The Federal Circuit issued a second opinion in this matter concerning the date damages accrue and patent marking. In its first opinion from December 2017, the court vacated the jury verdict from the Southern District of Florida, finding it was premised on the district court’s erroneous judgment on marking. Marking was important in this matter, because Arctic Cat sought damages prior to the date on which it served its complaint on Bombardier. Arctic Cat argued that it should be allowed damages going back in time before the date of its complaint, because a licensee to its patents in suit (i.e., Honda) sold a product that practiced the patent in the earlier time period.
In the first round of this litigation, the district court determined that to allow defendant Bombardier to limit damages to the date the complaint was filed, it was Bombardier’s burden to show that licensee-Honda had failed to mark its practicing products with Arctic Cat’s patents. Bombardier did not meet its burden per the District Court, and thus the damages period extended prior to Arctic Cat’s serving of its complaint.
The Federal Circuit explained in its 2017 opinion that the burden of marking was on the patent-holder Arctic Cat, not the defendant Bombardier. If the patent holder seeks damages prior to notice, it must prove its licensee marked practicing product. In its 2020 opinion, the Federal Circuit reiterated its findings from December 2017 that the burden of proof for marking falls upon the patent holder, not an alleged infringer.
In this latest opinion, the Federal Circuit considered when damages should accrue based on information that Arctic Cat’s licensee, Honda, both did not mark its product and stopped selling its unmarked practicing product prior to filing of the suit. Because there were no products to mark in the year or so prior to filing of the complaint, Arctic Cat argued that damages should accrue at least from when Honda stopped selling unmarked licensed products; but possibly back six years from filing based on Bombardier’s willful infringement. The District Court for its part ruled in favor of defendant Bombardier, which Arctic appealed.
The Federal Circuit affirmed the district court’s opinion that damages do not start and stop based on sales of an unmarked practicing product. It reiterated that in order for a patent holder to collect damages prior to notice, where a product practicing the patent(s) in suit is sold, that product must be marked. If a practicing product is sold but unmarked at any point in time, then the patent holder cannot seek damages prior to notice to the alleged infringer. The court also held that a finding of willfulness is irrelevant to when damages begin to accrue.
