Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc.: Federal Circuit Explains Willful Infringement

Last week, in Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., the Federal Circuit issued a precedential opinion concerning the willful infringement standard articulated in In re Seagate Technology, LLC (“Seagate”). After affirming the United States District Court for the District of Arizona, appellant Gore filed a petition for rehearing and rehearing en banc, challenging the District Court’s willfulness analysis. The Federal Circuit granted Gore’s petition for rehearing en banc for the sole purpose of determining the standard of review applicable to willful infringement.

Pursuant to 35 U.S.C. § 284, a willful infringement determination is necessary for enhanced damages, which can be up to three times actual damages. Supreme Court precedent requires a recklessness finding for enhanced damages. Seagate established a two-pronged test for recklessness ‘by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent [where] the patentee must also demonstrate that this objectively-defined risk . . . [was] either known or so obvious that it should have been known to the accused infringer.’ Slip op. at 4. Although Seagate set this two-pronged test, the Court ‘le[ft] it to future cases to further develop the application of this standard.’ Id. Case law since Seagate held that the objective prong was not met where “an accused infringer relies on a reasonable defense to a charge of infringement,” thus narrowing the issue for this appeal to whether a defense or noninfringement theory was reasonable. Id. at 5.

Although willfulness has previously been treated as a question of fact, the Federal Circuit recognized that treating the standard only as a question of fact “oversimplifies” the issue. Id. at 6. As a result, the Federal Circuit determined that the second prong of Seagate –the reasonableness of the relief — may be a question of fact, but Seagate also required “a threshold determination of objective recklessness.” Id. The Court further explained that this standard “entails an objective assessment of potential defenses based on the risk presented by the patent.” Id. (emphasis added). This objective determination of recklessness is best decided by the “judge as a question of law subject to de novo review.” Id. Thus, the Federal Circuit has taken a full finding of willful infringement out of the jury’s hands.

Practitioners must be guided in their litigation strategies by the clarification set forth in this decision. Gibbons will keep apprized of how cases continue to interpret the willful infringement standard post-Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc.

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