness."10


1 Halo Elecs., Inc. v. Pulse Elecs., Inc., — U.S. —, 136 S.Ct. 1923 (2016). Halo was consolidated with Stryker Corp. v. Zimmer, Inc.

2 In re Seagate Tech., LLC, 497 F.3d 1360 (2007) (en banc).

3 Halo Elecs., Inc. v. Pulse Elecs., Inc., No. 2013-1472, — F.3d —, 2016 WL 4151239 (Fed. Cir. Aug. 5, 2016).

4 Id. at *10.

5 Innovention Toys, LLC v. MGA Entm't, Inc., No. 2014-1731, — F.3d —, 2016 WL 4151240, at *2 (Fed. Cir. Aug. 5, 2016).

6 Id.

7 Presidio Components, Inc. v. Am. Technical Ceramics Corp., No. 14-cv-02061-H-BGS, slip. op. at 24–28 (S.D. Cal. June 17, 2016).

8 Id. at 27.

9 Sociedad Espanola de Electromedicina Y Calidad, S.A. v. Blue Ridge X-Ray Co., No. 1:10-cv-00159-MR, 2016 WL 3661784, at *2 (W.D. N.C. July 8, 2016).

10 Id. at *2–3.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
McDermott Will & Emery
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
McDermott Will & Emery
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions