Page 132 - Intellectual Property Disputes

Enhanced Damages, Willfulness, or Inducement

Damages in infringement matters may be adjusted based upon a finding of willfulness. A finding of
willfulness is a decision for the court, but the court may obtain guidance from the jury. The issue of
willfulness may arise during an infringement trial; therefore, this section provides certain information
regarding recent case decisions to assist the forensic practitioner in understanding the issue and the cases
that may be cited by counsel or the court. The practitioner may be asked to calculate different damages
scenarios assuming different enhancements. For example, in a simple matter, the practitioner may be
asked to present a separate scenario that multiplies the primary damages conclusion of the practitioner
by a factor of three (that is, trebled damages). Although the practitioner may be asked to provide
calculations that assume an enhancement above the primary damages conclusion, the finding of
willfulness is ultimately a legal determination.

In Underwater Devices, Inc. v. Morrison-Knudsen Co., Inc., fn 101 the Federal Circuit had held that a
defendant has an affirmative duty of due care (such as obtaining legal advice from counsel) to determine
whether its actions infringe. In 2007, the Federal Circuit reversed this standard in In re Seagate
Technology, LLC.

The Federal Circuit affirmed the position that an award of enhanced damages requires a showing of
willful infringement, although a finding of willfulness does not require an award of enhanced damages;
it merely permits it. fn 102 However, the court concluded that "the duty of care announced in Underwater
Devices sets a lower threshold for willful infringement that is more akin to negligence," as opposed to "a
showing of objective recklessness." fn 103 Accordingly, the court established the following revised
framework for demonstrating willful infringement based on the Supreme Court’s interpretation of "the
meaning of willfulness as a statutory condition of civil liability for punitive damages": fn 104

...to establish willful infringement, a patentee must show by clear and convincing evidence that
the infringer acted despite an objectively high likelihood that its actions constituted infringement
of a valid patent. The state of mind of the accused infringer is not relevant to this objective
inquiry. If this threshold objective standard is satisfied, the patentee must also demonstrate that
this objectively-defined risk (determined by the record developed in the infringement
proceeding) was either known or so obvious that it should have been known to the accused
infringer. fn 105

In Halo Electronics, Inc. v. Pulse Electronics, Inc., fn 106 the Supreme Court announced a new standard
for the award of enhanced damages. In particular, the court held that the "subjective willfulness of a

fn 101 Underwater Devices, Inc. v. Morrison-Knudsen Co. Inc., 717 F.2d 1380 (Fed. Cir. 1983).

fn 102 In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007) (citing Beatrice Foods Co. v. New England Printing & Lithographing
Co., 923 F.2d 1576, 1578 (Fed. Cir. 1991); Jurgens v. CBK, Ltd., 80 F.3d 1566, 1570 (Fed. Cir. 1996); Odetics, Inc. v. Storage Tech.
Corp., 185 F.3d 1259, 1274 (Fed. Cir. 1999); and 35 USC 284.)

fn 103 In re Seagate, 497 F.3d at 1360.

fn 104 Id. (citing Safeco Ins. Co. of Am. v. Burr, 127 S. Ct. 2201 (June 4, 2007)).

fn 105 Id.

fn 106 136 S. Ct. 1923 (2016).

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