the court the district courts award of the maximum possible enhanced damages was flawed as a matter of law first the district court failed to apply reid's instructions to give weight to factors that are mitigating and ameliorating and second that the court flatly misapplied several of the reed factors including concealment closeness of the case motivation for harm and but how far is too fuck and how much does that equate to what are we supposed to do with that so judge each edge pros our position is at least with respect to this panel we are not disputing the subjective willfulness finding the question is how much enhanced damages are appropriate we're not asking we're not suggesting what the right number is we're not asking this court to come up with the right number that is the function of the district court it is the function of this court and i would submit a very very important function in light of halo two to clarify and correct the district court's confusion on the meaning of the read factors in order to provide lower courts with guidance we have a situation and this case illustrate well illustrates it in which different district courts around the country looking at the same facts or applying the reed factors in diametrically different ways  so no one has suggested including in this court's opinion in read that a mechanical application is appropriate what reed said and underscored was that number one and  halo underscored that treble damages are rizzi reserved for the quote worst of the worst number two that to ensure adequate appellate review by this court the district court is obligated to explain the basis for the award particularly where the maximum amount is imposed and third and most important the court must consider all of the circumstances including factors that are mitigating or not mitigating now in this case the record is filled with mitigating factors the district court treated zimmerman as if it was a company that intentionally infringe known patents concealed that sales ignored infringement letters and was unable to present reasonable defenses when sued when in fact zimmer launched its product before the patents in suit even issued it openly sold its product for ten years with the patent holder and its principal competitors knowledge without a whisper from stryker or even a suggestion that it was violating any of its pat and when it was sued it came up with what this court has now twice said were reasonable legal defenses to all of the claims of all three of the assert damages award because of the failure of proof of objective reasonable this and that's no longer a factor but we will reaffirm the fact that it was not on reasonable for a jury to have concluded that there was infringement and the patents were not invalid but this court reiterated as to each of our defenses and at the outset of this opinion that our positions on those dispositive issues were reasonable and that by definition shows that the district court errored in the application of the closeness of the case factor that caylee was close i'm trying to read right what the supreme court told  district court's application of the reed factors explain why with respect to certain of those factors the district court had erred as a matter of law and it reminded to the district court to reconsider the availability and amount of enhanced damages in light of this court's articulation of what those reed factors mean and that the the i can't underscore how important it is we have district courts all over the country some of which like this court may never see another enhanced damages case and they are demonstrably applying the same factors quite differently with the consequences i mean here we had a whole jury trial there was a determination we paid our ninety million dollars in compensatory damages and on the basis of the district judges application i would say misapplication of the reed factors we pay one of what i believe is the second largest enhanced damages award i mean when we're talking about punitive damages it is yes these are all subject to discretion but as halo says particularly with reference to judge friendly's opinion in discretion about discretion that it is a function and office of this court to make sure that district courts around the country and frankly litigants that are deciding whether or not to contest kind of stress test that the supreme court took away from us when they took away the two times that we did before the supreme courts and very firmly that this is something that is an act of discretion by district court just the court on the ground top i'll answer your question with respect to the closeness of the case and then point out some of the other week factors that we think just have to be clarified by this court with respect to the closeness of the case with respect we think and we think this court's decisions and in a number of its prior cases indicate that if you have i mean of course there are you know what dozen or two dozen asserted claims presented in this case as to which we had lots of defenses of claim construction and not infringement that's inevitable when you're talking about a dozen or two dozen different court up a little gate patent claims across multiple patents the dispositive question is whether or not with respect to every claim of every asserted patent we had a defense which although ultimately unsuccessful was close and was reasonable and that's what determines whether the case was close or not we could have had ten defenses or ten claim construction arguments but if one of them won we would have won if one with respect to each of those patent figure one we would have had no liability here saying that post halo in this court has said in multiple multiple cases after halo including western gecko and polaris and i believe also inhalable fish the striker itself on remand is while objective reasonableness is no longer an absolute defense the strength of the claims the objective reasonableness factor is nonetheless important as one factor among many in determining whether enhanced damages are appropriate and how much and the point here is that we have a situation in which the district judge found applied the maximum penalty as if we were as halo explains the wanton malicious pirate who intentionally infringes another's patent with no doubts about its validity no notions of defense for no purpose other than stealing the plaintiff's business when the facts and the facts of this case far utterly different  just to mention a couple of the other errors on the read factors the district court found that factor number eight motivation for harm favored enhanced damages because we were competitors this court and in read and the district court in power integrations makes clear and we think it's correct that the fact that the end for the alleged infringer and the plaintiffs are competitors is insufficient to constitute motivation for harm absent misconduct for concealment there is no question in this case that we sold our product openly for ten years ten years after they obtained sixty six copies of our product and tested it without one whisper that they even thought we were infringing the district court said well i'm going to find that concealment factor satisfied  by the way the litigation conduct satisfied because there was a single discovery dispute that spanned a few months and which the district court never even knew about until post trial briefing on enhanced damages and i'm going to find that that discovery dispute ok satisfies a position and this is where i started which is one of your arguments  your main underlying argument is that enhanced damage is fine but this last number three times a lot of the music for the worst of the worst of the worst and there is not a sufficient finding here that this was the worse of the worse or not correct finding this or i don't know what to do with that because if we send it back and the district court says ok federal circuit said three times as we serve for the worst of the worst the worst this was the worst the worst worst fav off two million dollars or three million dollars and then it comes back here arguing by giving the discretion to the district court chief judge proces supreme court understood and its reference to the two centuries of case boff and this court's function in reviewing the application of discretion under the factors requires that this court clarify what those factors mean if concealment means as we thin concealment during the legit period of infringement and not one minor discovery dispute that means that the just district judge and even know about and never prejudice the defend it you should say so because he used if say repeated i think three in three or four cases post halo that requires a district court to explain adequately consider all of the facts and circumstances including those that are mitigating have to explain yourself you have to show your work well what we have never said that the read factors are required at the consideration we've said courts can but they'll have to consider and when they do we haven't said that there that we're not arguing with respect a precise formula we're arguing a situation in which the read fact multiple read factors were demonstrably applied in correctly this single discovery dispute with no prejudice and no judge involvement because not only the award of attorney's fees but was the sole it was the sole reason cited for satisfying two of the read factors the duration of the misconduct there are this court has not resolved it but another as we point out a number of district courts have properly concluded in our view that the duration of misconduct is the period of time in which the defendant had noticed that it was infringing what the lower court said is nope i'm going to find that the duration of the misconduct was the entire ten years of the infringement period a period in which even striker our competitor having tested the products never wrote us a letter never called never suggested that we were infringing these patents the meaning of those read factors has got to be uniform it's got to be it's then up to district judges to exercise their discretion and consistent with reed and halo right in opinion that explains how they resolve maybe not all of the factors but in the case in which with which the re factors are argued both pro and con with respect to the availability vel non of enhanced damages and the amount it is yes it is incumbent on the district court to explain the application of the factors alleged to be present or alleged not to be present and explain to this court why it is so that all the notwithstanding the district court's discretion there is meaningful appell some of those decisions under the framework are just flat out wrong then how are we to know whether the court would have came up with the same images or words if you had corrected those errors i think in this particular case the district court was quite adamant that looking at the totality of circumstances and the district court said that zimmer's overall conduct was a case of agree just piracy and i think it's clear that this court decided the district court found all standard so here is them are telling you about certain factors that it used to be mitigating in this case but leaving out the facts that tell the rest of the story so with respect to copying for example there then deliberate copying found by the district court here and while it did take place prior to the issuance of the patents what they were doesn't say is that it was actually aware of stryker's patents shortly after worse they were actually tried to get a patent application or try to get a patent on its copycat possible act plus product filed its application with the patent office and it was rejected by the patent office i district court did in fact take that into consideration and more importantly at zimmer's insistence the jury considered the timing issue as part of the willfulness determination and found against them or now the district court specifically district court in arctic cat and this court affirmed the word of trouble damages in that case very recently with respect to objective reasonable miss the district court specifically considered whether or not it needed to do so it specifically considered this court statements with respect to zimmer's for defenses that it brought up on appeal last time around here the district court and the jury have already found the relevant facts and they were supported by clear and convincing evidence under the sea kate standard and there's certainly enough to support the preponderance of evidence standard under halo so back in two thousand and thirteen and its original order and post trial motions the district court actually set forth a narrative of the facts as he saw them and as was presented to the jury and so that's an appendix eighty six forty two to forty four we start out with zimmer found out they were praised striker's invention as being pioneering that was admitted at trial zimmer referred to stryker as the market indicators zimmer try to come up with its own design and did in fact put out a product that was not infringing called the vera pulse but it failed miserably in the marketplace and then what happened is them or was afraid that it would be read factors and that there needs to be some guidance regardless of how we can know what i think if we've learned anything from halo has that there is no rigid formula here and these are all very fact specific circumstances the district as i don't necessarily agree that they're all over the board here it's just every case is going to have its own special circumstances and i do want to at least point out with respect to some of the retractors that zimmer's counsel addressed for example the concealment factor factor number nine i think zimmer is looking for a very narrow read of that particular factor but it's not intended to be so narrow in fact the read factor itself says whether and in that case the enhanced damages were supported and hurt by findings that the defendant had failed to preserve its records and failed to cooperate as it should a trial issue of damages so in other words it has nothing to do with concealing your court has been directed by the supreme court to look at the totality of circumstances so there's not anything that's been deleted from there the supreme court isn't saying well if you look at one factor then you can't consider it for something else it's not a mathematical here contrary to simmers argument there is no longstanding mandate that says treble damages are only for the very worst possible offenders that you can imagine there's nothing in section two eighty four or in halo that suggests that it's only for the worst of the worst and in fact this court has recognized that and has a firm of several cases where trouble damages have been awarded on less than all read factors most recently in arctic cat for read factors so i think that shows that there's not some kind of formula that should be applied this is a discretionary determination for the district court to make with respect to objective  reasonable i think down i think there's been an assumption that if you have an objectively reasonable defense necessarily that means the case is closed and i don't think that's true and i think that's what the district court was saying here when really considering what this court said in the first place about objective reasonableness but then looking at that in the context of the entirety of the case so looking at all  fairly rare in a patent case they were lost on all the remaining issues that trial zimmer lost on all fifteen post trial motions so this is not a case of there's an improper  competitors therefore there should be trouble damages obviously these factors should not be viewed in a vacuum but rather is part of the to tell it the circumstances here or zimmer wasn't just a competitor we know that right from the recognize you know this goes to kind of the policy question that mr waxman threw out there that under the abuse of discretion standard there there could have been a district court judge somewhere else or even in the same district that would have looked at this  double the award right i think that's certain then possible here and if you came in and tried to challenge that it's not likely that we would reverse and say no you need three times so we're left with the situation under abuse of discretion standard where it's not a perfect world that every potential infringer someone can go to the courthouse and you know those might be good goals so that everybody can know what the likely outcome is at the end of the day there's a lot of money  and similar very similar circumstances i think so and i think that it's probably quite rare that you'd have there ever have circumstances that are precisely the same from case to case and that's the whole point of the supreme court saying that the district court is really in the best position to make that determination because it's been a living with the case for a long period of time and so there could be a situation where someone is just as egregious as them are but maybe they're very small and there's a determination that well we don't want them to go bankrupt so we're not going to even though they are the worst of the worst we're not going to trouble damages because of that so there's there's certainly factors that the district court in its discretion is allowed to make that determination when the supreme court said that they should look at their own experience or comparable experience in other cases absolutely if the supreme court said that all in the concurrence right and every every court is going to have different experiences against which to compare yes i quick points counsel is underscoring the fact that will this wasn't a closed case because we lost on all issues that's the price of admission to the enhanced damages question if you don't lose on your issues we're not going to have a question of enhancing damages if you know on the notion that this was a close case because we lost all of our claim construction issues this court has already written two opinions on this i said let's stand them because you could win a lot of first in order to but not on all not on every single issue but just to take the issues for example you know the fact that we lost on our ten claim construction issues one of them this court is for mill your was was the did we you know was the motor which is in the nub of the barrel of this in fact in the in the handle between the top of the handle and the bottom the other which was a focus of the oral argument the first time this case was here is whether in the we have a device that has a distal and capable of receiving the suction and water tubes when we argued that and this court's opinion actually said we have the opposite front and where we have to mail nozzles not a female receptacle as in strykers device the second point i want to make is yes we have knowledge that we knew of a beast a paralegal in the company knew of the three twenty nine and the eight zero seven patents knowledge of a patent is not the same as knowing infringement and there was no finding by the court or by the jury that we ever knew or thought that we were infringing these patents the first going about duration of the misconduct right after we were sued we propounded our defenses this court has recognized twice and that as to every single assert claim and all three patents we had reasonable defenses at a minimal it was wrong for the court to enhance our damages over that two year period between the time that we asserted in good well the point here is what this what the supreme court said in willfulness in halo is that you do have to take account of the the defendant's  culpability against the knowledge that the defendant had at the time of the challenge conduct now there's an issue when the time we started selling this device and they tested it and we were sued that's that ten year period when there's no finding that we knew we were infringing or thought we were fringing and then a few months after the complaint was filed in this case which is the very first time we were on notice of any allegation or suggestion of infringement we propounded defenses which is this court has twice said although unsuccessful were reasonable and at a minimum the imposition of enhanced damages during that period is an abuse of discretion