Supreme Court Takes Up Enhanced Damages Under Section 284

Stryker Corp. v. Zimmer Inc., 774 F.3d 1349 (Fed. Cir. 2014), revised, 782 F.3d 649 (Fed. Cir.), reh'g en banc denied, 596 F. App'x 924 (Fed. Cir. 2015). Supreme Court Dkt. 14-1520 Halo Elecs., Inc. v. Pulse Elecs., Inc., 769 F.3d 1371 (Fed. Cir. 2014), reh'g en banc denied, 780 F.3d 1357 (Fed. Cir. 2015). Supreme Court Dkt. 14-1513

The Supreme Court granted certiorari in two cases in which patent owners have argued the current Federal Circuit standard for awarding enhanced damages to patent owners is too rigid and stringent. In both cases, the patent owners allege that the infringer deliberately copied the patented invention, which they argue should be sufficient to support a finding of willfulness.

35 U.S.C. § 284 provides that the a court "may increase damages awarded in a patent case by up to three times the amount found or assessed." To receive these enhanced damages under the current Federal Circuit test, a patentee must prove by clear and convincing evidence that infringement was "willful," which requires a showing that (1) there was an objectively high likelihood that the infringer's actions constituted infringement, and (2) the accused infringer either knew or should have known of the infringement. The appellants in each case argue that this standard has effectively stripped district courts of the discretion granted by the statute to award these enhanced damages by imposing the rigid willfulness framework on top of the flexible statutory language. They emphasize that "willfulness" does not appear in the statute at all.

In 2014, the Supreme Court rejected a similar standard that the Federal Circuit had imposed on the award of attorneys' fees in patent cases under 35 U.S.C. § 285. See Octane Fitness LLC v. ICON Health & Fitness, Inc., 134 S.Ct. 1749 (2014); Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S.Ct. 1744 (2014). There, the Supreme Court overturned the standard used by the Federal Circuit to determine if a case was "exceptional" which required that proof that the litigation was both brought in subjective bad faith and objectively baseless. Instead, the Supreme Court ruled that an "exceptional" case under the statute is "simply one that stands out from others with respect to the substantive strength of a party's litigating position...or the unreasonable manner in which the case was litigated." Octane, 134 S.Ct. at 1756. Similarly, the appellants in Stryker and Halo argue that the statute governing enhanced damages is...