Halo Electronics, Inc. v. Pulse Electronics, Inc. et al.


Docket No. 2013-1472, -1656

LOURIE, O’MALLEY, HUGHES
August 5, 2016

Brief Summary: On remand from SCOTUS, DC decision of no willfulness based on Seagate test vacated and remanded (DC to “consider, as one factor in its analysis, what Pulse knew or had reason to know at the time of the infringement of the Halo patents.”)

Summary: This case is on remand from SCOTUS. In 2014, the FC affirmed the grant of SJ of no direct infringement of the Halo patents by Pulse’s products manufactured, shipped, and delivered outside the US because Pulse did not sell or offer to sell those products within the US but not those delivered in the US by Pulse or others (inducement to infringe) (§ 271(a)). It also affirmed the judgment of no willful infringement under “the then-controlling standard” (Seagate, FC 2007), of noninfringment of Pulse’s ‘963 patent, and that Halo’s patents were not invalid for obviousness. On certiorari, SCOTUS declined to consider the § 271(a) issue but did consider willfulness. In its June 2016 decision, SCOTUS held that “Section 284 of the Patent Act ‘gives district courts the discretion to award enhanced damages…in egregious cases of misconduct beyond typical infringement”, rejecting “the Seagate test and ‘unduly rigid’ and ‘impermissibly encumber[ing] the statutory grant of discretion to district courts.’” The FC then reopened this case in July 2016. Here, the FC panel reaffirmed the other judgments (“Following Halo’s logic…the geographical scope of § 271(a) in effect would confer a worldwide exclusive right to a U.S. patent holder, which is contrary to the statute and case law” and although “negotiations occurred in the [US],…the locations of the contemplated sales were outside the [US]”…“the court did not err in reaching the ultimate legal conclusion that the asserted claims were not invalid for obviousness”) but vacated the wilfullness decision and remanded the same for further proceedings in light of SCOTUS’s June 2016 opinion. The jury had awarded “Halo $1.5 million in reasonable royalty damages with respect to products delivered in the” US and that Pulse’s infringement was willful. But the DC determined the objective Seagate prong was not met “because…the obviousness defense that Pulse presented at trial was not objectively baseless.” The FC opinion noted SCOTUS’s explanation that “culpability is generally measured against the knowledge of the actor at the time of the challenged conduct”, consistent with Halo’s argument “that Pulse did not actually rely on any invalidity defense pre-suit when selling the accused products because Pulse’s obviousness defense was developed after the lawsuit was filed in 2007.” The FC panel therefore directed the DC to “consider, as one factor in its analysis, what Pulse knew or had reason to know at the time of the infringement of the Halo patents.”

This entry was posted in Attorney's Fees, Inducement to Infringe, Infringement, Willfullness. Bookmark the permalink.

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