from the United States District Court for the District of
Nevada in No. 07-CV-0331, Judge Philip M. Pro.
E. COUNTRYMAN, Fish & Richardson P.C., San Diego, CA for
plaintiff-appellant. Also represented by MICHAEL J. KANE,
WILLIAM WOODFORD, Minneapolis, MN.
Lee Hogge, Dentons U.S. LLP, Washington, DC, for
defendants-cross-appellants. Also represented by Shailendra
K. Maheshwari, Charles R. Bruton, Rajesh Charles Noronha.
Loueie, O'MALLEY, and HUGHES, Circuit Judges.
LOURIE, CIRCUIT JUDGE.
case has returned to us on remand from the Supreme Court of
the United States. In its earlier appearance in this court,
Halo Electronics, Inc. ("Halo") appealed from the
decisions of the United States District Court for the
District of Nevada (1) granting summary judgment that Pulse
Electronics, Inc. and Pulse Electronics Corp. (collectively,
"Pulse") did not sell or offer to sell within the
United States the accused products that Pulse manufactured,
shipped, and delivered to buyers outside the United States
and thus that Pulse did not directly infringe Halo's U.S.
Patents 5, 656, 985 ("the '985 patent"), 6,
297, 720 ("the '720 patent"), and 6, 344, 785
("the '785 patent") (collectively, "the
Halo patents") with respect to those products; and (2)
holding that, with respect to the accused products that Pulse
sold and delivered in the United States, Pulse's
infringement of the Halo patents was not willful, and thus
declining to enhance damages under 35 U.S.C. § 284.
See Halo Elecs., Inc. v. Pulse Eng'g, Inc., 810
F.Supp.2d 1173, 1205-08 (D. Nev. 2011) (sale and offer for
sale); Halo Elecs., Inc. v. Pulse Elecs., Inc., No.
2:07-CV-00331, 2013 WL 2319145, at *14-16 (D. Nev. May 28,
2013) (willfulness); Halo Elecs., Inc. v. Pulse Elecs.,
Inc., No. 2:07-CV-00331, ECF No. 523 (D. Nev. May 28,
2013) (final judgment awarding damages without enhancement).
cross-appealed from the district court's decisions (1)
construing the claim limitation "electronic surface
mount package" in the Halo patents; (2) construing the
claim limitation "contour element" in Pulse's
U.S. Patent 6, 116, 963 ("the '963 patent")
that Pulse asserted in its counterclaim; and (3) holding that
the asserted claims of the Halo patents were not invalid for
obviousness. See Halo Elecs., Inc. v. Pulse Eng'g,
Inc., 721 F.Supp.2d 989, 998-1001 (D. Nev. 2010) (claim
construction); Halo, 2013 WL 2319145, at *l-7
(obviousness); Halo Elecs., Inc. v. Pulse Elecs.,
Inc., No. 2:07-CV-00331, 2013 WL 4458754, at *1-3 (D.
Nev. Aug. 16, 2013) (obviousness).
affirmed the summary judgment of no direct infringement of
the Halo patents by the accused products that Pulse
manufactured, shipped, and delivered outside the United
States because Pulse did not sell or offer to sell those
products within the United States. Halo Elecs., Inc. v.
Pulse Elecs., Inc., 769 F.3d 1371, 1377-81 (Fed. Cir.
2014). In addition, applying the then-controlling standard
for an award of enhanced damages and the related two-part
test for willful infringement as stated in In re Seagate
Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en
banc), and its progeny, we affirmed the judgment of no
willful infringement of the Halo patents with respect to
products that were delivered in the United States and,
consequently, the district court's decision not to
enhance damages. Halo, 769 F.3d at 1381-83. On the
cross-appeal, because we found no reversible error in the
contested claim constructions, we affirmed the judgment of
direct infringement of the Halo patents with respect to
products that Pulse delivered in the United States and the
judgment of inducement with respect to products that Pulse
delivered outside the United States, but that were ultimately
imported into the United States by others, as well as the
judgment of noninfringement of Pulse's '963 patent.
Id. at 1383. We also affirmed the judgment that the
asserted claims of the Halo patents were not invalid for
parties petitioned for rehearing en banc, which this court
denied. Halo Elecs., Inc. v. Pulse Elecs., Inc., 780
F.3d 1357 (Fed. Cir. 2015). Halo then filed a petition for a
writ of certiorari in the Supreme Court. Halo's petition
presented two questions:
1. Whether the Federal Circuit erred by applying a rigid,
two-part test for enhancing patent infringement damages under
35 U.S.C. § 284, that is the same as the rigid, two-part
test this Court rejected last term in Octane Fitness, LLC
v. ICON Health & Fitness, Inc., 134 S.Ct. 1749
(2014) for imposing attorney fees under the similarly-worded
35 U.S.C. § 285.
2. Whether the Federal Circuit erred by holding that a U.S.
defendant does not "sell" or "offer to
sell" the patented invention "within the United
States" under 35 U.S.C. § 271(a), even though it
enters [into] a requirements contract with a U.S. customer
that they negotiate and execute in the U.S., that is governed
by California law, that specifies the material terms, and
that creates legally binding obligations.
for a Writ of Certiorari, at i, Halo Elecs., Inc. v.
Pulse Elecs., Inc., 579 U.S. ___, 136 S.Ct. 1923 (2016)
(No. 14-1513), 2015 WL 3878398, at *i. In addition, Pulse
filed a conditional cross-petition for a writ of certiorari
on the obviousness issue. Conditional Cross-Petition for a
Writ of Certiorari, at i, Pulse Elecs., Inc. v. Halo
Elecs., Inc., No. 15-121, 2015 WL 4550375, at *i (U.S.
July 24, 2015).
Supreme Court granted Halo's petition in part, limiting
its review to Question 1 relating to enhanced damages, and
declining to review Question 2 relating to sale and
offer-for-sale. Halo Elecs., Inc. v. Pulse Elecs.,
Inc., 577 U.S. ___, 136 S.Ct. 356 (2015). The Court also
denied Pulse's conditional cross-petition relating to
obviousness. Pulse Elecs., Inc. v. Halo Elecs.,
Inc., 577 U.S. ___, 136 S.Ct. 236(2015).
13, 2016, the Court announced its decision. Halo Elecs.,
Inc. v. Pulse Elecs., Inc., 579 U.S.___, 136 S.Ct. 1923
(2016). The Court held that Section 284 of the Patent Act
"gives district courts the discretion to award enhanced
damages ... in egregious cases of misconduct beyond typical
infringement." Id. at 1935. The Court rejected
the Seagate test as "unduly rigid" and
"impermissibly encumber [in g] the statutory grant of
discretion to district courts." Id. at 1932
(internal quotation marks omitted). Because we decided the
enhanced damages issue under the Seagate framework,
the Court vacated our decision and remanded the case for
remand, we recalled our mandate and reopened the case on July
14, 2016. Because the Supreme Court's review was limited
to the issue of enhanced damages and left undisturbed the
judgments on other issues, we reaffirm the summary judgment
of no direct infringement of the Halo patents by the accused
products that Pulse manufactured, shipped, and delivered
outside the United States, and we also reaffirm all aspects
of the cross-appeal. On those issues, we restate herein the
reasoning stated in our earlier opinion. Because the district
court applied the Seagate test in declining to
enhance damages, however, we vacate its unenhanced damages
award with respect to products that were delivered in the
United States, and remand for further proceedings consistent
with the Supreme Court's opinion on enhanced damages.
a supplier of electronic components and owns the '985,
'720, and '785 patents directed to surface mount
electronic packages containing transformers for mounting on a
printed circuit board inside electronic devices such as
computers and internet routers. The Halo patents are all
derived from an application filed on August 10, 1995. At
issue here are claims 6-8 and 16 of the '985 patent,
claims 1 and 6 of the '720 patent, and claims 40 and 48
of the '785 patent (collectively "the asserted
claims"). Claim 6 of the '985 patent is
representative and reads as follows:
6. An electronic surface mount package for mounting on a
printed circuit board in an electronic device, said
electronic surface mount package comprising: a one piece
construction package having a side wall and an open bottom,
a plurality of toroid transformers carried within said
package by a soft silicone material, said toroid transformers
each having wires wrapped thereon,
a plurality of terminal pins molded within and extending from
the bottom of said package, each of said pins extending
through a bottom of said side wall and having a notched post
upon which said wires from said transformers are wrapped and
soldered thereon, respectively.
'985 patent col. 411. 19-33.
another supplier of electronic components, designs and sells
surface mount electronic packages and manufactures those
products in Asia. Some of Pulse's products were delivered
by Pulse to customers in the United States, but the majority
of them were delivered outside the United States, for
example, to contract manufacturers for companies such as
Cisco. Those contract manufacturers incorporated the
electronic packages supplied by Pulse into end products
overseas, including internet routers manufactured for Cisco,
which were then sold and shipped to consumers around the
those products that Pulse delivered abroad, all purchase
orders were received at Pulse's sales offices abroad.
Halo, 810 F.Supp.2d at 1207. However, Pulse engaged
in pricing negotiations in the United States with companies
such as Cisco, and Pulse's employees in the United States
approved prices that its agents quoted to foreign customers
when the quoted prices fell below certain thresholds. Pulse
also engaged in other activities in the United States,
including meeting regularly with Cisco design engineers,