Supreme Court Determines Federal Circuit Test for Enhanced Infringement Damages Too Rigid

The unanimous Halo Electronics decision by the U.S. Supreme Court sidesteps the Seagate case from 2007 and effectively reopens the real possibility that a patentee can obtain enhanced damages (or treble damages) by proving willful infringement of their patent claims.  That is, Halo will now require parties accused of infringement to prove their own subjective lack of willfulness without regard to whether infringement was in fact objectively reckless.

The Halo decision also shifts the burden of proof of showing willfulness back from a “clear and convincing standard” to a lesser requirement of “preponderance of the evidence.”  By shifting the burden back to accused infringers (albeit not completely, but partially), accused infringers will have to mount defenses to show they did not have such a subjective belief.

In the wake of the Halo decision, companies may need to invest in additional legal fees, company resources, and the like, before launching new products in the future.  For the biotech and chemical sectors, where new product releases are already seeing mounting costs from the regulatory, marketing and production standpoints, the burdens imposed by the Halo decision may further delay product-to-market timelines.