In 2016 the Supreme Court changed the legal standard for determining what constitutes willful patent infringement.1 The new standard makes it easier for courts to find willful infringement, exposing the infringer to enhanced damages up to three times the actual damages. As a result, there is more impetus for businesses to obtain a patent attorney opinion in situations where they have a concern about a known patent. An objective, timely opinion from an attorney that their product or service doesn’t infringe the patent is potent evidence of a lack of willfulness.2 Even if a court ultimately disagrees with the patent attorney’s opinion and finds infringement, the attorney opinion can shield the infringer from enhanced damages.
Today, the court that handles all appeals in patent cases unsealed a decision3 upholding a federal district court’s award of a $1,000,000 damages enhancement for willful infringement. The appellate decision noted four factors in upholding the district court’s finding of willful infringement:
- the infringer “continued to rely on arguments through trial that were substantially weak and rejected time and again”4;
- “evidence that [the infringer] was aware of the [infringed] patent prior to the current litigation”5;
- evidence that the infringer “believed that it was infringing the patent … includ[ing] evidence of the parties’ prior business dealings [suggesting that the infringer] believed that it needed to acquire or license [the patent] to avoid infringement”6; and
- “circumstantial evidence that [the infringer] copied [the patentee’s] technology.”
The first and second factors are present in many cases in which a party is found to infringe a patent, and as to the third factor, it is not uncommon for businesses to consider licensing a patent that they have a concern about. As to the fourth factor, there was conflicting evidence.7
It is clear then that, in practice, a finding of willful infringement may be made in many cases where no opinion was obtained. Conversely, it’s highly likely that if the infringer in this case had been able to obtain a thorough opinion of non-infringement or invalidity from an objective, skilled attorney and had acted in conformity with that opinion, the infringer would not have been found to have infringed willfully.
The opinion released today affirms the newly-increased value of seeking attorney opinions when there is a patent of concern.
- Halo Electronics v. Pulse Electronics, 579 U.S. __, 136 S.Ct. 1923.
- If the attorney’s opinion is that the product or service does infringe and the patent is valid and enforceable, then the business should license or design around the patent, or failing that, stop marketing the product or service.
- Georgetown Rail Equipment Co. v. Holland L.P., No. 2016-2297 (Fed. Cir. Aug. 1, 2017).
- Id. at 22.
- Id. at 25.
- Id. at 24.
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