Jury’s Willfulness Determination Affirmed Under Modified In re Seagate Standard

cafc-federal-circuit-windowsIn re Stryker Corporation v. Zimmer, Inc.,  (Before Hughes, Newman, and Prost, CJ.) (Opinion for the court, Prost, CJ.) Click Here for a copy of the opinion.

Stryker Corporation was awarded $70 million in lost profits after a jury found that Stryker’s patents were valid and willfully infringed by Zimmer. The district court affirmed the jury’s verdict, awarded Stryker treble damages for willful infringement, and awarded Stryker attorney’s fees. Stryker’s patents concerned portable, battery-powered, and handheld pulsed lavage devices used in orthopedic procedures to deliver pressurized irrigation for medical therapies, including cleaning wounds.

On appeal, the Federal Circuit initially held that Stryker’s patents were valid and infringed but reversed the district court’s finding of willfulness and the award of treble damages and attorney’s fees, applying the test for willful infringement and enhanced damages set forth in In re Seagate Technology, Inc. For infringement to be willful under the Seagate standard, a patentee had to establish by clear and convincing evidence that there was an objectively high likelihood that the accused infringer’s actions constituted patent infringement and that the risk was “either known or so obvious that it should have been known to the accused infringer.”

Stryker filed a petition for writ of certiorari in the Supreme Court, which was granted to determine whether the Seagate test regarding willfulness and enhanced damages was consistent with the Patent Act. The Supreme Court rejected the Federal Circuit’s Seagate approach, finding that “[t]he subjective willfulness of a patent infringer, intentional or knowing, may warrant enhanced damages, without regard to whether his infringement was objectively reckless.” Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1932 (2016). The Supreme Court also rejected the use of a clear and convincing standard in favor of a preponderance of the evidence standard.

On remand from the Supreme Court, the Federal Circuit re-affirmed the jury’s finding that Stryker’s three patents were valid and infringed and it affirmed the jury’s award of lost profits. The Federal Circuit also affirmed the jury’s subjective willfulness determination, which Zimmer had not appealed, finding that willful misconduct had been sufficiently established under the higher clear and convincing evidence standard. However, the Federal Circuit vacated the district court’s award of enhanced damages and remanded for the district court to determine whether the case was exceptional enough to warrant enhanced damages. The Federal Circuit also vacated and remanded the district court’s award of attorney’s fees, which had been based solely on its determination that Zimmer was liable for willful infringement.

The award of damages for willful infringement and of attorneys fees for an “exceptional case” are independent matters of discretion for the district court to evaluate under the totality of the circumstances in each case.

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Robert Schaffer

Robert Schaffer is an intellectual property partner at Troutman Sanders. Bob applies more than 30 years of experience to IP counseling and litigation. His work includes patent procurement, strategic planning and transactional advice, due diligence investigations, district court patent cases, and Federal Circuit appeals. He regularly handles complex and high-profile domestic and international patent portfolios, intellectual property agreements and licensing, IP evaluations for collaborations, mergers, and acquisitions. In disputed court cases Bob’s work includes representing and counseling client in ANDA litigations, complex patent infringement cases and appeals, and multidistrict and international cases. In disputed Patent Office matters his work includes representing and counseling clients in interferences, reexaminations, reissues, post-grant proceedings, and in European Oppositions. For more information and to contact Bob please visit his profile page at the Troutman Sanders website.

Robert Schaffer

Joseph Robinson has over 20 years of experience in all aspects of intellectual property law. He focuses his practice in the pharmaceutical, life sciences, biotechnology, and medical device fields. His practice encompasses litigation, including Hatch-Waxman litigation; licensing; counseling; due diligence; and patent and trademark prosecution. He has served as litigation counsel in a variety of patent and trademark disputes in many different jurisdictions, and has also served as appellate counsel before the Court of Appeals for the Federal Circuit. Joe also focuses on complex inter partes matters before the U.S Patent and Trademark Office, inventorship disputes, reexaminations and reissues. His experience includes numerous interferences, a particular advantage in new U.S. Patent and Trademark Office post-grant proceedings. He also counsels on patent–related U.S. Food and Drug Administration issues, including citizen petitions, Orange Book listing, and trademark issues. For more information and to contact Joe please visit his profile page at the Troutman Sanders website.

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