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10 Geo. Mason L. Rev. 97 (2001-2002)
Willful Patent Infringement and Enhanced Damages - Evolution and Analysis

handle is hein.journals/gmlr10 and id is 107 raw text is: 20011 WILLFUL PATENT INFRINGEMENT AND ENHANCED DAMAGES-EVOLUTION AND ANALYSIS INTRODUCTION A charge of willful infringement has become a routine adjunct to al- most every pleading asserting patent infringement.1 If the infringement is found to be willful, damages may be trebled and attorney fees may be awarded.2 Because patent infringement lawsuits are enormously expensive and often swamp balance sheets,3 it is no wonder that a potential finding of willfulness can send shock waves through corporate management.4 Additionally, settlement can often be forced by the mere possibility of a finding that the infringement was willful, even though the patent challenger has an otherwise sound case.5 The past two decades witnessed a dramatic increase in the use of pat- ents to protect intellectual property.6 With the rise in the pleading of willful infringement in patent cases, the Court of Appeals for the Federal Circuit's treatment of willful infringement is increasingly under fire.7 The current high standard of behavior for potential infringers imposes an affirmative duty to avoid infringing activity when knowledge of another's patent rights is discovered.8 This standard exists in a totality of the circumstances framework within which the Federal Circuit explicitly refuses to be tied to hard and fast rules.9 The detractors of this high standard argue that it creates incentives that are inconsistent with the broad goals of the patent system, 1 See Ira V. Heffan, Willful Patent Infringement, 7 FED. CIR. B.J. 115, 154-57 (1997); Four- teenth Annual Judicial Conference of the United States Court of Appeals for the Federal Circuit, 170 F.R.D. 534, 615 (1996) (remarks of Judge Sue Robinson of the Delaware District Court) (stating that in her own court, eighty-seven percent of the pending patent cases had an allegation of willful infringe- ment). 2 35 U.S.C. §§ 284, 285 (2000). See also Lester L. Hewitt & E. Randall Smith, The Effect of Ten Years of Federal Circuit Law on: Willful Infringement and Increased Damages, 35 IDEA 37 (1994). 3 Randy Myers, Fighting Words: Growing Ranks of Litigants Are Putting Price Tags on Ideas, CFO MAG. (Mar. 1998), http://www.cfo.com/article/1,4616,011 1AD11529,00.html. 4 Richard B. Racine & Michele C. Bosch, Willful Infringement: A Real Concern, 3 FED. CIR. B.J. 409, 409 (1993). See, e.g., 3M v. Johnson & Johnson Orthopaedics, Inc., 976 F.2d 1559, 1563 (Fed. Cir. 1992) (affirming a district court finding, doubling a $54 million judgment to $117 million when the infringement was found to be willful); AM. INTELL. PROP. LAW Ass'N, AIPLA REPORT OF ECONOMIC SURVEY 84 tbl.22 (2001). 5 Racine & Bosch, supra note 4, at 409. Statistics also demonstrate that when the issue of will- fulness is litigated, patents are more likely to be held willfully infringed than not willfully infringed. Kimberly A. Moore, Judges, Juries, and Patent Cases-An Empirical Peek Inside the Black Box, 99 MICH. L. REv. 365, 390 (2000). 6 See infra notes 66-77 and accompanying text. 7 See discussion infra Part 11. 8 Underwater Devices, Inc. v. Morrison-Knudson Co., 717 F.2d 1380, 1389 (Fed. Cir. 1983). 9 See discussion infra Part lI.

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