Lack of Opinion Results in Enhanced Damages

In an earlier post commenting on the Federal Circuit decision in Spectralytics, Inc. v. Cordis Corp., we observed that a willful infringer’s failure to obtain advice of counsel prior to litigation can affect the amount by which the district court judge enhances damages. In the Spectralytics decision, the Federal Circuit affirmed the lower court in all respects except on the issues of whether Spectralytics, the patent owner, should have been denied enhanced damages and attorney’s fees for Cordis’s willful infringement.

On remand, the district court declined to award attorney’s fees, but, taking into account all of the Read factors, awarded enhanced damages of $500,000. Spectralytics, Inc. v. Cordis Corp., No. 05-cv-1464, slip op. at 2 (D. Minn. Nov. 30, 2011). Notably, the district court found that only the following two Read factors weighed in favor of an award of enhanced damages: Cordis’s failure to obtain pre-litigation advice of counsel and the fact that Cordis was a large corporation in good financial condition. Id.at 13. Had it obtained the advice of counsel C which presumably would have been favorable to Cordis, given the district court’s observation “that, had the court been sitting as the fact finder, it likely would have found [Spectralytics’s] patent invalid” id. at 9 C Cordis likely would have avoided $500,000 in enhanced damages. It also goes without saying that, had Cordis obtained advice of counsel and formed a good-faith belief that it did not infringe, then the jury may not have found Cordis’s infringement to be willful in the first place.