United States District Court, E.D. Texas, Marshall Division
WILLIAM C. BRYSON, UNITED STATES CIRCUIT JUDGE
case was tried to a jury during the week of April 17, 2017.
The jury returned a verdict finding that defendant Eli Lilly
& Co. (“Lilly”) had infringed U.S. Patent No.
8, 791, 124 (“the '124 patent”), which is
owned by the plaintiff, Erfindergemeinschaft UroPep GbR
(“UroPep”). The jury also found that the '124
patent was not invalid under any of the four theories of
invalidity advanced by Lilly-anticipation, obviousness, and
failure to satisfy the enablement and written description
requirements of 35 U.S.C. § 112, ¶ 1. The jury
awarded UroPep $20 million in damages.
course of the trial, several legal issues arose on which the
Court ruled but did not have an opportunity to provide a
comprehensive explanation for its rulings. This opinion
addresses several of those issues and provides a more
detailed rationale for the Court's rulings than was
possible during the trial. In addition, this opinion
addresses the issue of prejudgment interest, on which the
Court directed the parties to file briefs prior to the
Court's entry of final judgment in this matter.
Judgment as a Matter of Law on Willfulness
close of the evidence, the Court granted Lilly's Rule
50(a) motion for judgment as a matter of law on the issue of
willful infringement under 35 U.S.C. § 284. The Court
concluded that UroPep had not introduced enough evidence of
willfulness to justify submitting that issue to the jury.
Dkt. No. 346, at 5-6 (Trial Tr. 1390-91). In addition, the
Court stated on the record that even if the jury returned a
verdict of willful infringement, the Court would not have
enhanced the damages award, based on the evidence presented
at trial. Id. at 115 (Trial Tr. 1500).
Supreme Court has made clear that an award of enhanced
damages under section 284 is reserved for “egregious
cases.” Halo Elecs., Inc. v. Pulse Elecs.,
Inc., 136 S.Ct. 1923, 1932, 1934 (2016). As the Supreme
Court explained in the Halo case, 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 behavior. 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. Moreover, the party
seeking enhanced damages under section 284 has the burden of
showing its entitlement to an enhanced award by a
preponderance of the evidence. Halo, 136 S.Ct. at
1934; WBIP, LLC v. Kohler Co., 829 F.3d 1317,
1339-40 (Fed. Cir. 2016).
case, the evidence was not sufficient to support a finding
that UroPep had met its burden of showing that Lilly's
conduct was “egregious” or
“malicious” behavior that is
“characteristic of a pirate.” The evidence on
which UroPep relied at trial to support its claim of
willfulness was Lilly's failure to respond to
UroPep's single, one-page letter of October 9, 2014,
notifying Lilly about the '124 patent and stating that
the sale of Cialis for BPH “appears to require a
license of the '124 patent.” In addition, UroPep
argued that the infringement case against Lilly was strong,
given the simplicity and breadth of the '124 patent.
See Dkt. No. 342, at 210, 212-13 (Trial Tr. 469,
471-72); Dkt. No. 344, at 369, 373 (Trial Tr. 1377, 1381).
other hand, UroPep's letter was a barebones assertion of
infringement. Nothing in the notification letter set out the
strength of UroPep's infringement case or addressed the
issue of validity. Nor was there evidence of any follow-up
communications from UroPep after the October 9, 2014, letter.
Meanwhile, during the pretrial proceedings and at trial Lilly
raised substantial arguments as to the validity of the
'124 patent, from which it could be inferred that Lilly
reasonably concluded that even if the patent covered the use
of tadalafil to treat BPH, Lilly's continued marketing of
Cialis did not infringe a valid patent.
the strongest point in UroPep's favor on the willfulness
issue is that Lilly did not offer any explanation for its
failure to respond to UroPep's October 9, 2014,
notification letter. Rather than offering an explanation for
its silence in response to the letter, such as whether its
silence was the product of oversight or a considered decision
based on analysis of the patent, Lilly chose to rest mainly
on the fact that UroPep bore the burden of proof on
willfulness and the argument that UroPep failed to satisfy
that burden. See Dkt. No. 344, at 370, 373 (Trial
Tr. 1378, 1381). Lilly did not, for example, offer an advice
of counsel defense. On the other hand, the Patent Act
expressly provides that the “failure of an infringer to
obtain the advice of counsel with respect to any allegedly
infringed patent, or the failure of the infringer to present
such advice to the court or jury, may not be used to prove
that the accused infringer willfully infringed the patent . .
. .” 35 U.S.C. § 297. Therefore, the Court may not
take into account Lilly's failure to offer evidence that
it consulted counsel regarding the '124 patent after
receiving notification of the patent in October 2014.
addition, Lilly pointed out that the single communication
sent by UroPep prior to the filing of the complaint was sent
after Lilly had already been marketing Cialis for the
treatment of BPH for almost three years, so it was not
surprising that Lilly would not have lightly concluded that
its entire “Cialis for BPH” marketing program was
at risk because of the '124 patent. See Dkt. No.
344, at 370-71 (Trial Tr. 1378-79). This is not a case in
which the defendant copied patented technology; Lilly clearly
developed the use of Cialis for BPH without consulting the
'124 patent, which is a factor that cuts against a
finding of willfulness and an award of enhanced damages.
weighing the evidence at trial, the Court concluded that
there was no direct evidence of willfulness (or lack of
willfulness). All that the parties on either side could point
to was circumstantial evidence. In the end, the Court
concluded that the circumstantial evidence relied on by
UroPep was not strong enough to justify submitting the issue
of willfulness to the jury, particularly in light of the fact
that UroPep bore the burden of proof on the issue of
willfulness and was required to show that Lilly's conduct
was sufficiently extreme to qualify as
“egregious” under the Supreme Court's
to the thrust of UroPep's argument at trial, a finding of
willfulness is not required simply because the infringer knew
about the patent at issue. As Justice Breyer noted in his
concurring opinion in Halo, 136 S.Ct. at 1936
(Breyer, J., concurring), “a court is not required to
award enhanced damages “simply because the evidence
shows that the infringer knew about the patent and
nothing more. . . . It is ‘circumstanc[e]'
that transforms simple knowledge into such egregious
behavior, and that makes all the difference.” In this
case, there was no evidence in addition to the evidence of
Lilly's pre-suit knowledge of the patent that showed that
Lilly's infringement was “egregious, ”
“deliberate, ” “wanton, ” or
otherwise characteristic of the type of infringement that
warrants the “punitive” sanction of enhanced
damages. See Continental Circuits LLC v. Intel
Corp., No. CV 16-2026, 2017 WL 679116, at *11 (D. Ariz.
Feb. 21, 2017) (after Halo, “awareness of the
patent and continued use of the infringing product despite
‘an objectively high likelihood' of infringement or
‘reckless disregard' of that risk no longer compel
a finding of willfulness”); Vehicle IP, LLC v.
AT&T Mobility LLC, C.A. No. 09-1007, 2016 WL
7647522, at * 8 (D. Del. Dec. 30, 2016) (“[A]
party's pre-suit knowledge of a patent is not sufficient,
by itself, to find ‘willful misconduct' of the type
that may warrant an award of enhanced damages.”);
Greatbatch Ltd. v. AVX Corp., C.A. No. 13-723, 2016
WL 7217625, at *3 (D. Del. Dec. 13, 2016) (“The key
inquiry in this case is whether there is evidence in
addition to AVX's pre-suit knowledge of the patents
that could show that AVX's infringement was
‘egregious, ' ‘deliberate, '
‘wanton, ' or otherwise characteristic of the type
of infringement that warrants the Court in exercising its
discretion to impose the ‘punitive' sanction of
enhanced damages.”); CG Tech. Dev., LLC v. Big Fish
Games, Inc., 2:16-cv-587, 2016 WL 4521682, at ¶ 14
(D. Nev. Aug. 29, 2016) (plaintiff failed to state a claim
for willful infringement under Halo because the
complaint “fail[ed] to allege any facts suggesting that
Defendant's conduct is ‘egregious . . . beyond
typical infringement.”) (quoting Halo, 136
S.Ct. at 1935); Dorman Prods., Inc. v. Paccar, Inc.,
201 F.Supp.3d 663, 681 (E.D. Pa. 2016) (“Halo
requires more than simple awareness of the patent and
awareness of infringement.”).
the Court notes that the question whether the issue of
willfulness should have been submitted to the jury is
rendered largely moot by the fact that the decision whether
to enhance damages on a finding of willfulness is for the
Court. Halo, 136 S.Ct. at 1934. And as the Supreme
Court explained in Halo, there is no requirement
that enhanced damages must be awarded, even following a
finding of egregious misconduct. Id. at 1933.
Court in this case explained at trial that it would not have
enhanced damages even if the jury had found Lilly's
infringement to be willful. See Read Corp. v. Portec,
Inc., 970 F.3d 816, 826 (Fed. Cir. 1992) (a finding of
willful infringement “does not mandate that damages be
enhanced”; identifying a number of factors that bear on
the district court's enhancement decision); Brigham
& Women's Hospital, Inc. v. Perrigo Co., Civil
Action No. 13-11640, 2017 WL 1496916, at *5 (D. Mass. Apr.
Read case, the Federal Circuit set out a number of
factors that are pertinent to the decision whether to award
enhanced damages under section 284. The Court reviewed those
factors and concluded that several of the most important of
them cut against an enhanced damages award in this case. In
particular, the Court concluded that there was no evidence of
deliberate copying; there was no improper behavior by the
infringer in its capacity as a party to the litigation; Lilly
made reasonable arguments with respect to certain of the
issues of invalidity; there was no showing that Lilly had a
motivation (or sought) to harm UroPep; and there was no
evidence that Lilly attempted to conceal any misconduct.
Read, 970 F.2d at 827-28. The Court therefore would
have exercised its discretion to deny an award of enhanced
damages even if the jury had returned a verdict finding that
Lilly's infringement was willful.
Enablement of Both Prophylaxis and Treatment
of the '124 patent recites in part “A method for
prophylaxis or treatment of benign prostatic hyperplasia . .
. .” '124 patent, col. 8, ll. 18-19. Lilly
requested an instruction that UroPep was required to enable
both prophylaxis ...