In June, the United States Supreme Court issued a decision that may fundamentally change the way damages are awarded in patent infringement lawsuits.
In Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923, 1932 (2016), Chief Justice Roberts criticized a standard that allowed, “the ‘wanton and malicious pirate’ who intentionally infringes another’s patent” to avoid enhanced damages if a reasonable defense could later be mustered at trial.
Patent infringement has long been thought of as a strict liability tort. Liability for patent infringement can be found without showing that the infringer intended to infringe and damages can be awarded, as long as the patentee provided actual or constructive notice. Intent does matter, however, for the purpose of enhancing damages. Where infringement is willful, damages can be enhanced up to three times the amount of actual damages pursuant to 35 U.S.C. § 284, but the standard for showing willfulness has been exacting. Proving willfulness required showing, by clear and convincing evidence, both (1) that the infringer “acted despite an objectively high likelihood that its actions constituted infringement of a valid patent” and (2) that this objective risk was “known or so obvious that it should have been known” to the infringer. In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007). Read more.