Monday, January 26, 2015

Chinese Court Awards $12 Million in Damages for Infringement of Two Utility Models

Recently I came across an article by Song Haining in 2014 issue 4 of China Patents & Trademarks titled A Story of Battling Giants: Comments on Goer Tek Acoustics v. Knowles Electronics.  (The article does not appear to be freely available on the magazine's website yet, but interested readers may want to check back in a few weeks.)  In any event, according to Mr. Song, the parties compete in the market for micro-electrical-mechanical systems (MEMS), and both supply microphones to Apple and Samsung.  (Knowles is a U.S. company with a Chinese subsidiary, Knowles (Suzhou); Goer Tek is a Chinese firm.)  In 2013, Knowles commenced an ITC investigation and a patent infringement suit against Goer Tek in the U.S., both of which matters remain pending.  Shortly thereafter, Goer Tek filed actions in China against Knowles (Suzhou), the Chinese subsidiary, for infringement of four utility models and one patent.  Knowles filed an invalidation action against two of the utility models, but lost on one and withdrew its request regarding the other.  The actions proceeded to trial on these two utility models and judgment was entered for Goer Tek in April 2014.  (According to Mr. Song, the other three actions (involving two utility models and one patent) remain pending.)  As far as remedies are concerned:

1.  The court enjoined a retailer, Weifang Sanlian Home Electronic Appliances Co., Ltd., from selling Samsung cell phones (model GT-I9500) that contained the infringing product;

2.  The court enjoined Knowles (Suzhou) from selling or making infringing microphones; and

3.  The court ordered Knowles (Suzhou) to pay Goer Tek RMB 74.4 million, which comes to approximately U.S. $12 million.  To my knowledge, this makes the judgment one of the largest ever in China, though not quite as large as the RMB 330 million awarded by the Wenzhou Intermediate People’s Court in the 2007 case of Chint Group Corp. v. Schneider Electric Low-Voltage (Tianjin) Co. (see my book p.355).

Analyzing the case, Mr. Song argues that the injunction is disproportionately harsh as to the retailer, given the relatively small value of the infringing component in comparison with the price of a cell phone, but states that under Chinese law an injunction remains the "default remedy for patent infringement."  He also notes, however, that there are some Chinese precedents permitting courts to withhold injunctions in the public interest, including a case titled Zhuhai City Jingyi Glass Engineering Co. Ltd. v. Guangzhou Baiyun International Airport Co., Ltd., where a court denied an injunction against an airport due to its "special nature as a public transport facility."  (See also the discussion in my book at pages 349-50 of China Environmental Project Co., Ltd. v. Fujikasui Engineering Co., Ltd., Huayang Electric Power Co., Ltd., another case in which a Chinese court denied an injunction on public interest grounds.)  Moreover, Mr. Song cites "an internal draft document being circulated among Chinese IP professors as of June 2014" in which "the Supreme People's Court proposes that, in addition to 'public interest', 'serious imbalance of interests between parties' might also justify an exception to injunction."  As I note in my book (pp. 350-51), Supreme People's Court Vice President Cao Jianming made a similar suggestion in a 2008 speech, so perhaps it would not be surprising if China formally adopted such a rule in the near future.

As for damages, the court awarded lost profits calculated by taking the number of infringing products (estimated from sales data disclosed by the defendant and from "import/export data from Chinese customs") and multiplying it by the "average profit rate in the industry."  This sounds very similar to a procedure used in Japan under article 102(1) of the Japan Patent Act, which states in relevant part and subject to some qualifications that “the amount of damage sustained . . . may be presumed to be the amount of profit per unit of articles which would have been sold by the patentee . . . if there had been no such act of infringement, multiplied by the quantity . . . of articles assigned by the infringer . . . .”  To my mind, however, the procedure seems problematic, since it may well be the case that the infringer would have been able to make some or all of its sales by using a noninfringing alternative--though if I understand Mr. Song correctly, in this case the defendant didn't provide any rebuttal evidence.  In any event, lost profits are not awarded very frequently in China, as I discuss in my book at pp. 354-55; so-called statutory damages are much more common.  So for that reason alone the Goer Tek case is significant, and I am thankful to Mr. Song for bringing it to my attention in his paper.   

Friday, January 23, 2015

False Allegations of Patent Infringement in Japan

The September 2014 issue of AIPPI-Journal of Japanese Group of AIPPI has a short article by Yosuke Kurita of a case titled Iris Ohyama, Inc. v. Y, Tokyo District Court, Judgment of December 19, 2013, Case No. 2011 (Wa) No. 30214.  According to the article, the defendant owns a patent on an "energy saving lamp with sensor."  The defendant sought an injunction against the plaintiff's importation and sales of a product that the defendant alleged was infringing, and also sent letters to two other firms (retailers of plaintiff's product) making this same allegation against the plaintiff.  The plaintiff filed suit for a declaratory judgment of noninfringement and for an injunction against the defendant's alleged unfair competition.  The court concluded that the plaintiff's product did not infringe and awarded it the requested declaratory judgment.  On the unfair competition claim, the relevant statute states (in this unofficial translation available from the OECD) in article 3(1) that "A person whose business interests have been infringed or are likely to be infringed by unfair competition may seek an injunction suspending or preventing the infringement against the person that infringed or is likely to infringe such business interests," and article 2(1)(xiv) defines "unfair competition" to include, among other things, "acts of making or circulating a false allegation that is injurious to the business reputation of another person in a competitive relationship."  The court concluded that a "competitive relationship" between the plaintiff and defendant existed, on the ground that "existence of a likelihood of competition occurring in the market suffices from the perspective of the purpose . . .  of the Unfair Competition Prevention Act, that is, ensuring fair competition among business operators, even if there is no competition in the actual market.  Sela has also made its way into Japan, and is in a competitive relationship with the plaintiff.  In addition, the defendant is the representative of Sela and has the patent right.  Therefore, it is recognized that there is a likelihood of competition occurring in the market in relation of the business of selling lamps with a sensor" (p.347).  

The article doesn't indicate that the plaintiff sought any damages for the alleged unfair competition,  perhaps because no damages would have been available under the damages provisions of the unfair competition law.  The relevant portions of those provisions read as follows:
Article 4 (Damages)
A person who intentionally or negligently infringes on the business interests of another person by unfair competition shall be liable for damages resulting therefrom. However, this Article shall not apply to damages resulting from the use of a trade secret after the rights prescribed in Article 15 have extinguished pursuant to the said Article.
Article 5 (Presumption of amount of damages, etc.)
(1) Where a person whose business interests have been infringed by unfair competition listed in items 1 to 9 or item 15 of Article 2(1) . . . (hereinafter referred to as the "infringed person" in this paragraph) claims damages caused by such an infringement from a person who has intentionally or negligently infringed such business interests, and where the infringer has sold or otherwise transferred the articles constituting the act of infringement, the quantity of the articles sold or transferred (hereinafter referred to as the "transferred quantity" in this paragraph) multiplied by the amount of profit per unit of the articles that the infringed person could have sold in the absence of the infringement may be deemed as the amount of damages suffered by the infringed person, provided it does not exceed the amount attainable by the infringed person's capability to sell or conduct other acts concerning said articles. However, where there are any circumstances that would have prevented the infringed person from selling the quantity of articles equivalent to all or part of the transferred quantity, an amount corresponding to the quantity relevant to such circumstances shall be deducted.
(2) Where a person whose business interests have been infringed by unfair competition claims damages caused by a person who intentionally or negligently infringed such business interests and received profits through the act of infringement, the amount of such profits shall be presumed to be the amount of damages suffered by the person whose business interests were infringed. . . .
(4) The provisions of the preceding paragraph shall not preclude a claim for damages exceeding the amount prescribed in the paragraph. In such a case, if the person who infringed such business interests did not do so intentionally or through gross negligence, the court may take this into consideration in determining the amount of damages. . . .
Article 9 (Determination of reasonable damages)
In a lawsuit for the infringement of business interests by unfair competition, where damages were found and it is extremely difficult to prove the facts necessary for proving the amount of damages due to the nature of said facts, the court may determine a reasonable amount of damages based on the overall purport of the oral arguments and the results of the examination of evidence.
Presumably, then, if the defendant hasn't yet sold any products in competition with the plaintiff, which I take it to be the case here based on the court's discussion of "likelihood of competition," the only recourse would have been article 9; and perhaps there were no actual lost sales on which to base a damages award, which would have made an undertaking for damages futile.  Interesting nonetheless to see what the statute says about damages for unfair competition, including unfair competition based on wrongful claims of patent infringement, and to compare the above provisions with the (somewhat similar) corresponding provisions on patent damages found in article 102 and 105-3 of the Japanese Patent Act (available in unofficial translation here).

For further discussion of patent damages and declaratory judgments in Japan, see my book pp. 307-331.

Wednesday, January 21, 2015

Some New Papers on Wrongful Enforcement

I continue to collect materials on wrongful patent enforcement in preparation for what I hope eventually will turn into a book project.  Here are some recent papers relevant to the subject:

1.  Paul  Gugliuzza has posted a paper on ssrn titled Patent Trolls and Preemption.  Here is a link to the paper, and here is the abstract:
Patent law is usually thought to be the domain of the federal government, not state governments. Yet eighteen states have recently passed statutes outlawing false or bad faith assertions of patent infringement. The statutes are aimed at fighting so-called patent trolls, particularly those who send letters to thousands of users of allegedly infringing technology—as opposed to the manufacturers of that technology—demanding that each user purchase a license for a few thousand dollars or else face an infringement suit. The Federal Circuit, however, has held that state-law claims challenging acts of patent enforcement are preempted by the federal Patent Act unless the patent holder made  infringement allegations with knowledge that the allegations were objectively baseless. No court has yet applied this rule to the new state statutes, but it will likely provide patent holders with nearly absolute immunity from liability under the new laws.
Although the Federal Circuit has called this immunity a matter of “preemption,” a close examination of the court’s decisions reveals that the rule is not grounded in the Supremacy Clause but in the First Amendment right to petition the government. Unlike the Supremacy Clause, the First Amendment limits the power of the federal government, not just state governments, so patent holders will also be able to invoke this immunity to thwart impending federal initiatives to fight patent trolls, such as unfair competition proceedings brought by the Federal Trade Commission and proposals in Congress to outlaw false and misleading statements made in patent demand letters.
This article argues that the broad immunity the Federal Circuit has conferred on patent holders is wrong as a matter of doctrine, misguided as a matter of policy, and inconsistent with a long history of courts enjoining unfair and deceptive acts of patent enforcement. Accordingly, the article suggests a reimagined immunity standard that would not shield extortionate schemes of patent enforcement but would still respect a patent holder’s right to make legitimate allegations of infringement.
2.  David Lee Johnson has published a student note in volume 71 of the Washington & Lee Law Review review titled Facing Down the TrollsStates Stumble on the Bridge to Patent-Assertion RegulationHere is a link to the published paper, and here is a portion of the introduction:
To determine the proper relationship between state and federal regulation of the patent system, it is first helpful to identify the patent uses that states are attempting to regulate. To that end, Part II introduces the players in the patent ecosystem. Part III describes the Vermont and Oregon bad-faith patent assertion laws and similar state bills. To assess whether state bad-faith patent-assertion legislation is preempted by federal patent law, Parts IV and V develop the general doctrine of federal preemption and its specific application to patent law. Part VI applies this preemption analysis to the Vermont law to reach the conclusion that much of the law is likely dead letter because it is preempted by federal patent law. Part VII argues that the inoperability of the law is normatively justified, especially in light of the potential value of preempted law, described in Part VIII.
 3. Another recent paper (not specific to patent law) is Thomas J. Miceli & Michael P. Stone, "Piggyback" Lawsuits and Deterrence:  Can Frivolous Litigation Improve Welfare?, 39 International Review of Law and Economics 49 (2014).  Here is a link to the paper, and here is the abstract:
Previous literature on frivolous lawsuits has focused on litigation costs and the optimal settlement-trial decision of defendants, but has not examined how they affect deterrence. This paper considers whether there are circumstances under which frivolous suits might actually increase deterrence, and thereby possibly improve welfare. The reason this is possible is that in a costly legal system, injurers will generally be underdeterred because they will ignore the litigation costs of plaintiffs. The fact that some uninjured plaintiffs will succeed in obtaining settlements may therefore affect the care and activity choices of injurers in a socially valuable way.
The authors caution, however, that "[t]he fact that frivolous suits may, in some circumstances, improve welfare should not . . . be interpreted as a justification for curbing efforts to discourage meritless cases," and they suspect that, "as a matter of public policy," the negative consequences of frivolous litigation "would overwhelm any of the considerations raised in this paper."

Monday, January 19, 2015

Hoppe-Jänisch on Important German Patent Cases Since 2013

Daniel Hoppe-Jänisch recently published an article titled Die Rechtsprechung der Instanzgericthe zum Patent- und Gebrauchsmusterrecht seit dem Jahr 2013 ("The Patent and Utility Model Case Law of the Lower Courts Since 2013") in the December 2014 issue of GRUR RR.  Here is the abstract (my translation from the German):
The essay follows the report appearing in the October 2013 issue of GRUR-RR.  Included are selected decisions published since the middle of 2013.  In contrast to the last essay, a section is also dedicated to the Arbeitnehmererfinderrecht [the law of employee-inventor rights].  The publication practice of the courts is still greatly varied, with the Düsseldorf courts still being especially active.  The accumulation of decisions of Düsseldorf origin is attributable to this publication practice.
On the issue of remedies in particular, Mr. Hoppe-Jänisch discusses some cases on injunctions, including one in which he reports that the Düsseldorf district court concluded that a risk of recurring infringement is not eliminated by virtue of the fact that a defendant is no longer in possession of the challenged article and has ceased distribution, unless it is evidently incapable of making and distributing the patented article; and another in which he reports that the Hamburg district court held that the exhibition of a not yet marketable medicine did not give rise to a danger of imminent infringement (Erstbegehungsgefahr) through the introduction of an identical, marketable end product.  Mr. Hoppe-Jänisch also discusses some cases on damages, including one on infringer's profits in which he reports that the Düsseldorf district court held that a court should consider whether the infringer chose a protected configuration despite the existence of technical alternatives (whereby it might be inferred that the infringer attributed significance to the invention for its sales success).  On the other hand, the court suggested that a lower price for the infringing article could reduce the portion of the profits attributable to the infringement, if it cannot be established that precisely the use of the invention opened up the possibility of such a favorable price reduction.  (Who has the burden of proof on this issue, I wonder?)  The court also noted that the significance of the patent to the defendant's profit recedes to the extent the product also makes use of other protected rights.  These other rights are to be considered, however, only if they are valid and actually being used, and the infringer bears the burden of proof on these issues.  (I imagine that could turn out to be a double-edged sword for the infringer, if any such argument could be used against it in a proceeding involving one of those other protected rights!)  Mr. Hoppe-Jänisch also mentions the OLG Karlsruhe's decision in Foliendruckverfahren, a case I blogged about here this past April, in which the court held (among other things) that on the facts of the case it was appropriate to use the entire value of the end product as the royalty base, and that the defendant may be liable for an additional payment where a real-world licensee would have had to pay a default payment for failing to pay its license fee on time.  

Other sections of the paper discuss stays and preliminary injunctions, which I may address in a future post.   

Friday, January 16, 2015

Updated Version of Contreras and Gilbert Paper on FRAND and Other Royalties

Jorge Contreras and Richard Gilbert have posted on ssrn an updated version of their paper A Unified Framework for RAND and Other Reasonable Royalties, which is forthcoming in the Berkeley Technology Law Journal.  I was favorably impressed by the initial version; the new version incorporates responses to feedback from several commentators, including me.  Here is a link, and here is the abstract:
The framework for calculating “reasonable royalty” patent damages has evolved over the years to a point at which, today, it is viewed by many commentators as potentially misleading and untethered from its original purpose. We offer a proposal to modify the framework for determining reasonable patent royalties that is based on recent scholarly and judicial analyses of standards-essential patents that are subject to commitments to license on terms that are reasonable and non-discriminatory (RAND). Litigated cases have applied the traditional Georgia-Pacific factors to assess RAND royalty rates with modifications to account for the circumstances of the RAND commitment. We propose that the reasonable royalty analysis should be conducted in essentially the same manner for all patents, whether or not they are encumbered by RAND commitments. We find considerable support for our approach in the historical development of U.S. patent law prior to the advent of the Georgia-Pacific test. Our approach focuses on the technical and economic characteristics of allegedly infringed patents and their incremental value to the overall product offering. 

Thursday, January 15, 2015

Some New Papers on Patent Remedies

1.  Daryl Lim's paper Standard Essential Patents, Trolls, and the Smartphone Wars:  Triangulating the End Game, is now available in 119 Penn State Law Review 1 (2014).  (I mentioned an earlier version of the paper here in September.)  The paper is not available on the journal's website yet, but it is on Westlaw, and what appears to be a near-final version is available on ssrn.  Here is the abstract of the published version:
Few legal issues in recent years have captured the public's attention more powerfully than litigation over standard essential patents (“SEPs”). This Article explains how SEP litigation overlaps with two other major centers of patent litigation--litigation involving smartphones and patent assertion entities (“PAEs”). It observes that attempting to pre-empt patent hold-ups by imposing blanket ex ante disclosure obligations and royalty caps on standard setting organizations (“SSOs”) is misdirected and counterproductive. Instead, the solution lies in clear and balanced rules to determine “fair, reasonable and non-discriminatory” (FRAND) royalties and injunctive relief. This solution will help parties make more realistic assessments of their options and help adjudicators resolve SEP disputes.
Correctly framed, implementers bear the burden of proving the breach of a FRAND commitment. FRAND royalties should, in the absence of comparable licenses, focus on apportioning the profits based on the relative importance of the patented technology in the covered product. Royalties should be measured at the time the standard is set but generally should not be discounted for the possibility of invalidity and non-infringement. Discriminatory licenses can be hard to detect, but targeted initiatives and improved transparency would make the task easier. Injunctions should be granted based the wording and intent of the relevant FRAND commitment, conduct of the parties, and proof that the technology drove the sales of the component or product on which the relief is sought. More broadly, courts must understand both the limits and opportunities of the antitrust and patent laws. While useful in arresting ex ante misconduct and attempts to elide FRAND commitments through patent assignments, antitrust is largely irrelevant in addressing patent hold-ups; patent law has a role in both improving patent quality and deterring vexatious litigation.
2. David O. Taylor's paper Using Reasonable Royalties to Value Patented Technology, is now available in 49 Georgia Law Review 79 (2014).  Like Professor Lim's paper, this one is not up yet on the journal's website yet, but it is on Westlaw; and an earlier version, which I mentioned here in April, is still available on ssrn.  Here is the abstract from the ssrn version:
In the last several years, commentators have expressed serious concerns with the state of the law governing awards of reasonable royalties as damages in patent infringement cases. Given these concerns, the proper assessment of royalties has been a recent, frequent topic for debate among economists and legal scholars. At the same time, all three branches of the federal government have studied ways to improve the law governing reasonable royalties. In this Article, I reframe the ongoing debate by identifying and exploring two basic paradigms for calculating reasonable royalties: valuing patent rights and valuing patented technology. The traditional paradigm, valuing patent rights, reflects a tort-law make-whole conception of compensatory damages. Notably, however, the alternative paradigm, valuing patented technology, in various respects explains the course of the common law governing the method for calculating reasonable royalties, comports with the public policies identified by courts as guiding the award of reasonable royalties, and, moreover, if fully adopted may have significant benefits. I therefore consider several reforms that would focus the law governing reasonable royalty determinations on the value of patented technology, and I highlight several open questions related to full adoption of this alternative paradigm.
3.  In addition, I may as well note that I recently posted new versions of two of my own coauthored papers on ssrn:  Anticompetitive Injunctions (coauthored with Erik Hovenkamp) and A New Framework for Determining Reasonable Royalties in Patent Litigation (coauthored with Norman Siebrasse).  Get 'em while they're hot. 

Tuesday, January 13, 2015

Divided Federal Circuit Affirms Finding of Willfulness in Long-Running Bard v. Gore Litigation

This morning the Federal Circuit published the latest installment in the ongoing saga of Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, available here.  The patent in suit, which "relates to prosthetic vascular grafts made of highly-expanded polytetrafluoroethylene ('ePTFE')," can be traced back to an application filed in 1974.  Along the way the parties have disputed who was entitled to the patent and whether Gore's employee Cooper should have been named as a coinventor, among other issues.  These issues ultimately were resolved in favor of Bard, and in 2003 Bard and inventor Goldfarb filed suit against Gore for infringement.  A jury returned a verdict for Bard, which was affirmed on appeal.  The jury also found that Gore willfully infringed, but in 2012 the Federal Circuit 
vacated the parts of its opinion discussing willfulness and allowing enhanced damages and attorneys’ fees. Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 682 F.3d 1003, 1005 (Fed. Cir. 2012) (“Bard II”). It held that as to the threshold determination of willfulness, “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 (p.3).
On remand, the district court again found "'that Defendant, as a "reasonable litigant," could not have "realistically expected" its defenses to succeed'” and entered a finding of willfulness.  A divided panel of the Federal Circuit has now affirmed.

Writing for the majority, Judge Prost notes that
under Bard II, we review de novo the district court’s determination whether Gore’s “position is susceptible to a reasonable conclusion of no infringement.” Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1310 (Fed. Cir. 2011). Objective recklessness will not be found where the accused infringer has raised a “substantial question” as to the validity or noninfringement of the patent. Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc., 620 F.3d 1305, 1319 (Fed. Cir. 2010); DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314, 1336 (Fed. Cir. 2009).
On remand, the district court evaluated several defenses raised by Gore and determined that none of them were objectively reasonable. On appeal, Gore appeals only its determination with respect to Gore’s inventorship defense. . . .  Gore’s argument is based on the fact that its employee, Peter Cooper, supplied the particular ePTFE tubing that Goldfarb used in making his successful vascular graft (the “2-73 RF” graft). In Gore’s view, Cooper furnished to Goldfarb “the embodiment of the invention before Goldfarb conceived the invention using that embodiment.” Bard III, at 7 (pp. 10-11).
Applying de novo review, the majority first "reject[s] Gore’s argument that the mere fact a member of the previous panel dissented on this issue indicates that its position was reasonable," asserting that "[o]therwise, we would be imposing a rule that any single judge’s dissent on the merits could preclude the determination of willful infringement" (p.11).  Judge Prost then reviews the record and concludes that "Gore’s position was not susceptible to a reasonable conclusion that the patent was invalid on inventorship grounds" (p.16).  The willfulness determination therefore is affirmed.  Moreover, since the district court in an earlier proceeding had awarded enhanced damages based on the jury's initial finding of willfulness and in Bard III  found it "unnecessary . . . to reconsider its rulings on enhanced damages and attorney's fees," 2013 WL 5670909, at *12, I assume that the award (doubling the damages from $185,589,871.02 to $371,179,742.04) stands.

Concurring in the judgment, Judge Hughes reiterated a point made by Judge O'Malley in the recent Halo v. Pulse case, namely that "the full court should review our willfulness jurisprudence in light of the Supreme Court’s recent decisions in Highmark Inc. v. Allcare Health Management Sys., Inc., 134  S. Ct. 1744 (2014) and Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014)."  According to Judge Hughes, "[t]hose decisions call into question our two-part test for determining willfulness, In Re Seagate Tech., LLC, 497 F.3d 1360 (2007) (en banc), and our de novo standard for reviewing the district court’s willfulness determination, Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 682 F.3d 1003, 1006–07 (Fed. Cir. 2012) (Bard II)."  Judge Hughes believes that, as is now the case with attorneys' fee awards, the correct standard requires some deference to the district court:
This case demonstrates why de novo review of willfulness is problematic. The panel is divided over the strength of Gore’s joint inventorship defense. Each side advances a sound argument about whether the evidence in this case raises a “substantial question” of joint inventorship. And the district court, likewise, provided a thorough and well-reasoned opinion. If one of these several reasonable opinions must ultimately govern, it should be the opinion of the district judge, whose assessment of litigation positions is informed by trial experience and who has “lived with the case over a prolonged period of time.” Highmark, 134 S. Ct. at 1748.
A more deferential standard of review would be consistent with the standards for reviewing mixed questions of law and fact in other contexts. See, e.g., Highmark, 134 S. Ct. at 1748–49 (holding abuse of discretion is the proper standard for reviewing award of attorney fees in patent cases, “[a]lthough questions of law may in some cases be relevant . . . .”); Pierce v. Underwood, 487 U.S. 552, 558 (1988) (holding abuse of discretion is the proper standard for reviewing determinations of whether a litigant’s position is “substantially justified” for purposes of fee-shifting under the Equal Access to Justice Act, although the determination frequently turns on a purely legal issue). It would also be consistent with the standard for reviewing a finding of willful copyright infringement. See Dolman v. Agee, 157 F.3d 708, 715 (9th Cir. 1998) . . . .
Dissenting, Judge Newman writes that 
Precedent establishes that the objective prong of willful infringement “tends not to be met where an accused infringer relies on a reasonable defense to a charge of infringement.” Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc., 620 F.3d 1305, 1319–20 (Fed. Cir. 2010). When there is a “substantial question of invalidity or  unenforceability” of the patent, willful infringement cannot arise, as a matter of law. Seagate, 497 F.3d at 1371. The panel majority does not review the evidence and apply the law objectively; the court merely searches for and recites adverse evidence.
Judge Newman's lengthy review of the evidence leads her to conclude that Gore's position was reasonable and therefore that Gore did not willfully infringe.  

Judge Newman also forcefully dissents from the imposition of enhanced damages:
Even when willful infringement is found, it does not follow that punitive damages must be imposed, or that the damages must be doubled. The public benefit of Gore’s product cannot be ignored. Punitive damages are intended to discourage bad behavior, not life-saving medical devices. . . .
Extensive precedent supports judicial refusal to enhance damages when the case is close and the equities counsel moderation, not punishment. The award of punitive damages depends on both the infringer’s degree of culpability, and the injury that the infringement imposed on the patentee. Bard was awarded full recovery for its loss of business to the Gore product. The district court stated that “the Court is satisfied that a fair and full amount of compensatory money damages, when combined with a progressive compulsory license, will adequately compensate Plaintiffs’ injuries, such that the harsh and extraordinary remedy of injunction–with its potentially devastating public health consequences—can be avoided.” Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., No. 03-CV-0597, 2009 WL 920300, at *5 (D. Ariz. Mar. 31, 2009).
The district court’s recognition of the public’s interest and medical benefits imparted by Gore’s product, and the court’s refusal to enjoin its provision, cannot be reconciled with the punitive doubling of damages. There was no showing, or even a charge, of intentional harm, as required for severe punishment as here meted out. See Restatement (Second) of Torts § 500 (1965).
Thus, regardless of whether willfulness was a supportable ruling, the doubling of the damages award is untenable.
Given the force of the concurring and dissenting opinions, I don't think we've heard the last of the Bard v. Gore story.  On the law, I'm inclined to agree with Judge Hughes that after Highmark  and Octane Fitness, the Federal Circuit's current standards for evaluating willfulness are not easily supportable.  Perhaps Judge Newman is right, however, that even under those standards punitive damages should not be imposed here.  More generally, and as I have discussed elsewhere, I don't think that economic logic supports the awarding of enhanced damages at all other than in a few narrowly circumscribed circumstances such as where the defendant has actively concealed its infringement--though whether the Federal Circuit or the Supreme Court is ever willing to go that far may be hoping for too much.