The years-long court battle between C.R. Bard, Inc. and W.L. Gore & Associates, Inc. made headlines again recently, this time as a result of the Federal Circuit re-affirming a billion-plus dollar ruling in favor of Bard. For practitioners, more interesting than the record-setting award is the Federal Circuit Panel’s discussion of willful infringement, and what it may signal for the future.
The merits of the case center on a blood vessel graft technology developed more than 40 years ago. Initially, two competing patent applications covering the invention were filed. One application was assigned to Gore; the other would ultimately be licensed to Bard. After a lengthy interference battle, Bard’s patent finally issued in 2003.
Bard quickly sued Gore for infringement. Having spent decades attempting to secure its own patent over the same technology, Gore’s available defenses were limited. A District of Arizona jury found that Gore willfully infringed the patent. Gore appealed. The Federal Circuit initially affirmed the district court’s finding, but then granted Gore’s petition for re-hearing en banc, and returned the case to its original panel (Judges Newman, Gajarsa, and Linn) for reconsideration of the issue of willfulness. Upon rehearing, that panel vacated its prior decision in part, holding that the objective prong of the willfulness standard is a question of law subject to de novo review, and remanding the case for a determination of willfulness. On remand, the district court reinstated its prior judgment of willfulness, doubled damages, and attorneys’ fees. Gore again appealed.
In its more recent opinion, handed down on January 13, 2015, the Federal Circuit again found that Bard satisfied the willfulness standard set forth in Seagate, demonstrating by clear and convincing evidence that Gore acted despite a known, objectively high likelihood that its actions constituted patent infringement. Reviewing the lower court opinion de novo, Chief Judge Prost’s majority opinion concentrated on whether Gore’s inventorship defense was objectively unreasonable, concluding that, in light of the factual record developed during the interference proceedings, the argument Gore made at trial was not reasonable.
Judge Newman dissented, accusing the majority opinion of simply assessing whether the district court opinion could be supported by substantial evidence, rather than reviewing its willfulness determination de novo. Newman emphasized that willfulness cannot lie when a defendant raises any reasonable defense to infringement, and enumerated several questions of validity and enforceability put forth by Gore at trial that she deemed substantial, including the inventorship defense addressed by the majority opinion.
Perhaps most interesting was Judge Hughes’ short concurrence, which questioned whether the de novo standard is even appropriate for reviewing willfulness decisions. Referencing the Supreme Court’s 2014 Highmark and Octane Fitness opinions, Hughes argued that a “more deferential standard of review would be consistent with the standards for reviewing mixed questions of law and fact in other contexts.” He reasoned that where the majority, dissent, and district court each “provided a thorough and well-reasoned opinion,” the district judge, “whose assessment of litigation positions is informed by trial experience and who has lived with the case over a prolonged period of time,” should be given deference.
Given the history of this case, it is hardly surprising that, on February 13, Gore petitioned for another en banc rehearing. Adopting Judge Newman’s and Judge Hughes’ positions, Gore’s petition contends that further clarification of the appropriate standard of deference on willfulness is needed in light of Highmark and Octane Fitness, and that the panel’s January opinion failed to properly apply de novo review to the district court’s willfulness determination. If the Bard panel’s differences of opinion are any indicator, Gore’s petition stands a decent chance of being granted. The question of whether a district court’s opinion on willfulness issues should be owed any deference (and if so, how much) may be ripe for reassessment.