In Stryker Corporation v. Zimmer, Inc., Appeal No. 2013-1668, the Federal Circuit held that a finding of enhanced damages and attorneys’ fees for willfulness under Seagate does not necessarily justify enhanced damages and fees for willfulness under Halo.
The Supreme Court decided Halo and Stryker together, overruling Seagate and the then-controlling law for willful patent infringement and enhanced damages. The Seagate test for willful infringement had required clear and convincing evidence, both that the accused infringer was objectively reckless and that the accused infringer knew or should have known of the risk of infringement. In Halo and Stryker, the Supreme Court held that subjective willfulness alone can warrant enhanced damages without regard to objective recklessness and rejected the clear and convincing evidence standard in favor of a preponderance of the evidence standard.
On remand in this case, the Federal Circuit affirmed the jury’s finding of subjective willful infringement, reasoning that willfulness determined under the higher clear and convincing standard was sufficient to establish willfulness under the lesser preponderance standard. But, the Federal Circuit vacated the award of enhanced damages and remanded to the district court for reconsideration under Halo, which permits an award of enhanced damages at the district court’s discretion based on the circumstances of the case. The Federal Circuit also vacated and remanded the award of attorneys’ fees that had been awarded solely based on the willful infringement finding. A finding of willfulness does not necessarily render a case exceptional. Under Octane Fitness, the exceptional nature of a case is decided on a case-by-case basis at the court’s discretion considering the totality of the circumstances.