In Halo Elecs., Inc. v. Pulse Elecs., Inc., Appeal No. 2014-1513, the Supreme Court overturned the Federal Circuit’s decision in In re Seagate that required a patentee alleging willful infringement to demonstrate, by clear and convincing evidence, that the accused infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent (“objective prong test”).
On appeal, the Court rejected the objective prong test as being unreasonably rigid. The Supreme Court pointed out that the pertinent language of § 284 “contains no explicit limit or condition” on when enhanced damages are appropriate. The Supreme Court also looked to its previous decision in Octane Fitnessconcerning fee-shifting in patent cases. There, the Court explained what it meant for a case to be “exceptional” under the Patent Act, correcting the Federal Circuit’s previous misunderstanding of the term. The Court found that the rigid objective prong test was also based on the Federal Circuit’s misunderstanding of what it meant for a case to be “exceptional,” further supporting its decision to overturn Seagate.