New Hope for Patent Owners: Supreme Court Eases the Path to Enhanced Damages – June 14, 2016

Pepper Hamilton

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litigation. That business owner may not be engaging in reckless behavior justifying an award of enhanced damages. Id., slip op. at 4 (Breyer, J., concurring).

Further, Justice Breyer notes that not all small businesses may be able to afford obtaining an opinion of counsel and that a failure to obtain an opinion need not prescribe a finding of enhanced damages. Id. at 2-3 (“an owner of a small firm, or a scientist, engineer, or technician working there, might, without being ‘wanton’ or ‘reckless,’ reasonably determine that its product does not infringe a particular patent, or that that patent is probably invalid.”).

The concurrence also notes that, due to the Federal Circuit’s expertise on patent issues, there may be instances where a district court improperly awards enhanced damages because it erroneously misapprehended the reasonableness of a patent defense. Id. at 5.

In such a case, the Federal Circuit would be within its purview to find an abuse of discretion. Id. Justice Breyer’s concurrence may provide accused infringers with some comfort in its observation that enhanced damages should be not be abandoned, but rather carefully applied “to ensure that they only target cases of egregious misconduct.” Id. at 5. Given the new standard articulated in Halo, the task will largely fall on the district courts to sort out what behavior will be deemed “egregious,” warranting enhanced damages, and what behavior will be characterized as merely routine or “garden variety” infringement. Berwyn | Boston | Detroit | Harrisburg | Los Angeles | New York | Orange County | Philadelphia | Pittsburgh | Princeton Silicon Valley | Washington | Wilmington pepper.law .