Court Doubles Damages Award for Patent Infringement to US$73.6 Million.

Two days ago, the U.S. District Court for the Western District of Pennsylvania increased an award of patent infringement damages to the University of Pittsburgh against Varian Medical Systems from US$36.8 million to US$73.6 million. University of Pittsburgh v. Varian Medical Systems, Inc., No. 2:08-cv-01307-AJS (W.D. Pa. Apr. 25, 2012). A jury had previously awarded actual damages to the university based upon the finding that Varian’s cancer radiation equipment infringed the university’s U.S. Patent No. 5,727,554.

U.S. District Judge Arthur J. Schwab doubled the damages award pursuant to 35 U.S.C. § 284, which, in cases of willful infringement, allows the court to “increase the damages up to three times the amount found or assessed.” The court based its finding that Varian’s infringement was willful upon several determinations, including that (1) “Varian was aware of Pitt’s ‘554 patent since at least February 2000;” (2) “Varian did not have a good faith belief that Pitt’s ‘554 patent was invalid, or that it was not infringing the ‘554 patent;” (3) “Varian has consistently attempted (although not in bad faith) to have the trial proceed in the manner in which it chose, rather than based upon this Court’s rulings;” (4) “[w]hile the jury’s damages award may be said to adequately compensate Pitt for Varian’s infringement, it does not serve a punitive function because of Varian’s high profit margins and revenue;” (5) “Varian’s reliance on its alleged non-infringement, and its reliance on the other non-liability issues and defenses raised by Varian were not reasonable, and was objectively reckless…. Varian’s infringement was never a ‘close case;'” (6) “Varian’s willful infringement had begun by at least 2002 and continues to present;” (7) “Varian’s lack of remedial actions weigh in favor of enhanced damages;” and (8) “Varian was attempting to conceal its misconduct during its license negotiations with Pitt.”  Although the court noted that it had discretion to triple the damages award, it determined that because the jury award was substantial, doubling that award would be sufficient to compensate the university and to punish Varian.

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