In a lengthy ruling issued September 24, 2013, the Federal Court of Appeals of Canada affirmed a trial judge’s prior determination that Bell Helicopter intentionally infringed a Eurocopter patent and that Eurocopter is entitled to punitive damages from Bell. Eurocopter’s patent covers an innovative helicopter landing gear design that Eurocopter developed and implemented on its EC120 and EC130 models.
The patent litigation between Bell Helicopter and Eurocopter has been pending for several years. This most recent decision stems from Bell Helicopter’s appeal of a January 30, 2012 decision by a trial judge that Bell had infringed a claim of Eurocopter’s patent to its famous “Moustache” landing gear used on the EC120 and EC130 helicopters. The Appeals Court rejected Bell Helicopter’s appeal of those issues and also concluded that Eurocopter is entitled to punitive damages based on Bell’s “bad faith and egregious conduct.”
Although the Court noted that punitive damages should “only be awarded where the evidence shows that there has been high-handed, malicious, arbitrary or highly reprehensible conduct that departs to a marked degree from the ordinary standards of decent behaviour,” it found that Bell Helicopter’s behaviour in this case had exceeded that “high threshold.” p. 58. The Court also noted that the purpose of punitive damages, “is not to compensate the plaintiff, but to give the defendant its just retribution, to deter the defendant and others from similar misconduct in the future, and to mark the community’s collective condemnation of what has happened.” p. 58.
Applying those standards, the Appeals Court found that Bell Helicopter’s conduct justified an award of punitive damages, citing “credibility concerns” with Bell’s senior officials and the fact that “Bell Helicopter’s staff raised early on concerns” about copying Eurocopter’s design, “yet nothing was done to alleviate these concerns.” Rejecting Bell’s claim that it did not know about Eurocopter’s patent, the court concluded that “it simply defies belief that a large and sophisticated corporation such as Bell Helicopter would not verify intellectual property rights prior to embarking, as it did, on a research program directly involving the study of the landing gear of a leased EC120 helicopter.” Worse yet, Bell Helicopter promoted the landing gear “as its own invention through an article by one of its senior technical staff specialists.” pp. 67-68.
With Bell Helicopter’s liability now decided, Eurocopter will have the opportunity to seek a specific amount of punitive damages in further court proceedings. Eurocopter previously requested a punitive damage award of $25 million.