June 15, 2012
Yesterday, in Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., the Court of Appeals for the Federal Circuit issued an important decision relating to willful infringement. The court held that the objective prong of the “willfulness” standard enunciated in In re Seagate Technology, LLC is a question of law that is subject to de novo review at the Court of Appeals.
In 2007, in In re Seagate Technology, LLC, the Federal Circuit issued an en banc opinion on the law of willful infringement. Seagate established a two-pronged test for establishing the requisite grounds for willful infringement. The court held that a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent. Once this threshold is satisfied, the patentee also must demonstrate that this objectively defined risk was either known to the infringer or so obvious that it should have been known. Following Seagate, other decisions of the Federal Circuit could have generally held that the “objective” prong of Seagate is not met where an accused infringer relies on a reasonable defense to a charge of infringement.
In the Bard case, the Federal Circuit noted that the determination of the objective prong of Seagate requires an objective assessment of potential defenses based on the risk presented by the patent. The court observed that these defenses may include questions of infringement, but also in most cases will include questions of validity that would best be determined by the court.
Thus, held the court, when a defense or noninfringement theory is purely legal, such as for claim construction, the objective prong of such theory is a purely legal question to be determined by the judge. Further, where the objective prong turns on fact questions or legal questions that depend on fact questions, “the judge remains the final arbiter of whether the defense was reasonable, even when the underlying fact question is sent to the jury.” Thus, held the court, “the ultimate legal question of whether a reasonable person would have considered there to be a high likelihood of infringement of a valid patent should always be decided as a matter of law by the judge.”
In the Bard case the court remanded the lawsuit to the trial court for consideration of the question of willfulness. One judge, Judge Newman, concurred with the majority’s reasoning on the willfulness standard but dissented from the remand, stating that, in her view, a remand was unnecessary.
For more information on this decision, please contact Fitch Even partner Joseph F. Marinelli, the author of this alert.