The Federal Circuit has greatly reduced the $1.5 Billion award to Carnegie Mellon University — leaving a still healthy $278 million to be paid by chip manufacturer Marvell Technology (plus interest) with the potential of additional receipts from a new trial on whether foreign sales are actually US sales. [Read the Decision]
1. Willful Infringement: A portion of the original damage award (~20%) in this case came from enhanced damages. The statute provides that “the court may increase the damages up to three times the amount found or assessed.” Although seemingly open-ended, the court has restricted enhanced damages only to the situations involving willful infringement — and further requiring “clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.” and “this objectively-defined risk . . . was either known or so obvious that it should have been known.” (quoting Seagate).
The Federal Circuit has ruled that an adjudged infringer who presents an objectively reasonable (though ultimately deficient) defense at trial cannot be held liable for enhanced damages. Here, the court found that Marvell’s invalidity defense had some merit and was not ‘objectively unreasonable.’
2. Foreign Infringement: The original verdict included damages for all of the chips that resulted from Marvell’s use of the infringing methods sold worldwide – including chips that were manufactured abroad and never imported into the US. On remand, the Federal Circuit asked the lower court to reconsider particularly whether those chips made and used outside of the US could be considered as “sold” in the U.S. since, at times, the “place of inking” can be the location of the sale even if delivery is at a different location.
3. Laches: Under the equitable doctrine of laches, a patentee who has unreasonably and prejudicially delayed the filing of an infringement lawsuit will be barred from collecting damages for pre-filing infringement. The non-statutory (and potentially defunct) doctrine of Laches sits atop the statutory limit on collecting back damages that accrued more than six years before the filing of the infringement action. Here, the district court found that CMU’s six-year delay in filing suit after noticing the infringement was “unreasonable and inexcusable” and that Marvell had suffered some amount of evidentiary prejudice. However, the district court found that Marvell did not suffer economic prejudice due to the delay because, “Marvell . . . would have gone ahead with its infringement regardless, accepting the risk of liability.”