Recent U.S. Decisions Affecting Licensing
Tuesday, May 16, 2017
Activities by an Infringer Occurring After it is Sued for Patent Infringement May Not Support a Finding of Willful Infringement
A court may assess punitive damages for patent infringement when the infringer had knowledge of the patent before the lawsuit was filed and the infringement represents an “egregious case. . . typified by willful misconduct.”
In the current case, Cooper v. Cordelia, a Georgia court considered whether a claim for willful infringement could be based on acts occurring solely after the accused infringer was sued for infringement.
Cooper sued Cordelia for patent infringement, but did not allege that Cordelia’s purported infringement was willful or request punitive damages. Cooper then filed an amended complaint, accusing Cordelia of willfully infringing the patents because Cordelia had knowledge of the patents since the service of the original Complaint and continued its commercial activities. Cooper’s allegation of willful infringement was based solely on conduct by Cordelia that occurred after filing of the original complaint.
Cordelia asked the court to dismiss Cooper’s willful infringement allegations, arguing that (1) willful infringement cannot be based on knowledge solely gained from a complaint, and (2) to state a claim for willful infringement, Cooper must allege that Cordelia had knowledge of the asserted patents prior to the date the lawsuit began and engaged in reckless behavior.
The court granted Cordelia’s motion to dismiss Cooper’s willful infringement claim because it was based on conduct by Cordelia that occurred after filing of the original complaint, and concluded that knowledge based on service from an original complaint does not entitle a patent owner to punitive damages.
Cooper’s motion to dismiss argued that the Supreme Court’s Halo decision abrogated the rules in the Federal Circuit’s Seagate decision, and that after Halo, general allegations of conduct occurring after notice from the original complaint are sufficient to allege willful infringement. The court disagreed, stating that Halo did not consider whether damages are limited to conduct occurring before suit was filed.
In dismissing Cooper’s willful infringement claim, the court applied the rules and reasons articulated in the Federal Circuit Seagate decision, namely, that “in ordinary circumstances, willfulness will depend on an infringer’s prelitigation conduct,” and noted that after the Supreme Court’s Halo decision, several courts concluded that the Seagate decision prohibits plaintiffs from alleging willful infringement based solely upon conduct occurring after suit was filed.
The Cooper decision limits a patent owner from requesting willful infringement damages based only on conduct occurring after suit is filed. The decision also demonstrates that the Seagate rules may not be completely abrogated, and the Seagate analysis with respect to the timing of allegations of willfulness remains valid.
The Cooper opinion can be found here.
The editors and authors are attorneys at Finnegan, Henderson, Farabow, Garrett & Dunner, LLP.
This article is for informational purposes and does not constitute legal advice.
The views expressed do not necessarily reflect the views of LES or Finnegan.