Federal Circuit Highlights Range of Unanswered Questions Regarding Willfulness In Denying Petition for Rehearing En Banc

Halo Elecs., Inc. v. Pulse Elecs., Inc., ___ F.3d ___ (Fed. Cir. Mar. 23, 2015) (per curiam) (D. Nev.: Pro, J.) (1 of 5 stars)

Federal Circuit denies petition for panel rehearing and rehearing en banc. The panel had held that the district court did not err in holding that the objective prong of the willfulness inquiry was not satisfied.

Concurrence (Taranto, J., joined by Reyna, J.): Judge Taranto concurred in the denial of rehearing en banc, explaining that the narrow question under 35 U.S.C. sec. 284 raised in the petition for rehearing (i.e., "whether the objective reasonableness of Pulse's invalidity position must be judged only on the basis of Pulse's beliefs before the infringement took place") did not warrant further review. Concurrence at 1, 5. Judge Taranto, however, highlighted the range of "distinct, but related questions, that others have raised about § 284," to clarify that those questions were not at issue. Id. at 1. Such questions include: 1) whether willfulness should remain a necessary condition for enhancement under sec. 284; 2) what the proper standards should be for finding willfulness; 3) whether a judge or jury should decide willfulness; 4) the standard of proof for willfulness; 5) the appropriate standard of appellate review; and 6) whether the Supreme Court's recent holding in Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S. Ct. 1744 (2014), that attorney's fees decisions under sec. 285 are reviewed for an abuse of discretion, affects appellate review of willfulness determinations under sec. 284. Id. at 2-6.

Dissent (O'Malley, J., joined by Hughes, J.): Judge O'Malley dissented, stating that the full court should have heard the case en banc to reevaluate the court's sec. 284 jurisprudence in light of the statutory text and the Supreme Court's Octane Fitness and Highmark decisions. Dissent at 8. In light of the Federal Circuit's prior test for the award of attorneys' fees under 35 U.S.C. sec. 285, which the Court overruled in Octane Fitness, Judge O'Malley noted that the full court should reconsider whether it has made the same "interpretative errors" with respect to § 284. Judge O'Malley further identified the following additional questions regarding the court's "willfulness jurisprudence" requiring attention: 1) whether willfulness requires clear and convincing evidence; 2) whether de novo review is the proper appellate standard for willfulness determinations; and 3) whether the court, rather than the jury, should make decisions on enhanced damages under sec. 284. Id. at 5-8.