Ben J. Smith is a patent attorney at Suiter Swantz IP. Ben received his B.S. in Mechanical Engineering from the University of Nebraska Lincoln and his Juris Doctor with distinction from the University of Nebraska College of Law.
Primer on Patent Infringement: Enhanced Damages
Parties found to infringe a patent may be subject to enhanced damages in egregious cases beyond typical infringement. District courts may consider the Read factors when determining whether to award enhanced damages.
What are Enhanced Damages?
The statutory provision for enhanced damages is defined in 35 U.S.C. § 284, which states that “the court may increase the damages up to three times the amount found or assessed.” 35 U.S.C. § 284. Here, the damages refer to “damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.” Id. Thus, enhanced damages of up to three times the damages adequate to compensate for the infringement are permissible.
The purpose of enhanced damages is to serve as a deterrent against patent infringement. By imposing significantly higher financial penalties for infringers, the law seeks to discourage potential violators from engaging in unlawful use of patented technology. The possibility of facing treble damages can be a powerful motivator for businesses and individuals to respect intellectual property rights, fostering a culture of innovation and fair competition.
When are Enhanced Damages Appropriate?
The statutory provision for treble damages is silent as to when enhanced damages are appropriate. The Supreme Court has found that enhanced damages should “generally be reserved for egregious cases typified by willful misconduct.” Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1933-34 (2016).
The Court further indicates that district courts have discretion to award enhanced damages in such egregious cases typified by willful misconduct beyond typical infringement.
What are the Read Factors?
While enhanced damages play a crucial role in preserving the integrity of the patent system, courts must strike a balance between protecting patent holders and preventing misuse of this provision to target legitimate competition.
Courts may consider the following non-exhaustive list of factors, commonly called the Read factors, to determine when enhanced damages are appropriate. The Read factors include: (1) whether the infringer deliberately copied the patentee’s ideas or design; (2) whether the infringer, upon knowing of the other’s patent protection, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed; (3) the infringer’s litigation behavior; (4) the infringer’s size and financial condition; (5) the closeness of the case; (6) the duration of the infringer’s misconduct; (7) remedial action taken by the infringer; (8) the infringer’s motivation for harm; and (9) whether the infringer attempted to conceal its misconduct. Pierce Mfg. v. E-One, Inc., 8:18-cv-617-TPB-TGW, 1 (M.D. Fla. Feb. 16, 2022) (citing to Read Corp. v. Portec, Inc., 970 F.2d 816, 826-27 (Fed. Cir. 1992).
Conclusion
Enhanced damages under 35 U.S.C § 284 serve as a potent weapon in the arsenal of patent holders to safeguard their intellectual property rights. By punishing infringers with treble damages, courts send a clear message that patent infringement will not be tolerated. As technology continues to advance, it is essential to uphold the patent system’s credibility to foster innovation, reward inventors, and maintain a level playing field in the marketplace.
Suiter Swantz IP is a full-service intellectual property law firm providing client-centric patent, trademark, and copyright services. If you need assistance with an intellectual property matter and would like to speak with one of our attorneys, please contact us at info@suiter.com.