Saturday, June 06, 2015

CAFC reverses D. Minn. on Seagate issue in Global Traffic Technologies

The patentee won on infringement [Because Appellants claim construction
arguments regarding the method claims are
waived, we affirm the finding of infringement and decline
to address Appellants’ claim construction arguments for
the remaining system claims. ] but did not prevail on willful infringement.

The CAFC discussed Seagate:

In re Seagate Tech., LLC, 497
F.3d 1360 (Fed. Cir. 2007) (en banc). Seagate sets out a
two-part test for proving willfulness where the patentee
must show that: (1) “the infringer acted despite an objectively
high likelihood that its actions constituted infringement
of a valid patent,” and (2) the “objectively defined
risk (determined by the record developed in the
infringement proceeding) was either known or so obvious
that it should have been known to the accused infringer.”
Id. at 1371. The first question is for the court; the second
is for the jury. Bard Peripheral Vascular, Inc. v. W.L.
Gore & Assocs., Inc., 682 F.3d 1003, 1007 (Fed. Cir. 2012).
We review the first prong de novo and the second prong
for substantial evidence. SSL Servs., LLC v. Citrix Sys.,
Inc., 769 F.3d 1073, 1090–91 (Fed. Cir. 2014).

On appeal, Appellants challenge the district court’s
analysis of the first prong. We conclude that the district
court applied the wrong standard in its analysis of that
The district court found that there was ample
evidence in the record that Appellants knew of the patent
and determined that “an objectively reasonable person,
with knowledge that a patent exists in the field in which
the potential infringers wish to compete would not ignore
the patent, but would investigate whether its design
would infringe.” JMOL Order, 2014 WL 1663420, at *13.
The infringer’s knowledge of the patent is irrelevant to
the first Seagate prong, however. See Seagate, 497 F.3d
at 1371 (“The state of mind of the accused infringer is not
relevant to this objective inquiry.”). Instead, the district
court should have considered whether Appellants acted
“despite an objectively high likelihood that its actions
constituted infringement of a valid patent.” Seagate, 497
F.3d at 1371. This requires analysis of all of the infring
er’s non-infringement and invalidity defenses, even if
those defenses were developed for litigation. See Halo
Elecs., Inc. v. Pulse Elecs., Inc., 769 F.3d 1371, 1382 (Fed.
Cir. 2014) (“The court properly considered the totality of
the record evidence, including the obviousness defense
that Pulse developed during the litigation, to determine
whether there was an objectively-defined risk of infringement
of a valid patent.”).

In this case, the district court found that Appellants
“had good-faith invalidity defenses once litigation began.”
JMOL Order, 2014 WL 1663420, at *14. We agree.
Because Appellants’ defenses during litigation were
objectively reasonable, GTT failed to prove the first prong
of our willfulness test. See Halo, 769 F.3d at 1382. As a
result, we reverse the district court’s award of enhanced
damages under § 284.

docket: 2014-1537, 2014-1566


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