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U.S. Supreme Court

Supreme Court to consider standard for enhanced damages in patent cases

The U.S. Supreme Court has agreed to decide whether the standard for awarding enhanced patent-infringement damages is too rigid.

The court granted cert Monday in two consolidated cases raising the issue, SCOTUSblog and Reuters report. The Recorder previewed the cases in a Sept. 25 article (sub. req.).

The new cases follow a 2014 Supreme Court decision that found the U.S. Court of Appeals for the Federal Circuit had set too rigid a standard for the award of attorney fees when it interpreted Section 285 of the Patent Act. In the new cases, Halo Electronics Inc. and the Stryker Corp. say the Federal Circuit’s standard for awarding enhanced damages under Section 284 is also too strict.

Section 284 provides that courts may increase damages up to three times the amount found. The cert petitions argue the law uses “permissive and discretionary language” while the Federal Circuit uses a “rigid, two-part test” to determine eligibility.

The Federal Circuit requires proof by clear and convincing evidence that the infringement was willful for an enhanced award. To establish willfulness under the Federal Circuit’s test, patentees must show the infringer’s defenses were objectively unreasonable, and if so, that the infringer acted in subjective bad faith.

The cases are Stryker Corp. v. Zimmer Inc. and Halo Electronics Inc. v. Pulse Electronics. The cert petitions are here (PDF) and here (PDF). The patents at issue relate to a medical devices and an electrical component used on circuit boards.