Willful infringement

Under 35 U.S.C. 284, once the court finds for the claimant it shall award damages adequate to compensate for the infringement, but in no event less than a reasonable royalty¹. When the damages are not found by a jury, the court assesses them. In either event the court may increase the damages up to three times the amount found or assessed¹. Increased damages do not apply to provisional rights under 35 U.S.C. 154(d)¹.

Section 284 does not use the word willful. The Supreme Court has said that the word may clearly connotes discretion, and that this discretion is to be exercised in light of the considerations underlying its grant².

In Halo Electronics v. Pulse Electronics (2016) the Supreme Court rejected the two-part test the Federal Circuit had adopted in In re Seagate. That test required a patent owner to show by clear and convincing evidence both that the infringer acted despite an objectively high likelihood of infringing a valid patent, and that the risk was known or so obvious that it should have been known².

• Egregious cases. Enhanced damages are designed as a punitive or vindictive sanction for egregious infringement behavior and are generally reserved for such cases. Conduct that has been described in the Court's cases as warranting them includes willful, wanton, malicious, bad-faith, deliberate, consciously wrongful and flagrant behavior².
• No objective recklessness threshold. The subjective willfulness of a patent infringer, intentional or knowing, may warrant enhanced damages without regard to whether the infringement was objectively reckless².
• Knowledge at the time. Culpability is generally measured against the knowledge of the actor at the time of the challenged conduct².
• Not automatic. Enhanced damages do not have to follow a finding of egregious misconduct. Courts take into account the particular circumstances of each case in deciding whether to award them, and in what amount².
• Standard of proof. A patent owner does not have to prove the grounds by clear and convincing evidence. Patent-infringement litigation has always been governed by a preponderance of the evidence standard, and enhanced damages are no exception².
• Review on appeal. The decision is reviewed on appeal for abuse of discretion².

A concurring opinion in Halo by Justice Breyer, joined by two other Justices, said that the majority's references to willful misconduct do not mean a court may award enhanced damages simply because the evidence shows the infringer knew about the patent and nothing more².

Under 35 U.S.C. 298, the failure of an infringer to obtain the advice of counsel with respect to an allegedly infringed patent, or to present such advice to the court or jury, may not be used to prove that the accused infringer willfully infringed the patent, or that it intended to induce infringement³. Section 298 applies to civil actions commenced on or after January 14, 2013³.

The decision below is the US Supreme Court's ruling on the standard for enhanced damages under section 284. It is an example of how the term is used in US law, and says nothing about either party beyond the decision itself.

Decided June 13, 2016. The Court held that section 284 gives district courts discretion to award enhanced damages, rejected the Federal Circuit's Seagate test, and vacated and remanded the judgments in both cases before it2.