Following a ten-day jury trial, a Florida jury found that some of Bombardier Recreational Products Inc.'s ("BRP") Sea-Doo personal watercraft vehicles infringed two of Arctic Cat's patents relating to steering technology for personal watercraft. Moreover, the jury found, by clear and convincing evidence, that BRP infringed the claims "with reckless disregard of whether such claim was infringed or was invalid or unenforceable." The issue of subjective willfulness reached the jury after the Court found objective willfulness by clear and convincing evidence, pursuant to the two-part Seagate test. (In re Seagate Technology, LLC, 497 F. 3d 1360 (Fed. Cir. 2007) (en banc)). Shortly after the conclusion of the trial, the Supreme Court discarded the Seagate test for willfulness as inconsistent with Section 284 of the Patent Act. See, Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 , 1926 , 195 L. Ed. 2d 278 (2016). Halo held that "an independent showing of objective recklessness should [not] be a prerequisite to enhanced damages" and that a determination as to enhancement should be governed by the preponderance of the evidence standard that "has always" governed all other aspects of patent-infringement litigation. 136 S. Ct. at 1926-27. This decision, importantly, did not impact the validity of the judgment because, as the Court explained, "where both objective willfulness and subjective willfulness were found by clear and convincing evidence, a more lenient inquiry as to subjective willfulness, without the additional hurdle imposed by the objective willfulness inquiry, and by the lesser preponderance of the evidence standard, would reach the same result."
In deciding the damages, the jury set a royalty at $102.54 per infringing vehicle, covering nearly 152,000 vehicles. The court also ordered BRP to pay triple damages, because the patent infringement was willful. The triple damages raised the initial award to nearly $47 million. On Aug. 12, the court granted Arctic Cat's motion for supplemental damages, including the triple damages multiplier, for the nearly 5,000 infringing vehicles BRP sold since the earlier verdict, for an extra $1.5 million. The court also ordered the parties to negotiate a royalty rate for future sales of infringing units until the expiration of the '545 patent and ordered that the negotiations should take into account the royalty setting factors outlined in Georgia-Pacific Corp. v. U.S. Plywood Corp. (S.D.N.Y. 1970), with $102.54 per unit as the floor for negotiations. The court noted that it was within its power to set the royalty rate on its own, but denied Arctic Cat's request to do so, explaining that it was better for the parties to negotiate among themselves.
To read the Court's Order ruling upon two post-trial Motions: (1) Defendants Renewed Motion for Judgment as a Matter of Law or for a New Trial and (2) Plaintiff's Motion for (A) Accounting of Supplemental Damages, (B) Post-Judgment Ongoing Royalty, and (C) Periodic Accounting through Expiration of the '545 Patent, click here.
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