SRI INTERNATIONAL, INC. v. CISCO SYSTEMS, INC.
Before LOURIE, O’MALLEY, and STOLL. Appeals from the United States District Court for the District of Delaware.
Summary: Applying the proper test for willful infringement, the Federal Circuit reinstated a jury’s willfulness verdict and affirmed the district court’s damages enhancement and attorney-fee award.
SRI International, Inc. (“SRI”) sued Cisco Systems, Inc. (“Cisco”) for patent infringement. A jury found Cisco willfully infringed SRI’s patents and awarded damages. After trial, the district court upheld the jury’s finding of willfulness, doubled the jury’s damages award, and awarded SRI its attorney fees based in part on the finding of willfulness. In a first appeal, the Federal Circuit reversed the jury’s finding of willful infringement before May 8, 2012 and therefore vacated the district court’s decisions regarding willfulness and attorney fees.
On remand, the district court considered whether substantial evidence supported a finding of willful infringement after May 8, 2012. It applied a willfulness standard requiring conduct rising to the level of “wanton, malicious, and bad-faith” behavior. Based on that standard, the district court granted judgment as a matter of law (“JMOL”) of no willful infringement after May 8, 2012 and did not award enhanced damages. However, the district court again awarded SRI its attorney fees, this time without relying on willfulness. Both parties appealed.
In a second appeal, the Federal Circuit reversed the district court’s JMOL of no willful infringement after May 8, 2012. The Federal Circuit clarified that while “wanton, malicious, and bad-faith” behavior warrants enhanced damages, such behavior is not required for a jury to find willful infringement. It noted that, instead, willfulness requires no more than deliberate or intentional infringement. The Federal Circuit also reinstated the district court’s original enhancement doubling the jury’s damages award. It noted the original enhancement applied only to damages sustained after May 8, 2012 and found that the district court had properly considered the issue before the first appeal. Lastly, the Federal Circuit affirmed the district court’s award of attorney fees to SRI based on a litigation strategy by Cisco that the court described as “aggressive.”
Editor: Paul Stewart
