Post-infringement-verdict sales point to a high likelihood that enhanced damages will be awarded sua sponte, regardless of whether pre-verdict willfulness has been pled.
Background / Facts: The patents at issue involve converters with separate “isolation” and “regulation” stages. Following a finding of infringement at trial, the district court issued a permanent injunction that was partially stayed by the Federal Circuit. During this period between trial and the time when the permanent injunction was set to take effect (the post-verdict period), the defendants continued to sell infringing products overseas with knowledge that they would be imported into the United States. The district court therefore enhanced the damages award for defendants’ post-verdict sales by 1.75 times.
Issue(s): Whether the award of enhanced damages was improper because the court did not expressly find willful infringement and because the patentee did not pursue a willfulness claim at trial.
Holding(s): No. The Federal Circuit agreed with the district court’s finding of the defendants’ conduct as “egregious[]” in continuing, and even increasing, sales in the face of an infringement verdict. The court noted that the defendants effectively admitted to knowledge of the continued infringement by entering into an indemnification agreement with its customers for their continued shipping of products that incorporated the infringing devices into the U.S. following the infringement verdict. The Federal Circuit found that the district court’s enhancement of damages was squarely based on a recognition of defendants’ willful infringement even if not so-stated. “[W]hile a finding of willfulness is a ‘prerequisite’ to the award of enhanced damages, the ‘paramount determination in deciding to grant enhancement and the amount thereof is the egregiousness of the defendant’s conduct based on all the facts and circumstances.’” Further, there is no reason why a plaintiff’s decision not to argue pre-verdict willful infringement at trial should preclude a court from finding willful infringement for post-verdict sales.