Upon remand by the Supreme Court following its decision in Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016), a panel of the Federal Circuit reconsidered its previous decision to vacate a jury’s determination of willful infringement and, applying the Supreme Court’s newly articulated test for willfulness, reversed course to affirm the willfulness finding.
The parties involved in this appeal represent the two main competitors in the orthopedic pulsed lavage device market. In 2010, Stryker sued Zimmer for infringement of three patents. On summary judgment, the district court found that Zimmer infringed two of the three asserted patents. The parties then proceeded to trial on the issue of infringement of the third patent, willfulness of all three patents and Zimmer’s invalidity defenses. Following a jury verdict in which Zimmer was found to willfully infringe all three asserted patents and the patents were found to be not invalid, the district court awarded treble damages to Stryker. The district court also found the case exceptional, awarded fees to Stryker and entered a permanent injunction against Zimmer.
In its initial review, the Federal Circuit reversed the jury’s finding of willfulness. However, the Supreme Court granted certiorari to consider whether the test for willfulness articulated in Seagate was consistent with the Patent Act. In its Halo decision, the Supreme Court described the Seagate test as too restrictive for district courts to exercise their discretion and held that willfulness should be evaluated under a preponderance of the evidence standard. In view of this decision, the Supreme Court vacated the Federal Circuit’s earlier decision in this case. On remand, the Federal Circuit affirmed the jury’s finding that Zimmer willfully infringed Stryker’s patents because the jury made its finding under the clear and convincing evidentiary standard, which exceeds the preponderance of the evidence standard articulated by the Supreme Court in Halo. However, the Federal Circuit vacated the award of enhanced damages and remanded the case to allow the district court the opportunity to “exercise its discretion” and determine whether enhancement is appropriate in view of the circumstances of the case.
Stryker Corporation v. Zimmer, Inc., No. 2013-1668 (Fed. Cir. September 12, 2016).