District Court Awards Enhanced Damages and Attorneys' Fees for Objectively Reckless Infringement | Practical Law

District Court Awards Enhanced Damages and Attorneys' Fees for Objectively Reckless Infringement | Practical Law

In WBIP, LLC v. Kohler Co., the US District Court for the District of Massachusetts awarded the patent owner, WBIP, LLC, enhanced damages under 35 U.S.C. § 284 and attorneys' fees under 35 U.S.C. § 285 due to Kohler Co.'s willful infringement.

District Court Awards Enhanced Damages and Attorneys' Fees for Objectively Reckless Infringement

by Practical Law Intellectual Property & Technology
Published on 18 Feb 2014 • USA (National/Federal)
In WBIP, LLC v. Kohler Co., the US District Court for the District of Massachusetts awarded the patent owner, WBIP, LLC, enhanced damages under 35 U.S.C. § 284 and attorneys' fees under 35 U.S.C. § 285 due to Kohler Co.'s willful infringement.
On February 12, 2014, in WBIP, LLC v. Kohler Co., the US District Court for the District of Massachusetts awarded the patent owner, WBIP, 50% enhanced damages and attorneys' fees based on Kohler's willful infringement of WBIP's patents directed to low-emission marine power generators (No. 11–10374–NMG, (D. Mass. Feb. 12, 2014)).
In May 2013, a jury found that WBIP's asserted patents were valid and willfully infringed by Kohler. Among other post-verdict motions, WBIP moved for enhanced damages under 35 U.S.C. § 284 and attorneys' fees under 35 U.S.C. § 285. To determine willfulness, the court applied the test set out by the US Court of Appeals for the Federal Circuit in In re Seagate Tech., LLC, which requires that the patent owner show by clear and convincing evidence that the infringer:
  • Acted despite an "objectively high likelihood" that it would infringe.
  • Knew or should have known of the objectively high likelihood.
(497 F.3d 1360 (Fed. Cir. 2007)).
The district court began by noting that it could determine the "objective recklessness" prong of the Seagate test even after submitting the question of subjective willfulness to the jury. The court held that Kohler had been objectively reckless in manufacturing its marine generators because its obviousness and non-infringement defenses were not reasonable.
Kohler's obviousness defense was not reasonable because while all of the patent claim elements existed separately in the prior art, Kohler's chief engineer testified that it would have been impossible to combine them in a low-emission generator at the time of WBIP's invention. Kohler's non-infringement defense was not reasonable because it was based on Kohler's argument that it used a different parts vendor than WBIP to manufacture its generators when, the court noted, WBIP's commercial embodiment of its patent claims is not relevant to Kohler’s non-infringement defense. The court also rejected Kohler's argument that its defenses were reasonable because the USPTO granted Kohler's request to reexamine the patents.
Having found willful infringement, the court applied the enhanced damages factors set out by the Federal Circuit in Read Corp. v. Portec, Inc., including:
  • Whether the infringer deliberately copied the patent.
  • Whether the infringer analyzed the scope of the patent and formed a good-faith belief that it was invalid or not infringed.
  • The infringer's conduct during litigation.
  • The infringer's size and financial condition.
  • The closeness of the case.
  • The length of the infringer's misconduct.
  • Any remedial action taken by the infringer.
  • Whether the infringer intended to harm the patent holder.
  • Whether the infringer attempted to conceal its misconduct.
(970 F.2d 816 (Fed. Cir. 1992)).
The court awarded 50% enhanced damages based on:
  • Kohler's copying of WBIP's generators (even with no "smoking gun" evidence of copying).
  • Kohler's litigation misconduct, including preventing WBIP's expert from seeing key documents.
  • The fact that the case was not close because Kohler's defenses were not objectively reasonable.
  • A reasonable inference that Kohler concealed the fact that its employees knew of WBIP's patents earlier than disclosed.
Based on its willful infringement finding, the court held that the case was exceptional and justified attorneys' fees and costs under 35 U.S.C. § 285 and ordered the parties to submit briefs addressing the appropriate fee amount.
The decision underscores the need for counsel to examine the full scope of patent claims to develop non-infringement and invalidity defenses before commercializing a product that competes with a patented product.