Copying copyright's willful infringement standard: a comparison of enhanced damages in patent law and copyright law.

• Author: Emsley, Rachel L.

"The term willful is not unique to patent law, and it has a well-established meaning in the civil context. For instance, our sister circuits have employed a recklessness standard for enhancing statutory damages for copyright infringement. Under the Copyright Act, a copyright owner can elect to receive statutory damages, and trial courts have discretion to enhance the damages, up to a statutory maximum, for willful infringement. 17 U.S.C. [section] 504(c). Although the statute does not define willful, it has consistently been defined as including reckless behavior." (1)

1. INTRODUCTION

   Federal law entitles patent holders (patentees) to compensation for losses resulting from patent infringement. (2) Courts measure a patentee's loss as lost profits attributable to the infringement or as a reasonable royalty during the infringement period. (3) Although Congress has statutorily provided for discretionary enhanced damages, a judicially created threshold requires courts to find willful infringement before awarding enhanced damages. (4) This requirement makes enhanced damages exclusively punitive and not compensatory. (5)

   Since 1983, courts have interpreted willful patent infringement as the breach of a "duty of care" that the infringer owes to the patentee, thus equating willfulness with negligence. (6) In its August 2007 Seagate (7) decision, the Court of Appeals for the Federal Circuit raised the standard for willful patent infringement from negligence to "objective recklessness." (8) The new standard makes it harder to obtain enhanced damages from a patent infringer. (9) The Seagate court justified the "objective recklessness" standard, in part, as harmonizing with the accepted meaning of willfulness in the copyright infringement context. (10)

   Although United States patent law and copyright law share an origin in the United States Constitution, these bodies of law are considerably different. (11) In particular, patent law and copyright law differ in infringement standards and, at least historically speaking, in damage award considerations. (12) This Note explores these differences to determine if, as the Seagate court suggests, patent law and copyright law should nonetheless share a willfulness standard with regard to enhanced damage awards. (13)

   This Note begins by explaining the origins and objectives of patent law and copyright law. (14) It then presents the substantive requirements of patent infringement, willful patent infringement, and the structure of patent-infringement damages. (15) In parallel, this Note presents the substantive requirements of copyright infringement, willful copyright infringement, and the structure of copyright-infringement damages. (16) It then analyzes the relevant differences between the two bodies of law and considers whether these differences should affect the meaning assigned to "willfulness," and thus the availability of enhanced damages to prevailing plaintiffs. (17) The analysis focuses on whether an "objective recklessness" standard for willfulness in patent law allows for an adequate remedy that preserves the incentive to patent inventions and effectively deters patent infringement. (18) Finally, this Note concludes that in deciding to import a standard from copyright law into patent law, courts should consider the contrasting policies and statutory structures underlying patent and copyright protection. (19) Copyright law's objective recklessness standard may not be appropriate in patent law because it can preclude patentees from recovering full compensation for infringement and it contributes to the underdeterrence of patent infringement. (20)

2. BACKGROUND

   1. Patent Law and Copyright Law: Origins and Objectives

      Congress derives its power to enact patent and copyright laws from the Constitution, which provides authorization "[t]o promote the [p]rogress of [s]cience and useful [a]rts, by securing for limited [t]imes to [a]uthors and [i]nventors the exclusive [r]ight to their respective [w]ritings and [d]iscoveries." (21) Although these limited, private monopolies benefit individuals, their primary goal is to benefit the public. (22) Patent Law has developed under the belief that the net effect of a carefully balanced patent system enables competition, fuels investment, and furthers technological development. (23) Similarly, copyright law carefully balances restraints on free speech with the underlying incentive to increase the variety of creative works. (24)

      1. Fundamentals of Patent Law

         Patent-eligible subject matter is limited to that which is useful, novel, nonobvious, and which fits into at least one of the statutory categories of a process, machine, article of manufacture, or composition of matter. (25) A patent is a publication that includes a complete disclosure from the inventor specifying how to practice his invention. (26) In exchange for the full disclosure, patent holders enjoy the right to exclude others from making, using, selling, and importing their inventions for twenty years. (27) Thus, the exclusivity granted to the patentee gives inventors an incentive to fully disclose the details of their inventions. (28) Using the disclosure as a starting point, others can improve on patented inventions and develop alternative technologies, thereby increasing the public value of the initial invention. (29) After the patent expires, the public is free to make, use, and sell the previously patent-protected invention. (30)

         Alternatively, inventors can keep their inventions secret and invoke trade secret law to maintain exclusivity. (31) Trade secret status secures potentially unlimited monopolies, but deprives the public of its benefit from the full disclosure of an invention. (32) Because trade secrets are difficult to maintain and misappropriation may be difficult to prove, the increased level of protection that patent law provides encourages inventors to patent their inventions. (33)

         Obtaining a patent can be a complex, expensive, and lengthy process. (34) An inventor must first submit to the United States Patent and Trademark Office (USPTO) an application that fully describes and defines what the inventor considers to be his invention. (35) USPTO examiners search "prior art" to evaluate the novelty and nonobviousness of an applicant's claims, and they assess the sufficiency of the applicant's disclosure. (36) Typically, examiners engage in a written dialogue with the applicant, often through an attorney or agent, and the applicant refines the claims to comport with statutory requirements. (37) This process can cost as much as $30,000, but the cost varies widely depending on attorney's fees and the subject matter's complexity. (38) Not only can the process be costly, but the time between filing a patent application and issuance of a patent can stretch to over forty-three months. (39) Once the USPTO issues the patent, courts presume its validity in view of the USPTO's examination. (40)

      2. Fundamentals of Copyright Law

         Although both patents and copyrights can protect some inventions, copyrights generally protect a different category of subject matter than patents. (41) Copyrights do not protect processes, machines, or articles of manufacture, which are the subject matters eligible for patent protection. (42) Instead, copyrights protect literary, musical, and artistic works from being copied in substantial part. (43) Copyright law aims to increase the variety of creative works available to the public. (44) This increased variety, in turn, increases the public's education and enjoyment. (45)

         A copyright owner has the exclusive right to reproduction and distribution, to public visual or audio performance, and to public display of the copyrighted work, as well as to creation of derivative works based on the copyrighted work. (46) Congress grants this "bundle of rights" to the author, or his assigns, for the duration of the author's life plus seventy years. (47) At the end of the copyright term, the public may freely engage in all of the activities previously reserved for the copyright owner. (48) Through its grant of exclusive rights, copyright law enables artists and authors to derive revenue for creative works, which the public would otherwise easily reproduce royalty free. (49)

         For a copyright to be valid, the work must be the original work of the author. (50) Originality, in the copyright context, has two prongs: the work must be an independent creation of the author, and the work must possess a de minimis amount of creativity. (51) The work must also be fixed in a tangible medium. (52)

         A copyright is valid without registration with the United States Copyright Office, but the author must register the copyright before commencing an infringement action in the courts. (53) Unlike the USPTO, the Copyright Office does not perform a substantive examination to determine a copyright's validity. (54) Copyright registration is simple and quick, requiring only that the author deposits the work with the Copyright Office along with a small fee. (55) In a copyright-infringement action, the simple registration establishes prima facie evidence of originality, but registering beyond five years from the first publication will destroy the presumption of originality. (56)

   2. Patent Infringement

      When faced with an infringement suit, defendants often attempt to demonstrate first that the patent-in-suit is invalid, and then, if it is valid, that they did not infringe. (57) A substantial number of patents are held invalid by courts despite the USPTO's pre-issuance examination. (58)

      To determine whether patent infringement has occurred, a court performs a two-step analysis. (59) First, the court construes the patent claims, which set the boundary of the patentee's rights. (60) Second, the court compares the allegedly infringing product to the patentee's construed claims. (61) Often a claim's meaning is not straightforward, and it can be difficult for a competitor to differentiate...