Supreme Court Loosens Test for Enhanced Patent Damages

by LeClairRyan

The U.S. Supreme Court recently issued a decision in the companion cases Halo Electronics, Inc. v. Pulse Electronics, Inc. and Stryker Corp. v. Zimmer Inc., altering the analysis for when patent damages can be increased up to three times the amount found or assessed for willful infringement. Specifically, the Supreme Court:

  • Overruled the Federal Circuit’s prior test established in In re Seagate Technology, LLC for awarding enhanced damages for willful infringement of a patent
  • Decreased the burden for proving entitlement to enhanced damages
  • Made the appellate standard of review more deferential

These changes will increase the application of enhanced damages in patent litigation and will require greater care to be exercised when there is knowledge of potential patent infringement.

Prior to Seagate, the Federal Circuit imposed an affirmative duty on an accused infringer to exercise care, including seeking opinion of counsel, prior to making the potentially infringing product in order to avoid a finding of willfulness. In Seagate, the Federal Circuit set forth a test for willfulness that required objective recklessness on the part of the accused infringer. This test effectively eliminated the duty of a potential infringer to obtain written opinion of counsel to protect against an enhanced damage award.

The Supreme Court overturned Seagate, holding that the test established therein is inconsistent with the discretionary authority granted for awarding enhanced damages under the Patent Act. Although the Supreme Court rejected the Seagate test as too rigid and impermissibly encumbering on the discretion afforded to district courts in punishing egregious cases of willful patent infringement, the Supreme Court still acknowledged that many aspects of the Seagate test reflect the sound principle that enhanced damages should only be available in egregious cases.

In this decision, the Supreme Court found the objective recklessness requirement of the Seagate test could serve to insulate some of the worst patent infringers. In particular, the Supreme Court noted the objective recklessness standard would not be satisfied in cases where, during the proceedings, the accused infringer raises a substantial question of validity with regard to the patent-in-suit. Such a substantial question of validity would serve to preclude enhanced damages, whether or not the infringer acted on the basis of that defense or was even aware of the defense prior to committing the accused acts of infringement.

Objective Recklessness Requirement Eliminated

Although the Supreme Court overruled the Seagate test, unfortunately the court did not announce a new standard for the enhanced damages analysis. Instead, district courts must now evaluate the particular circumstances of each case to determine whether to impose enhanced damages. The Supreme Court noted that subjective willfulness on the part of the accused infringer may alone warrant enhanced damages, without regard to whether the infringement was objectively reckless. Further, culpability for enhanced damages is to be measured at the time of the challenged conduct, not after the fact during trial. The elimination of the objective recklessness requirement effectively lowers the standard for obtaining enhanced damages.

The Supreme Court also found that the heightened proof standard of clear and convincing evidence as previously applied by the Federal Circuit is inappropriate. Thus, the lower preponderance of the evidence burden is to be applied to the enhanced damages determination.

Finally, the Supreme Court made the Federal Circuit’s standard of review for enhanced damages determinations more deferential. The Supreme Court held that the abuse of discretion standard alone should be applied to enhanced damages decisions and that the Federal Circuit should review the district court’s exercise of discretion in light of the precedent defining the egregious circumstances where enhanced damages should be applied.

Going forward, these aspects of the Supreme Court’s decision clearly open the possibility of more enhanced damages awards. Additionally, ex post facto issues of validity raised in defense to patent infringement at trial will no longer be sufficient to avoid an enhanced damages sanction for patent infringement. Further, subjective willfulness alone on the part of the infringer may result in treble damages.

While the Supreme Court’s decision does not restore the affirmative duty of care established prior to Seagate, a party will need to develop and document reasonable bases for invalidity and/or non-infringement at the time it learns that it might infringe a patent to avoid the implication of subjective willfulness. LeClairRyan’s patent attorneys are available to assist in developing strategies to minimize risks of running afoul of the new enhanced damages standards and will continue to monitor the application of this decision in the district courts and the Federal Circuit.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© LeClairRyan | Attorney Advertising

Written by:


LeClairRyan on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.