Article by David J. Evered
Originally published in The Daily Journal on June 27, 2012.
Infringement of a valid U.S. patent is a strict liability offense. What that means is that the finder of fact (usually a jury) need not be concerned with the accused infringer’s state of mind or intentions – all that is required for a product to infringe a patent claim is for each limitation of the claim to be satisfied by the accused product.
However, courts have long been able to take account of the circumstances in which a patent is infringed when awarding damages against an infringer. Depending on the circumstances the trial judge may enhance a damages award (again, usually decided by a jury) by up to three times the amount awarded. Today, following various court decisions, the court may consider enhancing a damages award only where the infringer has been found to have willfully infringed the patent. A court may also award attorney fees if willfulness is found. Willfulness is thus commonly asserted by patentee plaintiffs in order to raise the stakes in litigation.
In common with many other non-contractual offenses giving rise to civil liability for damages, willful infringement of a patent involves the breach of a duty of care that arises from the circumstances at the time of the infringement, including the infringer’s state of mind. The development of the law in this area has largely concerned where and how to set the bar for this duty of care. The duty of care owed by a potential infringer who had actual knowledge of a patent was, until 2007, described and treated as an “affirmative” duty of care leading to findings of willfulness where for instance the infringer had failed to obtain an opinion of counsel before acting. The standard was effectively one of negligence and over time was felt to be set too low.
In 2007, the Federal Circuit in [In re Seagate Technology LLC], 497 F.3d 1360 (Fed. Cir. 2007), changed the test for willfulness, requiring that a patentee must first show that the infringer acted despite an “objectively high likelihood that its actions constituted infringement of a valid patent.” The court emphasized that this part of the test is truly objective and does not involve the state of mind of the actual infringer. If this part of the test is satisfied the patentee must then show that this objective risk of infringement was either known or so obvious that it should have been known to the infringer. [Seagate] was viewed as raising the bar for willfulness but reviews of court decisions post [Seagate] do not show significant changes in the statistics for findings of willfulness. This may now change with the recent decision of the Federal Circuit in [Bard v. Gore], 2012 WL 2149495 (Fed. Cir. June 14, 2012).
In its en banc decision in [Bard v. Gore] the Federal Circuit held that the first, objective part of the [Seagate] test should be decided by the trial judge as a matter of law and not by the jury. In fulfilling this role the judge will objectively assess whether an infringer’s defenses are reasonable in deciding whether or not there was an objectively high likelihood that the infringer’s acts were infringing acts.
To the extent that a defense, e.g. non-infringement, is based on issues of fact, those issues can go to the jury to decide before the judge completes the objective assessment of the defense. If the threshold objective test is satisfied, the jury may then decide as a matter of fact the second part of the test whether the infringer knew or should have known of the risk of infringement.
There are steps that a potential infringer with knowledge of a patent can take to minimize the risk of a finding of willfulness in a future lawsuit. These include obtaining an opinion of counsel that the patent is not infringed by the product or is invalid and documenting measures to design around the patent. However, the existence and assertion of a strong non-infringement and/or invalidity defense to a patentee’s assertions of infringement will likely become even more important now that a judge will assess the reasonableness of all defense theories in deciding the first, objective prong of the [Seagate] test.