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Federal Circuit Takes “Willfulness” Out of Jurors’ Hands

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by Justin Shubow
Posted June 19, 2012, 10:30 AM

According to Thomson Reuters:

Chances are that any given juror in a patent case has never before and will never again have to decide a similar legal dispute. But because jurors sit through patent trials and weigh the evidence they've heard, they've always been charged with determining not only whether the plaintiff has a valid patent that the defendant has infringed but also whether the defendant's infringement was willful.

As of Thursday, that's no longer the case.

In a new appellate ruling in C.R. Bard v. W.L. Gore & Associates, the Federal Circuit Court of Appeals wrested some of that discretion away from jurors and placed it in the hands of the federal judges who oversee patent disputes. The judge is in the best position to determine whether a defendant's conduct was reasonable, the court concluded.

The 38-year-old (yes, 38-year-old) Bard case has a long and contorted history. Just last February, a divided three-judge panel of the Federal Circuit affirmed a $186 million jury verdict against Gore-Tex maker W.L. Gore for willful infringement, as well as post-trial rulings that doubled the damages. It also tacked on $19 million in attorneys' fees, and added a 12.5 percent to 20 percent royalty for Gore's ongoing infringement of C.R. Bard's patent on vascular stents. That brought the grand total of what Gore owed Bard to between $800 million and $900 million -- one of the largest patent awards ever affirmed by the Federal Circuit.

But the panel backtracked last week, after the en banc court called for reconsideration. On appeal, Gore had argued that the company's own plant manager had come up with the idea for using Gore-Tex as a possible prosthetic blood vessel and was at least a co-inventor. What's more, Bard's patent was pending for 28 years, which raised doubts as to its validity.

The divided Federal Circuit panel concluded that trial judge Mary Murguia (then a U.S. district judge in Arizona, now a member of the 9th Circuit) used the wrong test to determine whether Gore's alleged infringement was willful or not. Instead of reviewing whether the jury had enough evidence to find willfulness, she should have first determined on her own whether Gore's actions were objectively reckless. In other words, was Gore being reasonable in assuming that it was not infringing Bard's patent?

"The objective determination of recklessness, even though predicated on underlying mixed questions of law and fact, is best decided by the judge as a question of law subject to de novo review," Judge Arthur Gajarsa wrote for the two-judge majority.

Paul Clement of Bancroft had filed an amicus brief on behalf of Verizon, Google and Intel supporting Gore's request for a rehearing en banc. John Thorne, Verizon's general counsel, welcomed the panel's decision to make willfulness a question of law for the judge. "This result will better achieve patent law's aims by promoting innovation," he said in a statement.

But the result exposes a perennial tension in patent litigation over who should have decision-making authority: the jury or the judge?

"It's harder to persuade a lay jury that the patent office made a mistake than it is to convince a federal district judge that the patent office made a mistake. Therefore, the allocation of authority really matters," said James Dabney, who heads Fried Frank's IP practice.

The latest decision reflects a broader trend of shifting that authority into the hands of the judge that started with the 1996 case Markman v. Westview Instruments, when the Supreme Court ruled that judges, not juries, would decide what the words used in patent claims meant. The same fight has also been brewing over other elements of patent law, including the requirements of non-obviousness and the sufficiency of a claim's written description -- both of which still lie with the jury.

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