Case 6:12-cv-00855-RWS Document 494 Filed 06/13/16 Page 1 of 4 PageID #: 36481

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS
TYLER DIVISION
VIRNETX INC. AND
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
Plaintiffs,
v.
APPLE INC.,

Civil Action No. 6:12-cv-855-RWS

LEAD CONSOLIDATED CASE

JURY TRIAL DEMANDED

Defendant.

VIRNETXS NOTICE OF NEW SUPREME COURT AUTHORITY REGARDING

VIRNETXS REQUEST FOR ENHANCED DAMAGES PURSUANT TO 35 U.S.C. 284
On June 13, 2016after briefing on VirnetXs request for enhanced damages had closed
and the motion had been arguedthe Supreme Court decided Halo Electronics, Inc. v. Pulse
Electronics, Inc., et al., which is attached as Exhibit A. In that opinion, the Supreme Court
overturned the Federal Circuits holding in In re Seagate Technology requiring patentees to
prove, by clear and convincing evidence, that an infringer acted with objective recklessness as a
prerequisite for enhancement. Writing for a unanimous Court, Chief Justice Roberts stated:
Section 284 allows district courts to punish the full range of culpable
behavior. Yet none of this is to say that enhanced damages must follow a
finding of egregious misconduct. As with any exercise of discretion,
courts should continue to take into account the particular circumstances of
each case in deciding whether to award damages, and in what amount.
Section 284 permits district courts to exercise their discretion in a manner
free from the inelastic constraints of the Seagate test.
Slip Op. at 11. Thus, the objective prong of Seagate is no longer a requirement for enhancement.
Moreover, a patentee must only prove that enhancement is warranted by a preponderance of the
evidence. Id. at 12.
In holding that the Seagate test is unduly rigid, and impermissibly encumbers the
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statutory grant of discretion to district courts, Id. at 9, the Supreme Court in Halo explicitly
ruled that [t]he subjective willfulness of a patent infringer, intentional or knowing, may warrant
enhanced damages, without regard to whether his infringement was objectively reckless. Id. at
10. No longer can an infringer argue that it is insulated from enhancement solely on the
strength of [its] attorneys ingenuity, because culpability is generally measured at the time of
the challenged conduct, thus eliminating any defenses of which a defendant was not aware at
the time of infringement. Id.
Finally, Section 284 allows district courts to punish the full range of culpable behavior,
not only where there has been finding of willfulness. Id. at 11. (But to be sure, enhancement
should generally be reserved for egregious cases typified by willful misconduct. Id. at 11.)
Circumstances in which enhancement is warranted may include cases where an infringer has
behaved in a willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, [or]
flagrant manner. Id. at 8. Accordingly, because the Court is now free from the inelastic
constraints of the Seagate test, whether and how much damages should be enhanced is to be
decided by tak[ing] into account the particular circumstances of each case. Id. at 11.

Case 6:12-cv-00855-RWS Document 494 Filed 06/13/16 Page 3 of 4 PageID #: 36483

Dated: June 13, 2016.

Respectfully submitted,
CALDWELL CASSADY & CURRY

Bradley W. Caldwell
Texas State Bar No. 24040630
Email: bcaldwell@caldwellcc.com
Jason D. Cassady
Texas State Bar No. 24045625
Email: jcassady@caldwellcc.com
John Austin Curry
Texas State Bar No. 24059636
Email: acurry@caldwellcc.com
Daniel R. Pearson
Texas State Bar No. 24070398
Email: dpearson@caldwellcc.com
Hamad M. Hamad
Texas State Bar No. 24061268
Email: hhamad@caldwellcc.com
Justin T. Nemunaitis
Texas State Bar No. 24065815
Email: jnemunaitis@caldwellcc.com
Christopher S. Stewart
Texas State Bar No. 24079399
Email: cstewart@caldwellcc.com
John F. Summers
Texas State Bar No. 24079417
Email: jsummers@caldwellcc.com
Jason S. McManis
Texas State Bar No. 24088032
Email: jmcmanis@caldwellcc.com
Warren J. McCarty, III
Illinois State Bar No. 6313452
Email: wmccarty@caldwellcc.com
CALDWELL CASSADY CURRY P.C.
2101 Cedar Springs Road, Suite 1000
Dallas, Texas 75201
Telephone: (214) 888-4848
Facsimile: (214) 888-4849
Robert M. Parker
Texas State Bar No. 15498000
Email: rmparker@pbatylor.com
R. Christopher Bunt
Texas State Bar No. 00787165
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Case 6:12-cv-00855-RWS Document 494 Filed 06/13/16 Page 4 of 4 PageID #: 36484

Email: rcbunt@pbatyler.com
PARKER, BUNT & AINSWORTH, P.C.
100 East Ferguson, Suite 1114
Tyler, Texas 75702
Telephone: (903) 531-3535
Telecopier: (903) 533-9687
T. John Ward, Jr.
Texas State Bar No. 00794818
Email: jw@wsfirm.com
Claire Abernathy Henry
Texas State Bar No. 24053063
Email: claire@wsfirm.com
WARD, SMITH & HILL, PLLC
P.O. Box 1231
1127 Judson Road, Suite 220
Longview, Texas 75606
Telephone: (903) 757-6400
Facsimile: (903) 757-2323
ATTORNEYS FOR PLAINTIFF
VIRNETX INC.

CERTIFICATE OF SERVICE

The undersigned certifies that the foregoing document was filed electronically in
compliance with Local Rule CV-5(a) on June 13, 2016. As such, this document was served on all
counsel who are deemed to have consented to electronic service. Local Rule CV-5(a)(3)(A).

/s/ Bradley W. Caldwell

Bradley W. Caldwell