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Press Release

Fish & Richardson Wins Major U.S. Supreme Court Victory for Halo Electronics in Patent Suit Over Enhanced Damages

June 13, 2016

Press Release

Fish & Richardson Wins Major U.S. Supreme Court Victory for Halo Electronics in Patent Suit Over Enhanced Damages

June 13, 2016

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Fish & Richardson won a groundbreaking U.S. Supreme Court case for its client Halo Electronics, Inc. in its nine-year patent litigation with Pulse Electronics, Inc. (Halo Electronics, Inc. v. Pulse Electronics, Inc.).  The Supreme Court ruled, in a unanimous decision by Chief Justice Roberts, that the current legal test for increased damages is not consistent with Section 284 of the Patent Act.  The decision will make it easier for courts to award enhanced damages in cases of egregious behavior by the infringer.

In the Halo case, which was paired with another case (Stryker Corp. v. Zimmer Inc.), the Supreme Court scrutinized the legal framework adopted in 2007 by the Federal Circuit in In re Seagate Technology.  The Seagate test made it difficult for patent owners to prove that they are entitled to enhanced damages by insulating the worst patent infringers if they could muster a reasonable (even though unsuccessful) defense at trial.  Halo argued that the test was too rigid and that judges should instead have discretion to decide when to award enhanced damages.

The Court agreed and noted, “The principal problem with Seagate’s two-part test is that it requires a finding of objective recklessness in every case before district courts may award enhanced damages.  Such a threshold requirement excludes from discretionary punishment many of the most culpable offenders, such as the ‘wanton and malicious pirate’ who intentionally infringes another’s patent—with no doubts about its validity or any notion of a defense—for no purpose other than to steal the patentee’s business.”

“We are thrilled with the Supreme Court’s decision.  Halo came up with a truly innovative idea that larger companies, like Pulse, decided to copy. This win means that all patent owners – no matter how big or small – can better protect themselves from patent infringers and can be sure that infringers will be held accountable for their egregious conduct,” said Jeffrey Heaton, Vice President of Halo Electronics.

Fish has represented Halo since 2007 when Halo filed suit claiming that Pulse infringed its portfolio of patents that cover packaging for surface mount transformers, a common electronic component in computer networks.  Fish won a jury verdict on November 26, 2012 for Halo with the jury finding that Pulse willfully infringed eight claims of three Halo patents.  The district court ordered Pulse to pay Halo damages and issued a permanent injunction.  On October 22, 2014, Fish successfully convinced the Federal Circuit to affirm findings that Halo’s patents were both valid and infringed by Pulse, and reject Pulse’s argument that the inventions were invalid.  The Court also affirmed a non-infringement finding for Halo on a Pulse patent.

Fish principals William Woodford and Tom Melsheimer were co-lead trial counsel in the case.  The appeals were handled by William Woodford, Craig Countryman, Michael Kane, and John Dragseth.

“The jury evaluated Pulse’s behavior and determined that its infringement was willful. But the Seagate test forced the district court to focus on Pulse’s trial defenses rather than Pulse’s conduct at the time it decided to infringe Halo’s patents.  The new Supreme Court standard rightfully shifts the focus back to Pulse’s infringing behavior,” added Fish principal William Woodford. “We look forward to returning to the district court to hold Pulse accountable.”

Halo’s patented technology has been widely used in the industry.  Several of Halo’s competitors have taken licenses to Halo’s patent portfolio.  Each of these competitors paid Halo royalties for the right to continue selling components using Halo’s innovative design.

Halo is a privately-held company that was founded in 1991.  The company is based in Las Vegas and is a leading global supplier of communication and low power management magnetics for the electronics industry. Halo’s patented packaging technology houses magnetic components, such as transformers, that are commonly found in computers, routers, and other electronic devices that have an Ethernet connection.

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