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Parties should accumulate evidence of subjective good faith in order to protect against a finding of wilful patent infringement and triple damages in light of Halo Electronics v Pulse Electronics.
This is the opinion of Michael Mutter, head of law firm Birch Stewart Kolasch Birch’s (BSKB) electronics and IT patent department, speaking during a WIPR webinar held yesterday.
He advised parties to make an effort at the time that the potentially infringing conduct occurs to establish admissible evidence of good faith.
This could come in the form of an opinion from an independent counsel, which may be preferable to internal corporate evidence, testimony of engineers or memorandums.
Subjective good faith, which involves the analysis of the accused infringer’s culpability as measured by what it knew at the time of the challenged conduct, is one of the factors looked at by a court when considering enhanced damages.
Enhanced damages for patent infringement have been available since the beginning of US patent law, and the current statute allowing enhanced damages—35 USC, section 284—was enacted in
Before Halo, an en banc US Court of Appeals for the Federal Circuit established in the case In re Seagate Tech (2007) a two-part test for wilful infringement based on “objective recklessness”.
However, the US Supreme Court rejected the test in 2016 in Halo, returning the interpretation of section 284 to a subjective test.
Shawn Hamidinia, associate at BSKB, explained that the court pointed to the word “may” in the text of section 284, stating that the word “clearly connotes discretion” in increasing damages.
Currently, the decision of whether there has been subjective wilfulness is determined by a jury (or a judge, if a jury trial is waived).
If subjective wilfulness is found, a judge applies the Read Corp v Portec factors while exercising discretion to determine the extent of enhanced damages.
Post-Halo decisions have turned to the Read factors to determine the extent to which the infringer’s conduct was egregious.
Of this nine factor list, Mutter believes that the duration of the defendant’s misconduct and the remedial action that it takes will be very important.
The webinar also discussed the issue of infringement during the time period between the adoption of Seagate and the reversal by Halo, a “somewhat unanswered question”, according to Mutter.
He recommended any parties in this position to revisit any conduct within the period that will be potentially challenged and to develop evidence of good faith now.
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wilful infringement, damages, Seagate, Halo Electronics v Pulse Electronics, patent, BSKB, US Supreme Court, good faith, WIPR webinar