Valinge Innovation AB v. Halstead New England Corporation et al

Filing 171

REPORT AND RECOMMENDATION regarding D.I. 34 MOTION to Dismiss for Failure to State a Claim , in part, the Second Amended Complaint filed by Home Depot U.S.A., Inc., Halstead New England Corporation. Please note that when filing Objec tions pursuant to Federal Rule of Civil Procedure 72(b)(2), briefing consists solely of the Objections (no longer than ten (10) pages) and the Response to the Objections (no longer than ten (10) pages). No further briefing shall be permitted with respect to objections without leave of the Court. Objections to R&R due by 6/12/2018. Signed by Judge Christopher J. Burke on 5/29/2018. (mlc)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

VALINGE INNOVATION AB, Plaintiff,
V.

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HALSTEAD NEW ENGLAND CORP.
and HOME DEPOT U.S.A., INC.
Defendants.

Civil Action No. 16-1082-LPS-CJB

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REPORT AND RECOMMENDATION

In this patent infringement action filed by Plaintiff Valinge Innovation AB ("Plaintiff' or
"Valinge") against Defendants Halstead New England Corporation ("Halstead") and Home
Depot U.S.A., Inc. ("Home Depot") (collectively, "Defendants"), pending is Defendants' motion
to dismiss allegations of willful infringement of United States Patent Nos. 7,398,625; 7,763,345;
8,021,741; 8,365,499; 8,584,423; 8,658,274; 8,756,899; 8,834,992; and 9,249,581 (collectively,
the "asserted patents" or the "patents-in-suit") in Counts I-XVIII in the currently-operative
Second Amended Complaint ("SAC"), filed pursuant to Federal Rule of Civil Procedure 12(b)(6)
(the "Motion"). (D.I. 34) The Motion has been referred to this Court for resolution. (D.I. 5) For
the reasons that follow, the Court recommends that Defendants' Motion be GRANTED without
prejudice.
I.

BACKGROUND

Valinge alleges that Halstead directly and indirectly infringes the asserted patents, inter

alia, through the sale, and/or importation of certain ofHalstead's flooring products (i.e., certain
floor panel, tile, and floor panel locking systems, referred to herein as the "accused products"); it
alleges that Halstead has sold and continues to sell those products throughout the United States

on a Halstead website and though Home Depot. (D.I. 26 at ,r,r 35-36) Valinge claims that
Halstead had knowledge of the asserted patents prior to the date of the filing of the original
Complaint in this case. It claims that Halstead obtained such knowledge due to the fact that
Halstead has long been a competitor ofValinge in the flooring products industry, and because of
the "well-known nature of Valinge's patents[.]" (Id. at ,r,r 33-34, 38) Valinge also alleges that
"in addition to [Halstead's] pre-suit knowledge ... [both Defendants] had actual knowledge of
the Infringed Patents, the Accused Products, and Valinge's allegations of infringement no later
than November 23, 2016," when Defendants received a copy of the original Complaint filed in
this case, along with a letter from Valinge asking Defendants to cease their infringing activity.
(Id. at ,r,r 38, 44) Valinge alleges that after acquiring knowledge of the asserted patents,
Defendants have engaged and continue to engage in "deliberate, willful, and knowing"
infringement of those patents, "entitling Plaintiff to treble damages." (Id. at ,r,r 58, 72, 83, 94,
104, 116, 128, 140, 152, 162, 171, 180, 189,198,207,216,225,234; see also id. at 52 (alleging,
in the Prayer for Relief, that "Defendants' infringement has been willful"))
In their Motion and the accompanying briefing, Defendants did not contest that as to
certain of the allegations in the SAC, Valinge had made out a plausible claim of infringement.
That is, Defendants did not contest that in the SAC, Valinge pleaded plausible allegations of
direct infringement of all asserted claims other than claims 1, 25, and 30 of U.S. Patent No.
8,365,499 ("the '499 patent") and claim 1 of U.S. Patent No. 8,756,899 ("the '899 patent")
(collectively, the "asserted method claims"). Defendants did argue that Valinge's allegations in
the SAC were deficient in that they failed to state plausible claims of: (1) direct infringement of
the four asserted method claims; (2) indirect and contributory infringement as to all of the
2

asserted patents; and (3) willful infringement as to all of the asserted patents.
In its November 9, 2017 Report and Recommendation ("November 9 R&R"), the Court
recommended that Defendants' Motion be granted without prejudice to the extent that it sought
dismissal of: (1) Valinge's claims against Home Depot for direct infringement of the asserted
method claims; (2) induced infringement claims against both Defendants as to all asserted
patents prior to the filing of the SAC; and (3) contributory infringement claims against both
Defendants as to all asserted patents prior to the filing of the SAC, and as to the '499 and '899
patents in their entirety. (D.I. 81 at 10) The Court recommended, on the other hand, that the
Motion be denied to the extent that it sought dismissal of: (1) Valinge's claims against Halstead
for direct infringement of the four asserted method claims; (2) induced infringement of the
asserted patents against both Defendants as to infringement occurring after the filing of the SAC;
and (3) contributory infringement of all asserted patents, except the '499 and '899 patents, as to
infringement occurring after the filing of the SAC. (Id.) In the November 9 R&R, the Court did
not address Defendants' Motion as it related to the claims of willful infringement. (Id. at 2) In
the instant Report and Recommendation, the Court will address these willful infringement
claims.
In coming to its conclusions in the November 9 R&R, the Court determined that the SAC
had not contained plausible allegations that Halstead knew of the patents-in-suit prior to the date
of the filing of the original Complaint. (D.I. 81 at 6-7) It explained that even if Halstead was
Valinge' s competitor during that period, and even if it was well known during that time that
Valinge had a substantial patent portfolio, that did not render it plausible that Halstead was aware
of every patent in that large portfolio and of what it would take to infringe all of those patents.

3

(Id.) Of course, the Court agreed that when Defendants received the original Complaint, they
now had knowledge of the patents-in-suit. But because the infringement allegations in that
original Complaint-and in the subsequent First Amended Complaint-were of a bare-bones
nature, the Court explained that those two pleadings did not contain sufficient information to put
Defendants on notice of how it is that they were said to infringe the asserted patents thereafter.
(Id at 7-8)

Chief Judge Leonard P. Stark adopted the November 9 R&R on January 10, 2018. (D.I.
95)

II.

STANDARD OF REVIEW
The standard of review here is the familiar two-part analysis applicable to motions made

pursuant to Rule 12(b)(6). First, the court separates the factual and legal elements of a claim,
accepting "all of the complaint's well-pleaded facts as true, but [disregarding] any legal
conclusions." Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). Second, the
court determines "whether the facts alleged in the complaint are sufficient to show that the
plaintiff has a 'plausible claim for relief."' Id at 211 (quoting Ashcroft v. Iqbal, 556 U.S. 662,
679 (2009)). A plausible claim dcies more than merely allege entitlement to relief; it must also
demonstrate the basis for that "entitlement with its facts." Id Thus, a claimant's "obligation to
provide the 'grounds' of his 'entitle[ment] to relief requires more than labels and conclusions,
and a formulaic recitation of the elements of a cause of action will not do[.]" Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). In assessing the plausibility of a claim, the court must

"'construe the complaint in the light most favorable to the plaintiff, and determine whether,
under any reasonable reading of the complaint, the plaintiff may be entitled to relief."' Fowler,
4

578 FJd at 210 (quoting Phillips v. Cty. ofAllegheny, 515 F.3d 224,233 (3d Cir. 2008)).

III.

DISCUSSION
Defendants argue that Valinge's willfulness allegations 1 are insufficient because they are

"general and conclusory allegations that Defendants willfully infringe the [a]sserted [p]atents
without any context or factual detail as to how the infringement has been willful or why
Defendants' actions amount to an egregious case of patent infringement." (D.I. 35 at 5-6) For its
part, Valinge argues that its allegations are sufficiently detailed, and that at the pleading stage "it
is not necessary to show that a case is egregious." (D.I. 49 at 11 (internal quotation marks and
citation omitted))- Resolving the Motion, then, requires an assessment of what exactly a patentee
like Valinge must do to successfully plead a claim of willful infringement.
In 2016, the Supreme Court of the United States issued its decision in Halo Electronics,

Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016); that decision has, in turn, had a profound
impact on how district courts have assessed willful infringement claims. And district courts have
often disagreed about what lessons are properly drawn from Halo. See Continental Circuits LLC

v. Intel Corp., No. CV16-2026 PHX DGC, 2017 WL 2651709, at *7 (D. Ariz. June 19, 2017)
(noting that the "the law concerning willfulness has been in a state of flux, and Halo's effect on
the pleading standard for willful infringement remains unclear") (internal quotation marks and
citation omitted); see also Bobcar Media, LLC v. Aardvark Event Logistics, Inc., Case No. 16CV-885 (JPO), 2017 WL 74729, at *6 (S.D.N.Y. Jan. 4, 2017) (same); Simplivity Corp. v.

Springpath, Inc., CIVIL ACTION NO. 4:15-13345-TSH, 2016 WL 5388951, at *16 (D. Mass.

Courts alternately use the terms "willful infringement," "willful," and
"willfulness" to describe the same idea. The Court uses these terms interchangeably.
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July 15, 2016) (noting that "the willfulness landscape has dramatically changed" after Halo).
These disagreements are of interest to the Court, since it is often called on (as it has been here) to
resolve motions seeking dismissal of willfulness claims at the pleading stage.
Below, then, the Court will first summarize (1) the state of the law on willful
infringement prior to Halo. and (2) the Halo decision itself. Next, the Court will assess Halo's
impact on two hotly disputed issues that are relevant to pleading willful infringement.
thereafter, the Court will set out its view as to what, in fact, a patentee must plead in order to
make out a claim of willful infringement. And lastly, with that standard in mind, the Court will
address Valinge's allegations in the SAC.

A.

Willful Infringement Prior to Halo and the Halo Decision

At the outset, it is worth noting that because patent infringement is a strict liability
offense, a finding that a party's infringement is "willful" is relevant only in the sense that it will
inform a later district court decision as to whether the patentee is entitled to enhanced damages.

SeeXY, LLCv. Trans Ova Genetics, L.C.,-F.3d-, 2018 WL2324460, at *10 (Fed. Cir. May
23, 2018) (citing Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259, 1274-75 (Fed. Cir. 1999))
(dismissing as moot defendant's appeal of a finding of willful infringement because the district
court exercised its discretion to not enhance damages and that decision was not appealed).
Pursuant to Section 284 of the Patent Act, once infringement has been established, the court
"shall award the claimant damages adequate to compensate for the infringement." 35 U.S.C. §
284. After damages are found by a jury or assessed by a court, the statute explains, a district
court may "increase the damages up to three times the amount found or assessed." Id.
Prior to Halo, the United States Court of Appeals for the Federal Circuit had long held

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that, in order for a court to enhance damages pursuant to Section 284, there must first be a
showing of willful infringement. In re Seagate Tech., LLC, 497 F.3d 1360, 1368 (Fed. Cir.
2007) (citing cases); LG Display Co. v. AU Optronics Corp., 722 F. Supp. 2d 466,470,474 (D.
Del. 2010); see also SRI Int'!, Inc. v. Advanced Tech. Labs., Inc., 127 F.3d 1462, 1464 (Fed. Cir.
1997) (explaining that "willful infringement ... is the term designating behavior for which
enhanced damages may be assessed"). A finding of willfulness did not require a later award of
enhanced damages; it merely permitted it. In re Seagate Tech., LLC, 497 F.3d at 1368. 2
For many years, the term "willful infringement" did not have a clear, consistent
definition. See Robert Bosch, LLC v. Pylon Mfg. Corp., 719 F.3d 1305, 1326 (Fed. Cir. 2013)
(Reyna, J., dissenting) ("The definition of willful patent infringement has changed significantly
over time."). The Federal Circuit had described the relevant standard using either subjective
language or objective language (or both). Compare Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572,
1579 (Fed. Cir. 1996) (citation omitted) (noting that whether an infringer was acting "willfully"
rested on a determination of the "infringer's state of mind," i.e., a subjective standard), with State

Indus., Inc. v. Mor-Flo Indus., Inc., 883 F.2d 1573, 1581 (Fed. Cir. 1989) (finding that the test
for willfulness was whether "'a reasonable person would prudently conduct himself with any
confidence that a court might hold the patent invalid or not infringed[,]"' i.e., an objective

2

That said, during this time period, the Federal Circuit instructed that if a jury
found willfulness, but a district court thereafter was of the mind that enhanced damages were not
appropriate, then the district court was required to set out reasons justifying that decision.
Failure to sufficiently articulate such reasons was a basis for reversal. See Jurgens v. CBK, Ltd.,
80 F.3d 1566, 1572 (Fed. Cir. 1996) (noting that "a trial court should provide reasons for not
1ncreasing a damages award" upon a finding of willful infringement); see also Whitserve, LLC v.
Computer Packages, Inc., 694 F.3d 10, 37 (Fed. Cir. 2012) (finding that a district court abused
its discretion in denying a motion for enhanced damages without independent justification,
despite the jury's finding of willful infringement).
,
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standard) (citation omitted), and Georgia-Pacific Corp. v. US. Gypsum Co., 195 F.3d 1322,
1334 (Fed. Cir. 1999) (noting that willfulness "raises issues ofreasonableness and prudence, and
is often accompanied by questions of intent, belief, and credibility[,]" i.e., both an objective and
subjective standard).
Then, in 2007, the Federal Circuit issued its decision in In re Seagate Tech., LLC, 497
F.3d 1360 (Fed. Cir. 2007). Seagate set out a two-part standard for demonstrating willful
infringement. First, the plaintiff was required to show, by clear and convincing evidence, that the
infringer had acted despite an objectively high likelihood that its actions constituted patent
infringement (without regard to the state of mind of the accused infringer). In re Seagate Tech.,

LLC, 497 F.3d at 1371. Second, if this "objective recklessness" was established, the patentee
was required to show that the risk of infringement was either known to the infringer or was so
obvious that it should have been known. Id. Only when both steps had been satisfied, and
willful infringement established, could the district court then proceed to consider whether to
exercise its discretion to award enhanced damages. Id. at 1368-72.
In Halo, however, the Supreme Court ruled that the two-part Seagate test, as a
prerequisite to enhancing damages, was "unduly rigid, and [] impermissibly encumber[ ed] the
statutory gr~t of discretion to district courts" found in Section 284. 136 S. Ct. at 1932 (internal
quotation marks and citation omitted). The "principal problem" with that test, according to the

Halo Court, was that it "require[ d] a finding of objective recklessness in every case before
district courts may award enhanced damages." Id. The Supreme Court noted that requiring a
finding of objective recklessness as a prerequisite to enhancing damages "excludes from
discretionary punishment many of the most culpable offenders, such as the 'wanton and

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malicious pirate' who intentionally infringes another's patent-with no doubts about its validity
or any notion of a defense-for no other purpose than to steal the patentee's business." Id.
(citation omitted). The Halo Court explained that "qulpability is generally measured against the
knowledge of the actor at the time of the challenged conduct." Id at 1933. As such, the Court
did not see why in "the context of such deliberate wrongdoing ... an independent showing of
objective recklessness-by clear and convincing evidence, no less, should be a prerequisite to
enhanced damages." Id. at 1932. 3 Instead, it found that "the subjective willfulness of a patent
infringer, intentional or knowing, may warrant enhanced damages, without regard to whether his
infringement was objectively reckless." Id at 1933. A patentee, the Court explained, also need
only prove that enhanced damages are appropriate by a preponderance of the evidence. Id. at
1934.
The Halo Court cautioned that "none of this is to say that enhanced damages must follow
a finding of egregious misconduct." Id. at 1933. Instead, "[a]s with any exercise of discretion,
courts should continue to take into account the particular circumstances of each case in deciding
whether to award damages, and in what amount." Id.
Yet the Supreme Court also emphasized that "[c]onsistent with nearly two centuries of
enhanced damages under patent law, such punishment should generally be reserved for egregious
cases typified by willful misconduct." Id at 1933-34 (emphasis added). This was because, over
time, federal caselaw had established that such damages are "designed as a 'punitive' or

3

The Halo Court was troubled that "someone who plunders a patent-infringing it
without any reason to suppose his conduct is arguably defensible-can nevertheless escape any
comeuppance under [Section] 284 solely on the strength of his attorney's ingenuity." 136 S. Ct.
at 1933.
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'vindictive' sanction for egregious infringement behavior" and that the "sort of conduct
warranting enhanced damages has been variously described in our cases as willful, wanton,
malicious, bad-faith, deliberate, consciously wrongful, flagrant, or-indeed--characteristic of a
pirate." Id. at 1932; see also id at 1929 (citing cases).

B.

Two Key Unresolved Questions After Halo Regarding Pleading Willful
Infringement

Since Halo, district courts have wrestled with a number of issues relevant to assessing a
cause of action of willful infringement4 at the pleading stage. The Court addresses two of those
issues here.
1.

Should a Patentee Be Required to Plead Facts Plausibly Evidencing
"Egregious" Infringement in Order to State a Claim for Willful

4

Our Court has long referred to willful infringement as a separate "cause of
action[.]:' See DNA Genotek Inc. v. Ancestry.com DNA, LLC, Civ. No. 15-355-SLR, 2016 WL
1128491, at *1 (D. Del. Mar. 22, 2016); MONEC Holding AG v. Motorola Mobility, Inc., 897 F.
Supp. 2d 225,236 (D. DeL 2012) (same). And post-Halo, the Federal Circuit has continued to
speak of "the factual components of the willfulness question" as something that "should
[continue to] be resolved by the jury[,]" noting that "there is a right to a jury trial on the
willfulness question." WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341 & n.13 (Fed. Cir. 2016)
(emphasis added); see also Exmark Mfg. Co. v. Briggs & Stratton Power Prods. Grp., LLC, 879
F.3d 1332, 1353 (Fed. Cir. 2018) (noting that "under Halo . .. [now] the entire willfulness
determination is to be decided by the jury" and that "willfulness is an issue for the jury, not the
district court") (citation omitted). Thus, the Court will continue to consider a claim for willful
infringement to be a separate cause of action, and one that if it is pleaded, must be put to a jury
for resolution. See Novitaz, Inc. v. inMarket Media, LLC, Case No. 16-cv-06795-EJD, 2017 WL
2311407, at *5 (N.D. Cal. May 26, 2017) (explaining that "willfulness[-]should a plaintiff seek
to use it as a basis for seeking enhanced damages[-]is still a factual determination that a court
must make, and district courts have continued, post-Halo, to treat it as a separate claim that can
be subject to a motion to dismiss"); cf Finjan, Inc. v. Blue Coat Sys., Inc., Case No. 13-cv03999-BLF, 2016 WL 3880774, at *15-17 (N.D. Cal. July 18, 2016), rev'd in part on other
grounds, 879 F.3d 1299 (Fed. Cir. 2018) (assessing, after a jury found that the defendant
infringed five of plaintiffs patents, whether the court should enhance damages pursuant to
Section 284, in a case in which the patentee did not claim willful infringement, and explaining
that "while willfulness may support a finding of enhancement, Halo does not hold that
willfulness is necessary for enhanced damages").
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Infringement?
In order to plead that willful infringement has occurred, must the patentee make a
showing that the accused infringer has engaged in "egregious" patent infringement? After Halo,
district courts have disagreed on that question. Some courts (including the Court here) have
dismissed claims of willful infringement because the patentee failed to articulate how
defendant's conduct "amounted to an egregious case of infringement of the patent." Varian Med.
Sys., Inc. v. Elekta AB, Civil Action No. 15-871-LPS, 2016 WL 3748772, at *8 (D. Del. July 12,

2016); see also Finjan, Inc. v. Cisco Sys. Inc., Case No. 17-cv-00072-BLF, 2017 WL 2462423, at
*5 (N.D. Cal. June 7, 2017) (dismissing plaintiffs willful infringement claim because, inter alia,
the complaint failed to make sufficient factual allegations that defendant's behavior was
"egregious ... beyond typical infringement") (internal quotation marks omitted); Jenkins v.
LogicMark, LLC, Civil Action No. 3:16-CV-751-HEH, 2017 WL 376154, at *5 (E.D. Va. Jan.

25, 2017) ("Therefore, the Court finds that, at a minimum, plaintiffs alleging willful infringement
must plead facts sufficient to support an inference 'plausible on its face' that the alleged conduct
is of the egregious nature described in [Halo]."). 5 Other courts, including one judge in this
District, have held that in order to successfully plead willful infringement, the patentee does not
need to plead facts plausibly indicating that "egregious" infringement has occurred. See Bio-Rad
Labs. Inc. v. Thermo Fisher Sci., Inc., 267 F. Supp. 3d 499, 501 (D. Del. 2017) ("At the pleading

stage, it is not necessary to show that the case is egregious."); see also Progme Corp. v. Comcast

5

The Federal Circuit Bar Association's Model Jury Instruction 3.10, which relates
to "Willful Infringement," also states that "willful infringement is reserved only for the most
egregious behavior, such as where the infringement is malicious, deliberate, consciously
wrongful, or done in bad faith." Fed. Cir. Bar Ass'n, Model Patent Jury Instructions§ 3.10 (July
2016).
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Cable Commc'ns LLC, CIVIL ACTION NO. 17-1488, 2017 WL 5070723, at *12 (E.D. Pa. Nov.
3, 2017) (declining to dismiss a post-suit willful infringement claim, based on the facts that the
defendant has had knowledge of the patent and "persisted in its alleged infringement[,]" as
"further development of the record [could yield] evidence of egregious conduct"); cf Bobcar
Media, LLC, 2017 WL 74729, at *6 (suggesting that what is required at the pleading stage are
allegations that the accused infringer's actions were "subjectively willful[,]" not necessarily that
the case is an "egregious case" justifying enhanced damages)).
Although it was previously in the former camp, after having further considered
Halo and Federal Circuit precedent, the Court has now determined that it was wrong. For at least
the following four reasons, the Court concludes that "egregiousness" should not be a part of the
calculus for determining whether a patentee has set out a plausible claim of willful infringement.
The first reason has to do with the way the Supreme Court, in Halo, discussed the
concepts of "willful infringement" on the one hand, and "egregious infringement" or "egregious
cases of misconduct beyond typical infringement" on the other. That is, the Halo Court
confirmed that these are two distinct legal concepts.
This is probably most evident in the portion of Halo where the Supreme Court explained
that the "subjective willfulness of a patent infringer, intentional or knowing, may warrant
enhanced damages" and that enhanced damages "should generally be reserved for egregious
cases typified by willful misconduct." Halo, 136 S. Ct. at 1933-34 (emphasis added). These
statements, on their face, suggest that "egregious cases" of infringement are the kinds of cases
where a district court will be most likely to enhance damages. And they suggest that "willful
misconduct" (or willful infringement) will be a characteristic of many-though not necessarily
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all-"egregious cases" of infringement. But they also indicate that willfulness and egregiousness
are not the same thing. 6
This conclusion-that the Halo Court did not consider "egregiousness" to be a necessary
component of willful infringement-is also evidenced by the way the Halo Court described what
willful infringement is. In rejecting Seagate's two-part test "to establish such willfulness" (i.e.,
by rejecting the objective component of the Seagate test) and in emphasizing the role of the
"subjective willfulness of a patent infringer, intentional or knowing" in the Section 284 analysis,
the Supreme Court seemed to be affirming the idea that a claim of willful infringement is rightly
focused on the infringer's state of mind. Halo, 136 S. Ct. at 1933. That is, the Supreme Court
seemed to be defining willful infringement as "subjective willfulness" or "intentional or

6

In his concurring opinion, Just~ce Breyer appeared to be making this same point.
He noted that "the Court's references to 'willful misconduct' do not mean that a court may award
enhanced damages simply because the evidence shows that the infringer knew about the patent
and nothing more." Halo, 136 S. Ct. at 1936 (Breyer, J., concurring) (emphasis in original,
citation omitted). Instead, he noted that "while the Court explains that 'intentional or knowing'
infringement 'may' warrant a punitive sanction, the word it uses is may, not must" and that it is
'"circumstanc[e]' that transforms simple knowledge into such egregious behavior, and that
makes all the difference." Id (emphasis in original, citation omitted). It appears that here,
Justice Breyer was simply: (1) noting that a finding of willful infringement and a decision to
enhance damages under Section 284 are two separate determinations; (2) one might willfully
infringe a patent but not necessarily be found to have engaged in "egregious" infringing conduct.
Indeed, post-Halo, numerous district courts have recognized that a jury may find willful
infringement has occurred, and yet the court may thereafter determine that egregious misconduct
warranting enhanced damages has not occurred. See XY, LLC v. Trans Ova Genetics, L. C., Civil
Action No. 13-cv-0876-WJM-NYW, 2016 WL 6664619, at *3-4 (D. Colo. Nov. 10, 2016)
(reinstating jury verdict of willful infringement under Seagate's subjective prong in light of Halo
but denying reconsideration of the court's denial of an award of enhanced damages because the
case was not egregious); cf Presidio Components, Inc. v. Am. Tech. Ceramics Corp., 875 F.3d
1369, 1382-83 (Fed. Cir. 2017) (noting that, after a jury found willful infringement, "[d]iscretion
remain[ed] with the court to determine whether the conduct is sufficiently egregious to warrant
enhanced damages[,]" and affirming the district court's ultimate decision not to enhance
damages).
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knowing" infringement. That kind of definition does not include an "egregiousness"
component. 7
The second reason is that, since Halo, the Federal Circuit has similarly appeared to define
willful infringement without making reference to whether the willful infringer has engaged in
what could be called "egregious" behavior. In Arctic Cat Inc. v. Bombardier Recreational Prods.
Inc., 876 F.3d 1350 (Fed. Cir. 2017), for example, the Federal Circuit reviewed a district court's
pre-Halo instruction as to what a patentee must prove in order to show that willful infringement

has occurred. The district court had instructed the jury that "as to willful infringement, [the
plaintiff] must prove ... that [the defendant] actually knew or should have known that its actions
constituted an unjustifiably high risk of infringement of a valid and enforceable patent." Arctic
Cat Inc., 876 F.3d at 1371 (emphasis added, internal quotation marks and citation omitted).

After the jury found willfulness, on appeal, the defendant argued that the "should have known"
component of the instruction was contradicted by Halo. But the Federal Circuit reasoned that in
Halo, the Supreme Court had (1) articulated that willful infringement can be found ifthere is

"subjective willfulness[,]" and (2) noted that Seagate described subjective willfulness as "proof
that the defendant acted despite a risk of infringement that was either known or so obvious that it
should have been known to the accused infringer[.]" Id (certain quotation marks omitted)
(quoting WesternGeco L.L.C. v. JON Geophysical Corp., 837 F.3d 1358, 1362 (Fed. Cir. 2016) ·
(quoting Halo, 136 S. Ct. at 1930)). Because this subjective test for willful infringement

7

The Supreme Court used the term "egregious" six times in its majority opinion in
Halo. Each time, the word was used to refer to the kind of infringement that might warrant a
decision to enhance damages; it was never used to define what willful infringement is. Halo, 136
S. Ct. at 1932-35.
14

included a "should have known" component, the Arctic Cat Court found that the district court
had not erred in instructing the jury. Id.; see also Innovention Toys, LLC v. MGA Entm 't, Inc.,
667 F. App'x 992, 994 (Fed. Cir. 2016) (finding that "the predicate of willful misconduct is
established by the jury's finding that [the defendant] was subjectively willful under the second
part of the Seagate standard" and that in Halo, the Supreme Court did not "doubt that a finding
favorable to the patentee on the second part of the Seagate standard suffices to establish the
subjectively willful misconduct that, when present, moves the enhancement inquiry to the stage
at which the district court exercises its discretion"). Thus, in Arctic Cat, the Federal Circuit also
confirmed that willful infringement amounts to subjective willfulness. And nowhere in Arctic
Cat did the Federal Circuit indicate that a component of a willfulness finding involves a
determination as to whether "egregious" infringement was at play. 8 See Ericsson Inc. v. TCL
Commc'n Tech. Holdings, Ltd., Case No. 2:15-cv-00011-RSP, 2018 WL 2149736, at *8 (E.D.
Tex. May.20, 2018) ("The implication from ... Ar[c]tic Cat is that the jury must decide whether

8

At least two pre-Seagate Federal Circuit decisions used language that seemed to
suggest that willful infringement and "egregious" infringement were the same thing-that is, that
"[w]illfulness requires a showing that the totality of the circumstances evince the egregious
conduct that constitutes willful infringement." Imonex Servs., Inc. v. WH Munzprufer Dietmar
Trenner GmbH, 408 F.3d 1374, 1377 (Fed. Cir. 2005) (emphasis added) (citing Knorr-Bremse
Systeme Fuer Nutzfahrzeuge GmbHv. Dana Corp., 383 F.3d 1337, 1342 (Fed. Cir. 2004)); see
also nCube Corp. v. Seachange Int'/, Inc., 436 F.3d 1317, 1323-24 (Fed. Cir. 2006) (citing
Imonex Servs., Inc., 408 F.3d at 1377). Both of these decisions, either directly or indirectly, were
relying on the Federal Circuit's decision in Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v.
Dana Corp., 383 F.3d 1337 (Fed. Cir. 2004) for this premise.
But Knorr-Bremse does not stand for this proposition. Knorr-Bremse never explicitly
stated that a claim of willful infringement requires egregious conduct-in fact, the term
"egregious" was not used in the majority opinion at all. Knorr-Bremse, 383 F.3d at 1340-48.
Rather than addressing that issue, Knorr-Bremse was primarily concerned with the propriety of
an adverse inference in relation to opinions of counsel, and how such an inference relates to the
willful infringement inquiry. Id.
15

the infringement was intentional, and then the court must decide whether the intentional conduct
was egregious enough to justify enhanced damages.").
The third reason has_to do with how courts typically define and/or assess whether
"egregious" misconduct has occurred in a patent case. In Read Corp. v. Portee, Inc., 970 F.2d
816 (Fed. Cir. 1992), the Federal Circuit set out a list of factors (the "Read factors") that district
courts can use to help determine "the egregiousness of the [accused infringer's] conduct[;]" the

Read Court described such "egregiousness" as a "paramount determination" in "deciding
[whether to] grant enhancement [pursuant to Section 284] and the amount thereof[.]" Read

Corp., 970 F.2d at 826-27. The nine factors, which the court found were "in line with punitive
damage considerations in other tort contexts[,]"9 were:
(1) whether the infringer deliberately copied the ideas or design of
another;[] (2) whether the infringer, when he knew of the other's
patent protection, investigated the scope of the patent and formed a
good-faith belief that it was invalid or that it was not infringed; []
(3) the infringer's behavior as a party to the litigation[;] (4)
[d]efendant's size and financial condition[;] (5) [the c]loseness of
the case[;] (6) [the d]uration of defendant's misconduct[;] (7)
[r]emedial action by the defendant[;] (8) [d]efendant's motivation
for harm[; and] (9) [w]hether defendant attempted to conceal its
misconduct.

Id at 827-28 (citations omitted). Although a court is not required to utilize the Read factors in
assessing whether to award enhanced damages (and, if so, how much to award), see Presidio

Components, Inc. v. Am. Tech. Ceramics Corp., 875 F.3d 1369, 1382-83 (Fed. Cir. 2017), district
courts have continued to do so after Halo, see, e.g., Idenix Pharm. LLC v. Gilead Scis., Inc., 271

9

That the factors were in line with punitive damage considerations keeps Read
squarely aligned with Halo, which noted that enhanced damages were designed to be a punitive
or vindictive sanction for egregiously culpable infringement behavior. Halo, 136 S. Ct. at 1932.
16

F. Supp. 3d. 694,697 (D. Del. 2017); Polara Eng'g, Inc. v. Campbell Co., 237 F. Supp. 3d 956,
992 (C.D. Cal. 2017), and the Federal Circuit has continued to sanction such use, see, e.g.,

Georgetown Rail Equip. Co. v. Holland L.P., 867 F.3d 1229, 1244-45 (Fed. Cir. 2017) (noting
that district courts often apply the Read factors when deciding how much to award in enhanced
damages); WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1325, 1342 (Fed. Cir. 2016).
It is not surprising that many of the Read factors are relevant to the question of whether
an accused infringer willfully infringed the patent-in-suit and to the broader question of whether
enhanced damages are appropriate. 10 After all, intent and culpability are central to both
determinations. Compare Halo, 136 S. Ct. at 1933 (noting that Section 284 allows courts "to
punish the full range of culpable behavior"), with Nat 'l Presto Indus., Inc. v. West Bend Co., 76
F.3d 1185, 1192 (Fed. Cir. 1996) (noting that liability for willful infringement "turns on
considerations of intent, state of mind, and culpability"). But what is noteworthy in this context
is that a number of the Read factors go to issues that a jury could not and should not decide. For
example, the "closeness of the case," "behavior as a party to litigation," and the "size and
financial condition" of the infringer are not factors that a jury really can or should assess in
determining whether willful infringement has occurred. See Idenix Pharm. LLC, 271 F. Supp. 3d
at 697 (noting, in making a determination whether to enhance damages, that the aforementioned
three Read factors concerned matters that were either not before the jury or which a jury would

10

It should be noted that in considering the Read factors, "a judge cannot substitute
his or her factual determination for a jury's willfulness finding." Advanced Cardiovascular Sys.,
Inc. v. Medtronic, Inc., 265 F.3d 1294, 1310-11 (Fed. Cir. 2001).
17

not be a position to assess). 11 From this, the Court concludes that: (1) if there are certain factors
that may go into assessing whether an infringer's conduct was "egregious," but those factors
cannot be determined by a jury, and (2) we know that it is the jury that determines whether
willful infringement has occurred, then (3) egregiousness must not be an element of a willful
infringement claim, such that (4) it would be wrong to assess whether a plaintiff has plausibly
pleaded willful infringement by asking whether the plaintiff has set out a plausible claim of
"egregious" infringement.
The fourth reason has to do with the way that the Federal Circuit has in the past described
how willful infringement (and patent infringement more generally) can consist of a spectrum of
behavior. In Rite-Hite Corp. v. Kelley Co., 819 F.2d 1120 (Fed. Cir. 1987), the Federal Circuit
explained that willfulness "is not an all-or-nothing trait, but one of degree[,]. ... [which]
recognizes that [patent] infringement may range from unknowing, or accidental, to deliberate, or
reckless, disregard of a patentee's legal rights." Rite-Hite Corp., 819 F.2d at 1125-26. The court
further clarified that:
The term "willfulness" thus reflects a threshold of culpability in
the act of infringement that, alone or with other considerations of
the particular case, contributes to the court's assessment of the
consequences of patent infringement. These consequences include
the assessments provided by statute for multiplied damages and/or
attorney fees. Whether or not "willfulness" is found, the court has
authority to consider the degree of culpability of the tortfeasor.

11

See also Advanced Cardiovascular Sys., Inc., 265 F.3d at 1311 (noting that
"behavior as a party to the litigation," and "[c]loseness of the case" are factors "that a jury is not
in the best position to assess"); Amstead Indus. Inc. v. Buckeye Steel Castings Co., 24 F .3d 178,
184 (Fed. Cir. 1994) (finding that a "trial judge is in the best position to weigh considerations
such as the closeness of the case, the tactics of counsel, the conduct of the parties, and any other
factors that may contribute to a fair allocation of the burdens of litigation as between winner and
loser") (internal quotation marks and citation omitted).
18

Id. at 1126 (emphasis added); see also Read Corp., 970 F.2d at 828 (explaining that a finding of
willful infringement does not mandate the enhancement of damages and that the Read factors
would assist the trial court, after a finding of willful infringement by the jury, "in evaluating the
degree of the infringer's culpability"); TA Instruments, Inc. v. Perkin-Elmer Corp., 277 F. Supp.
2d 367,379 (D. Del. 2003) (finding that enhanced damages were warranted because defendant's
willful infringement was "highly culpable" and rejecting defendant's argument that its willful
infringement was "at the least culpable end of the spectrum of willfulness"). If there can be
many kinds of patent infringers, and even many kinds of willful infringers-some more culpable,
some less culpable, depending on the facts-then requiring a patentee to plead facts suggesting
that every alleged willful infringer has exhibited "egregious" behavior seems out of line with
what is necessary to simply show that the infringer has acted "willfully."
For all of these reasons, the Court concludes that in considering whether a patentee has
successfully pleaded willful infringement, it should no longer require that the patentee plead facts
plausibly evidencing "egregious" infringement conduct.
2.

Can a Patentee Withstand a Motion to Dismiss a Claim of Willful
Infringement If There is No Evidence of Willful Infringement As of
the Date of the Filing of the Claim?

The Federal Circuit reiterated after Halo that "[k]nowledge of the patent alleged to be
willfully infringed continues to be a prerequisite to enhanced damages." WBIP, LLC, 829 F.3d at
1341 (citing Halo, 136 S. Ct. at 1932-33); $ee also Scripps Research Inst. v. lllumina, Inc., Case
No. 16-cv-661 JLS (BGS), 2016 WL 6834024, at *7(S.D. Cal. Nov. 21, 2016) (dismissing
willfulness claims where plaintiff failed to plead knowledge of the patent-in-suit). Courts are

19

split, however, on whether post-suit 12 knowledge of a patent can alone suffice to make out a
claim of willful infringement.

In Seagate, in the course of considering whether an "advice of counsel" defense waives
the attorney client privilege at trial, the Federal Circuit noted that "in ordinary circumstances,
willfulness will depend on an infringer's prelitigation conduct." In re Seagate Tech., LLC, 497
F.3d at 1374. Although the Seagate Court noted that "patent infringement is an ongoing offense
that can continue after litigation has commenced[,]" it reasoned that since "a patentee must have
a good faith basis for alleging willful infringement" at the time a "complaint is filed," then "a
willfulness claim asserted in the original complaint must necessarily be grounded exclusively in
the accused infringer's pre-filing conduct." Id. (citing Fed. R. Civ. P. 8, 1 l(b)). The Seagate
Court also explained that, "[b]y contrast, when an accused infringer's post-filing conduct is
reckless, a patentee can move for a preliminary injunction, which generally provides an adequate
remedy for combating post-filing willful infringement." Id. It then stated that a "patentee who
does not attempt to stop an accused infringer's activities in this manner should not be allowed to
accrue enhanced damages based solely on the infringer's post-filing conduct." Id. The Seagate
Court did recognize that there may be some limited circumstances where a patentee may be
denied a preliminary injunction due to reasons that have little to do with whether it can show that
the accused infringer knowingly or recklessly infringed a valid patent-in-suit-such as when a
preliminary injunction is denied based on consideration of relevant factors other than the
"likelihood of success on the merits" factor. 497 F.3d at 1374. In that event, the Seagate Court

12

The Court uses "post-suit" and "post-filing" conduct interchangeably, to refer to
conduct occurring after the date on which the patentee files the relevant claim of willful
infringement.
20

allowed that "whether a willfulness claim based on conduct occurring solely after litigation
began is sustainable will depend on the facts of each case." Id.
After Seagate, many courts, including judges of this Court, ruled that Seagate stood for
the proposition that "a patentee cannot recover enhanced damages based solely on an accused
infringer's post-filing conduct where the patentee has not sought a_preliminary injunction."

SoftView LLC v. Apple, Inc., Civ. No. 10-389-LPS, 2012 WL 3061027, at *8 (D. Del. July 26,
2012) (emphasis in original); see also Inventio AG v. Thyssenkrupp Elevator Ams. Corp., Civil
Action No. 08-874-RGA, 2013 WL 6117605, at *2 (D. Del. Nov. 20, 2013). 13 And indeed, to the
Court, that does seem to be what Seagate was saying.
Recently some courts, including some judges of this Court, have held that the prior rule
proscribing solely post-suit willful infringement claims (absent a filing of a motion for a
preliminary injunction) should be discarded, on the ground that it does not jibe with the overall
tenor of the Supreme Court's dedsion in Halo. See, e.g., Progme Corp., 2017 WL 5070723, at
*12; T-Rex Prop. AB v. Regal Entm 't Grp., Case No. 6:16-cv-927-RWS-KNM, 2017 WL
4229372, at *8 (E.D. Tex. Aug. 31, 2017); Zimmer Surgical, Inc. v. Stryker Corp., Civil Action
No. 16-679-RGA-MPT, 2017 WL 3736750, at *2 (D. Del. Aug. 30, 2017); Apple Inc. v.

Samsung Elecs. Co., 258 F. Supp. 3d 1013, 1025-27 (N.D. Cal. 2017); DermaFocus LLC v.
Ulthera, Inc., 201 F. Supp. 3d 465,473 (D. Del. 2016). Other courts, however, have concluded

13

That said, some judges of this Court permitted a non-practicing entity patentee
who did not allege willful infringement in an original complaint to file an amended complaint
containing that allegation, even if the patentee had not sought a preliminary injunction. Clouding
IP, LLC v. Amazon.com, Inc., C.A. No. 12-641-LPS, 2013 WL 2293452, at *4-5 (D. Del. May
24, 2013). Others did not permit this practice. See, e.g., Callwave Commc 'ns LLC v. AT & T
Mobility LLC, Civil Action No. 12-1701-RGA, 2014 WL 5363741, at *1 (D. Del. Jan. 28, 2014).
21

that the Halo decision did not upset Seagate's holding that the focus of a willful infringement
claim should be on pre-litigation conduct. See Wis. Alumni Research Found. v. Apple, Inc., 261
F. Supp. 3d 900, 917-18 & n.6 (W.D. Wis. 2017); Cooper Lighting, LLC v. Cordelia Lighting,
Inc., Civil Action File No. 1:16-CV-2669-MHC, 2017 WL 3469535, at *2-3 (N.D. Ga. Apr. 6,
2017); CG Tech. Dev., LLCv. FanDuel, Inc., 2:16-cv-00801-RCJ-VCF, 2017 WL 58572, at *6
(D. Nev. Jan. 4, 2017). 14
The Federal Circuit has addressed this issue squarely in at least one instance post-Halo, in
Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275 (Fed. Cir. 2017). In the Court's view,
Mentor Graphics provides the best indication as to what is the current state of the law on this
question.
In Mentor Graphics, the declaratory judgment plaintiff ("Synopsys") filed the action,
seeking a decision that the patent-in-suit was invalid and not infringed; thereafter, the defendant
("Mentor") answered and counterclaimed that Synopsys willfully infringed that patent. 851 F.3d
at 1295. The district court later granted Synopsys' motion in limine to preclude Mentor from
presenting evidence of willfulness at trial. It did so on the ground that Mentor had "relied
exclusively on post-suit willfulness conduct" and "had not first sought a preliminary
injunction[,]" stating '"I think Synopsys is right about what we will call the Seagate rule, which
is if you don't seek an injunction, you can't seek willful infringement for post-filing conduct."'

14

The Court has not previously rendered an opinion on the issue, having simply
assumed without deciding that, after Halo, a willful infringement claim based solely on
post-filing conduct may be cognizable (in a case where the Court decided that the willful
infringement allegations were nevertheless wanting). See Princeton Dig. Image Corp. v. Ubisofi
Entm 't SA, Civil Action No. 13-335-LPS-CJB, 2016 WL 6594076, at *11 n.20 (D. Del. Nov. 4,
2016).
22

Id. (citation omitted). In finding that the district court abused its discretion in precluding Mentor

from presenting evidence of willful infringement, the Mentor Graphics Court held that the
district court had committed two errors.
First, the Mentor Graphics Court ruled that the district court "erred in determining that
the alleged conduct was post-suit conduct because it erred in determining the filing date of the
relevant suit." Id. On this point, the Federal Circuit held:
The relevant date for determining which conduct is pre-suit is the
date of the patentee's affirmative allegation of infringement, in this
case the date of Mentor's counterclaim. See Seagate, 497 F.3d. at
13 74 (explaining that "in ordinary circumstances, willfulness will
depend on an infringer's prelitigation conduct" because "a patentee
must have a good faith basis for alleging willful infringement").
Mentor relies on Synopsys' acquisition of EVE [another defendant
entity, founded by former Mentor employees], which terminated
the license and rendered all subsequent sales infringing. These
events occurred after the declaratory judgment was filed but prior
to Mentor's counterclaim for infringement. The alleged acts of
infringement are thus pre-suit acts, and there is accordingly no
basis for excluding Mentor's evidence of willfulness.
Id

In the Court's view, this portion of Mentor Graphics seems to be saying that in order for
a patentee to have a viable claim of willful infringement, the patentee must allege in the
governing pleading (there, the answer containing the counterclaim at issue) that the accused
infringer had willfully infringed prior to that date. If this was no longer a requirement after Halo,
then the Federal Circuit could easily have said so-i.e., it could have simply said that it did not
matter whether the alleged infringing conduct was entirely "post-suit" conduct, because a claim

of willful infringement may solely be based on post-suit conduct. But the Mentor Graphics
Court did not say that. Instead, it cited Seagate approvingly for at least the proposition that there
23

is a "relevant date for determining which conduct is pre-suit" for purposes of successfully
making out a claim of willful infrin~ement: the date of the filing of the willful infringement
claim at issue. This all indicates to the Court, then, that if a patentee wishes to successfully plead
a claim of willful infringement, the patentee needs to be able to allege that some form of willfully
infringing conduct has occurred as of the time it files its claim. See Adidas Am., Inc. v. Skechers
USA, Inc., Case No. 3:16-cv-1400-SI, 2017 WL 2543811, at *4 (D. Or. June 12, 2017) (citing
this portion of the Mentor Graphics decision as supporting the proposition that "[a] patentee ....
must have a good faith basis for alleging willful infringement at the time when the complaint is .
filed"). 15

15

This can be seen as being in line with the thrust of the Halo decision. As was
previously noted, Halo placed emphasis on the fact that willful infringement should be
understood to require only subjective willful infringement, explaining that "culpability is
generally measured against the knowledge of the actor at the time of the challenged conduct" and
that considerations of objective recklessness had no place in the test for willful infringement.
Halo, 136 S. Ct. at 1933. But at times when a patentee files an original complaint, the accused
infringer has not yet even been served with that pleading. If there is allegation of willful
infringement in that complaint, and if it is solely based on the idea that once the accused infringer
is served with the pleading, he will thereafter know of the patent-in-suit and willfully infringe
(i.e., if the accused infringer were to continue the infringing conduct thereafter), then technically,
at the time of the filing, the accused infringer does not yet have the requisite "culpability" or
offending "knowledge." Adidas Am., Inc., 2017 WL 2543811, at *4 (citation omitted) ("If the
defendant does not learn of the patent's existence until the plaintiff files a complaint for
infringement, there is no basis upon which the plaintiff can plead that the defendant's
infringement was willful."). One would have to wait to see what happened thereafter in order to
determine whether a claim for willful infringement was sound.
That is not to say that culpable conduct warranting enhanced damages cannot occur after
an original complaint is filed. It is just to say that, if it does, then the patentee would have to
amend its complaint (or seek leave to do so) if it had evidence that, post-filing, willful
infringement had in fact now occurred. Cf Clouding IP, LLC, 2013 WL 2293452, at *5
("Additionally, [plaintiffs] willful infringement claims are not 'based solely on the infringer's
post-filing conduct,' as they are based, at least in part, on conduct predating the operative
amended complaint.") (emphasis in original, citation omitted).
24

The second error highlighted by the Mentor Graphics Court was that the district court had
"erred in concluding that Synopsys could not present evidence of post-filing willful infringement
because Synopsys did not seek a preliminary injunction." 851 F.3d at 1295. Here, the Mentor
Graphics Court explained:

We also disagree with the district court's second decision-that
Mentor could not assert willful infringement because it did not seek
a preliminary injunction. As we noted in Aqua Shield, there is "no
rigid rule" that a patentee must seek a preliminary injunction in
order to seek enhanced damages. Aqua Shield v. Inter Pool Cover
Team, 774 F.3d 766, 773-74 (Fed. Cir. 2014); see Halo Elecs., Inc.
v. Pulse Elecs., Inc., -U.S.-, 136 S. Ct. 1923, 1934, 195 L.Ed.2d
278 (2016) ("[W]e eschew any rigid formula for awarding enhanced
damages under § 284 .... ").

Id. at 1295-96.
One could read the import of this statement in different ways. On the one hand, it could
be that the reason why Mentor, the patentee, was not required to have filed for a preliminary
injunction in order to pursue a willful infringement claim (pursuant to the rationale set out in
Seagate) was that Mentor's claim was not solely a "post-suit" willful infringement claim. Yet

this does not seem to be what the Mentor Graphics Court intended. Instead, it appears that the
Federal Circuit here was: (1) referring to Seagate's "rule" that in certain circumstances, in order
to claim willful infringement, one must have first filed for a preliminary injunction; and (2)
deeming this to be an unduly "rigid" rule-one not in keeping with the spirt of the Halo decision.
See Apple Inc., 258 F. Supp. 3d at 1026. Thus, it appears that the Mentor Graphics Court was

stating that, going forward, the fact that a patentee does not file for a preliminary injunction
should not be a barrier to that party's ability to bring any type of claim for willful infringement.
In sum, then, in light of Mentor Graphics: (1) to state a claim of willful infringement, the

25

patentee must allege facts in its pleading plausibly demonstrating that the accused infringer had
committed subjective willful infringement as of the date of the filing of the willful infringement
claim; but (2) whether the patentee filed for a preliminary injunction will not be relevant to a
consideration of whether its willful infringement claim is sufficiently pleaded.

C.

What Does a Patentee Need to Plead to Plausibly Allege Willful Infringement
After Halo?

So, with all of this in mind, what are the pleading requirements for a claim of willful
infringement? As discussed above, "willful infringement" should now be understood to refer to
subjective willful infringement-meaning that the focus must be on "the subjective willfulness of
a patent infringer, intentional or knowing[.]" Halo, 136 S.Ct. at 1933; see also WesternGeco
L.L. C., 837 F.3d at 1362. In order to survive a motion to dismiss, then, the allegations regarding

willful infringement must simply render it plausible that this type of conduct has occurred as of
the date of the filing of the claim.
In order to make this showing, it is clear that the patentee must plead facts plausibly
suggesting that the accused infringer had prior knowledge of the patent(s)-in-suit. One cannot
infringe a patent with the requisite state of mind for this type of claim if one does not know of
that patent's existence. See, e.g., Atmos Nation, LLC v. BnB Enter., LLC, CASE NO. 16-62083CIV-DIMITROULEAS, 2017 WL 5004844, at *2 (S.D. Fla. Aug. 22, 2017); Scripps Research

Inst., 2016 WL 6834024, at *7; cf WCM Indus., Inc. v. JPS Corp., -F. App'x - , 2018 WL
707803, at *7 (Fed. Cir. Feb. 5, 2018).
From there, it stands to reason that there must be some other factual allegations that go to
the accused infringer's subjective intent to infringe-i.e., that plausibly demonstrate that the

26

accused infringer not only knew of the patent-in-suit, but also knew or should have known that
what it was doing (and what it continued to do) amounted to infringement of that patent. This
will necessarily require an assessment of the totality of the patentee's allegations, Nanosys, Inc.
v. QD Vision, Inc., Case No. 16-cv-01957-YGR, 2016 WL 4943006, at *7 (N.D. Cal. Sept. 16,
2016), as a sufficiently plausible showing could come in many different forms, see, e.g., Bio-Rad
Labs. Inc., 267 F. Supp. 3d at 501 (finding allegations of willful infringement plausible, where
the allegations were that plaintiff gave defendant notice of defendant's infringement of the patent
in March 2013, plaintiff sent proposed licensing terms to the defendant in January 2014, plaintiff
sent a May 2015 letter to defendant reminding it that sales of the accused products amounted to
infringement, that the defendant or an affiliated company thereafter directed the filing of an
opposition to a European counterpart of the patent, and that the defendant continued to sell the
accused products); Bobcar Media, LLC, 2017 WL 74729, at *6 (finding willful infringement
allegations plausible where the plaintiff sent multiple letters to defendant describing the alleged
infringement, including a pre-suit letter that named particular patents at issue, identified the
defendant's allegedly infringing products, and informed the defendant that the plaintiff believed
it to be using plaintiffs patents without authorization, and where the defendant, inter alia,
continued to engage in infringing activities).
In sum, in order to sufficiently plead willful infringement, a plaintiff must allege facts
plausibly showing that as of the time of the claim's filing, the accused infringer: (1) knew of the
patent-in-suit; (2) after acquiring that knowledge, it infringed the patent; and (3) in doing so, it
knew, or should have known, that its conduct amounted to infringement of the patent.

D.

Valinge's Claims of Willful Infringement
27

With the above standard in mind, the Court finds that Valinge fails to make out plausible
claims for willful infringement of the asserted patents. As the Court noted in its prior November
9 R&R, Valinge did not plausibly allege that Defendants had knowledge of the patents as of the
date of the filing of the original Complaint. (D.I. 81 at 6-7) Additionally, Valinge did not plead
sufficient facts in the SAC to plausibly demonstrate that, between the date of filing of the original
Complaint and the date of the filing of the SAC, Defendants were on notice of how it is that they
were said to infringe the asserted patents. (Id. at 8)
The Court's November 9 R&R did explain that, as to at least some claims of
infringement, the SAC itself sufficiently gave Defendants notice of how they could be said to
infringe the asserted patents in certain ways. (Id. at 2-8) But because this notice was not
provided until the date of the filing of SAC, Valinge would not have been able to make out a
claim for willful infringement as of that date. It is possible that, thereafter (i.e., now that
Defendants were aware of the asserted patents and of plausible allegations that they infringe
those patents), Valinge might be able to plead facts plausibly showing that Defendants had the
subjective intent to infringe and did in fact continue to infringe the asserted patents. But such an
allegation would have to be made in a further filing.
The Court had previously recommended that Valinge be given one final opportunity to
amend its complaint, (id. at 10), and the District Court affirmed this recommendation, (D.I. 95).
IfValinge chooses to file such a further amended complaint, the Court recommends that therein
it be given a final opportunity to sufficiently plead any claim for willful infringement.

IV.

CONCLUSION
For the foregoing reasons, the Court recommends that the Motion be GRANTED

28

without prejudice to the extent that it seeks dismissal of Valinge's claims against both
Defendants for willful infringement of the asserted patents.
This Report and Recommendation is filed pursuant to 28 U.S.C. § 636(b)(l)(B),
Fed. R. Civ. P. 72(b)(l), and D. Del. LR 72.1. The parties may serve and file specific written
objections within fourteen (14) days after being served with a copy of this Report and
Recommendation. Fed. R. Civ. P. 72(b)(2). The failure of a party to object to legal conclusions
may result in the loss of the right to de novo review in the district court. See Sincavage v.
Barnhart, 171 F. App'x 924,925 n.l (3d Cir. 2006); Henderson v. Carlson, 812 F.2d 874,
878-79 (3d Cir. 1987).
The parties are directed to the Court's Standing Order for Objections Filed Under Fed. R.
Civ. P. 72, dated October 9, 2013, a copy of which is available on the District Court's website,
located at http://www.ded.uscourts.gov.

Dated: May 29, 2018
Christopher J. Burke
UNITED STATES MAGISTRATE JUDGE

29