The recent decision in SRI International, Inc. v. Cisco Systems, Inc. is another in a line of cases involving the federal court’s handling of the issues of willful infringement and enhanced damages, but it is actually a case about how parties handle the language in their jury instructions. Willful infringement is typically a question of fact left to the jury, and if a jury finds willful infringement, the ability to overturn that verdict is incredibly difficult. If you are found to be a willful infringer, then your judge has discretion to increase damages by a factor of up to three times.

Federal Circuit Court of Appeals

In this case, the Federal Circuit Court of Appeals was asked to find that the infringer, Cisco, was not a willful infringer because the Federal Circuit in a prior decision had held that Cisco could not be a willful infringer before it ever learned of the asserted patents. That prior Federal Circuit decision vacated the double enhanced damages award against Cisco for having been found a willful infringer. The problem for Cisco on the second appeal was that its instructions informed the jury that damages would only start on the date Cisco became aware of the asserted patents (and the Federal Circuit was not aware of this until the instant appeal either). In other words, the fact that Cisco didn’t know of the patents meant the prior Federal Circuit appeal in its favor was meaningless in terms of damages against it. Consequently, in the instant appeal, the Federal Circuit affirmed the willful infringement finding and the doubling of damages despite its previous ruling that Cisco was not a willful infringer prior to its knowledge of the asserted patents. So the entire appeal over whether to double $23 million turned on the wording in the jury instructions.

Be Mindful of Jury Instructions

The takeaway from this case is that clients must be mindful of the instructions their counsel sends to the court and the jury during their pre-trial period. The words in those instructions can and will bind them in the event of an appeal.