Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc.

• Decision Date: 14 June 2012
• Docket Number: No. 2010–1510.,2010–1510.
• Citation: 682 F.3d 1003,103 U.S.P.Q.2d 1088
• Parties: BARD PERIPHERAL VASCULAR, INC. and David Goldfarb, M.D., Plaintiffs/Counterclaim Defendants–Appellees, and C.R. Bard, Inc., Counterclaim Defendant–Appellee, v. W.L. GORE & ASSOCIATES, INC., Defendant/Counterclaimant–Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

682 F.3d 1003

103 U.S.P.Q.2d 1088

BARD PERIPHERAL VASCULAR, INC. and David Goldfarb, M.D., Plaintiffs/Counterclaim Defendants–Appellees,andC.R. Bard, Inc., Counterclaim Defendant–Appellee,

v.W.L. GORE & ASSOCIATES, INC., Defendant/Counterclaimant–Appellant.

No. 2010–1510.

United States Court of Appeals, Federal Circuit.

June 14, 2012.

Frank P. Porcelli, Fish & Richardson, P.C., of Boston, MA, filed a combined petition for panel rehearing and rehearing en banc for the defendant/counterclaimant-appellant. With him on the petition was John A. Dragseth. Of counsel on the petition were John S. Campbell, W.L. Gore & Associates, Inc., of Newark, DE, and David H. Pfeffer of Boca Raton, FL.

John C. O'Quinn, Kirkland & Ellis, LLP, of Washington, DC, filed a response to the petition for the plaintiffs/counterclaim defendants-appellees and counterclaim defendant-appellee. With him on the response were Nathan S. Mammen, William H. Burgess, and Dennis J. Abdelnour. Of counsel on the response were Steven C. Cherny of New York, New York; and Gregory G. Garre and Maximilian A. Grant, Latham & Watkins LLP, of Washington, DC; and Andrew M. Federhar, Fennemore Craig P.C., of Phoenix, AZ; and John L. Strand, Wolf, Greenfield & Sacks, P.C., of Boston, MA.

Paul D. Clement, Bancroft PLLC, of Washington, DC, for amici curiae Verizon Communications Inc. and Intel Corp. With him on the brief was D. Zachary Hudson. Of counsel on the brief for amicus curiae Verizon Communications Inc. were John Thorne and Gail F. Levine, Verizon Communications Inc., of Arlington, VA; and for amicus curiae Intel Corp. was Tina M. Chappell, Intel Corporation, of Chandler, AZ. Michelle K. Lee, Google Inc., of Mountain View, CA, for amicus curiae Google Inc. With her on the brief was Suzanne Michel.

Before NEWMAN, GAJARSA,^* and LINN, Circuit Judges.

Opinion for the court filed by Circuit Judge GAJARSA. Opinion concurring-in-part and dissenting-in-part filed by Circuit Judge NEWMAN.

GAJARSA, Circuit Judge.

I. Introduction

In deciding the present appeal, this court determined that the United States District Court for the District of Arizona (“trial court”) was correct in its judgment and affirmed all of the conclusions reached by the trial court. See Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 670 F.3d 1171 (Fed.Cir.2012). The appellant, W.L. Gore & Associates, Inc. (“Gore”), timely filed a petition for rehearing and rehearing en banc. Therein, Gore again faulted the trial court's willfulness analysis. Separately, an Amici Curiae brief in support of that petition argued that the objective prong of willfulness should be considered a question of law subject to de novo review on appeal. This court granted the petition for rehearing en banc and returned the matter to the panel for reconsideration, see En Banc Order, Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., No. 2010–1510 (Fed.Cir. June 14, 2012), for the sole purpose of revisiting the issue of willfulness and further explicating the standard of review applicable to it.

The court today reaffirms its opinion issued on February 10, 2012, except for section E and that portion of section F relating to Section 284 and 285 of Title 35 of the United States Code allowing for enhanced damages and attorneys' fees.¹ The court vacates section E and the limited portion of section F relating to its prior discussion of willfulness. The briefs related to the petition for rehearing present this court with a new question regarding the nature of the objective inquiry from In re Seagate Technology, LLC (“ Seagate”), 497 F.3d 1360 (Fed.Cir.2007) ( en banc ). The court agrees that the trial court failed to address the objective prong of willfulness as a separate legal test from Seagate's subjective component. The court now holds that the threshold objective prong of the willfulness standard enunciated in Seagate is a question of law based on underlying mixed questions of law and fact and is subject to de novo review. The court remands the issue of willfulness so that the trial court may reconsider its denial of JMOL of no willful infringement in view of this holding. If the court grants the JMOL, it should then reconsider its decisions on enhanced damages and attorneys' fees.

II. Discussion

A finding of willful infringement allows an award of enhanced damages under 35 U.S.C. § 284. Seagate, 497 F.3d at 1368. Because Supreme Court precedent requires a showing of recklessness before civil punitive damages are allowed, Seagate overruled this court's previous standard for willfulness, which was “more akin to negligence.” Id. at 1371. Seagate established a two-pronged test for establishing the requisite recklessness. Id. Thus, to establish willful infringement, “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.” Id. Once the “threshold objective standard is satisfied, 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. The Seagate court “le[ft] it to future cases to further develop the application of this standard.” Id. Following Seagate, this court established the rule that generally the “ ‘objective’ prong of Seagate tends not to be met where an accused infringer relies on a reasonable defense to a charge of infringement.” Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc., 620 F.3d 1305, 1319 (Fed.Cir.2010). Thus, the question on appeal often posed is whether a defense or noninfringement theory was “reasonable.” See, e.g., Powell v. Home Depot U.S.A., Inc., 663 F.3d 1221, 1236 (Fed.Cir.2011).

The ultimate question of willfulness has long been treated as a question of fact. See, e.g., Stryker Corp. v. Intermedics Orthopedics, Inc., 96 F.3d 1409, 1413 (Fed.Cir.1996) (“The court's finding of willful infringement is one of fact, subject to the clearly erroneous standard of review.”). And the court has made similar statements even after Seagate. See, e.g., Cohesive Techs., Inc. v. Waters Corp., 543 F.3d 1351, 1374 (Fed.Cir.2008) (“ ‘The court's finding [on] willful infringement is one of fact, subject to the clearly erroneous standard.’ ” (quoting Stryker Corp., 96 F.3d at 1413)); i4i Ltd. P'ship v. Microsoft Corp., 598 F.3d 831, 859 (Fed.Cir.2010) (citing Cohesive Techs., 543 F.3d at 1374, and stating “willful[ness] is a question of fact”), aff'd,––– U.S. ––––, 131 S.Ct. 2238, 180 L.Ed.2d 131 (2011); Powell, 663 F.3d at 1228 (citing i4i, 598 F.3d at 859);Spine Solutions, 620 F.3d at 1319 (citing i4i, 598 F.3d at 859). The court has not been called upon, however, to clearly delineate the standard applicable to Seagate 's objective test.

Since Seagate, however, even in those cases that have continued to recite the general characterization that willfulness ultimately presents a question of fact, our opinions have begun to recognize that the issues are more complex. For example, while this case was on appeal this court in considering the objective prong clarified that “the answer to whether an accused infringer's reliance on a particular issue or defense is reasonable is a question for the court when the resolution of that particular issue or defense is a matter of law” but it “is properly considered by the jury” “[w]hen the resolution of a particular issue or defense is a factual matter.” Powell, 663 F.3d at 1236–37.

After reviewing the Supreme Court's precedent in similar contexts, as well as our own, we conclude that simply stating that willfulness is a question of fact oversimplifies the issue. While the ultimate question of willfulness based on an assessment of the second prong of Seagate may be a question of fact, Seagate also requires a threshold determination of objective recklessness. That determination entails an objective assessment of potential defenses based on the risk presented by the patent. Those defenses may include questions of infringement but also can be expected in almost every case to entail questions of validity that are not necessarily dependent on the factual circumstances of the particular party accused of infringement.

In considering the standard applicable to the objective prong of Seagate, it can be appreciated that “the decision to label an issue a ‘question of law,’ a ‘question of fact,’ or a ‘mixed question of law and fact’ is sometimes as much a matter of allocation as it is of analysis.” Miller v. Fenton, 474 U.S. 104, 113–14, 106 S.Ct. 445, 88 L.Ed.2d 405 (1985). When an “issue falls somewhere between a pristine legal standard and a simple historical fact, the fact/law distinction at times has turned on a determination that, as a matter of sound administration of justice, one judicial actor is better positioned than another to decide the issue in question.” Id. at 114, 106 S.Ct. 445;see also Markman v. Westview Instruments, Inc., 517 U.S. 370, 388, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996) (applying this test to determine that claim construction is best left to the judge). We believe that the court is in the best position for making the determination of reasonableness. This court therefore holds that 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.

When a defense or noninfringement theory asserted by an infringer is purely legal (e.g., claim construction), the objective recklessness of such a theory is a purely legal question to be determined by the judge. See Powell, 663 F.3d at 1236. When the objective prong turns on fact questions, as related, for example, to anticipation, or on legal questions dependent on the underlying facts, as related, for example, to questions of obviousness, the judge remains the final arbiter of whether the defense was reasonable, even when the...