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4 Factors Influencing Enhanced Damages After Halo
This article considers district court decisions on enhanced damages issued within the first six months after Halo, particularly focusing on the factors that influence whether enhanced damages are ultimately awarded. Our article tomorrow will analyze how district courts have addressed the sufficiency of pleading enhanced damages after Halo at the motion-to-dismiss stage.

The U.S. Supreme Court in Halo1 rejected Seagate’s requirement for “objective recklessness” as a prerequisite for willful infringement and enhanced damages under § 284,2 explaining that this requirement allowed the most culpable offenders to avoid punishment.3 Rather, the court focused on the subjective knowledge of the infringer at the time of the alleged misconduct.4 The court specifically rejected the practice of avoiding enhanced damages by presenting reasonable post-litigation defenses, regardless of the culpability at the time of the infringement.5 Although Halo lowered the bar for proving willfulness, enhanced damages do not automatically follow a willfulness determination. Indeed, the court cautioned that enhancement should be limited to particularly egregious cases, not the “garden-variety” infringement case.6 Nor is willfulness required to award enhanced damages, and post-Halo opinions have considered enhancement even in the absence of willfulness.7 This marks a shift in the enhanced damages analysis from willful conduct to egregious behavior more generally. Halo emphasized that “courts should continue to take into account the particular circumstances of each case,”8 and while some district courts continue to emphasize the same factors,9 others state that the “touchstone for awarding enhanced damages after Halo is egregiousness.”10 This article examines what factors most strongly influence enhancement of damages post-Halo.11 In decisions rendered in the first six months after Halo, the most salient factors supporting enhancement were copying, failure to investigate the scope of the patent, and concealment. Reasonable defenses, by contrast, weighed in favor of no enhancement. Copying Copying correlated strongly with enhancement.12 In Imperium IP, the defendant, then a customer, received detailed information about the patented cameras before designing a very similar device.13 The defendant also failed to produce any evidence that it independently developed the patented technology.14 Considering these and other factors, the court concluded: “In view of evidence of Defendants’ conduct at the time of accused infringement and after reviewing the Read factors, the Court finds that enhancement is warranted.”15 In another case, evidence that the infringer observed patented features at a trade show before adding these to its own products supported copying.16 In one case, simply adding a feature known to be infringing was sufficient to support copying, although other egregious behavior, such as concealment and litigation misconduct also contributed to enhancement.17 By contrast, copying was not present in any of the decisions that declined to award enhanced damages. In Finjan, for example, evidence that Blue Coat’s employees discussed Finjan’s products was not sufficient to show copying but “simply evidence of normal business competition.”18 While there appears to be a fine distinction between copying and business competition, most defendants found to have deliberately copied the technology received information directly from the patent holder,19 rather than simply monitoring from a distance, as in Finjan. Thus, evidence of copying as opposed to normal business competition weighs strongly in favor of enhancement. Investigated Scope and Formed Good-Faith Belief of Invalidity or Noninfringement Courts were more likely to enhance damages when the infringer knew of the patents but failed to adequately investigate them. In Dominion, the defendant concluded that it did not infringe because its product included additional elements, without consulting anyone with expertise in reading patent claims.20 In PPC, the defendant received legal advice regarding the scope of the patents, but only with regard to an earlier, noninfringing version of the product.21 Attempting to purchase the patents but then not thoroughly investigating them supported enhancement.22 In all of these cases, the court ultimately enhanced damages. By contrast, courts denied enhancement when the infringer did not have sufficient information to conclude that it may be liable. In Finjan, the defendant knew generally of the patents, but not the specific patents-in-suit.23 In Presidio, the defendant knew of the patents, but filed a re-examination request that ultimately caused the plaintiff to narrow the claims.24 In another case, where the infringer filed for declaratory judgment of invalidity and noninfringement, the court declined to enhance damages despite finding that the infringer failed to investigate the scope of the patents, holding that in light of the particular circumstances, the case was close and the egregiousness was somewhere between the parties’ views of the facts.25 Finally, the court did not enhance damages when the defendant developed a noninfringement theory based on opinions from two different law firms and third-party testing.26 This early analysis indicates that adequately investigating scope and developing reasonable defenses at the time of suspected infringement is prudent to avoid enhanced damages.
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NEWSLETTER ARCHIVE
Volume 48, Issue 2
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Reprinted with permission from Law360, New York (Original - January 17, 2017)
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Index
Community Calendar Read more >
Table of Contents
Message from the President Monica Grewal
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Report of the Giles Rich Moot Court Competition
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The BPLA Files Amicus Curiae Brief in Wi-Fi One, LLC v. Broadcom Corp.
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Announcement of 7th Annual Invented Here! Program
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TTAB Proceedings Hosted by BPLA and Suffolk University Law School
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Annual Judges Dinner
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BPLA’S 2017 Annual Writing Competition Is Now Accepting Entries
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IP Due Diligence: The Five Questions You Must Ask in Corporate Transactions
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BPLA Committee Report
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Undiscovered “discovery”: Measures available in European civil law systems to obtain evidence in possession of the counterpart
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Report from the NYIPLA Section 101 Forum 2017
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Limitations on Enforceability of Patent Rights
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PTAB Proceedings Hosted by BPLA and Suffolk University Law School
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BPLA International and Foreign Practice Committee Hosts Event on Strategies for Prosecuting Biotech and Life Science Patents in China
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2 Ways Courts Approach Willful Infringement After Halo
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4 Factors Influencing Enhanced Damages After Halo
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Trademarks and Bankruptcy – The Difficult Mission to Harmonize Continues
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Message from the Editor-in-Chief
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Members on the Move
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