Federal Circuit Remands Treble Damages CAse after Supreme Court DecisionAugust 9, 2016

In the Striker-Halo decision, the Supreme Court addressed the standard for awarding treble damages for patent infringement, finding the existingSeagate standard was “unduly rigid”and “impermissible encumber[ed] the statutory grant of discretion to trial courts.”In order to award treble damages, theSeagate standard required clear and convincing evidence that the infringer acted despite an objectively highly likelihood that the actions constituted infringement of a valid patent, and that the objective risk was known or should have been known to the accused infringer. The Seagate standard was rejected by the Supreme Court not only because it in effect allowed many willful infringers to avoid enhanced damages. The test’s rigid framework and heightened “clear and convincing”burden of proof was inconsistent with 35 U.S.C. ยง 284 (allowing for treble damages), as well as patent litigation in general (which primarily relies upon a preponderance of the evidence standard).

Upon remand to the Federal Circuit, the court determined that the district court must reassess the damages award. Specifically the court noted that “[b]ecause the district court applied the Seagate test in declining to enhances damages. . . . we vacate its unenhanced damages award with respect to products that were delivered in the United States, and remand for further proceedings consistent with the Supreme Court’s opinion on enhanced damages.”On remand, the district court must decide whether, based on the jury’s subjective willfulness finding as one of several factors, an enhancement of the damages is warranted. Essentially, a finding of willfulness is an important but not dispositive factor in the assessment of whether treble damages are appropriate. In the future, it will be interesting to see how, if at all, the “factors”for awarding treble damages are developed by the Federal Circuit.

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