On January 3, 2017, Judge Bloom of the Southern District of Florida added nearly $1 million in pre-judgment interest to the damage figure of roughly $48.2 million already owed by Bombardier to Arctic Cat due to a finding of willful infringement. Arctic Cat had sued Bombardier, the makers of Sea-Doo, over patents covering steering technology that is used to increase safety. The $48.2 million damage amount included an ongoing royalty rate of double the jury’s verdict, bringing the rate to $205.08 per Sea-Doo that was sold. This increase in royalty rate as well as pre-judgment interest and damages for infringement during trial, brought the total damage figure owed by Bombardier to about $49.2 million.
Judge Bloom found that Bombardier had willfully infringed Arctic Cat’s patents, basing her decision on the conclusory way in which Bombardier’s IP department determined that Bombardier allegedly did not infringe. She also focused on evidence that Bombardier had attempted to purchase Arctic Cat’s patents, but when that failed, simply continued to produce potentially infringing products. Judge Bloom noted that she supported the jury’s finding of “objective recklessness” under the old Seagate test in supporting willful infringement, noting that the Supreme Court’s Halo decision makes it even easier for patent holders to seek willful infringement.
Regarding the enhanced ongoing royalty, Judge Bloom stated that after the jury’s verdict and a finding of willful infringement, there was no way Bombardier could reasonably believe that the patents-in-suit were invalid. Bombardier had also stated that the verdict was “baseless” and “unfounded” which prompted Judge Bloom to increase the ongoing royalty noting that “such actions in fact demonstrate a lack of respect for the court, the jury and the U.S. patent system.” She concluded that a higher ongoing royalty was appropriate because it reduced the incentive to infringe; something that Bombardier had shown it needed.
This case underscores the importance of diligently ensuring non-infringement to avoid a willfulness finding. Especially considering the Supreme Court’s Halo decision reducing the standard for a willful infringement finding.
Arctic Cat Inc. v. Bombardier Rec. Prods., 14-cv-62369 (S.D. Fla. January 3, 2017)