The Federal Circuit has reversed a district court’s award of enhanced damages after a de novo review of whether there was an objectively high likelihood of infringement.
In Carnegie Mellon Univ. v. Marvel Tech. Grp., Ltd., a jury awarded over a billion dollars in damages after finding Marvel had infringed Carnegie Mellon’s patents. The district court added 23 percent in enhanced damages after finding willful infringement on the grounds that Marvel’s trial defenses were not objectively reasonable and that Marvel knew of should have known its actions would infringe the patents. On appeal, the Federal Circuit held Marvel had presented defenses during the litigation that were objectively reasonable.
First, the court rejected the district court’s premise that a reasonable defense had to be known to Marvel during the time prior to the litigation. Quoting In re Seagate, the court reiterated that “‘[t]he state of mind of the accused infringer is not relevant to th[e] objective inquiry’ into the risk of liability to the defendant necessary for a finding of recklessness.” Citing further precedent, the court held there is no temporal aspect to the objective reasonableness of a defense, i.e. Marvel need not have “had the defense in mind before the litigation.”
Second, the court rejected the district court’s distinction between those defenses presented at trial and those raised an earlier stage, such as during summary judgment proceedings. The court held objectively reasonable defenses can include “claim-construction arguments [and] other defense that [do] not make the cut for consuming precious time and attention of the jury. Indeed, the court noted the record of defenses as a whole must be examined, and that the “record is not limited to evidence presented to the jury.” Thus, Marvel did not have to present a defense to the jury for that defense to be found objectively reasonable.
Carnegie Mellon Univ. v. Marvel Tech. Grp., Ltd., No. 2014-1492 (Fed. Cir. Aug. 4, 2015) [Taranto (opinion), Wallach, Chen].