November 05, 2014

Using AIA trials as a defense to willful infringement

4 min

A finding of willful infringement in patent litigation allows the judge to triple the damages award.[1] In order to prove willful infringement, the patent owner must prove: 1) that the alleged infringer “acted despite an objectively high likelihood that its actions constituted infringement of a valid patent;” and 2) that this objectively high risk was “known or so obvious that it should have been known” to the alleged infringer.”[2]  An alleged infringer can defend against this allegation by showing that its invalidity defense is objectively reasonable, and not baseless.[3]  Recently, in Ultratec, Inc. v. Sorenson Communications, Inc., the Western District of Wisconsin held that the Patent Trial and Appeal Board’s (PTAB) decision to institute an AIA trial (i.e. an inter partes review (IPR)) for the asserted patent does not conclusively establish the reasonableness of an invalidity defense.[4]  The court denied summary judgment of non-willfulness, but indicated that the institution of AIA trials may still be used to defend against a charge of willful infringement.


On May 17, 2013, Ultratec sued Sorenson Communications, Inc. and CaptionCall, LLC (Sorenson) alleging infringement of ten patents relating to captioned telephones and associated systems and concurrently petitioned for IPR of U.S. Patent No, 8,379,801, relating to text caption systems.  Sorensen filed a counterclaim alleging infringement of the ‘801 patent and in turn petitioned for IPR on each of Ultratec’s asserted patents.  On March 5, 2014, the PTAB instituted IPRs on all of the asserted patents but it has yet to issue a final decision.  On April 14, 2014, both Ultratec and Sorenson filed motions for summary judgment on various grounds, including infringement, non-willfulness.  The court granted in part and denied in part the partial motions for summary judgment, but importantly, refused to grant summary judgment as to willful infringement.

Sorensen’s reliance on IPRs as a defense to willful infringement

Sorenson attempted to rely on the PTAB’s institution of AIA trials to avoid a finding of willful infringement. Specifically, Sorenson alleged that Ultratec would be unable to meet the objective prong of the willfulness test because “grant of inter partes review by the Patent Trial and Appeal Board proves that defendants have a reasonable invalidity defense.”  Sorenson argued that case law involving initial office actions granting re-examination should be given little weight and instead, IPR institution should be conclusive evidence of the reasonableness of invalidity defenses. 

In its order, the court explained the differences between inter partes reexamination and IPRs, stating that IPRs are “adjudicative proceedings” in which a petitioner must show a reasonable likelihood of prevailing “with respect to at least 1 of the claims challenged in the petition.”  In contrast, the court stated, inter partes reexamination proceedings are “examination proceedings” which included a lower burden for institution, namely the requestor need only show a “substantial new question of patentability.” Acknowledging these differences, the court concluded that institution of an AIA trial (i.e. an IPR) should be given more weight than a grant of reexamination.  Nonetheless, it held that institution is not conclusive evidence of non-willfulness because “[a] decision to institute inter partes review is merely a threshold determination whether … the petitioner has demonstrated a reasonable likelihood that at least one of the patent claims will be found invalid.” 

In part, the court did not give the grant of an IPR conclusive weight because an IPR petition may sometimes be decided without any response filed by the patentee and it refused to evaluate the invalidity arguments in the IPR petitions for their reasonableness at the summary judgment stage in an effort to conserve judicial resources.  Moreover, the court held, “the preliminary and incomplete nature of a decision to institute inter partes review cautions against affording those decisions conclusive weight.”  Accordingly, the court deferred its reasonableness determination until trial, and Sorenson may renew their motion after the close of evidence at trial.  Finally, the court noted that In re Seagate does not “preclude[] the court from affording controlling weight to a grant of review by the board…”

AIA Trials and defenses to willful infringement

The decision in Ultratec suggests that institution of other kinds of AIA trials – post-grant review and covered business method review – may also have some weight in a defense against willfulness, but similarly would not be conclusive. Unsurprisingly, the opinion suggests that a final decision in an AIA trial may be more probative evidence of the reasonableness of an accused infringer’s conduct.  Going forward, we would expect that the institution of AIA trials may supplement an alleged infringer’s reliance on an opinion of counsel to show a reasonable belief that the asserted patent was invalid.  Interestingly, the decision in Ultratec did not address that the IPR was filed after alleged infringement and litigation as opposed to an opinion of counsel, which would typically be obtained long before litigation.

[1] 35 U.S.C. § 284.
[2] In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007)(en banc).
[3] See, e.g., Halo Electronics, Inc. v. Pulse Electronics, Inc., No. 2013-1472, 2014 WL 5352367, at *9 (Fed. Cir. Oct. 22, 2014)
[4] 3:13-cv-00346-bbc (W.D. Wis. Aug. 28, 2014).