Dive Brief:
- The U.S. Supreme Court will hear two patent infringement cases, Halo Electronics Inc. v Pulse Electronics Inc. and Stryker Corporation v. Zimmer, both of which raise the question of "willful" infringement where a company may receive up to triple damages. The question is whether the test for willful infringement at the U.S. Court of Appeals for the Federal Circuit is appropriate.
- Halo sued Pulse for patent infringement and was awarded $1.5 million but the judge would not increase the damages and the federal circuit agreed with that decision. A jury ruled Zimmer willfully infringed on a Stryker patent for a handheld device, and said the company should pay Stryker triple damages in the amount of $210 million. But a federal appeals court ruled it was a patent infringement, but not willful infringement, and reduced the amount to $70 million.
- Stryker said in court documents the current test for determining willfulness is flawed. A company must show the party infringed on the patent despite a high likelihood its actions infringed on a valid patent and the risk of patient infringement was either known or should have been obvious.
Dive Insight:
Stryker also said standard wrongly protects those who infringe from triple damages "as long as they present at least one plausible defense at the post-trial appellate stage." But Zimmer argues in court documents changing the standard at the federal circuit would create disparities across the country in how circuit courts handle such questions. Eliminating the willfulness test would, also according to court documents, "force small companies to settle when they are unable to bear the risk of large judgements."
"The ease with which willful damages can be awarded affects people's judgement about whether to settle or carry on with behavior that's alleged to be infringing," Harold Edgar, a professor at Columbia Law School, told Modern Healthcare. He added the court's decision could "have a very significant effect" on whether and when triple damages are awarded in cases involving medical devices.