Feldman and Lemley on Treble Damages After Halo

Michael Feldman and Mark Lemley have posted a short piece on ssrn titled "Characteristic of a Pirate":  Willfulness and Treble Damages.  Here is a link, and here is the (correspondingly short) abstract:

In this short piece we take a first look at the Supreme Court's decisions in Halo and Stryker, identifying some of the questions that remain unanswered in patent treble damages, including the role of willfulness, the role of opinion letters, and the role of the jury.

The authors state that lower courts might interpret Halo as suggesting "that treble damages requires subjective intent to engage in misconduct, in which case, the Supreme Court has established a standard stricter than Seagate's."  That last part I don't quite get, since Seagate held that “to establish willful infringement, a patentee 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. . . . If this threshold objective standard is satisfied, the patentee must also demonstrate that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer."  I guess the point the authors are making is that a "subjective intent to engage in misconduct," if that's what the courts now require, could be harder to show than the subjective prong of Seagate ("known or so obvious that it should have been known").  But since Halo does away with the need to prove the "objective" prong as well as the clear and convincing evidence standard, I think it would be a stretch to read Halo as establishing a stricter standard.  Maybe I'm missing something.  And to be fair, the authors also note that one could read the case as making it easier to obtain treble damages, if courts conclude that enhanced damages may be "appropriate in any case that goes 'beyond typical infringement.'"

I was also initially confused by the authors' discussion of the timing of the culpability inquiry and how this may relate to opinion letters, but I think I get it now.  If, on the one hand, culpability is determined at the time the infringement began, and the infringement was at that time unknowing, it's not culpable, so there's no point in producing an exculpatory opinion letter. (Failure to produce such a letter appears to be irrelevant under 35 U.S.C. section 298:  "The failure of an infringer to obtain the advice of counsel with respect to any allegedly infringed patent, or the failure of the infringer to present such advice to the court or jury, may not be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent."). If on the other hand culpability is determined once the infringer continues to infringe after being put on notice (say, by a cease and desist letter), then it might be in the defendant's interest to commission an exculpatory opinion letter at that point.  Interesting issue.

Finally, the authors talk about whether Halo contemplates a role for the jury (p.3).  I'm inclined to think that juries will make the determination whether the defendant's conduct was culpable (willful, whatever) and that judges (as before) will exercise discretion in deciding whether to award a damages enhancement in light of that determination.  But we'll see.

(For my post last month on the first two post-Halo Federal Circuit decisions on willfulness, see here.  For my posts this month on two more cases, see here and here.)