Share this e-Alert:

Polsinelli Intellectual Property & Technology Litigation
         

  

June 2016

  

Supreme Court Loosens Standard for Willful Infringement/Enhanced Damages

  

 
 

  

     

  

 
 

For more information about this alert, please contact:

  

Keith J. Grady

Author

314.552.6883

Email | Bio

  

Patrick C. Woolley

Author

816.360.4280

Email | Bio

  

Q. Todd Dickinson

Author

202.626.8379

Email | Bio

  

  

To learn more about our Intellectual Property & Technology Litigation practice, to contact one of our attorneys, or for more Intellectual Property & Technology Litigation Intelligence, click here.

  


View Polsinelli documents on JD Supra  

SUBSCRIBE

LinkedIn Twitter Facebook Polsinelli Podcast Connect with us on LinkedIn. Connection with us on Twitter. Connect with us on Facebook.

 

   

In a relatively rare “pro-patent” decision, the U.S. Supreme Court earlier this week unanimously overruled the Federal Circuit’s so-called Seagate standard for finding willful patent infringement and awarding enhanced damages. In Halo Electronics, Inc. v. Pulse Electronics 14-1513, (together with Stryker Corp. v. Zimmer, Inc. 14-1520), the Court vacated and remanded the Federal Circuit’s decision denying Halo enhanced damages under §284 of the Patent Act. The Court’s decision appears to have lowered the bar for finding willful infringement and awarding enhanced damages.

The key takeaways from this decision are:

  • The Seagate test is overruled, and District Courts now have greater discretion in awarding enhanced damages in patent litigation, similar to their discretion in awarding attorneys’ fees under Octane Fitness.
  • Enhanced damages may be awarded to punish “egregious behavior,” measured at the time of the infringement, and reviewed under a preponderance of the evidence standard.
  • Halo may potentially result in an increased awarding of enhanced damages, thereby strengthening the position of patent holders in litigation, and, by extension, the value of their patent portfolios.

Under §284, if the District Court awards damages for patent infringement, it “may increase the damages up to three times the amount found or assessed.” In the Seagate case the Federal Circuit established a two-part test for determining when to enhance damages, ruling that the patentee must prove (1) that there was an “objectively high likelihood” of infringement, and (2) that this likelihood was known or should have been known to the infringer. Additionally, the patentee had to prove this by clear and convincing evidence.

In a parallel analysis to last term’s Octane Fitness decision interpreting §285, (giving District Court judges greater discretion in awarding attorneys’ fees for exceptional cases), the Court rejected the Seagate standard as too rigid, and ruled that the District Courts have discretion to award enhanced damages for “egregious cases of misconduct beyond typical infringement,” without regard to “objective recklessness.” The Court also rejected the Federal Circuit’s clear and convincing evidence standard, finding no statutory basis for that requirement.

Acknowledging concerns about increasing the leverage of so-called “patent trolls,” the Court stated that in awarding enhanced damages, the District Court has discretion “to punish the full range of culpable behavior”, but must “be guided by sound legal principles” developed over two centuries and not awarded in “garden-variety cases.”

In a separate concurrence joined by two other justices, Justice Breyer suggested applying a somewhat more rigorous reading of “egregious behavior,” also citing the “troll” assertion problem.

For More Information

For more information on this ruling or how it may impact your business, please contact the authors or your Polsinelli attorney.

 
 

  

     

  

 
         

 

 

 

  

     

  

 
 

Atlanta  Boston  Chattanooga  Chicago  Dallas  Denver  Houston  Kansas City  Los Angeles  Nashville  New York
Overland Park  Phoenix  Raleigh  St. Joseph  St. Louis  San Francisco  Washington, D.C.  Wilmington
polsinelli.com

 
 

  

     

  

 
 

  

ABOUT POLSINELLI

real challenges. real answers.SM  
Polsinelli is an Am Law 100 firm with more than 800 attorneys in 19 offices, serving corporations, institutions, and entrepreneurs nationally. Ranked in the top five percent of law firms for client service*, the firm has risen more than 50 spots over the past five years in the Am Law 100 annual law firm ranking. Polsinelli attorneys provide practical legal counsel infused with business insight, and focus on health care, financial services, real estate, intellectual property, mid-market corporate, and business litigation. Polsinelli attorneys have depth of experience in 100 service areas and 70 industries. The firm can be found online at www.polsinelli.com. Polsinelli PC. In California, Polsinelli LLP.

* 2016 BTI Client Service A-Team Report

  

 
 

  

     

  

 
 

Polsinelli provides this material for informational purposes only. The material provided herein is general and is not intended to be legal advice. Polsinelli is very proud of the results we obtain for our clients, but you should know that past results do not guarantee future results; that every case is different and must be judged on its own merits; and that the choice of a lawyer is an important decision and should not be based solely upon advertisements.

Copyright © 2016 Polsinelli PC.

 
             
Connect with us on LinkedIn. Connection with us on Twitter. Connect with us on Facebook. Intellectual Property & Technology Litigation Polsinelli