Under certain situations, holders of patents found to be infringed upon are entitled to enhanced damages. One such situation is when the infringement is found to be willful. Under U.S. law, such enhancement can result in treble damages.
In order for infringement to be found to be willful, under present U.S. law a rigid two-pronged test, as articulated by the Court of Appeals for the Federal Circuit, must be met.
Prong 1: “a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.” In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed.Cir.2007) (en banc). “The state of mind of the accused infringer is not relevant to this objective inquiry.” Id. This first prong is an objective inquiry without regard to what the accused knew or should have known.
If prong 1 is met, the inquiry moves on to prong 2, in which “the patentee must also demonstrate that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer.” Id.
Under this test, the patent holder must meet a double standard—an objective standard as well as a knowledge-based standard specific to the accused. The burden of proof for both prongs is with the patent holder.
The U.S. Supreme Court is presently examining this standard in two cases in which the petitioners argue that the present test is too rigid and a more flexible standard would make it easier for trial judges to award enhanced damages. We will report back when the Supreme Court issues its holding.
However the Supreme Court rules, probably later this year, it remains important for companies that come across patents of others to be sure that their implementations are non-infringing.