Polara v. Campbell was decided on July 10, 2018 on appeal from the Central District of California. The jury entered a verdict that the asserted claims were not invalid and that defendant Campbell willfully infringed the claims. After trial, the district court enhanced damages by 2.5, denied Campbell’s motion for JMOL of no willfulness and of invalidity for anticipation and obviousness. The district court held that substantial evidence supported the jury’s finding that plaintiff Polara’s installation of prototypes before the critical date was experimental use necessary to ensure that the invention would work for its intended purpose. Campbell appealed.
The Federal Circuit affirmed the judgment of no obviousness and no anticipation, affirmed the willfulness judgment, and vacated the enhancement.
Substantial evidence supported the jury finding of willfulness. “Based on the evidence adduced at trial, the jury reasonably could have found that Campbell intentionally copied the [patent] despite a significant known risk that its [system would infringe the [patent].” From the evidence presented, it is “undisputed that Campbell was aware” of the patent prior to developing its system. The “only written opinion of counsel Campbell received” does not show good faith because the opinion “only substantively discusses” a claim that was not at issue in the case. Campbell did not point “to any documentary or third-party evidence showing it received an opinion of counsel that the asserted claims of the [patent] are invalid and/or would not be infringed by its [system].”
The district court’s decision to enhance damages was improper. Although a district court “is not required to discuss the Read factors, it is obligated to explain the basis for [an] enhanced damages award.” The “closeness of the case” remains a relevant consideration for determining the appropriateness of enhancement. “Here, the district court awarded almost the maximum amount of enhanced damages, but did not adequately explain its basis for doing so, and failed to even mention Campbell’s public use defense, which presented a close question in this case.” The Federal Circuit thus vacated the enhancement. On remand, the district court is “to provide a more complete explanation, including a discussion of the public use defense, in exercising its discretion” to enhance damages.
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Polara Eng’g, Inc. v. Campbell Co., 894 F.3d 1339 (Fed. Cir. 2018)