Willfulness Case at the Federal Circuit: Eko Brands v. ARM — An Erroneous Jury Instruction Survives Challenge and Defeats Willfulness Claim

In a recent Federal Circuit case, Eko Brands, LLC v. Adrian Rivera Maynez Enters., the court narrowly upheld a jury instruction that may have been rejected had the defendant raised its objections differently at trial. The case generally stands to reinforce the division of duties between the jury and the court (namely that the jury decides intention/deliberateness while the court decides degree of punishment based on egregiousness), but the opinion’s dicta underscores an important practice point that should not be disregarded.

At trial, the plaintiff Eko challenged a jury instruction that read:

Eko argues that ARM willfully infringed the Eko 855 patent. For purposes of this case only, you are to assume direct infringement of amended claim 8 of the Eko 855 patent. Therefore, you must go on and address the additional issue of whether or not this infringement was willful. Willfulness requires you to determine whether Eko proved that it is more likely than not that the infringement was especially worthy of punishment. You may not determine that the infringement was willful just because ARM knew of the Eko 855 patent and infringed it. Instead, willful infringement is reserved for only the most egregious behavior, such as where the infringement is malicious, deliberate, consciously wrongful, or done in bad faith.

Eko objected to the highlighted language on the basis that it improperly referred to the higher standard that applies to the court, not the jury, in determining an amount of enhanced damages after a jury finding of willfulness. The trial court partly agreed, but only removed the phrase “only the most” (indicated by blue highlighting in the above quote) from the instruction. Eko appealed the ruling based on its preserved objection.

The Federal Circuit also agreed with Eko to some extent: “It is at this second stage at which the considerations of egregious behavior and punishment are relevant. Questions of whether an accused patent infringer’s conduct was “egregious behavior” or “worthy of punishment” are therefore not appropriate for jury consideration…. the inclusion of the phrases “especially worthy of punishment” and “reserved for egregious behavior” in Jury Instruction 40 was erroneous….”

But then came a twist. Even though the objected-to language in isolation was erroneous, the court nevertheless looked to the instruction as a whole to determine whether it provided “reasonable clarity as to the correct test for willful infringement.” The court noted that the same sentence suggests that “deliberate” behavior can qualify as “egregious,” thus providing sufficient clarity to the jury and holding that the instruction was not legally erroneous … “given the limited nature of Eko’s objection.

And there’s the rub. The court zigged and zagged from finding that the jury instruction contained erroneous language to nevertheless upholding it. The reason was because of the limited nature of Eko’s objection. In order to sustain an objection to an instruction based on legal error, the court noted, the party must establish that the proposed instruction would have remedied the error. The court said that it was “significant” that deletion of the only two phrases to which Eko objected would not have cured the problem that Eko identified since the instruction would still include the terms “malicious,” “consciously wrongful,” and “bad faith” conduct. Since the alleged error was that the instruction improperly went beyond mere intentionality and deliberateness to notions of egregiousness and bad faith, the fact that these terms would still have been present if Eko’s objections were upheld means that the error would not have been remedied.

It stands to reason, then, that if Eko had objected to each of the terms that went beyond mere intentionality and deliberateness, it would have presented a stronger case for rejecting the instruction. It follows that it would have been more likely that the jury would have found willfulness.