Federal Circuit Clarifies The Willful Infringement Standard And Provides Insights On Conduct That Is Exceptional In SRI v. Cisco

Published date29 October 2021
Subject MatterIntellectual Property, Litigation, Mediation & Arbitration, Patent, Trials & Appeals & Compensation
Law FirmHaug Partners
AuthorMr Rich Kurz and Isaac Kim

The Federal Circuit in SRI Int'l, Inc. v. Cisco Sys., Inc., No. 20-1685, slip op. (Fed. Cir. Sep. 28, 2021) addressed the standards for willful infringement and enhanced damages, and provided insights on litigation tactics that could lead to an award of attorney fees.

Procedural Posture and Background

This litigation commenced when SRI filed suit claiming that products sold by Cisco infringed certain patents.1 After trial, the jury found that Cisco infringed and that the infringement was willful.2 Thereafter, Cisco moved for judgment as a matter law (JMOL) of no willful infringement, and SRI moved for enhanced damages and attorney fees.3 The district court found substantial evidence supported the jury's finding of willfulness, specifically that certain Cisco employees did not read the asserted patents until their depositions, that Cisco designed the accused products in an infringing manner, and that Cisco directed its customers to use those products in an infringing manner.4 In addition, the court awarded attorney fees and costs because "Cisco pursued litigation about as aggressively as the court [had] seen in its judicial experience."5 The court also took into account the jury's willful infringement finding in awarding these fees.6 Lastly, the court granted enhanced damages, doubling the $23 million in compensatory damages awarded by the jury, noting that this was appropriate in light of the circumstances in the case, including Cisco's aggressive litigation conduct.7

In an earlier appeal, Cisco challenged the district court's JMOL denial of no willful infringement and grant of attorney fees and enhanced damages.8 The Federal Circuit held that the jury's verdict of willful infringement occurring before the notice date, i.e., the date Cisco first knew of SRI's patents, was not supported by substantial evidence.9 Support for the jury's finding of willfulness after the notice date, however, still needed to be determined.10 Thus, the Court vacated and remanded the case to the district court to determine whether the jury's finding of willful infringement after the notice date was supported by substantial evidence.11 Because attorney fees and enhanced damages were predicated on a finding of willful infringement, the Court vacated the orders on these findings.12

On remand, based on a more stringent standard for willfulness that the district court thought that the Federal Circuit had required, the court found that substantial evidence did not support the jury's...

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