Halo Electronics, Inc. v. Bel Fuse Inc. et al DC CAFC

The US Supreme Court has overturned the Federal Circuit’s Seagate test for enhanced damages, rejecting the previous framework as overly rigid and replacing it with a discretionary standard analogous to the high court’s Octane decision. In a decision issued on June 13, 2016 that addressed two companion cases, Halo Electronics v. Pulse Electronics (2014-1513) and Stryker Corp. v. Zimmer, Inc. (2014-1520), the Court also crafted a simpler standard for appellate review based on its decision in Highmark, ruling that enhanced damages awards were to be reviewed for abuse of discretion and rejecting the Federal Circuit’s tripartite appellate review system. Furthermore, the Supreme Court lowered the evidentiary burden for proving recklessness on the part of an alleged infringer, ruling that Section 284 of the Patent Act is governed by the same preponderance of the evidence standard applied to patent infringement cases overall, rather than the clear and convincing evidence standard previously required by Seagate.

On Monday, the US Supreme Court granted certiorari in two cases in which damages were enhanced for willful patent infringement. The cases, Halo Electronics, Inc. v. Pulse Electronics, Inc. (14-1513) and Stryker Corporation v. Zimmer, Inc. (14-1520), have been consolidated for decision and will be heard by the Court in a single, one-hour oral argument. At issue is whether the Federal Circuit’s two-step test for enhancing patent infringement damages under 35 U.S.C. §284 is too rigid. Last year, in Octane, the Court found that a two-part test for imposing attorney fees under the similarly worded 35 U.S.C. § 285 was too stringent and lowered the standard for shifting fees in patent cases.