Watering down willful infringement in the US – In Re Seagate
Its pretty common knowledge now that you can be liable for treble damages in the US if you’re found to have willfully infringed a patent. (Or liable for attorney’s fees in Hatch-Waxman litigation.)
How do you know when you’re in trouble? Well, if you haven’t got a well reasoned (and some would say lengthy) opinion from patent counsel which clears your conduct, then you should probably worry…
A unanimous en banc opinion of the CAFC handed down yesterday has further clarified what’s required. And in so doing, has made it still harder to prove willfulness.
In essence, there must now be ‘at least a showing of objective recklessness’. To quote the judges:
“Accordingly, 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.”
Make no mistake – this is big news for companies whose business models routinely put them on the wrong end of patent suits – generic pharmaceutical companies, and big technology companies who are frequently sued by patent licensing companies (some would use the term ‘patent trolls’).
Patentees should realise that whether the infringer in fact was objectively reckless is completely out of their hands. Instead, the punitive element of a finding of willfulness is an unusual bonus brought about by the poor strategic conduct of their opponent. Instead of decrying this decision, they would be better served to focus on changing the system to have a proportion of attorneys fees (legal costs) paid by the losing party as the normal practice in US patent litigation. (See my comment at Patently’O.)
Thanks once again to Dennis at Patently’O for the ever-timely and brief though insightful report of this case.