Sandrik on Enhanced Damages

Professor Karen Sandrik has published an article titled An Empirical Study: Willful Infringement & Enhanced Damages in Patent Law After Halo, 28 Mich. Tech. L. Rev. 61 (2021).  Here is a link to the paper, and here is the abstract:

For decades, companies and attorneys have instructed teams of engineers, researchers, and computer scientists to ignore patents. The reasoning for this advice: if there is no pre-suit knowledge of a patent, then it is nearly impossible for a patent holder to prove that enhanced damages are warranted. Pre-suit knowledge is a prerequisite for a finding of willful infringement, which is itself a prerequisite for awarding enhanced damages. The median patent damages award is around ten million dollars, and large companies like Intel, Teva Pharmaceuticals, Microsoft, and Abbott Laboratories have all recently faced billion-dollar patent infringement judgments. In this landscape, a multiplier of up to three times the compensatory damages is strong motivation for companies to purposely create a patent-ignorant work environment. Yet this advice defeats an important goal of patent law: the disclosure and dissemination of technological information. How can technology companies learn from new and nonobvious innovation disclosed in patents if their heads are stuck in the sand?

In this empirical study with data spanning 2010 to 2020, I provide a data-driven answer to whether this deliberate ignorance strategy is effective. The answer, in short, is that reading patents, conducting patent clearance searches, and/or responding to cease-and-desist letters does not, in isolation, open the door to enhanced damages. Finally, by employing an original data set to seek this answer and potential solutions to deliberate patent ignorance, this study provides empirical statistics regarding willful infringement and enhanced damages. This includes empirical statistics illustrating the impact of the 2016 Supreme Court decision, Halo Electronics v. Pulse Electronics.

I read this paper in draft last year and thought it was excellent.  The descriptive statistics on how often different districts make findings of willfulness, and how often they enhance damages, are quite interesting, and the paper makes a good case for why deliberate ignorance is not a worthwhile strategy.  (For previous discussion of this issue on this blog, see, e.g., here, here, and here.)  Highly recommended.