Bard Peripheral Vascular, Inc. v. Gore & Assoc.: Federal Circuit Finds the Objective Reckless Prong of the Seagate Willful Infringement Test to be a Matter of Law

The Federal Circuit recently changed the analysis of willful infringement, making the first prong of objective recklessness from a matter of fact to a matter of law. In Bard Peripheral Vascular, Inc. v. Gore & Assoc., Inc., 682 F.3d 1003 (Fed. Cir. 2012), the Federal Circuit took note of the mixed fact/law nature of that prong and determined that judges are in the best position to rule on the issue.

Background: A Matter of Fact

Under 35 U.S.C. § 284, a finding of willful infringement allows an award of enhanced damages.  To find willful infringement, Seagate established a two-prong test: (1) “a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent;” and (2) “the patentee must also demonstrate that this objectively-defined risk…was either known or so obvious that it should have been known to the accused infringer.”  Id. at 1005.

The first prong is often known as the “objective recklessness” prong.  Case law has shown that it “tends not to be met where an accused infringer relies on a reasonable defense to a charge of infringement.”  Id.  Thus, the analysis the Court often deals with is whether a defense is “reasonable.” Id. at 1006.

Before the instant case, the objective recklessness prong was treated by courts as a question of fact.  Id.  However, the Court noted that some defenses are questions of law, and thus, the instant case asks whether the objective recklessness prong should remain a question of fact or a question of law, subject to de novo review.  Id.

Court Determines Judges Are in Best Position to Rule on Objective Recklessness

Because an inquiry into the reasonableness of potential defenses involves issues of law and fact, the Court relied upon the principle that in cases of mixed law and fact, there is “one judicial actor…better positioned than another to decide the issue in question.”  Id.  Between the judge and the jury, the Court held that the “court is in the best position for making the determination of reasonableness.”  Id.  Specifically, “the objective determination of recklessness, even though predicated on underlying mixed questions of law and fact, is best decided by the judge as a question of law subject to de novo review.”  Id. at 1007.

The Court explained that in cases where the objective prong turns on questions of fact, “the judge may…allow the jury to determine the underlying facts relevant to the defense in the first instance.”  Id. at 1008.  Ultimately, however, “the judge remains the final arbiter of whether the defense was reasonable.”  Id.  at 1006.

The panel disagreed on whether to remand to the trial court.  The majority opted to remand the case to the trial court, deferring to that court’s “first hand knowledge” and “feel” for the case.  Id. at 1008.  While the majority noted the accused infringer’s potential defenses, the Court noted that the trial court did not analyze them under this new objective standard.  Id.

Dissenting only on the remand, Judge Newman found a remand “unnecessary.”  Id. at 1009.  Judge Newman cited a number of facts that the accused infringer could have relied upon in an invalidation defense, and thus found the facts sufficiently clear to deny willful infringement. Id.

Conclusion

By turning the objective recklessness prong into a question of law, the Court has also allowed parties to appeal de novo to the Federal Circuit on this issue.  To see how Bard may affect your infringement case, parties should contact experienced patent counsel.

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Tom Zuber

Jeff Zuber

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