Federal Circuit Clarifies Standards for Willful Infringement and Enhanced Damages While Reinstating, Affirming-in-Part and Reversing-in-Part Findings and Awards Below by the District of Delaware in Patent Infringement Action

Fox Rothschild LLP

Fox Rothschild LLP

By Memorandum Opinion entered on appeal from the United States District Court for the District of Delaware in SRI International, Inc. v. Cisco Systems, Inc., Case 20-1685 (Fed. Cir. September 28, 2021), the Federal Circuit reinstated the trial jury’s finding of willful infringement, affirmed the district court’s grant of attorneys’ fees and reinstated the district court’s award of enhanced damages, and reversed the district court’s judgment as a matter of law of no willful infringement on remand.

In doing so, the Federal Circuit explained that, by its prior reference to the language “wanton, malicious, and bad faith” from the U.S. Supreme Court’s decision in Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1932, it did not intend to create a heightened requirement for willful infringement.  Rather, “that sentence from Halo refers to ‘conduct warranting enhanced damages,’ not conduct warranting a finding of willfulness.”  Id. at *9 (quoting Halo, 136 S. Ct. at 1932).  The Federal Circuit clarified that “the concept of ‘willfulness’ requires a jury to find no more than deliberate or intentional infringement.”  Id. at *10.

In addition, the Federal Circuit clarified that, “[a]lthough willfulness is a component of enhancement, ‘an award of enhanced damages does not necessarily flow from a willfulness finding.’”  Id.  Indeed, “[d]iscretion remains with the district court to determine whether the conduct is sufficiently egregious to warrant enhanced damages” pursuant to 35 U.S.C. § 284.  Id.  Thus, on appeal, the Federal Circuit reviews a district court’s decision to award enhanced damages for an abuse of discretion.  Id.

A copy of the Memorandum Opinion is attached.

Some general points of take away from the case are (1) the standards for finding willful infringement and awarding enhanced damages are not the same; and (2) a finding of willful infringement does not automatically warrant the award of enhanced damages in every case.

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