Updated: Aug 12
Federal Circuit: the Federal Circuit Bar Association's model jury instruction on willfulness is bad, but not so bad that we'll order a remand.
Eko Brands, LLC,
Adrian Rivera Maynez Enterprises, Inc. et al., Defendants-Appellants
January 13, 2019
35 USC § 284 says that upon a “finding for the claimant … the court shall award damages to compensate for the infringement.” These damages may be found by a jury or assessed by a District Court judge; and that judge may increase damages by up to three times the amount found or assessed.
Although §284 does not define (or even mention) “willful” infringement, courts view the statute as allowing an award of enhanced damages when a patent has been willfully infringed. The standards that dictate whether a court may enhance damages have changed dramatically over the past 37 years. In 1983, Underwater Devices set the bar for willful infringement fairly low; 24 years later, the standards articulated in Seagate made it nearly impossible to prove that infringement had been willful; finally, the Supreme Court’s June 2016 Halo decision attempted to swing the pendulum more towards the middle. In that case, the high court said that a trial judge may enhance damages when the infringer’s actions were “egregious” or had “the characteristics of a pirate.”
Shortly after this Supreme Court decision, the Federal Circuit Bar Association (FCBA) amended its model patent jury instruction 3.10 to be consistent with (what it believed) Halo requires juries to consider when deciding whether infringement was willful; the new instruction read in part:
Willfulness requires you to determine whether [patent holder] proved that it is more likely than not that the infringement by [alleged infringer] was especially worthy of punishment.
You may not determine that the infringement was willful just because [alleged infringer] knew of the [ ] patent and infringed it.
Instead, willful infringement is reserved for only the most egregious behavior, such as where the infringement is malicious, deliberate, consciously wrongful, or done in bad faith.
This model jury instruction goes on to say that in determining whether a defendant willfully infringed, the jury may consider all facts relevant to the accused infringer’s mental state, including whether the accused infringer:
· Deliberately copied the claimed invention;
· Reasonably believed that the invention was not infringed or invalid;
· Made a good-faith effort to avoid infringing the patent; or
· Tried to cover up its infringement.
About two years after Halo, the parties to a patent litigation (Eko Brands, LLC v. Adrian Rivera Maynez Enterprises, Inc., No. 2:15-cv-00522-JPD (W.D. Wash)) agreed to use a nearly verbatim version of the FCBA’s willful infringement model jury instruction. But shortly before trial, the patent owner (Eko) argued that the instruction’s use of the phrases “especially worthy of punishment” and “willful infringement is reserved for only the most egregious behavior” “invite[d] the jury to make the legal decision as to whether damages should be enhanced, or whether it is an exceptional case, rather than limiting the jury to the underlying factual question of whether the infringement was willful.” In other words, the jury’s job under Halo is simply to determine whether the infringement was “willful,” “deliberate,” or “intentional”—not whether the defendant’s actions amounted to “the most egregious behavior.”
In response, the District Court amended the challenged instruction—but only to remove the phrase “only the most.” The amended instruction therefore read (in part): “willful infringement is reserved for egregious behavior.” With that version of the instruction, the jury returned a verdict of no willful infringement.
On appeal, the Federal Circuit agreed with patent owner Eko that under Halo, “the concept of ‘willfulness’ requires a jury to find no more than deliberate or intentional infringement,” and that questions of whether the accused infringer’s conduct was “egregious behavior” or “worthy of punishment” are only relevant to the trial judge’s decision whether to award enhanced damages.
Although the panel agreed with Eko that it was legal error for the jury instruction to include the phrases “especially worthy of punishment” and “reserved for egregious behavior,” they said that “the instruction taken as a whole provides reasonable clarity as to the correct test for willful infringement”—and gave two reasons for this.
First, the sentence in the challenged instruction that says willful infringement is reserved for “egregious behavior” also suggests that merely “deliberate” behavior can qualify as “egregious” behavior.
Second, the instruction also says that in deciding the issue of willfulness, the jury may consider whether the defendant intentionally infringed the asserted patent.
The Court of Appeals concluded by explaining that if a party seeks to alter judgment because of an erroneous jury instruction, it must show that the new instruction would have remedied the error. Here, even though Eko had properly preserved objections to the phrases “especially worthy of punishment” and “egregious behavior,” if the case were to be remanded with the offending phrases removed, the amended jury instruction would still not solve the problem that Eko identified; this is true because it would refer to “consciously wrongful” and “bad faith” conduct—both of which are irrelevant to the jury’s role under Halo.
 However, 35 USC §298 (Advice of Counsel) does mention willful infringement:
The failure of an infringer to obtain the advice of counsel with respect to any allegedly infringed patent, or the failure of the infringer to present such advice to the court or jury, may not be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent.
 Underwater Devices Inc. v. Morrison-Knudsen Co., 717 F.2d 1380, 1389-90 (Fed. Cir. 1983); In re Seagate Technologies, LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc); Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923, 1934 (2016).
 To that end, the model instruction also tells the jury to consider opinion of counsel evidence, if there is any:
[Alleged infringer] argues it did not act willfully because it relied on a legal opinion that advised [alleged infringer] either (1) that the [product] [method] did not infringe the [ ] patent or (2) that the [ ] patent was invalid [or unenforceable]. You must evaluate whether the opinion was of a quality that reliance on its conclusions was reasonable.
 “Willfulness requires you to determine whether Eko proved that it is more likely than not that the infringement was especially worthy of punishment. *** [W]illful infringement is reserved for only the most egregious behavior, such as where the infringement is malicious, deliberate, consciously wrongful, or done in bad faith.”
 At the beginning of its discussion, the Federal Circuit wanted to make clear that it has nothing to do with the Federal Circuit Bar Association’s model jury instructions:
There is no claim that the FCBA model instructions are afforded special status, nor could there be, since these instructions have not been endorsed or approved by this court.  [W]illful infringement is reserved for egregious behavior, such as where the infringement is malicious, deliberate, consciously wrongful, or done in bad faith.  “To determine whether ARM acted willfully, consider … (1) Whether or not ARM intentionally copied a product of Eko that is covered by the Eko 855 patent….”
 Eko’s proposed instruction would read in part:
[W]illful infringement is reserved [situations] where the infringement is deliberate, consciously wrongful, or done in bad faith.