Risk of Encouraging Infringement whereas Awaiting Appeal

TecSec, Inc. v. Adobe Inc.  (Fed. Cir. 2020)

The easy setup on this case:

• 2011: Following declare development, TecSec stipulated that use of Adobe’s product doesn’t infringe the asserted patents.
• 2013: Claim development is reversed on appeal, and the infringement case started-up once more.

The query on appeal:

• During the 2011-2013 timeline — is it legally attainable for Adobe to induce infringement? In different phrases, might Adobe have the have the requisite intent essential to induce infringement?

The Answer:

• Yes, intent to trigger infringement should be provable based mostly upon subjective-bad-faith, even when the conduct was “objectively reasonable.”
• The court docket writes: “As a logical matter, a defendant may have the liability-supporting subjective state of mind even if a person could believe, with objective reasonableness (though wrongly), that the induced conduct was not infringing. To make the point in terms of this case, Adobe may have had the requisite knowledge of infringement if it believed (as we ultimately held in 2013) that the March 3, 2011 claim construction was incorrect, even if that construction was objectively reasonable.”

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This case has been ongoing since 2010.  Back in 2011, the district court docket issued a narrowing claim-construction with the results of a stipulated dismissal of non-infringement.  The Federal Circuit reversed that consequence in 2013 with a broader development — establishing the eventual 2018 trial.

TecSec’s principle centered on each direct and induced infringement.  Just earlier than trial, the district court docket granted Adobe’s movement in limine to forestall TecSec from presenting any inducement proof from between the 2011 declare development and the 2013 reversal.

Defendant Adobe lacked the requisite intent to induce infringement or willfully infringe throughout the time interval what place the Court had moderately, although erroneously, dominated in Adobe’s favor on infringement and TecSec had entered a stipulation of noninfringement.

InLimineOrder.  The trial went on and TecSec was in a position to persuade the jury on the direct infringement declare, however not on inducement. [Verdict.] The Jury additionally awarded $1.75 million in compensatory damages.  At that time, nevertheless, the district court docket issued a JNOV order (renewed JMOL) that diminished the award all the way down to ZERO DOLLARS — holding that the damages proof was all tied to the inducement principle.

The document is … devoid of certified testament relating to applicable damages for Adobe’s direct infringement … [T]he jury’s damages award of $1.75 million have to be vacated in its entirety as inherently speculative and unsupported by the document.

DCT JMOL Opinion [JMOL Opinion].   

On appeal, the Federal Circuit has reversed — holding that it was not correct to exclude the proof of 2011-2013 inducement as famous above.

Although this seems like a win for the patentee, on remand I anticipate that the district court docket will open the door for a pretrial abstract judgment movement relating to whether or not TecSec can show subjective-intent to infringe.