No. 2010-1510 (Fed. Cir. June 14, 2012)

The objective reasonableness prong of the Seagate standard for willful infringement is a question of law for a judge and subject to de novo review on appeal.

The jury found the alleged infringer had willfully infringed the patent-in-suit. On appeal, the Federal Circuit originally affirmed the finding of willfulness. The alleged infringer sought en banc review.  Although the Federal Circuit denied en banc review, the court returned the matter to the panel for reconsideration of the ruling on willfulness and the standard of review for willfulness. The panel vacated its earlier decision regarding willfulness and remanded to the district court for reconsideration of willfulness in light of the holding in this opinion.

Under the Federal Circuit’s en banc decision in In re Seagate, willful infringement can be established by satisfying a two-part test, which has both an objective prong and a subjective prong. The two-part test required showing, (1) that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent and, (2) that this objectively defined risk was either known or so obvious that it should have been known to the accused infringer. Previously, the objective prong or the first of the test was treated as a question of fact. 

Here, the panel held that the objective prong of the Seagate standard, though predicated on underlying mixed questions of law and fact, is most appropriate for determination by a judge as a question of law subject to de novo review. Under this clarified standard, the panel found that the district court judge had not applied the correct standard in the first instance.  Instead of reviewing whether the jury had enough evidence to find willfulness, the judge should have first considered whether the alleged infringer’s defenses were objectively reasonable. The two-judge majority remanded the case to the district court for consideration of whether, based on the record ultimately made in the infringement proceedings, a reasonable litigant could realistically expect the alleged infringer’s defenses to succeed. 

Judge Newman, in a separate dissent, argued that the panel should have simply concluded that the alleged infringer did not commit willful infringement instead of remanding the case to the district court to make that decision in the first instance. 

A copy of the opinion can be found here