District Court Judge Denies Enhanced Damages for Willful Patent Infringement, but Finds the Case Exceptional Under 35 U.S.C. § 285 and Allows Attorney’s Fees

Key Takeaways

• In certain patent cases, even if a court denies enhanced damages under 35 U.S.C. § 284, attorney’s fees under 35 U.S.C. § 285 may still be available for exceptional conduct.
• Use caution when speaking about a case in the courtroom, even after a jury’s final verdict, as it can impact the court’s perception of the case and can lead to adverse consequences.

In a March 30, 2023 decision in Wash World, Inc. v. Belanger Inc., No. 19-C-1562, a case involving infringement of a patent relating to a vehicle spray car washer with a lighted spray arm, Judge William C. Griesbach of the Eastern District of Wisconsin denied a patentee’s motion for treble damages under 35 U.S.C. § 284 of the $10,060,000 jury award after the jury had found the accused infringer willfully infringed. However, the court granted the patentee’s motion for attorney’s fees under 35 U.S.C. § 285, finding the case to be exceptional. The court’s award of attorney’s fees was based, in part, on a dismissive statement by the infringer’s corporate representative and president overheard in the courtroom shortly after the jury’s verdict.

In denying the motion for enhanced damages, the court cited to the Supreme Court’s ruling in Halo Electronics., Inc. v. Pulse Electronics., Inc., 579 U.S. 93 (2016), noting that enhanced damages “are generally reserved for egregious cases of culpable behavior” and are “designed as a ‘punitive’ or ‘vindictive’ sanction for egregious infringement behavior.” The court then applied the eight-factor test enumerated by the Federal Circuit in Read Corp. v. Portec, Inc., 970 F.2d 816 (Fed. Cir. 1992). The court weighed each factor, including the jury’s finding of willfulness, and found “the question of enhanced damages to be close,” but based on the circumstances, enhancement was not appropriate. The court noted that the $10,060,000 award was “a substantial amount considering the limited nature of the improvement claimed in the patent” and did not warrant further compensation.

With respect to attorney’s fees, the court used the standard articulated by the Supreme Court in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 554 (2014), noting that exceptional cases “are, by definition, ‘uncommon,’ ‘rare,’ or ‘not ordinary.’”  The court then found that while a jury’s finding of willfulness is not dispositive, that finding in combination with a statement after the jury verdict by the infringer’s president that the $10 million verdict was “no big deal,” while whistling to himself as he left the courtroom, demonstrated to the court “a lack of remorse and suggests a need to send a message of deterrence.” Based on these facts, the court found attorney’s fees were appropriate. 

Given specific facts of this case, and the distinct tests for enhanced damages and attorney’s fees, such a result is understandable. A determination of whether to award enhanced damages under § 284 includes a balance of willfulness and a number of other factors related to the infringer’s actions—such as infringer’s behavior during litigation, the closeness of the case, and remedial actions by the infringer. By contrast, the determination of an exceptional case under § 285 only requires evaluation of the relative strength of the party’s litigation position or the reasonableness of the manner in which the case was litigated.  Still, the Wisconsin court’s holding is a somewhat unusual result.  There are a number of recent cases in which a district court awarded enhanced damages but refused to allow attorney’s fees, finding that the case was not exceptional.^[1]

The court’s ruling serves as a reminder that even through the standards for enhanced damages and attorney’s fees in patent cases rely on some similar factors, care should be taken to argue each standard distinctly.  For example, a court might find a jury award adequate compensation not warranting enhancement under § 284, but that the conduct was sufficiently egregious to warrant attorney’s fees under § 285. It also serves as a reminder to be mindful of what you say and do in a courtroom, even after the jury’s verdict, as that conduct can adversely affect how the court perceives enhancement and attorney’s fees later.