CCIA Praises Patent Court’s Reversal on “Willfulness”

File Under: News, 2007, CCIA

Aug 21, 2007

Washington, DC - The Computer & Communications Industry Association praised yesterday’s unanimous en banc decision by the Court of Appeals for the Federal Circuit, In re Seagate Technology, LLC, which rejected the court’s own precedent on the “willfulness” standard in patent infringement cases.  
 
If a patent is “willfully” infringed, the patent owner can get treble damages.  The court’s old rule imposed an affirmative duty of care on anyone who learned that they might be infringing a patent, which usually meant hiring outside attorney to evaluate the likelihood that the patent was valid and infringed.  The new rule requires that the patent owner show by “clear and convincing evidence” that an infringer acted recklessly in ignoring the patent.
 
“We appreciate the Federal Circuit’s willingness to revisit its own standard,” said CCIA president Ed Black.  “The risk of willful infringement has been a particular problem in the IT sector, where there are vast number of patents, many of which are junk.  Legal departments tell engineers not to read patents because of the risk of willful infringement, and the quality is so low that engineers are happy to comply.”
 
The patent system is intended to promote public disclosure of new technology in exchange for a limited monopoly, so the effect of the willfulness standard has caused calls for legislative reform.  “There are many contentious issues in the patent reform debate,” noted Black, “but there is widespread agreement that the Federal Circuit had willful infringement wrong.”  The language in the reform bills is more specific than the new Federal Circuit standard, which will have to be refined on a case by case.
 
“The real test will be whether smart people at innovative companies read patents,” said CCIA Senior Fellow, Brian Kahin, “that is, the innovators, not the lawyers.”
 
Very likely, Congress will enact its own version of the standard, if the legislation survives controversy in other areas.
 
“Nonetheless,” said Kahin, “the decision is significant because it shows that our specialized appeals court is taking widespread criticism of its “pro-patent” record to heart.”  The Federal Circuit has a virtual monopoly on patent appeals, but recently the Supreme Court has stepped in to reverse several of its rulings on patent law.  Said Kahin, “a court that has a monopoly on particular field of law not only tends to champion its specialty but is naturally reluctant to overturn past rulings, and litigants are generally too intimidated to suggest it.”  CCIA favors a recent proposal to break the monopoly by giving another appellate court joint jurisdiction over patent appeals.