Willful Infringement Does Not Mean Automatic Enhanced Damages or Attorney Fees Award

Published 10 October 2019 by Offit│Kurman

Vectra Ltd. v. GlaxoSmithKline LLC, No. 16-638-RGA (D. Del., Sept. 12, 2019)

In this recent case in the District of Delaware, the court refused to award either enhanced damages or attorney fees after the jury found willful patent infringement. The Court’s application and analysis of the Read factors, while certainly case-specific, are instructive here and indicate facts that can insulate against enhanced damages, or attorney fees, after a finding of willful infringement.

Plaintiff Vectra sued the Glaxo defendants for direct and indirect infringement of U.S. Patent No. 8,303,991, which claims pharmaceutical compositions for inhalation of medicaments. Glaxo raised defences of no infringement and invalidity. Prior to trial, Vectra narrowed its case to assert only direct infringement of claim 3. After a five-day jury trial, Glaxo was found to have willfully infringed the claim. In a post-trial briefing, along with other damages adjustments, Vectra sought enhanced damages for willful infringement and, if enhancement was denied, an award of attorney fees. Judge Anderson refused, however, to award enhanced damages or attorney fees.

Enhanced Damages

In its analysis of enhanced damages, the Court noted the U.S. Supreme Court’s test for increased damages in a case of willful or bad-faith infringement in Halo Electronics[1] and that it “merely requires the district court to consider the particular circumstances of the case to determine whether it is egregious.” Vectra, at 6 (citations omitted). Judge Andrews then applied the so-called nine Read factors to the enhancement issue, noting that it may do so at its discretion. Id. (citing Read Corp. v. Portec, Inc., 970 F.2d 816, 827 (Fed. Cir. 1992)).

On balance, despite finding that Read factors 2, 4, and 6 supported enhancement (lack of good-faith belief of invalidity/non-infringement; Glaxo’s size; and Glaxo’s three-year duration of infringement*, Judge Andrews found that the Read factors weighed against enhanced damages.  Recitation of some of the interesting Read factors[2], and how they influenced the Court’s decision, follow.

For Read factor one, there was undisputed evidence that Glaxo did not deliberately copy the claimed invention. The development of the accused products showed testing of other excipients before arriving at the claimed magnesium stearate. For Read three, the Court noted Glaxo’s argument that both parties in the case comported themselves professionally throughout the litigation, an argument unrebutted by the plaintiff.

For Read five, Vectra argued that Glaxo’s defences were “weak,” and the jury’s quick decision underscored this. On this point Judge Andrews was not persuaded and cited a prior decision of his, stating he “[does] not think that the length of jury deliberation is a meaningful metric [for assessing whether a claim is meritorious].” In addition, Glaxo put on considerable evidence supporting its non-infringement case. Vectra also argued that because Glaxo dropped its section 112 defences before trial, those theories were so weak that they were meritless. The Court again was unpersuaded, finding “[t]hat is not the inquiry here” and instead observed that Glaxo presented an obviousness defence which made the case, “at least relatively close.” Id. at 8.  Therefore, despite the jury’s willful infringement finding, Judge Anderson refused to award enhanced damages.

Attorney Fees

The Court also waived away Vectra’s alternative request for attorney fees for an “exceptional case” under 35 U.S.C. § 285. Vectra argued only that the case was exceptional because Glaxo willfully infringed and, further supported by its arguments on the Read factors. Judge Anderson was unconvinced, stating, “[a]lthough willfulness is a factor relevant to an exceptional case determination, it is not dispositive.” Id. at 10 (citing Octane Fitness, 572 U.S. at 554 (“[T]here is no precise rule or formula for making [exceptional case] determinations, but instead equitable discretion should be exercised.”)). The Court further found that plaintiff Vectra failed to show that Glaxo’s defences were frivolous or unreasonable, nor did Glaxo engage in litigation misconduct or unprofessional behaviour “that may ‘suffice, by themselves, to make a case exceptional under § 285.’” Id. at 11. In fact, here, plaintiff Vectra made no allegations of litigation misconduct.

As made clear from this case, a finding of willful patent infringement does not necessarily mean enhanced damages or attorney fees will follow. (At least in the District of Delaware.) While many mistakenly believe enhanced damages and/or attorney fees awards inevitably follow a willfulness finding, there is much more involved. A close analysis of the facts of the case, including the behaviour by the accused infringer, very much make the questions of enhanced damages and attorney fees undecided in a patent infringement case.