After finding that an accused infringer has willfully infringed a patent, a court may increase "damages to three times the amount found or assessed," under Title 35 of the U.S. Code, Section 284.1
Given that recent patent cases have yielded nine- and 10-figure damages awards, it is important to keep abreast of legal developments concerning willful infringement.2
In this article, we explore practical takeaways for litigating willful infringement in light of recent case law. These cases show that parties focus on the following seven areas:
- The impact of the 2021 SRI International Inc. v. Cisco Systems decision in the U.S. Court of Appeals for the Federal Circuit;
- The accused infringer's knowledge;
- Past relationships between the parties;
- Alleged copying;
- Attempts to invalidate the patent through post-grant proceedings;
- Lack of noninfringement arguments; and
- Reasonableness of an accused infringers' opinion of counsel.
1. Willfulness findings remain relatively stable after SRI; enhanced damages findings declined.
The Federal Circuit clarified the standard for willful infringement in SRI v. Cisco.3
In reversing the U.S. District Court for the District of Delaware's order granting the accused infringer's motion for judgment as a matter of law of no willful infringement, the Federal Circuit addressed the language in the U.S. Supreme Court's June 2016 Halo Electronics Inc. v. Pulse Electronics Inc. decision.
The Federal Circuit explained that the language in Halo concerning "wanton, malicious, and bad-faith" refers to "conduct warranting enhanced damages" not conduct warranting a finding of willfulness and that "the concept of 'willfulness' requires a jury to find no more than deliberate or intentional infringement."4
Using this test, the court found that substantial evidence supported the jury's finding of willful infringement.5
Has the Federal Circuit's clarification in SRI affected the incidence of willful infringement and enhanced damages findings? To explore this question, we reviewed published and unpublished district court decisions that postdate SRI and compared the data to published pre-SRI rates for willful infringement and enhanced damages.
For the willful infringement analysis, the data came from district court decisions where the patentee pleaded willfulness and there was a final decision on the merits regarding willfulness.6
For the enhanced damages analysis, the data came from district court decisions where there was a willfulness finding and the court ruled on whether to enhance damages.
The pre-SRI data came from a published study of district court decisions issued during the 4 1/2 years after the Halo decision.7 The post-SRI data came from district court decisions that issued during the 13 months following the SRI decision.
Prior to SRI, the rate of willfulness findings was 64.9% (76/117). Thirteen months after SRI, this rate decreased slightly to 52.6% (10/19).
Prior to SRI, the rate of enhanced damages findings was 69.0% (29/42). Thirteen months after SRI, this rate decreased to 21.4% (3/14).
While more data will be necessary to draw definitive conclusions about the impact of SRI, the data available suggest that SRI has had a neutral effect on willfulness findings but a negative effect on enhanced damages.
With respect to willfulness, it is possible that prior to SRI most district courts understood that willfulness does not require wanton, malicious and bad faith conduct. This is relevant here because the analysis focused on district court decisions as opposed to jury findings. The slight decrease could be due to the sample size.
The decrease in enhanced damages after SRI could be due to the fact that the Federal Circuit emphasized in SRI the language in Halo that "[t]he sort of conduct warranting enhanced damages has been variously described in our cases as willful, wanton, malicious, bad-faith, deliberate, consciously wrong, flagrant, or — indeed — characteristic of a pirate."8
Given this landscape, patentees should closely scrutinize the information that is put before the jury. For example, they should make sure that jury instructions on willful infringement do not contain terms like "egregious" or "pirate-like," which suggest a heightened standard.
For their part, accused infringers should refocus their efforts by arguing that there is no basis for enhanced damages based upon the wanton and pirate standard. Several courts have used summary judgment to remove willfulness from a jury because the evidence supporting enhancement does not suffice.9
2. Specific knowledge of the patent before the suit may not be required.
Establishing knowledge of the patent is foundational, because without knowledge one cannot intentionally infringe. Recent cases have confronted two questions related to knowledge. What suffices, and when must the alleged infringer obtain the knowledge?
Patentees seek a broad standard for both, while accused infringers advance a requirement that it have knowledge of the specific patent before the institution of the litigation. District courts have provided support for both arguments.
Patentees that have been unable to show that accused infringers had knowledge of the individual patent upon which they base their infringement claims have succeeded in having courts apply a standard that focuses on the "totality of the circumstances," discussed in the March Illumina Inc. v. BGI Genomics Co. Ltd. decision10
To view the dull article click here
1.5 U.S C. § 284
2. Gregory J. Lundell, James F. Haley, Joshua Van Hoven & Richard T. McCaulley, Recent Application of Patent Damages Law, IAM, Oct. 20, 2021.
3. SRI Int'l, Inc. v. Cisco Sys., Inc., 14 F.4th 1323 (Fed. Cir. 2021).
4. Id. at 1330; Halo Elecs., Inc. v. Pulse Elecs. Inc., 579 U.S. 93, 103 (2016).
5. SRI, 14 F.4th at 1330.
6. The data set did not include motions to dismiss or unsuccessful motions for summary judgment.
7. Karen E. Sandrik, An Empirical Study: Willful Infringement & Enhanced Damages in Patent Law After Halo, 28 Mich. Tech. L. Rev. 61 (2021).
8. SRI, 14 F.4th at 1330 (quoting Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 136 S.Ct. 1923, 1932 (2016).
9. Greatbatch Ltd. v. AVX Corp., 13-732-LPS, 2016 WL 7217625 *6 (Dec. 13, 2016); Halo Elecs. v. Pulse Elecs., Inc., 281 F. Supp. 3d 1087, 1093-94 (D. Nev. 2017).
10. Illumina, Inc. v. BGI Genomics Co., Ltd., 19-cv-03770, 2022 WL 899421 *14 (N.D. Ca. Mar. 27, 2022).
Visit us at mayerbrown.com
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
© Copyright 2020. The Mayer Brown Practices. All rights reserved.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.