Timing of Post Filing Conduct Deemed Crucial
As discussed previously, one purpose for seeking patent reexamination parallel to litigation is to avoid a post filing (i.e., complaint) willfulness determination. The existence of an ongoing patent reexamination may be admitted to demonstrate that the accused infringer was not objectively reckless in its actions irrespective of its prior knowledge of the asserted patent.
As Fairchild semiconductor learned the past week, it is probably best not to wait 5 years into a litigation and after a jury trial to showcase that objectively reasonable behavior.
In July of last year, a jury of the Delaware District Court found that Fairchild had willfully infringed several patents of their competitor Power Integrations. In a bench trial on the willfulness issue, the ongoing patent reexaminations were considered, but given little weight due to their belated pursuit by Fairchild. In a July press release Fairchild explained that it was “disappointed by the willfulness ruling because it is inconsistent with repeated rejections of Power Integrations patents by the U.S. Patent Office following re-examinations that were launched by Fairchild. In that process, Power Integrations has even cancelled one of the patent claims found to have been willfully infringed in the court process.”
Prior to appealing the issue to the CAFC, Fairchild sought to beef up the record on this point, arguing that recently retired Judge Farnan had failed to adequately develop the record in this regard. In a tersely worded opinion (here), Judge Stark was having none of it, explaining:
. . .Judge Farnan indisputably heard all of the reexamination evidence Fairchild believed to be relevant. The bench trial on willfulness focused almost entirely on the reexamination proceedings. (D.I. 740) On this record, Judge Farnan concluded that the timing of Fairchild’s behavior was crucial, and he relied most heavily on Fairchild’s pre-litigation conduct. (D.I. 750 at 13) (“The Court concludes that this evidence [pre-litigation conduct] weighs more heavily than the post-suit strategy developed by counsel to avoid a claim of willful infringement, after such infringement has already occurred.”) Fairchild did not initiate the reexamination proceedings until after a jury had returned a verdict finding that Fairchild infringed Power’s patents. It is plain that Judge Farnan deemed this post-suit conduct of Fairchild to be of limited relevance to the willfulness determination. (emphasis added)
Seems if you want to appear objectively reasonable post filing, you might want to get those reexamination requests in sometime before the 5 year mark of your “post filing” conduct.