IP Watchdog: District Courts should have more discretion to enhance patent damages, by Louis Foreman
This post originally appeared in IP Watchdog on January 30, 2015.
As part of my continued work to protect the rights of independent inventors, last month I filed an amicus brief (“friend of the court”) with the U.S. Court of Appeals for the Federal Court in the case Halo v. Pulse, in which I urge the court to allow judges to award enhanced damages in favor of the patent owner.
In the case of Halo v. Pulse, the plaintiff, a patent owner, had offered the defendant a license for the patent, but the defendant not only rejected the offer but it refused to negotiate, provided no reason for its rejection, obtained no legal opinion of invalidity or non-infringement, and continued to use the patented invention for years. When the plaintiff finally brought the case to court and won, the defendant was only ordered to pay only a “reasonable royalty,” which is no more than the original license that the plaintiff offered. In cases where the infringer has “not acted in good faith,” or has caused “unnecessary expense and injury” to the patent owner, the judge should have the power to increase the damages owed to the patent owner beyond those that would have been obtained in a license agreement that the defendant refused in the first place.
Indeed, infringers should not be able to arrogantly and recklessly violate patents for years but ultimately pay only the same amount they would have paid the patent owner for a license in the first place. Currently, however, that is the situation that exists, because an infringer can avoid being stuck with enhanced damages if the infringer’s attorneys, for the first time in the litigation, raise a newly-devised (but ultimately incorrect) argument that the patent is invalid or not infringed, even if this was not the actual reason why the infringer refused to take a license years earlier.