Halo Electronics, Inc. v. Pulse Electronics, Inc.

136 S.Ct. 1923 (2016)

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Nature of the Case

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Facts

Halo (P) and Pulse (D) supply electronic components. P alleges that d infringed its patents for electronic packages containing transformers designed to be mounted to the surface of circuit boards. P sent D two letters offering to license P’s patents. D's engineers concluded that P’s patents were invalid. D continued to sell the allegedly infringing products. P sued D. The jury found for P and that there was a high probability that D had infringed willfully. The District Court declined to award enhanced damages under §284, after determining that D had at trial presented a defense that “was not objectively baseless or a ‘sham.’” The court concluded, P had failed to show objective recklessness under the first step of Seagate. The Federal Circuit affirmed. Stryker and Zimmer compete in the market for orthopedic pulsed lavage devices. Stryker sued Zimmer for patent infringement. The jury found that Zimmer had willfully infringed Stryker’s patents and awarded Stryker $70 million in lost profits. The District Court added $6.1 million in supplemental damages and then trebled the total sum under §284, resulting in an award of over $228 million. The District Court noted the jury had heard testimony that Zimmer had “all-but instructed its design team to copy Stryker’s products,” and had chosen a “high-risk/high-reward strategy of competing immediately and aggressively in the pulsed lavage market,” while “opting to worry about the potential legal consequences later.” The Federal Circuit affirmed the judgment of infringement but vacated the award of treble damages. The court concluded that enhanced damages were unavailable because Zimmer had asserted “reasonable defenses” at trial. The Supreme Court granted certiorari.