Blog Tag: Supreme Court
Supreme Court Makes it Easier for Medical Device Companies to Recover Enhanced Damages for Patent Infringement
The Patent Act provides that, in a case of infringement, courts “may increase the damages up to three times the amount found or assessed.” Previously, in order to recover enhanced damages under the Patent Act, a patent owner had to show two things: (1) the infringer acted with objective recklessness and (2) the risk of infringement was either known or should have been known to the accused infringer. Both of these elements had to be shown by the relatively high standard of “clear and convincing” evidence.
The Supreme Court’s recent decision in Halo Electronics, Inc v. Pulse Electronics, Inc. drastically changed the standard for enhanced damages and made it easier for patent owners to obtain an enhanced damages award. The Court eliminated the objective recklessness prong and lowered the standard of proof from “clear and convincing evidence” to “preponderance of the evidence.” The Court also adopted an abuse of discretion standard for appellate courts reviewing a district court’s decision to grant enhanced damages.
Previously, patent owners struggled to obtain enhanced damages even when they could establish that the infringer acted with bad faith. Infringers were able to avoid enhanced damages by making a reasonable defense at trial. Thus, the ability of a patent owner to obtain enhanced damages sometimes depended more on the ingenuity of the defendant’s attorney than the defendant’s culpability at the time of the challenged conduct. By eliminating the objective recklessness prong, the Supreme Court refocused the analysis on the defendant’s knowledge at the time of the infringing conduct.
The Court’s new contemporaneous focus will likely influence the prelitigation conduct of patent owners and accused infringers. Demand letters informing accused infringers of their infringement and relevant patents will likely become more common place. Opinion letters will also likely take on an increased significance for accused infringers. Not all instances will warrant a full-blown infringement and validity analysis but, under the new standard, accusations of patent infringement should be given prompt, thorough, and carefully documented consideration.
United States Supreme Court Reverses Federal Circuit Decision in Medtronic, Inc. v. Mirowski Family Ventures, LLC
(January 22, 2014) A unanimous Supreme Court reversed the Federal Circuit and held that, when a licensee seeks a declaratory judgment against a patentee to establish that there is no infringement, the burden of proving infringement remains with the patentee.
According to the opinion, Mirowski Family Ventures, LLC (“Mirowski”) owns patents (U.S. Reissue Patents Nos. RE38,119 and RE39,897) relating to implantable heart stimulators. Figure 1 of U.S. Reissue Patent No. RE38,119 is illustrated below:
By way of background, Mirowski entered into a licensing agreement that permitted Medtronic, Inc. (“Medtronic”) to practice certain Mirowski patents in exchange for royalty payments. Mirowski notified Medtronic of its belief that several of Medtronic’s new products infringed the licensed patents, and thus royalty payments relating to those product were owed. Medtronic then brought a declaratory judgment action asserting that their products did not noninfringe the Mirowski patents. The district court concluded that Mirowski, as the party asserting infringement, had the burden of proving infringement and that Mirowski had not met that burden. The Federal Circuit disagreed. It acknowledged that a patentee normally bears the burden of proof, but concluded that where the patentee is a declaratory judgment defendant and, like Mirowski, is foreclosed from asserting an infringement counterclaim by the continued existence of a licensing agreement, the party seeking the declaratory judgment, namely Medtronic, bears the burden of persuasion.
The Supreme Court reversed the decision of the Federal Circuit and held that, “when a licensee seeks a declaratory judgment against a patentee to establish that there is no infringement, the burden of proving infringement remains with the patentee.” The case was remanded for further proceedings.
On June 13, 2013, the Supreme Court issued a unanimous decision finding that claims to naturally occurring DNA segments were invalid under the Patent Act because DNA is a product of nature and therefore not patent eligible. Myriad, the patentee, discovered the precise location and genetic sequence of the BRCA1 and BRCA2 genes, but did not create or alter the genetic information encoded in the BRCA1 and BRCA2 genes.
The Court also ruled that a second set of claims to complementary DNA (cDNA) sequences are patent eligible because cDNA is not naturally occurring. As a result, cDNA therefore does not present the same obstacle to patentability as naturally occurring, isolated DNA segments.
The Court expressed no opinion regarding method claims, new applications of knowledge about the BRCA1 and BRCA2 genes, or patentability of DNA in which the order of naturally occurring nucleotides has been altered, noting they are not implicated by this decision. A copy of the Supreme Court’s opinion is available here: Assoc. for Molecular Pathology v. Myriad Genetics, Inc., No. 12-398.