Supreme Court Relaxes Test for Increasing Damages after a Finding of Willful Infringement

On June 13, 2016, the Supreme Court issued a decision in Halo Electronics, Inc. v. Pulse Electronics, Inc. et al., in which the Court rejected the two-part test set forth by the Federal Circuit in In re Seagate Technology, LLC for finding increased damages under 35 U.S.C. § 284 for willful infringement. The Federal Circuit had held that increased damages for infringement could only be found if the patent owner proved by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent, and that the risk of infringement was known or so obvious that it should have been known to the infringer. The Supreme Court found that the Federal Circuit’s test was too rigid and inconsistent with the provisions of § 284, which simply states that "the court may increase the damages up to three times the amount found or assessed." The Supreme Court held that the district court had the discretion to find enhanced damages for "egregious cases typified by willful misconduct." The Court further found that the burden of proof should be a preponderance of evidence standard and not the higher standard of clear and convincing evidence.