“Awards of enhanced damages are not to be meted out in a typical infringement case, but are instead designed as a punitive or vindictive sanction for egregious infringement behavior.” WCM v. IPS. There is “no requirement that enhanced damages must follow a finding of egregious misconduct.” Id. Rather, “courts should continue to take into account the particular circumstances of each case in deciding whether” to enhance damages. Id. “Because a finding of willful infringement does not command the enhancement of damages,” the Read v. Portec factors, “although not mandatory, do assist the trial court in evaluating the degree of the infringer’s culpability and in determining whether to exercise its discretion to award enhanced damages at all, and if so, by how much the damages should be increased.” WCM.
The Read factors are:
(1) whether the infringer deliberately copied the ideas or design of another;
(3) the infringer’s behavior as a party to the litigation;
(4) the infringer’s size and financial condition;
(5) the closeness of the case;
(6) the duration of the infringer’s misconduct;
(7) remedial action by the infringer;
(8) the infringer’s motivation for harm; and
(9) whether the infringer attempted to conceal its misconduct.
This post will focus on Federal Circuit decisions involving the third Read factors: the infringer’s size and financial condition.
| Case | Strong Evidence of Size and Financial Condition? | Enhanced Damages? | Enhancement Multiple | Notes |
| WCM Indus., Inc. v. IPS Corp., 2016-2211 (Fed. Cir. Feb. 5, 2018) | Yes | No | — | The district court erred in balancing the factors and in trebling damages. Despite that defendant’s size and financial condition weighed in favor of enhanced damages, other factors counseled against enhancement. |
| Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 670 F.3d 1171 (Fed. Cir. 2012) | Yes | Yes | 2x | Enhancement was warranted because the district court found that all Read factors except one weighed in favor of enhanced damages. |
| I4I Ltd. Partnership v. Microsoft Corp., 598 F.3d 831 (Fed. Cir. 2010) | Yes | Yes | 1.2x | Enhancement was warranted. The jury award was only a small fraction of defendant’s profits from the sale of its accused products, the defendant was undisputedly the world leader in the relevant market, and other factors favored enhancement. |
| Metabolite Lab., Inc. v. Laboratory Corp., 370 F.3d 1354 (Fed. Cir. 2004) | Yes | Yes | 2x | Enhancement was warranted. Defendant was a large company with extensive financial means. Moreover, at least 3 other Read factors favored enhancement. |
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