The patent pendulum may be poised to swing back The patent pendulum may be poised to swing back
BY NIKA ALDRICHFEBRUARY 19, 2016
"...The Supreme Court has agreed to review the Federal Circuit’s willfulness test. In Stryker,one of the cases, one of the questions certified by the Supreme Court highlights the difficulty in obtaining enhanced damages: Does a district court have discretion under 35 U.S.C. § 284 to award enhanced damages where an infringer intentionally copied a direct competitor’s patented invention, knew the invention was covered by multiple patents, and made no attempt to avoid infringing the patents on that invention?
In that case, Stryker had presented evidence that Zimmer had “all but instructed its design team to copy Stryker's products,” and the jury found that Zimmer had willfully infringed. Notwithstanding, though affirming that the patents were infringed and not invalid, the Federal Circuit reversed the willfulness finding, holding “that Zimmer presented reasonable defenses to all of the asserted claims of Stryker's patents.”
A reversal by the Supreme Court in Halo and Stryker would be significant. The mere assertion of willful infringement can change the playing field for both how a case is presented to a jury and what kinds of evidence are allowed into a trial. Evidence that a company deliberately infringed a patent often has a strong influence on a jury. Along with the possibility of treble damages, the mere threat of a finding of willfulness can result in substantial pressure on the defendant to settle a case before trial on terms that are favorable to the patent owner. In many cases, particularly given the threats to patent holders discussed above, the prospects of getting a willfulness finding may tip the balance in a patent holder deciding whether to file suit to protect its intellectual property rights...
..The Supreme Court is likely to reverse
The fact that the Supreme Court has agreed to hear these cases indicates that it is likely to reverse. In recent years, the Supreme Court has taken a number of appeals of patent cases and, has reversed the Federal Circuit the vast majority of the time, often in unanimous decisions.
In the willfulness cases, reversal seems particularly likely. The test used by the Federal Circuit for allowing enhanced damages under § 284 is the same test it used for allowing the district court to grant an award of attorneys’ fees under § 285. But in the 2014 Octane Fitness case, the Supreme Court held that the Federal Circuit’s test for an award under § 285 was incorrect. The petitioners in the willfulness cases have presented the dichotomy between the Supreme Court’s holding in Octane Fitness and the Federal Circuit’s standard for awarding enhanced damages squarely in their questions presented for the Court’s consideration. It is likely the Court will use the same reasoning to strike the Federal Circuit’s strict, two-part test for awarding enhanced damages under § 284.
Thus, it appears that the Supreme Court is poised to send the patent pendulum swinging the other direction, and strengthen intellectual property rights."
https://www.insidecounsel.com/2016/02/19/the-patent-pendulum-may-be-poised-to-swing-back