A team of three lawyers from Fish & Richardson won an unusual patent infringement case in U.S. Supreme Court last June on behalf of their client, Halo Electronics. The case was notable because it led to changes in the standard for awarding punitive damages in patent cases.
Halo sued Pulse Electronics for infringing Halo’s design patents for surface-mount transformers, a common electronic component in computer networks. The team of lawyers won a jury verdict in 2012 that Pulse willfully infringed three Halo patents, that the patents were valid and awarding past damages. The district court also permanently enjoined Pulse, but set aside the jury’s finding that the infringement was willful, meaning Halo could not seek punitive damages.
But lawyers William Woodford, Michael Kane and John Dragseth were undeterred.
“The jury had found that (Pulse) were subjectively willful infringers, but the court took that away because they had a defense at trial that basically wasn’t a sham,” said Woodford. “The law made it difficult to obtain punitive damages from even the worst infringers.”
The Fish team convinced the Supreme Court to grant certiorari to review the willful infringement issue. It then argued that the so-called Seagate test for willful infringement made it hard for patent owners to show they are entitled to enhanced damages by insulating the worst patent infringers if they can manage basically any defense at trial. They also argued that judges should have discretion to decide when to award enhanced damages.
The Supreme Court found for Halo in a unanimous opinion authored by Chief Justice John Roberts. As a result, the court agreed with Halo’s contention that district court judges should be able to enhance damages against infringers that act in subjective bad faith at the time of their infringement, whether or not they’re able to mount a defense during litigation.
“The case has been heavily cited, and it impacts cases where someone had knowledge of a patent before it was filed,” said Woodford. “It used to be that getting punitive damages in a patent case was very difficult. It’s not easy now, but it’s certainly more available.”