Willful Infringement: Prompt Redesign Efforts and Complete Removal of Infringing products Suggest No Objective Recklessness

Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 2008-1392, -1393, -1422 (Fed. Cir. Feb. 25, 2010)

Holding:

Prompt redesign efforts and complete removal of infringing products in a span of a few months after the lawsuit commenced suggest that the infringer was not objectively reckless. Slip op. at 24-25.

Relevant Facts:

Trading Technologies (TT) owns U.S. Patent No. 6,772,132 and U.S. Patent No. 6,766,304, directed to a static display of prices in commodity trading. After TT sued eSpeed for infringement, eSpeed redesigned its products. The trial court found that the asserted patents were valid, enforceable, and infringed by eSpeed’s old product infringed, but not willfully, and not infringed by eSpeed’s redesigned products.
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Comments:

This case involves so many issues including standard claim construction disputes. The notable issues include the willful infringement analysis.

The Federal Circuit pointed out that in In re Seagate Technology, LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc), it held that “proof of willful infringement permitting enhanced damages requires at least a showing of objective recklessness” and that the patentee must also show that “the infringer knew or should have known of this objectively high likelihood.” Slip op. at 24. Here, the Federal Circuit held that prompt redesign efforts and complete removal of infringing products suggest no objective recklessness and thus no willful infringement.

eSpeed’s prompt redesign of the products after being sued is an excellent practice that makes perfect business sense. An accused infringer, no matter how confident it is, should always hedge its bet and anticipate the potential adverse ruling. One way to do so is, if possible, to redesign the accused products. In this case, even though eSpeed lost the lawsuit, but it is actually the winner business-wise, because the outcome of this lawsuit does not negatively affect its current products and business.