Legal Blog

Willful Infringement Does Not Mean Automatic Enhanced Damages or Attorney Fees Award

Vectra Ltd. v. GlaxoSmithKline LLC, No. 16-638-RGA (D. Del., Sept. 12, 2019)

In this recent case in the District of Delaware, the court refused to award either enhanced damages or attorney fees after the jury found willful patent infringement. The Court’s application and analysis of the Read factors, while certainly case-specific, are instructive here and indicate facts that can insulate against enhanced damages, or attorney fees, after a finding of willful infringement.

Plaintiff Vectra sued the Glaxo defendants for direct and indirect infringement of U.S. Patent No. 8,303,991, which claims pharmaceutical compositions for inhalation of medicaments. Glaxo raised defenses of no infringement and invalidity. Prior to trial, Vectra narrowed its case to assert only direct infringement of claim 3. After a five-day jury trial, Glaxo was found to have willfully infringed the claim. In post-trial briefing, along with other damages adjustments, Vectra sought enhanced damages for willful infringement and, if enhancement was denied, an award of attorney fees. Judge Anderson refused, however, to award enhanced damages or attorney fees.

Enhanced Damages

In its analysis of enhanced damages, the Court noted the U.S. Supreme Court’s test for increased damages in a case of willful or bad-faith infringement in Halo Electronics[1] and that it “merely requires the district court to consider the particular circumstances of the case to determine whether it is egregious.” Vectra, at 6 (citations omitted). Judge Andrews then applied the so-called nine Read factors to the enhancement issue, noting that it may do so at its discretion. Id. (citing Read Corp. v. Portec, Inc., 970 F.2d 816, 827 (Fed. Cir. 1992)).

On balance, despite finding that Read factors 2, 4, and 6 supported enhancement (lack of good-faith belief of invalidity/non-infringement; Glaxo’s size; and Glaxo’s three-year duration of infringement*), Judge Andrews found that the Read factors weighed against enhanced damages.  Recitation of some of the interesting Read factors[2], and how they influenced the Court’s decision, follow.

For Read factor one, there was undisputed evidence that Glaxo did not deliberately copy the claimed invention. The development of the accused products showed testing of other excipients before arriving at the claimed magnesium stearate. For Read three, the Court noted Glaxo’s argument that both parties in the case comported themselves professionally throughout the litigation, an argument unrebutted by plaintiff.

For Read five, Vectra argued that Glaxo’s defenses were “weak,” and the jury’s quick decision underscored this. On this point Judge Andrews was not persuaded and cited a prior decision of his, stating he “[does] not think that the length of jury deliberation is a meaningful metric [for assessing whether a claim is meritorious].” In addition, Glaxo put on considerable evidence supporting its non-infringement case. Vectra also argued that because Glaxo dropped its section 112 defenses before trial, those theories were so weak that they were meritless. The Court again was unpersuaded, finding “[t]hat is not the inquiry here” and instead observed that Glaxo presented an obviousness defense which made the case, “at least relatively close.” Id. at 8.  Therefore, despite the jury’s willful infringement finding, Judge Anderson refused to award enhanced damages.

Attorney Fees

The Court also waived away Vectra’s alternative request for attorney fees for an “exceptional case” under 35 U.S.C. § 285. Vectra argued only that the case was exceptional because Glaxo willfully infringed and, further supported by its arguments on the Read factors. Judge Anderson was unconvinced, stating, “[a]lthough willfulness is a factor relevant to an exceptional case determination, it is not dispositive.” Id. at 10 (citing Octane Fitness, 572 U.S. at 554 (“[T]here is no precise rule or formula for making [exceptional case] determinations, but instead equitable discretion should be exercised.”)). The Court further found that plaintiff Vectra failed to show that Glaxo’s defenses were frivolous or unreasonable, nor did Glaxo engage in litigation misconduct or unprofessional behavior “that may ‘suffice, by themselves, to make a case exceptional under § 285.’” Id. at 11. In fact, here, plaintiff Vectra made no allegations of litigation misconduct.

As made clear from this case, a finding of willful patent infringement does not necessarily mean enhanced damages or attorney fees will follow. (At least in the District of Delaware.) While many mistakenly believe enhanced damages and/or attorney fees awards inevitably follow a willfulness finding, there is much more involved. A close analysis of the facts of the case, including the behavior by the accused infringer, very much make the questions of enhanced damages and attorney fees undecided in a patent infringement case.


[1] Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1930 (2016).

[2] Nine Read factors exist, though all are not referenced in this comment.


 

ABOUT PEI-RU WEY

PeiRu.Wey@offitkurman.com | 267.338.1337

Pei-Ru Wey’s primary focus is on patent prosecution and intellectual property (IP) litigation.  In patent prosecution, Pei-Ru works closely with inventor-scientists to understand and realize the full potential of their inventions.  Her experience spans medical, diagnostic, pharmaceutical, nutraceutical, chemical, and consumer product technologies.

Pei-Ru is also an experienced IP litigator, with a focus on Hatch-Waxman litigation.  As a pharmacist-attorney, Pei-Ru combines her scientific knowledge and patient counseling experience to break down complex technology and IP legal concepts to target audiences.

Pei-Ru’s practice further includes patentability, freedom-to-operate, invalidity and noninfringement opinions across a range of technologies.

 

 

 

ABOUT MICHAEL HOGAN

Mike Hogan is a principal in Offit Kurman’s Philadelphia office and a member of the firms’ Intellectual Property Group. He practices intellectual property litigation and concentrates on complex patent litigation, primarily in the pharmaceutical and life science areas. Mike’s litigation experience has spanned other technology areas including biotechnology, medical and mechanical devices, and consumer electronics. He has also litigated design patent, trade secret, and copyright cases. Mike’s practice incorporates non-litigation components, including the freedom to operate, patent analysis and complex opinion work, all facilitated by bringing a litigation perspective to such patent scope, validity, and prosecution matters.

 

 

 

 

 

 

ABOUT OFFIT KURMAN

Offit Kurman is one of the fastest-growing full-service law firms in the United States. With over 200 attorneys in 14 offices that stretch from New York to North Carolina, we represent privately-held companies and families of wealth throughout their business life cycles. Our mission is to provide our clients with “The Better Way” to grow their organizations, protect their businesses’ and families’ wealth, and resolve their most challenging legal conflicts. In addition to our quality of attorneys and breadth of legal services, Offit Kurman is distinguished by our unique operational structure, which encourages collaboration rather than internal competition. The same approach that makes our firm attractive to legal practitioners gives clients unlimited access to experienced counsel in every area of the law. Trust, Knowledge, Confidence—in a partner, that’s perfect.

Find out why Offit Kurman is The Better Way to protect your business, your assets and your family by connecting via our Blog, Facebook, Twitter, Instagram, YouTube, and LinkedIn pages. You can also sign up to receive LawMatters, Offit Kurman’s monthly newsletter covering a diverse selection of legal and corporate thought leadership content.

DELAWARE | MARYLAND | NEW JERSEY | NEW YORK | NORTH CAROLINA | PENNSYLVANIA | VIRGINIA | WASHINGTON, DC