Willfulness finding under subjective prong of old Seagate standard sufficient under the Halo standard, and even with a willfulness finding, decision to enhance damages or find a case exceptional is within the discretion of the district court

Stryker Corporation v. Zimmer, Inc., No. 2013-1668 (Fed. Cir. Sept. 12, 2016)

This case was part of the Supreme Court’s decision on the willfulness standard in Halo Electronics, Inc. v. Pulse Electronics, Inc. In Halo, the Supreme Court established a less rigid test for willfulness and enhanced damages where “[t]he subjective willfulness of a patent infringer, intentional or knowing, may warrant enhanced damages, without regard to whether his infringement was objectively reckless.” The Supreme Court vacated the Federal Circuit’s earlier determination that the infringement in this case was not willful and remanded to the Federal Circuit to reconsider the finding of willfulness.

On remand, the Federal Circuit concluded that the jury sufficiently established a finding of willful misconduct because the jury found subjective willfulness by clear and convincing evidence under the old Seagate standard. Since clear and convincing evidence is a higher burden than the preponderance of evidence standard now required under Halo, the jury’s finding was sufficient for willfulness. However, the court vacated and remanded the district court’s award of treble damages, as well as its finding that this case was exceptional and warranted an award of attorney fees. The court reasoned that these issues are “discretionary” and should be determined by the district court “based on the circumstances of the case.” In its decision, the district court had automatically awarded enhanced damages, found the case exceptional, and awarded attorney’s fees based solely on the willfulness finding.