United States: Willful Patent Infringement May Be Alleged In Suit Filed On The Same Day The Patent Issues Based On Prior Notice Of Allowance

Authored by D. Brian Kacedon, John C. Paul, and Kevin D. Rodkey


Entitlement to enhanced damages for willful patent infringement requires the patent owner to show the infringer knew about the patent before the lawsuit was filed. In Malibu Boats, a district court concluded that the patent owner could allege willful infringement in a suit filed on the same day that the asserted patent issued where the complaint alleged that the defendant had knowledge of the Notice of Allowance and Issue Notification of the patent, had been contacted by patent owner's attorneys about the impending issuance of the patent, and was engaged in a separate litigation with the patent owner involving a related patent.

Damages for patent infringement may be enhanced up to three times the amount found or assessed in cases where the infringer has committed "willful infringement." Willful patent infringement requires, among other things, that the infringer had knowledge of the patent before the lawsuit was filed. In Malibu Boats, LLC v. Mastercraft Boat Company, LLC, the district court for the Eastern District of Tennessee considered whether a patent owner could seek enhanced damages where the infringement suit was filed on the same day the patent issued. The court concluded that the patent owner could allege willful infringement because the complaint alleged that the accused infringer had knowledge of the patent's allowance prior to issuance. The court made clear, however, that its decision extended only to the patent owner's ability to seek enhanced damages for willful infringement—the ultimate issue of whether infringement was willful would be decided by a jury and the court could then exercise its discretion to determine whether or not to award enhanced damages.


Malibu accused Mastercraft of infringing a patent directed to a system for modifying a boat's wake, in a complaint filed on the same day that the patent issued. Malibu's complaint included an allegation that Mastercraft willfully infringed the patent because Mastercraft had knowledge of the patent prior to its issuance, including by way of a Notice of Allowance and Issue Notification. A Notice of Allowance informs patent applicants that the application is entitled to a patent under the law. Shortly before a patent actually issues, an Issue Notification informs the applicants of the patent number and issue date assigned to the patent. Malibu also provided actual knowledge of the Notice of Allowance and Issue Notification via a letter from Malibu's patent prosecution counsel to Mastercraft thirteen days before the patent issued. At the time, Malibu and Mastercraft were also engaged in a separate litigation involving a related patent. Mastercraft filed a motion to dismiss Malibu's willful infringement allegations, arguing that it could not have pre-suit knowledge of a patent when the patent issued the same day the suit was filed.

The Malibu Boats Decision

The district court examined whether Malibu could legally allege willful infringement in its complaint, assuming all allegations in the complaint to be true. Although the court noted that infringement could not begin until the patent actually issued, it concluded that knowledge of a patent before it issued could form a basis for alleging willful infringement.

At the outset, the district court looked at the standard for proving enhanced damages and focused on how it is evaluated based on the totality of the circumstances. It observed that Mastercraft's motion to dismiss relied on the Federal Circuit's Seagate decision, which was largely abrogated by the Supreme Court in Halo Electronics. The court noted, however, that even under Halo Electronics, "enhanced damages should generally be 'reserved for egregious cases typified by willful misconduct'" and knowledge of the asserted patent continues to be a prerequisite for willful infringement and is decided by a jury based on the "totality of the circumstances." The court rejected Mastercraft's assertion that willful infringement is categorically excluded when the lawsuit is filed the same day a patent issues, explaining that Mastercraft's assertion was inconsistent with this totality of the circumstances test.

Next, the court examined the facts of this case to determine whether Malibu's complaint included allegations that Mastercraft had knowledge of the patent before it issued and pointed to the USPTO's Notice of Allowance and Issue Notification, Malibu's patent counsel's correspondence with Mastercraft, and Malibu and Mastercraft's ongoing litigation involving a patent related to the '161 patent, which "could conceivably contribute to a finding of willfulness." Taking Malibu's assertions in its complaint as true, the court determined that Malibu had set forth a plausible complaint for willful infringement.

The court distinguished the cases relied on by Mastercraft, noting that in those cases there was no evidence that the defendant received notice of the patent's impending issuance. The court also distinguished cases where a defendant only had knowledge of a patent application, but not the patent's issuance, noting that patent applications are often amended during prosecution and do not provide the same knowledge as a Notice of Allowance and Issue Notification.

The court also observed that the position taken by Mastercraft—precluding enhanced damages based on conduct and knowledge before a patent issued—would require patent owners to delay infringement suits to develop a willfulness case, even where the alleged infringer had knowledge of the patent's impending issuance. The court found that this contradicted precedent, which does not require delaying an infringement suit to assert willfulness.

Lastly, the court noted that an award of enhanced damages is within the discretion of the court, so even if the jury returns a finding of willfulness, the court is not required to exercise its discretion to award enhanced damages.

Strategy and Conclusion

Patent owners may file suit on the day a patent issues and allege willful infringement if they notify infringers of the Notice of Allowance or Issue Notification beforehand. But ultimately, the court has discretion to determine whether and how much to enhance damages.

Further information The Malibu Boats opinion can be found here.

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.

Events from this Firm
2 Nov 2017, Webinar, Washington, DC, United States

Join us for a two-part webinar series exploring recent developments in machine learning and other technologies that have greatly advanced artificial intelligence (AI) since its origins more than 50 years ago.

9 Nov 2017, Webinar, Washington, DC, United States

As part of Strafford Publications’ webinar series, Finnegan attorneys Adriana Burgy, Chris Johns, and Kai Rajan will discuss the Examiner Count System and provide strategies for interacting with examiners.

15 Nov 2017, Conference, California, United States

Finnegan is a Gold sponsor of the second annual Digital Media & IP Forum, hosted by World Congress.

In association with
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.