The CAFC vacates treble damages and attorneys' fees in Stryker case

On remand, we recalled our mandate and reopened
the case. Because Halo was limited to the questions of
willfulness and enhanced damages, it left the judgments
on other issues undisturbed. For the reasons stated
below, we therefore reaffirm the jury’s findings that
Stryker’s patents were valid and infringed. In light of the
new willfulness standard articulated by the Supreme
Court, we also affirm the jury’s finding of willful infringement.
However, we vacate and remand the district
court’s award of treble damages. Finally, we vacate and
remand the district court’s finding that this was an exceptional
case and its award of attorneys’ fees.




As to infringement of the '807 patent:


The district court noted that, in its view, “Zimmer’s
reading of ‘receive’ is artificially narrow.” Stryker Corp. v.
Zimmer, Inc., No. 10-1223, slip op. at 8 (W.D. Mich. Nov.
29, 2012), ECF No. 247 (“Summary Judgment Order II”).
Instead, the district court reasoned that “[t]he word
“receives” in this context can only mean that one part of
the device connects directly with another part of the
device.” Id. Thus, the district court found that Zimmer
infringed. While it is a close case, we do not find that the
district court erred in granting summary judgment of
infringement based on the record before it.



Of enhanced damages:


After taking into consideration the circumstances of a
particular case, a court may exercise its discretion and
award enhanced damages under 35 U.S.C. § 284. Halo
Elecs., Inc., 136 S. Ct. at 1933. “[H]owever, such punishment
should generally be reserved for egregious cases
typified by willful misconduct.” Id. at 1934.

(...)

On appeal, Zimmer did not appeal the jury’s finding of
subjective willfulness under the Seagate test. On the
record in this case, willful misconduct is sufficiently
established by the jury’s finding. The jury made its
determination under the clear and convincing evidence
standard, which is a higher standard than is now necessary.
We therefore affirm the jury’s finding of willful
infringement.
In doing so, we think the best course is to vacate the
award of enhanced damages and remand to the district
court for consideration of this issue. As Halo makes clear,
the decision to enhance damages is a discretionary one
that the district court should make based on the circumstances
of the case, “in light of the longstanding considerations
. . . as having guided both Congress and the
courts.” Id. at 1934. Thus, it is for the district court to
determine whether, in its discretion, enhancement is
appropriate here. We therefore vacate the district court’s
award of enhanced damages and remand to the district
court so that it may exercise its discretion.




Of attorneys fees:



The district court’s award of attorneys’ fees was based
solely on its determination that Zimmer was liable of
willful infringement. Though we uphold the district
court’s willfulness determination, it does not necessarily
follow that the case is exceptional. As with the determination
of whether enhanced damages are appropriate,
“[d]istrict courts may determine whether a case is ‘exceptional’
in the case-by-case exercise of their discretion,
considering the totality of the circumstances.” Octane
Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct.
1749, 1756 (2014). Because there exist further allegations
of litigation misconduct in this case and because the
standard for finding an exceptional case has changed
since the district court issued its ruling regarding attorneys’
fees, we also remand this issue for further consideration
by the district court.
IV
For the aforementioned reasons, we affirm the jury’s
verdict of infringement and validity of all three patents at
issue, as well as its award of lost profits and its willfulness
determination. However, we vacate and remand the
district court’s award of trebled damages. We also vacate
and remand the district court’s finding of an exceptional
case and its award of attorneys’ fees. The case is remanded
for further proceedings consistent with this opinion.



link: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/13-1668.Opinion.9-7-2016.1.PDF