Willfully Infringing Someone's Patent - Don't Do It! Episode 87

Understanding Patent Infringement

In a past episode, I talked about patent infringement, which occurs when you make or use a patented invention without the patent owner’s permission. If you infringe a patent, you may be liable for damages.

For example, if you copied someone’s patented product and made $1,000,000 in profits, you might owe the patent owner that entire $1,000,000. However, you could potentially owe even more than that.

Why? Because of something called willful infringement. If you copy someone’s invention but had no idea it was patented, you could still owe them lost profits or a reasonable royalty. However, if you knew about the patent and decided to move forward anyway, that is considered willful infringement, which can result in triple damages.

What Counts as Willful Infringement?

You might think determining whether someone knew about a patent is a simple yes or no question, but it’s more complicated than that.

• What if you saw the patent but believed you had designed around it to avoid infringement—only for a court to later rule that your design was still infringing?

• What if you believed the patent was invalid and assumed a judge would invalidate it if challenged in court?

• What if you obtained a legal opinion from an attorney stating that your product didn’t infringe, but a judge later disagreed?

• What if you suspected there were patents covering your product but deliberately avoided looking for them, thinking that ignorance would protect you from a willful infringement claim?

All these scenarios raise questions about willful infringement. Why does this matter? Because if you are found to have willfully infringed a patent, the court may triple the damages. So, if you were originally liable for $1,000,000 in damages, you could end up owing $3,000,000. In exceptional cases, you might also be ordered to pay the patent owner’s attorney fees.

The Old Standard: The Seagate Test

Prior to 2016, willful infringement was determined using a legal test from a 2007 case called Seagate Technology, LLC v. Western Digital Corp..

The Seagate test had two prongs:

1. Objective Recklessness – The infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.

2. Subjective Knowledge – The infringer either knew of the risk of infringement or the risk was so obvious that they should have known.

The burden of proof was also high—the patent owner had to prove willful infringement by clear and convincing evidence. This standard is lower than “beyond a reasonable doubt” (used in criminal cases) but higher than “preponderance of the evidence” (which means more likely than not).

Under this test, it was very difficult to prove willful infringement because all a defendant had to do was present a plausible argument that they reasonably believed:

• The patent was invalid

• They had designed around it

• They were not infringing, even if those defenses were ultimately unsuccessful

The New Standard: Halo Electronics v. Pulse Electronics

In 2016, the Supreme Court changed the standard in Halo Electronics, Inc. v. Pulse Electronics, Inc..

The Court rejected the rigid Seagate test, ruling that too many patent infringers were avoiding enhanced damages. Under the new standard:

• There is no longer a requirement for objective recklessness

• The focus is now on subjective willfulness—intentional or knowing infringement may warrant enhanced damages, even if the infringement was not objectively reckless

• The burden of proof was lowered from clear and convincing evidence to preponderance of the evidence (more likely than not)

What This Means in the Real World

The shift from Seagate to Halo makes it easier for patent owners to prove willful infringement and obtain triple damages.

Now, courts focus more on the infringer’s state of mind. If you obtained a legal opinion stating that your product didn’t infringe, that shows good faith and could help you avoid willful infringement claims. However, it’s not required. If you have other evidence showing you genuinely believed you were not infringing, that may also help.

How to Avoid Willful Infringement

There’s no foolproof way to avoid a willful infringement claim, but here are some best practices:

1. Consult a Patent Attorney

Obtaining a legal opinion from a patent attorney is one of the strongest ways to show that you acted in good faith. If you receive a well-reasoned opinion stating that you are not infringing, this can help protect you in court.

2. Conduct a Patent Search

Performing a reasonable patent search shows that you made an effort to ensure your product does not infringe existing patents. Your company’s legal or R&D team should document their search process and conclusions.

3. Document Your Design Process

If you believe you designed around an existing patent, keep detailed records of how and why you made those design choices. This can help demonstrate that you made a good-faith effort to avoid infringement.

4. Don’t Ignore Potential Patent Issues

Some companies deliberately avoid conducting patent searches to claim they had no knowledge of a patent. However, courts have ruled that deliberate ignorance (also known as “willful blindness”) does not protect against willful infringement claims. If you suspect there are patents that might cover your product, you should investigate.

The Bottom Line

Willful infringement is very fact-specific, meaning it depends on the details of each case. The key takeaway is that taking proactive steps—like obtaining legal opinions, conducting patent searches, and documenting your process—can help you avoid enhanced damages if you are ever accused of patent infringement.

Even if you lose a patent infringement case, it’s better to owe only lost profits or a reasonable royalty rather than triple damages.

I’m Adam Diament, and until next time, keep on inventing.