If a court or jury finds that an infringer willfully infringed a patent, the infringer may be subject to enhanced damages of up to three times lost profits or reasonable royalty, as well as attorneys’ fees and costs. Willful infringement generally refers to situations where the defendant has knowledge of the patent and does not have a valid defense to infringement. Last week, the Federal Circuit issued a decision in Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc. that clarified some of the standards for willful infringement.
The Federal Circuit set forth the standard for willful infringement its 2007 opinion In re Seagate Techs. LLC. 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 patentee must show that the accused infringer knew of the risk or that it was so obvious that it should have been known by the accused infringer, that is the accused infringer was objectively reckless in light of the infringement risk. An accused infringer can generally avoid this objective prong by demonstrating that it had a reasonable defense to infringement, such as that the patent is invalid or not infringed.
The court had long stated that the objective prong of the analysis is a question of fact for the jury. It was up to the jury, as a factual inquiry, as to whether the infringer’s defense was reasonable. Now, the court determined that the issue is more complex. The court determined that these questions are usually a mixture of law and fact. Therefore, the Federal Circuit now holds that the objective determination of recklessness is best decided by the judge as a question of law subject to de novo review on appeal.
[T]he ultimate legal question of whether a reasonable person would have considered there to be a high likelihood of infringement of a valid patent should always be decided as a matter of law by the judge.
Willful infringement is a strange area of patent law. Previously, the determination was made by the jury, but the decision whether or not to award enhanced damages for made by the judge. Now, most of the determination will be made by the court. The Seagate decision requires willful infringement to be proved by clear and convincing evidence. It seems a bit odd to require this enhanced standard for an issue that is now deemed a pure question of law.
The Federal Circuit loves de novo review where it grants the trial court no deference.
