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Federal Circuit Sets Forth New Standard for Willful Infringement
By Jie Zhang – Edited by Jennifer Wong

Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., No. 2010-1050 (Fed. Cir. June 14, 2012)
Slip Opinion

The Court of Appeals for the Federal Circuit, in a 2-1 ruling following an en banc decision that sent the case back to panel for rehearing, partly reversed its earlier decision from February 10, 2012, which had affirmed the verdict of the District Court for the District of Arizona against W.L. Gore and had upheld the district court’s doubling of the jury’s damages award for willful patent infringement.

On panel rehearing, the Federal Circuit reaffirmed the validity of Bard’s patent but vacated its prior opinion on the issue of willful infringement. The Federal Circuit employed the two-prong test for willfulness. The court redefined the first prong of the test and held that the objective determination of the likelihood that a defendant’s conduct constituted infringement is a question of law for the court to decide. Only after the objective threshold is satisfied can the jury consider the subjective recklessness of the defendant’s actions. The court further stated that if the defendant has a reasonable defense or non-infringement theory, then the objective threshold is not overcome and there is no willful infringement. Thus, the court remanded the case to the district court to determine whether the objective prong of willful infringement is satisfied under this new standard and to reconsider whether the enhanced damages award is proper.

JOLT Digest previously reported on the Federal Circuit’s earlier decision in the battle between Bard and Gore. Thomson Reuters provides an overview of the case. Patently-O comments on the implications of the new standard.

This ruling is the latest episode of the continuing battle between Bard and Gore over the patent for the expanded polytetrafluoroethylene (“ePTFE”) vascular graft. In the 1970s, Peter Cooper, a Gore employee, provided ePTFE tubes to outside researchers, including David Goldfarb, to investigate the possibility of using ePTFE tubes as vascular grafts. Both Cooper and Goldfarb made scientific discoveries independently and filed patent applications in 1974 claiming the use of certain forms of ePTFE tubes as vascular prosthesis. Goldfarb prevailed in the interference proceeding but the patent was not issued until 28 years later, in 2002. During this period, Gore continued manufacturing and distributing ePTFE.

In 2003, Bard sued Gore for patent infringement in the District Court for the District of Arizona. In 2007, the jury found that Gore willfully infringed Bard’s patent and awarded Bard lost profits and unpaid royalties. The district court denied Gore’s motion for judgment as a matter of law for both the issue of patent validity and the issue of willfulness. It also doubled the damages award based on the jury’s finding of willful infringement. On appeal, the Federal Circuit upheld the validity of the patent, rejecting Gore’s arguments of inventorship, anticipation, obviousness, and lack of written description.

On the issue of willful infringement, the Federal Circuit held that the jury’s finding was supported by substantial evidence. However, on rehearing of the case, the Federal Circuit corrected itself on the analysis of willfulness. The court noted that the objective prong of willfulness is a question of law for the trial judge, not the jury, to determine. Because the trial court did not consider the objective prong as a question of law but sent the entire issue of willfulness to the jury, the Federal Circuit remanded the case to the trial court to reconsider the objective prong.

Judge Newman concurred in part and dissented in part. She agreed with the majority’s standard for determining willfulness.  However, Judge Newman would not have remanded the case to the district court. Finding that the defendant had provided sufficient evidence to support its reasonable belief in non-infringement, Judge Newman would have held that Gore did not willfully infringe Bard’s patent.

Although the Federal Circuit established the two-prong test for willfulness in In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007), courts have generally focused on the second subjective prong and viewed the question of willfulness as a factual issue for the jury to decide. This case revitalizes the objective prong, separates the roles of judge and jury in the two-step analysis, and clarifies the standard applicable to the objective test.

Posted On Jun - 20 - 2012 Comments Off

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