Bottom line: Proving willful infringement is becoming increasingly difficult. Even if the accused infringer is ultimately found liable, and even if it ignores a patent and/or volitionally infringes the patent, the infringer can be absolved of liability for willful infringement if the infringer, during litigation, puts forth a reasonable defense to patent infringement or patent invalidity . The reason for the increased difficulty in proving willfulness is illustrated in Carnegie Mellon University v. Marvell Tech. Group (Fed. Cir. 2015) where the Federal Circuit held that the objective prong of the willfulness analysis is not associated in any way with the state of mind of the infringer.
Willful patent infringement has a legal definition which may be significantly different from a layperson’s expectation of what willful patent infringement ought to be. From the layperson’s perspective, willful patent infringement ought to focus on the state of mind of the infringer at the time of the infringing acts. If the infringer did not actually know about and did not actively ignore the patent, the reasoning goes, then how could it have been willful in infringing the patent? It may seem that the state of mind of the infringer ought to be paramount to whether the infringing activities are willful.
The legal definition includes a subjective prong/inquiry but it also has an objective prong/inquiry, both of which must be met to properly reach a conclusion of willfulness. Willful patent infringement requires a finding, by clear and convincing evidence, that: (1) the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent, and (2) this objectively defined risk was either known or so obvious that it should have been known. If either of the objective and subjective prongs is lacking, then there is no willful patent infringement. This is where the legal definition depart from the layperson’s view of willful patent infringement.
In Carnegie Mellon (CMU), CMU owned two patents related to controller ICs for hard disk drives and solving problems with reading and writing to the hard drives. In 1997, the inventors filed a provisional patent application on their solutions and ultimately obtained a patent. In May 1998, they published a paper in a publication of the most popular electrical engineering association.
Around 2001, Marvell engineers became aware of CMU’s invention through the published paper and incorporated the technology into their own hard drives controller ICs. From 2003 to 2012, Marvell sold 2.3 million chip sets incorporating the patented technology.
The jury found that Marvell knew of CMU’s patents before the start of litigation. It also found that Marvell actually knew or should have known that its actions infringed the patent’s claims. The district court found that Marvell acted in a subjectively reckless manner with respect to the risk of infringing the subject patents. The Federal Circuit affirmed these findings. Under a layperson’s perspective, this ought to constitute willful patent infringement because of the infringer’s state of mind at the time of the infringing acts. However, under the legal definition, this subjective aspect alone does not constitute willful infringement.
Marvell, at first, attempted to rebuff the willfulness findings by arguing that Marvell did not adopt the detailed algorithm of CMU’s patented technology into their own chip sets and that their own version was sub-optimal. If they incorporated a sub-optimal version of the algorithm and produced a suboptimal product, under U.S. patent laws, it may still be infringing since the scope of patent protection is defined by the claims, which could be directed to a generic version of the algorithm. As such, this argument did not work to counter a finding of willfulness.
Marvel then pointed to its invalidity defense that was raised at the time of trial to counter the willfulness charge. In this regard, Marvell found favor in the court’s eyes. The district court described the invalidity defense as injecting “enough uncertainty” about what the prior art disclosed and what CMU’s claims require so that it could not say that the defenses were objectively unreasonable. The district court ultimately held that the patent was valid but did describe its decision as a “close call.”
Based on the objectiveness prong, the Federal Circuit reversed the enhanced damages award based on willful patent infringement because the invalidity defense Marvell presented during litigation was found to be objectively reasonable. Hence, even if all of the facts favor the patent owner, no willful infringement and no enhanced damages were found because of the defenses raised during litigation. The state of mind of the infringer at the time of the infringing actvities play no part in the objectiveness inquiry. Put simply, there seems to be an impenetrable barrier between the subjective intent of the infringer and the objective inquiry. Thus, the defenses to infringement (non-infringement, invalidity, or unenforceability) or reasons for a less than high risk of patent infringement can be uncovered or brought forth at any time and does not need to be established before litigation or at the time of the infringing activity.
Even so, it is still a good idea to conduct a non-infringement and/or invalidity study when faced with accusations of patent infringement so that one can make a determination of the risks involved with a particular course of action. Ignoring a patent is not advisable since there could be a substantial risk of enhanced damages of up to three times the amount of actual damages, should no reasonable defense can be put forth during litigation.
I invite you to contact me with your patent questions at (949) 433-0900. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.