On October 19, 2015, the United States Supreme Court granted certiorari in two patent cases, Halo Electronics, Inc. v. Pulse Electronics, Inc. and Stryker Corp. v. Zimmer, Inc. 1The Court consolidated the cases and agreed to consider the first question presented in Halo, which asks whether the Federal Circuit erred by applying the two-part test for willful infringement, which is similar to the two-part test for attorney fees that the Supreme Court struck down in Octane Fitness, LLC v. ICON Health & Fitness, Inc. 2   

The test for willful infringement is important because a finding of such infringement may lead to enhanced damages.3 The current two-part test requires a showing, 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) that the objectively-defined risk was either known or so obvious that it should have been known to the accused infringer. 4     

In Halo and Stryker, the petitioners argue that the test should be rejected and replaced with a more flexible standard that would make it easier for district courts to award enhanced damages.5 The petitioners maintain that the test for willful infringement is analogous to the test for attorney fees that was rejected in Octane (the Brooks test), in part, because both tests contain objective and subjective prongs.6   

The Supreme Court rejected the Brooks test because it superimposes an inflexible framework onto the flexible statutory text of 35 U.S.C. § 285, and because the test has no roots in § 285.7 The Court also stated that the Brooks test is so demanding that it appears to render § 285 largely superfluous. 8   

Here, the petitioners argue that the same is true for the willful infringement standard.9 The standard is based on 35 U.S.C. § 284, which states that “the court may increase the damages up to three times the amount found or assessed.10” Given this discretionary language, the petitioners contend that the Federal Circuit erred when it grafted the rigid willfulness requirement onto the statute.11 Further, like § 285, § 284 is a flexible provision that imposes no mechanical prohibitions on when district courts can enhance damages.12 In fact, § 284 may be even more flexible than § 285 because § 284’s text imposes no limits on the district court’s discretion to enhance damages, while § 285 restricts fee-shifting to “exceptional” cases.13 Given these considerations, the petitioners argue that the willfulness test, like the Brooks test, must be struck down and replaced with a more flexible framework.14 

Halo also argues that the willfulness test conflicts with the Supreme Court’s precedent.15 The Patent Acts of 1836 and 1870 contained damages provisions that were carried over by § 284,16 and arguably the Supreme Court understood the predecessor provisions as giving district courts wide latitude to enhance damages.17 In contrast to the narrow circumstances required to satisfy the willfulness test, Halo argues that district courts should have the discretion to award enhanced damages when an infringer has not acted in good faith, or has caused unnecessary expense and injury to the patentee.18