Opinion ID: 2805640
Heading Depth: 2
Heading Rank: 2

Heading: Enhanced Damages Under Section 284

Text: The district court concluded that GTT was entitled to enhanced damages because it had proven successfully that Appellants willfully infringed the patent. The district court explained that Appellants’ actions were objectively unreasonable because “an objectively reasonable person, with knowledge that a patent exists in the field in which the potential infringers wish to compete would not ignore the patent, but would investigate whether its design would infringe.” JMOL Order, 2014 WL 1663420, at . As the district court noted, moreover, the jury found that GTT proved by clear and convincing evidence that Appellants actually knew or should have known that their actions constituted an unjustifiably high risk of infringement. As a result, the district court awarded GTT enhanced damages under § 284 in the amount of $2,526,059 (50% of the total damages award). 5 GTT also presented evidence that Appellants themselves performed the patented method by testing and supporting the EMTRAC system. See, e.g., J.A. 1693:23– 1694:2 (testifying that Appellants would make the EMTRAC systems, test it, and then ship it to customers). Because we uphold the jury’s finding of infringement based on indirect infringement, however, we need not decide whether the evidence of direct infringement is sufficient to maintain the entirety of the damages award. See Ericsson, 773 F.3d at 1222. GLOBAL TRAFFIC TECHNOLOGIES v. MORGAN 15 Section 284 states in relevant part that “the court may increase the damages up to three times the amount found or assessed.” A patentee must show that he is entitled to enhanced damages by showing that the infringer willfully infringed. In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en banc). Seagate sets out a two-part test for proving willfulness where the patentee must show that: (1) “the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent,” and (2) the “objectivelydefined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer.” Id. at 1371. The first question is for the court; the second is for the jury. Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 682 F.3d 1003, 1007 (Fed. Cir. 2012). We review the first prong de novo and the second prong for substantial evidence. SSL Servs., LLC v. Citrix Sys., Inc., 769 F.3d 1073, 1090–91 (Fed. Cir. 2014). On appeal, Appellants challenge the district court’s analysis of the first prong. We conclude that the district court applied the wrong standard in its analysis of that prong. The district court found that there was ample evidence in the record that Appellants knew of the patent and determined that “an objectively reasonable person, with knowledge that a patent exists in the field in which the potential infringers wish to compete would not ignore the patent, but would investigate whether its design would infringe.” JMOL Order, 2014 WL 1663420, at . The infringer’s knowledge of the patent is irrelevant to the first Seagate prong, however. See Seagate, 497 F.3d at 1371 (“The state of mind of the accused infringer is not relevant to this objective inquiry.”). Instead, the district court should have considered whether Appellants acted “despite an objectively high likelihood that its actions constituted infringement of a valid patent.” Seagate, 497 F.3d at 1371. This requires analysis of all of the infring16 GLOBAL TRAFFIC TECHNOLOGIES v. MORGAN er’s non-infringement and invalidity defenses, even if those defenses were developed for litigation. See Halo Elecs., Inc. v. Pulse Elecs., Inc., 769 F.3d 1371, 1382 (Fed. Cir. 2014) (“The court properly considered the totality of the record evidence, including the obviousness defense that Pulse developed during the litigation, to determine whether there was an objectively-defined risk of infringement of a valid patent.”). In this case, the district court found that Appellants “had good-faith invalidity defenses once litigation began.” JMOL Order, 2014 WL 1663420, at . We agree. Because Appellants’ defenses during litigation were objectively reasonable, GTT failed to prove the first prong of our willfulness test. See Halo, 769 F.3d at 1382. As a result, we reverse the district court’s award of enhanced damages under § 284.