Short of invalidating a patent, can the outcome of IPR dictate the outcome of a district court case? The interplay between PTAB and district courts remains uncertain. As we’ve previously reported here and here, sometimes district courts give weight to PTAB decisions, and sometimes they don’t.
In one recent case, the Western District of Wisconsin considered whether the PTAB denial of institution of inter partes review meant that the defendant’s obviousness case was objectively unreasonable, supporting a finding of willful infringement.
Enhanced damages requires a finding of willful infringement
Under current Federal Circuit caselaw, a district court may award enhanced damages under 35 U.S.C. § 284 only if it finds that the defendant willfully infringed the patent-in-suit. To prove willful infringement, a patent owner must show, by clear and convincing evidence, that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent and this risk was known or should have been known at the time of infringement. The first prong is not satisfied if an accused infringer presents an objectively reasonable defense during litigation, regardless of its state of mind at the time of infringement.
Court’s decision in WARF v. Apple
In its October 15, 2015 Opinion and Order, the court in WARF v. Apple considered whether Apple had willfully infringed the patent-in-suit. The court found that Apple had not willfully infringed because its “obviousness defense was objectively reasonable, albeit unsuccessful.” WARF argued that Apple’s obviousness defense could not be “objectively reasonable” because the PTAB had denied institution of inter partes review where Apple had raised the same obviousness case in its IPR petition.
WARF argued that Apple’s obviousness defense could not be “objectively reasonable” because the PTAB had denied institution of inter partes review.
WARF argued that the IPR institution precluded “Apple from now arguing that its obviousness defense was objectively reasonable because the PTAB ‘standard is lower than the ‘clear and convincing evidence’ required to prove invalidity in District Court.’” The court rejected this argument, finding instead that the PTAB found only that “Apple was not likely to prevail on its defense”; the “PTAB did not consider whether this defense was objectively reasonable or raised a substantial question” so as to avoid a finding of willfulness.
The Supreme Court may change the standard for willful infringement
Whether other district courts will follow the WARF v. Apple decision remains to be seen.
As we recently reported here, however, the Supreme Court has granted certiorari in two cases to consider the Federal Circuit’s requirement that enhanced damages can only be awarded upon a showing of willful infringement and that willful infringement can only be found under the Federal Circuit’s two-prong approach. If the Supreme Court were to require a more flexible standard, time will tell whether other district court decisions will give different weight to a PTAB institution denial when deciding whether to enhance damages.