Patent Law Practice Center

Federal Circuit hands pop stars defeat on attorneys’ fees

The United States Court of Appeals for the Federal Circuit recently issued a non-precedential decision in a patent infringement action involving Justin Timberlake and Britney Spears and their production companies. The Federal Circuit’s decision vacated an earlier award of attorneys’ fees to Timberlake, Spears and the other defendants based on a finding that the case was exceptional within the meaning of 35 U.S.C. 285. 

The original action in this patent infringement litigation was filed by Large Audience Display Systems (LADS), who alleged that Timberlake, Spears and their production companies infringed upon U.S. Patent No. 6,669,346, titled Large-Audience, Positionable Imaging and Display System for Exhibiting Panoramic Imagery, and Multimedia Content Featuring a Circularity of Action. This patent protects a panoramic imaging and display system in which an array of speakers is positioned around a perimeter of the system’s screen to provide audible sound which pans in such a way that can be synchronized with the movement of objects on the screen. (more…)

Supreme Court says district courts have discretion to enhance patent damages

In a unanimous decision delivered by Chief Justice John Roberts (left) in Halo Electronics, Inc. v. Pulse Electronics, Inc., the United States Supreme Court recently did what much of the patent world expected it would do; they overruled the Federal Circuit’s “unduly rigid” test for the awarding of enhanced damages for willful damages put in place by In re Seagate Technology, LLC, 497 F. 3d 1360, 1371 (2007)(en banc).

Under Seagate, in order for a patent owner to be entitled to receive enhanced damages of up to triple the original damages award, the patent owner first had to “show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.” Then, the patentee was required to demonstrate, again by clear and convincing evidence, that the risk of infringement “was either known or so obvious that it should have been known to the accused infringer.” The Supreme Court held that this test was not consistent with the express language of 35 U.S.C. §284.

In the Supreme Court’s recent decisions in Highmark Inc. v. Allcare Health Management Systems, Inc., 134 S. Ct. 1744 (2014) and Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014) the Court, interpreting 35 U.S.C. § 285, found that there was no textual support in the statute to impose an onerous, rigid test for the awarding of attorneys’ fees to a prevailing party in a patent infringement lawsuit. Most notably, the Supreme Court explained to the Federal Circuit that they misinterpreted a key ruling of the Supreme Court when they created their test, which would result in attorneys’ fees almost never being awarded.

That same exact misinterpretation was at the heart of Federal Circuit case law relating to an award of enhanced damages to a victorious patent owner, which was why so many believed that the Supreme Court would grant district courts the same discretion with respect to enhanced damages that they were given with respect to attorneys’ fees in 2014 in Highmark and Octane Fitness.

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SCOTUS hears enhanced damages oral arguments February 23, 2016

On Tuesday, February 23, 2016, the United States Supreme Court will hear oral arguments in Halo Electronics, Inc. v. Pulse Electronics, Inc. (14-1513) and Stryker Corporation v. Zimmer, Inc. (14-1520), which have been consolidated for appeal. These two cases will force the Court to dive into one of the most thorny patent litigation issues – the issue of enhanced damages for willful patent infringement.

The statute in question says very little that is relevant, merely saying that the district court judge “may increase the damages up to three times the amount found or assessed.” 35 U.S.C. § 284. Simple and straightforward enough, but over the years the United States Court of Appeals for the Federal Circuit has issued rulings that make it virtually impossible for a victorious patent owner to ever receive enhanced damages. The rigid structure of the enhanced damages test has effectively removed the permissive and discretionary language of the statute, which just says that the district court judge “may increase the damages.”

In the Supreme Court’s recent decisions in Highmark Inc. v. Allcare Health Management Systems, Inc., 134 S. Ct. 1744 (2014) and Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014) the Court, interpreting 35 U.S.C. § 285, found that there was no textual support in the statute to impose an onerous, rigid test for the awarding of attorneys’ fees to a prevailing party in a patent infringement lawsuit. Most notably, the Supreme Court explained to the Federal Circuit that they misinterpreted a key ruling of the Supreme Court when they created the test that would result in attorneys’ fees never being award. That same exact misinterpretation is at the heart of Federal Circuit case law relating to the awarding of enhanced damages to a victorious patent owner.

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Federal Circuit reverses damages award against Cisco Systems

On December 28, 2015, the United States Court of Appeals for the Federal Circuit reversed a $63.7 million jury verdict against Cisco Systems. The Court, in an opinion by Chief Judge Prost (pictured), concluded that substantial evidence did not support the jury’s finding that Cisco’s devices, when used, perform the “running” step of the asserted claims.

Commil owns U.S. Patent No. 6,430,395, which relates to a method of providing faster and more reliable handoffs of mobile devices from one base station to another as a mobile device moves throughout a network area. In 2007, Commil brought a patent infringement action against Cisco, which makes and sells wireless networking equipment. In a first jury trial, Commil alleged that Cisco directly infringed the ’395 patent by making and using networking equipment, and also that Cisco induced its customers to infringe by selling them the infringing equipment. The jury concluded that Commil’s patent was valid, that Cisco was liable for direct but not induced infringement, and awarded $3.7 million in damages. Commil then filed a motion for a new trial on induced infringement and damages, which the district court granted. The second jury concluded that Cisco was liable for induced infringement and awarded $63.7 million in damages.

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Willful Infringement Center Stage at Federal Circuit

The United States Court of Appeals for the Federal Circuit recently issued a unanimous panel decision in Halo Electronics, Inc. v. Pulse Electronics, Inc. This decision may have more far-reaching implications for patent reform than any other decision reached by any court in recent memory. The issue of particular interest in this case was willful infringement, and in a concurring opinion, Judges O’Malley and Hughes wrote that the majority was constrained by the Federal Circuit’s precedent in In re Seagate and Bard Peripheral Vascular v. W.L. Gore, but that recent Supreme Court decisions call into question the continued viability of that precedent. As such, Judges O’Malley and Hughes urged the Federal Circuit to reconsider en banc the standard for awarding enhanced damages under 35 U.S.C. 284.

The case came to the Federal Circuit on an appeal by Halo Electronics, Inc. (“Halo”), who appealed from multiple decisions of the United States District Court for the District of Nevada. First, Halo appealed the granting of summary judgment that Pulse Electronics, Inc. and Pulse Electronics Corp. (collectively “Pulse”) did not sell or offer to sell within the United States the accused products they manufactured for delivery to buyers outside the United States. Second, Halo also appealed the granting of summary judgment that Pulse did not directly infringe Halo’s U.S. Patents 5,656,985 (the “’985 patent”), 6,297,720(the “’720 patent”), and 6,344,785 (the “’785 patent”) (collectively “the Halo patents”). Finally, Halo appealed the holding that Pulse’s infringement of the Halo patents with respect to certain accused products that Pulse sold and delivered in the United States was not willful.

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