On June 1, 2016, the U.S. District Court for the District of Massachusetts denied Exergen Corporation’s (“Exergen”) motion for enhanced damages in a patent infringement action against Kaz USA, Inc. (“Kaz”). Exergen accused Kaz. of infringing its patents directed to temporal artery thermometers. Exergen moved for enhanced damages after a jury awarded it roughly $15 million in lost profits and reasonable royalties.
In rejecting Exergen's request for enhanced damages, the court explained that “an award of enhanced damages requires a showing of willful infringement” under In re Seagate Tech., LLC, 497 F.3d 1360, 1368 (Fed. Cir. 2007) and that it had previously ruled that Kaz’s infringement in this case was not willful. Exergen contended, nonetheless, that the Supreme Court may revisit the Seagate standard in Halo v. Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 356 (2015), and, therefore, the court should award enhanced damages under the Read factors: (1) whether the infringer deliberately copied the ideas or designs of another; (2) whether the infringer, when he knew of the other’s patent, investigated the patent and formed a good-faith belief that it was invalid or that it was not infringed; (3) the infringer’s behavior in the litigation; (4) the infringer’s size and financial condition; (5) the closeness of the case; (6) the duration of the misconduct; (7) the remedial action by the infringer; (8) the infringer’s motivation for harm; and (9) whether the infringer attempted to conceal its misconduct. See Read Corp. v. Portec, Inc., 970 F.2d 816 (Fed. Cir. 1992).
Ultimately, the court concluded that “[e]ven absent the willfulness threshold, the Read factors do not compel enhanced damages in this case,” because there was no trial evidence that Kaz copied Exergen’s product and Kaz’s invalidity defenses” were not objectively unreasonable.” Furthermore, Kaz committed no litigation misconduct and Exergen was able to “more than adequately vindicate its rights” in this case. Under these circumstances, the court ruled that the case was “not of an exceptional nature warranting an award of multiple damages.”
Exergen Corp. v. Kaz USA, Inc., No. 1:13-cv-10628-RGS (D. Mass.).