Federal Circuit Again Splits on Willful Infringement

by: Robert Wagner, intellectual property attorney at the Pittsburgh law firm of Picadio Sneath Miller & Norton, P.C. (Robert Wagner on G+)

The Federal Circuit issued another contentious decision on the subject of willful infringement on Tuesday in Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., (No. 2014-1114), splitting 2-1 and with another judge calling for the Circuit to revisit the law in this area.

The Bard-Gore case has had a long and tortured past, beginning more than 40 years ago. Gore, which makes an ePTFE polymer under the brand name Gore-Tex^®, invited Dr. David Goldfarb to its facilities in 1973 to participate in a study of Gore’s product for use as a vascular prosthesis. Gore was trying to find new uses for its product, including in the medical fields. Based on the materials that Gore provided to Dr. Goldfarb, Dr. Goldfarb filed a patent application on the structure of the most effective of the samples he tested back in 1974. Peter Cooper from Gore had previously filed a patent application, and the USPTO conducted an interference proceeding.

In the interference proceeding, the USPTO concluded that Cooper was the first to conceive of the subject matter of the invention, but Dr. Goldfarb was the first to reduce it to practice. Therefore, the USPTO awarded the patent to Dr. Goldfarb. The Federal Circuit affirmed, and the patent ultimately issued in 2002. During the pendency of this dispute, Gore continued to develop and sell ePTFE grafts and medical devices.

In 2003, Dr. Goldfarb and Bard sued Gore for infringement (previously, Dr. Goldfarb licensed the patent to Bard). The jury returned a verdict of willful infringement and awarded over $185 million in damages, which the district court doubled. The district court also awarded attorneys’ fees and costs. The Federal Circuit affirmed in a split panel, but the full Circuit vacated the decision in a rehearing en banc, ordering the district court to reconsider the willful infringement finding de novo. The district court reconsidered the evidence and reinstated its prior judgment. The Federal Circuit, in this decision, affirmed in a 2-1 decision with three separate opinions.

Judge Prost, writing the opinion of the Court, reviewed the evidence de novo and concluded that Gore’s defenses were not reasonable. In particular, the Court rejected the notion that the fact that a prior member of the panel at the Federal Circuit dissented does not mean that Gore’s position was reasonable. The Court did not want to create the precedent that a single dissenting view would preclude a finding of willful infringement as a matter of law.

Judge Hughes wrote a concurring opinion in which he called into question the Federal Circuit’s jurisprudence on willful infringement—in particular, the two-part objective-subjective test and the de novo standard of review. He believes that the full panel should reconsider the law in this area and should apply a deferential standard of review.

Finally, Judge Newman wrote a strong dissent in which she would have reversed the district court’s decision on willfulness. She was troubled by the majority’s failure to discuss what she believed to be relevant evidence supporting Gore’s position. She was also troubled by the fact that the district court refused to enjoin Gore from selling its products but then enhanced the damages.

This decision is another in which the judges on the Federal Circuit are openly questioning the current state of the law on willful infringement. It will be interesting to see if the Federal Circuit rehears one of these cases en banc to settle the disagreements that are brewing internally.