Monday, August 28, 2017

Recent Federal Circuit Cases on Lost Profits, Enhanced Damages, and Fees

While I was taking a blogging break these past two weeks the Federal Circuit decided two cases relevant to patent damages.  The first is Georgetown Rail Equipment Co. v. Holland L.P., decided August 1 (but not published until August 16, after the court issued a ruling unsealing the opinion) in a panel opinion authored by Judge Wallach.  Georgetown sued Holland for the infringement of a U.S. patent relating to a system for inspecting a railroad track bed.  A substantive issue on appeal was whether language found in claim 16's preamble functioned as a claim limitation (thus narrowing the scope of the claim); affirming the district court, the Federal Circuit held that it did not.  Another substantive issue involved the question of whether Holland directly infringed by using the patented invention, and the Federal Circuit again affirmed a conclusion adverse to Holland.  On the question of remedies, the jury awarded Georgetown $1,541,333 in lost profits.  Holland argued on appeal that the court misapplied the Panduit factors, but the Federal Circuit disagreed, holding that Georgetown had presented adequate evidence of demand for the patented invention (pp. 17-18) and the amount of profit Georgetown would have earned but for the infringement (pp. 18-22).  Not a lot of new legal ground here, in my view.  On the issue of enhanced damages, the court affirmed a finding of willful infringement, stating that "The jury heard evidence that Holland was aware of the ’329 patent prior to the current litigation, see, e.g., J.A. 1180−87, 1340, 1384−85; see also J.A. 1161−62, 1277, and believed that it was infringing the patent" (p.25).  The court cited the Read v. Portec factors (p.24 n.6) and held that the district court did not abuse its discretion in awarding $1,000,000 as an enhancement (pp. 25-26).  Finally, Holland did not challenge the district court's finding that the case was "exceptional" and thus meriting an award of fees (p.5 n.1).

Second, in a nonprecedential opinion handed down on August 25, the court affirmed an award of $1.6 million in attorneys' fees in Icon Health & Fitness, Inc. v. Octane Fitness, LLC, the same case in which the Supreme Court in 2014 altered the standard for finding exceptionality (see here).  On remand the district court held that a fee award was appropriate (see here) and the Federal Circuit affirms based on, among other things, the district court's findings on the weakness of the case and Icon's litigation conduct.

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