After Halo, District Court Concludes that Jury’s Finding of Willfulness Is Still Appropriate

After a jury trial finding American Technical Ceramics Corp. (“ATC) willfully infringed Presidio Component’s (“Presidio”) patent, ATC filed a motion for a finding of no willful infringement based on the Supreme Court’s decision in Halo. At the time the jury reached its verdict, the Federal Circuit’s decision in In re Seagate Tech required that “an award of enhanced damages [under section 284] requires a showing of willful infringement.” In re Seagate Tech., LLC, 497 F.3d 1360, 1368 (Fed. Cir. 2007) (en banc).

ATC argued that in light of the Supreme Court’s decision in Halo, the jury’s verdict as to willfulness is void and should be disregard. The district court explained that on June 13, 2016, the Supreme Court issued its decision in Halo Elecs., Inc. v. Pulse Elecs., Inc., No. 14-1513, 579 U.S. __ (June 13, 2016). In Halo, the Supreme Court rejected the Federal Circuit’s two-part test from Seagate for determining when a district court may award enhanced damages as inconsistent with § 284. Id., slip op. at 1-2. The Supreme Court explained that § 284 commits the award of enhanced damages to the discretion of the district court. See id. at 8, 12-13, 15. The Supreme Court further explained that the Seagate test is “‘unduly rigid'” and “‘impermissibly encumbers'” a district court’s discretion, particularly its requirement that there must be a finding of objective recklessness in every case before a district court may award enhanced damages.

The district court had instructed the jury as to willful infringement under the first prong of Seagate, which limited the issue to subjective willfulness and did not address objective willfulness. The jury then found by clear and convincing evidence that ATC’s infringement was willful.

Although the district court agreed with ATC that in Halo, the Supreme Court held that the ultimate decision of whether to award enhanced damages and in what amount is committed to the sound discretion of the trial court. The district court disagreed that a finding as to willful infringement must be made by the district court. “But there is no language in Halo holding that a finding as to whether the infringement was willful must be made by the Court. Nor is there any language in the Halo decision holding that a jury may not make a finding as to subjective willfulness. Indeed, the Federal Circuit has historically held that a finding of willfulness is a question of fact. See Bard, 682 F.3d at 1006. The Federal Circuit has further held that only the determination of whether the infringement was objective reckless is a question of law to be decided by the Courts. Id. at 1007. And a determination as to objective recklessness is no longer a prerequisite for an award of enhanced damages. See Halo, slip op. at 9.”

As a result, the district court concluded that it “properly permitted the jury to issue a finding as to whether ATC’s infringement was willful and the jury’s finding as to this issue is not void.”

Presidio Components, Inc. v. American Technical Ceramics Corp., Case No. 14-cv-02061-H-BGS (S.D. Cal. June 2016)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.