Artificial Enhancement: Limiting Enhanced Damages Awards for Patent Infringement

Artificial Enhancement: Limiting Enhanced Damages Awards for Patent Infringement

68 Am. U. L. Rev. 305 (2018). 

*Senior Federal Circuit Editor, American University Law Review, Volume 68; J.D. Candidate, May 2019, American University Washington College of Law; B.S., Materials Science & Engineering, 2016, Johns Hopkins University.  I would like to sincerely thank my colleagues on the Law Review for helping prepare this piece for publication.  In particular, I would like to thank Torey Davenport for helping me through the entire process of writing this piece.  I would also like to thank my faculty advisor, Jonathan Stroud, for always being a phone call away when I ran into issues throughout the publication process.  This piece would not have been possible without the help of my mentor, Jonas Anderson, who played an important role in helping me figure out where my comments fit in with current patent laws.  Lastly, and most importantly, I would to thank my parents, Gina and Joseph, my sister, Alexa, and my best friend, Lauren Guffy.  Without all of your encouragement, love, and support, none of this would be possible.

When the Supreme Court decided Halo Electronics, Inc. v. Pulse Electronics, Inc., it completely changed the status of willfulness and enhanced damages in patent law.  The Court overruled the United States Court of Appeals for the Federal Circuit’s long-standing Seagate test in favor of the more flexible Read standard without providing any guidance to the lower courts.  District courts were left with broad discretion to award enhanced damages based on the nine Read factors.  This decision led to confusion among the lower courts and inconsistent application of the law on patent damages, as evidenced by the cases discussed in this Comment. 

This Comment argues, based on trends in district court decisions post-Halo, that the Supreme Court should have provided more guidance to the district courts regarding how to properly and consistently apply the Read factors to enhanced damages analysis.  This Comment proposes limitations to the Read factors aimed to guide district courts.  It then reapplies these limitations to several district court cases to show that consistent application of the factors could still punish the “wanton and malicious pirate” that the Supreme Court was so worried about in Halo, while ensuring that enhanced damages are only used in rare cases.  The proposed limitations also ensure that patent law does not discourage inventors from engaging in the innovative process for fear of awards of enhanced damages against them.  In an area of the law where damages often reach into the hundreds of millions, it is important that damages statutes only apply to the more egregious cases.