Posts Tagged: "enhanced damages"

Carnegie Mellon University (CMU) sued Marvell Technology Group for infringing two patents related to a detector for reading data stored on hard-disk drives. A jury returned a verdict for CMU, and awarded $1.17 billion as a reasonable royalty for infringement, based on a royalty of 50 cents per chip. The district court increased the damages by 23% for willful infringement and entered a verdict of $1.54 billion in damages, plus a continuing royalty of 50 cents per chip. Marvel challenged the enhancement of damages for willfulness. While Marvell’s chips blatantly copied the CMU patents, Marvell’s invalidity defenses raised in litigation were not objectively unreasonable.

In a concurring opinion, Judge O’Malley, who was joined by Judge Hughes, wrote that she felt constrained by the Federal Circuit’s precedent in In re Seagate and Bard Peripheral Vascular v. W.L. Gore, but that recent Supreme Court decisions call into question the continued viability of that precedent. As such, Judges O’Malley and Hughes have urged the Federal Circuit to reconsider en banc the standard for awarding enhanced damages under 35 U.S.C. 284. With willful damages back on the table future patent reform is in question.

In January 2013, Taiwan’s InnoLux Corp. filed an appeal with the Federal Circuit, requesting the Court to overturn an award of enhanced post-judgment (“ongoing”) royalties that appeared to be enhanced, at least in part, because the trial judge took offense at an out-of-court remark made by the defendant’s CEO, after losing at trial. Following the verdict, the defendant’s CEO was quoted in a Taiwan newspaper as having said, “The issue of patent infringement is being taken too seriously sometimes.”

The relative paucity of design patent jurisprudence regarding the legal remedy of damages and the equitable remedy of an accounting for the infringer’s profits, makes clear that while an award of damages for patent infringement may be enhanced under 35 U.S.C. § 284 for willful infringement, and award of profits under 35 U.S.C. § 289, may not be enhanced under Section 284. While this distinction may appear important to one who wishes to obtain an enhancement of the damages award for willful infringement, the jury verdict form in Apple v. Samsung leaves one clueless as to whether the monetary award for infringement of 18 Samsung devices was an award of damages, an award of profits, or some combination of the two.

After dispatching with Underwater Devices the Federal Circuit announced the new rules, which requires at least a showing of objective recklessness in order to support a finding of willful infringement and, thereby permitting enhanced damages. The Federal Circuit did not stop there though, but rather took the opportunity to explain that because of the abandonment of the affirmative duty of due care, there is no affirmative obligation to obtain opinion of counsel. Thus entered the era of intentional blindness, effectively killing the practice of obtaining an infringement opinion.