Legal Case Summary

. And here's some of the principles that historically guided your exercise of discretion. But I don't think you have to do that, Justice Alito. I think you could. Why is the nature of the infringement so determinative under your view? Yes, they copied it, but perhaps they had a good faith belief that this wasn't patented. So the fact that they copied it doesn't seem to me to automatically make it something which is suitable for sanctions. So the products here were marked, I mean, they were marked as patented, but I take your point, Mr. Chief Justice, and I think they could have had a good faith belief that the patent wasn't valid. Sure. And that's exactly historically how the cases played out, and it's how they should play out once this court takes care of C-gate, which is both parties come at the enhancement stage. Most of the evidence has come in on infringement or liability or damages. And the patentee will say, you copied a patented product and haven't shown any evidence that you had a reasonable belief in invalidity. And the defendant, if the patentee is carried its burden will say, no, I did some investigation. I thought I wasn't infringing or thought it was invalid. And the district court will make a judgment call faced with those competing narratives about what the right answer is based on the facts. Our point is that that judgment call that district courts were making for a very long time has essentially been stripped from them because it no longer matters, even if you acted intentionally at the time, as Zimmer did. What the Federal Circuit says is, if you can hire good lawyers and come up with defenses in litigation, you'll be off the hook. And as Justice Breyer pointed out in the octane litigation, and I now know it's true from preparing for this case, you can, a patent lawyer can virtually always come up with some non-frivolous defense in litigation, and that's why, in effect, what you have is almost a per se bar. Now, maybe this is my question on this. The statute doesn't say anything. The statute just says, in either event, the court may increase the damages up to three times the amount found or assessed. I don't get too much guidance from that. Let me assume against you, assume against you, that the history does not favor the history in CIS upon willful. Let me assume with you that there isn't good ground for clear and convincing. Nothing suggests that. But now, the hardest part for me, and it is hard, I don't have a clear answer, is there are indeed some preliminary in tests. If, for example, the patentee has a flaw in his patent, not enough to kill it, but enough to make it pretty uncertain, a weak patent, there are all kinds of things wrong with it. No willfulness damages. Irrespective, almost of the state of mind of the infringer

. What could be said for that? You've read their excellent briefs on both sides, and you know perfectly well what can be said for that. And if I summarize it, and that's what I want your answer to, today's patent world is not a steam engine world. We have decided to patent tens of thousands of software products and similar things, where hardly anyone knows what the patent is really about. A company that it's a startup, a small company, once it gets a letter, cannot afford to pay $10,000 to $100,000 for a letter from Council, and may be willing to run its chances. You start saying, little company, you must pay $10,000 to $100,000 to get a letter, lest you get willful damages against you, sure your bet be wrong. We have one more path leading us to national monopoly by Google and Yahoo or their equivalent. And the patent statute is not designed to create monopolies throughout the United States. It's designed to help the small business man not to hurt him. So leave those words for interpretation to the expert court, and in this area it may well be the Federal Circuit. And if I stated the argument pretty much the way it is, or if I have, I would like your response to it. I think you have stated the best possible version of respondents argument. I'm happy with your assumptions, the PTO embraces them, and we are not living in a steam engine world. It's a high bar to carry, and I don't think patenties are often going to be able to do it. And what you rightly said, I think that is what respondents have, that's been their strategy in this court. It's not just their strategy. We have all kinds of amicus briefs that say, that's the truth. And indeed, thousands and thousands and thousands of small businessmen are trying to break into businesses that they just can't do without software. And when you have tens or hundreds of thousands of patents on software by other companies, that means we can't break in. Just as far as the sky didn't fall for a century and a half, and it's not going to fall if you reverse the Federal Circuit's framework, just as it didn't fall after Octane and Highmark in the fees context. You've got to show as a patentee. You've got to show as a patentee. It hasn't fallen. Go look at the market chairs of the different companies that are seriously involved in this all. Just as far as showing intent or recklessness based on the facts of the time is not going to be easy, the intent box is copying patented products. And I don't think we have a lot of dispute that where people are copying patented products in the absence of a reasonable belief in invalidity. It doesn't matter whether they're making software. Okay, then are you satisfied with this? You just use the word that might help. Reasonable belief

. We say that where a company is small, where it is small, and wants to run the risk, follow the Fed Circuit rule. In order to show willfulness, because it's reasonable, in order to show willfulness, you have to show that that infringer not only didn't know it was flawlessly, but also it was a big company that was pretty used to getting these lawyers' opinions and also pretty used to asking their own experts whether it really was a good patent or not. And they didn't do it here. What about something like that? Just spray, we tried in our opening brief to embrace the full totality of circumstances, including the strength of the patent, the kind of notice, what's commercially reasonable in the industry, the one point I just want to make, because I think it's very important, is to get into the recklessness box at common law and traditionally, you had to show an objectively high risk. So as a patentee, you've got to show to the judge not just that infringement occurred, but that a reasonable person looking at it would have said, there is a very high risk that what I am doing is unlawful because it trenches on someone else's valid patent. That's a pretty high bar. You're not going to be able to satisfy that. You shouldn't be able to satisfy that in a lot of cases. I think the strength of the PTO's argument is when you can show that, the district court should be able to make a judgment called about enhancement, and the fact that it can't show you that you've really skewed the incentives because on the other side of the parade of horribles you're worried about are the people who can infringe knowing that they can discount by the probability that they'll be found to have infringed in litigation with virtually no back end penalty, even if they were a very bad infringer, as a number of us here. Let me how you articulate this. And I ask because the S.G. is talking about describing it as egregious conduct. You're saying something about willfulness and recklessness. I don't know if this is all a matter of semantics, but I think the S.G. is right. Even if you give discretion to the district courts to make a judgment of when to enhance penalties. We have to give them some guidance. It can't be that they can give enhanced penalties on whim. That's right. All right. So if it's not whim, what is it? How do we articulate a test that protects what Justice Breyer is concerned about, which I think is a legitimate concern, but doesn't entrench a person who is not a position that just favors you? No, and by that I mean, you know, I think there's a little bit of daylight between us and the government in the sense that we think the statute was invoked for various purposes and not just a punish infringement, but to the extent that you invoke the statute to punish infringement, I think there is no daylight between our position and the government. So how do I think what the Justice Breyer is saying? The guidance is, in the lion's share of cases, what the parties are really debating is the nature of the infringement. That needs to be intentional or reckless based on the facts as they were known to the infringer, and as part of whether the infringer is acting to be. It's a retest to understand, life is more complex than that, okay? Because you can often use the conduct of someone after the time to reflect what they thought. And so if you're seeing that someone is withholding information, you might be able to infer that they wasn't good faith at the beginning. So your articulation doesn't really give life to the complexity of this inquiry

. So, and to add then a little more, I think what you ought to be taking into account is, for instance, the strength of the notice. Some of these letters are just form letters. They really are nothing more than a license. This is all the read corporation factors that the district court here did in the strike okay. I think that's right. I think some of them will matter more than others, but some claim letters are very fulsome. I don't want to adopt that test. How do I articulate this in a more generalized way? I think what you would say is that in judging whether a reasonable person would have thought that there was a really high risk, you've got to take account of both the strength of the notice. What kind of notice were they on of the patent? And what would have been commercially reasonable in the industry as it exists? And I think that those factors and those limitations are going to take account of the vast bulk of what Justice Breyer and what respondents are concerned about. Our courts kind of be able to assess the state of mind of the infringer at the time of the infringer's conduct without getting into communications with the companies' attorneys. Yes, Justice Alito. And they did historically. And I mean, I would point the court to a case like Consolidated Rubber and Judge Lerner in Hand's opinion. He said, look, you know, the patent was opened a doubt for a period of time, and so no enhancement. But at some point, here, the facts changed and the infringer knew about them. It reasonably should have known that patent was valid. We start the enhancement running, and then we get some misconduct on the back end like we had in this case. And so he says, I'm rolling it all in. This was more than negligent. And here's the enhancement I'm going to get. So, so you've had the case where at the time when the question of enhanced damages is decided, the judge can see that the defense was able to, I mean, with the help of good lawyers, was able to put on an objectively reasonable, although unsuccessful defense. How are you going to be able to show that the infringer did not have that same information at the time of the conduct in question? Well, I think in the typical, the intent cases are fairly easy because they're generally copying. I think in the typical recklessness case, the infringer will come in and say, here's the full sum claim letter I sent you. It's actually got a claim chart. It maps on the infringement to the patent. I reached out to you. You never responded, and you continue to infringe. And I think at that point then, the defendant has got to say, okay, I did something, but it doesn't talk into a lawyer

. I talked to my engineers. I looked at the claim, the specifications in the patent. You're limited to devices with four wheels, and I have three. I think there are lots of things that are commercially reasonable depending on the circumstances. And I honestly do think if you go back and look through the cases historically, that's what good judges and courts were doing for a very long time, for the federal circuit essentially stripped discretion from them. And having taken the bar too low and underwater devices over compensated in C gate, we think the bar ought to be high. We just don't think it ought to be arbitrarily high as it is now. Like the reserve of the random time. Thank you, Council. Mr. Martinez? Mr. Chief Justice, and may it please the court, we agree with the federal circuit, and with all the parties to this case, that mere negligence is not enough to trigger enhanced damages. But the federal circuit is wrong to categorically bar such damages whenever an infringer presents an objectively reasonable defense at trial. That rule creates an arbitrary loophole that allows some of the most egregious infringers to escape enhanced damages. We should close that. The enhanced damages that we're discussing are really almost entirely punitive if the octane standard for attorney's fees remains in effect. In other words, the octane standard gives a judge much more latitude to impose to award attorney's fees when there's been a necessary resistance. So all we're talking about is punitive damage. And you want to just basically dismantle the willfulness of structure of the court of appeals to establish? Is that correct? No. I think that's not correct. I think the federal circuit, in our view, took the law in a good direction or a better direction when it reversed its underwater devices standard, which it said was akin to negligence, and it tried to tighten the law versus about willfulness up to make it harder to get enhanced damages. We think that was a step in the right direction, but we think that they made two important mistakes when they did that. The first one is essentially that they said that in a case where you have subjective intent, that internet of itself is not enough to establish a case for enhanced damages. Essentially, you have to prove recklessness under an objective standard in each and every case. We don't think that's consistent with the history of the statute, with the purpose of the statute, with the way punitive damages have always been considered with the way willfulness has always been interpreted. We think that's wrong. The second mistake we think that the federal circuit made is with respect to how the recklessness inquiry is supposed to happen. Recklessness, everyone agrees, is an objective inquiry

. In every other area of law where courts are conducting an objective inquiry, what you're supposed to do is you're supposed to take a reasonable man and you put him in the actual person who is accused of wrongdoing in his shoes. And you take what that actual person knew and you figure out whether a reasonable man in that person's shoes would have thought that there was a very high risk that the conduct that issue was unlawful. And what the federal circuit does is not that. What they are essentially doing is taking the reasonable man and giving him the benefit of omniscience, giving him the benefit of hindsight and saying what facts do we know at the time of trial? And now that we know these facts at the time of trial, should we retroactively sort of undo the time? I didn't think they were doing that. I thought what they were doing was saying we are not going to allow punitive damages in a case where the patent is so weak. And so we're really not looking at State of mind. And the reason that we're doing that is the reason I said previously. And the reason that we're not leaving it up to 475 trial judges is because those 475 trial judges don't see patent cases very much. And where they have a pretty good idea of how employment law, tort law, and all kinds of other law works. They don't have that a good idea in respect to patent law. And we, the federal circuit, do. That's why we are created. And we are afraid that if we do not use this objective standard, what we will see is a major effect, discouraging invention because of fear, that if we try to invent, we'll get one of these letters and we can't afford $100,000 for an opinion. Now, I've just repeated the same argument, but we did create the government, that expert court, to make such determinations in the face of language that seems to allow it. And so what is wrong with their doing what they were paid to do? I think there are a couple things that are wrong with that. Because I think the first thing that they're paid to do is to look to the text and history of the statute. And the text is, as you said, doesn't provide a categorical silence. So it doesn't provide the kind of categorical bar that the federal circuit is asking for. And the history of the statute affirmatively undermines that categorical bar. Because the history makes clear that subjective bad intent, the wanton and malicious pirate that this court talked about in the Seymour case, that is a sufficient basis to enhance damages. With respect to the recklessness standard, the fact that recklessness is objective, we all agree with that. But there's no reason to conduct the objective analysis in a different way in this context from the way that it's conducted in every other context. And imagine a police search. A police search? Yes, but I just gave you the reason. Now, now you can say that you don't agree with that reason and give me a reason wrong, but just to say it's no reason is disturbing. Well, I think that the reason you gave is that I think of a concern that we share, which is that we think it's important in cases where a patent is of questionable validity. We think it's important to encourage people in certain cases to challenge the patent or to make sure that innovation is not being stifled. And we think that the ordinary standard test for recklessness and our test accommodates that concern because it would treat a reasonable good faith belief that a patent is invalid or that infringement is not occurring as a reason to conclude that enhanced damages are off the table

. So as I read your brief and the Petitioner's brief, I got the sense that there was quite a bit of difference between the two. The government seems to be taking a much higher standard before these punitive damages or however you want to describe them would be allowed. You use terms like egregious a lot. Your friend uses terms like, you know, intentional more than mere negligence. So is that an exception? Do you think that perception is inaccurate? I think there's some minor differences. Let me explain how I see our standard and maybe what the differences are. We think our standard covers three different buckets of cases. The first bucket, and this is borne out by the history, the first bucket of cases in which there's intentional conduct or bad faith conduct under a subjective standard, a subjective analysis. That's bucket number one. Just of her one brief moment, by intentional, you mean intentional infringement, not intentional. No, intentional conduct by a person who believes that he is infringing a valid patent. In other words, if you have a good faith belief that the patent is not valid and that believes reasonable, we don't think you're an intentional infringer. The second bucket covers recklessness cases and we all agree that recklessness is judged by an objective standard where we disagree with the other side as we think it's judged based on the facts and the circumstances that are known to the actual infringer at the time of infringement. And then the third bucket that we think would qualify for enhanced damages or cases involving other types of egregious misconduct not having to do with the infringement itself. For example, if there's corporate espionage, if one of the parties destroyed evidence. I think the difference between us and petitioners is very minor. I think they would also allow enhanced damages for certain purely compensatory purposes, even when a case did not fall into the other three buckets. We can have an interesting historical discussion about whether or not that basis for damages is warranted or not. I don't think the Court needs to resolve that in this case because it's not presented. But we do think our test is limited to those three buckets. Essentially, intentional conduct, reckless conduct, and other types of egregious litigation misconduct. We think that that test is a- Excuse me. That avoids the use of the word will fall. Right. And I think we think there is- There is a sort of semantic element to this case. I think if you wanted to use that, those three buckets to encompass willfulness, I think we wouldn't stand in the way of that. I think the problem that we see with what the respondents are trying to do is that they're looking to the history, the pre-1952 cases, and they're taking the word willful out of that. They're plucking that word out, and then they're defining it in a way that's at odds with the way in which willfulness or the way in which the standard was applied before 1952

. We think if history is the justification for imposing a willfulness requirement in the first place, history has to provide the guide for interpreting what willfulness means or what the standard is. And I think that one of the ironies of the respondents' position is that they agree that this statute is Section 284 is trying to get at culpable infringers. It's- the touchstone is culpability. And they agree that recklessness is culpable enough to get you into enhanced damages world. And yet everyone agrees, everyone in the civil law and the criminal law intentional misconduct has always been considered worse than reckless conduct. And yet their test would allow a class of intentional infringers to essentially get out of jail free based on their ability to hire a lawyer and come up with a post-hoc defense and present that defense. Why is it not- Why isn't that post-hoc defense necessarily- you're almost reading it is unreasonable by definition? I think it's possible to imagine- let me make it concrete. Imagine a case in which there's intentional violation or a reckless violation based on the facts known at the time. And later the person is sued, the infringer is sued, and he hires a law firm that scours the world. And they find the library in Germany that has a PhD dissertation that has some patents that arguably anticipated the invention at issue. So that's a new fact. It wasn't- anyone's head, no one was aware of it at the time the infringement occurred. And maybe that law firm then puts together a reasonable but wrong theory under which the patent is invalid in light of that prior art. We think that's a case in which the- the conduct was culpable at the time of infringement. And we think that's a case that would warrant and hand-hand damages. Justice Kagan, did you have a question? Kagan, can I ask a- if you were doing this just on policy, very odd, but you know, we have a text that everybody's off of at this point and- and- and maybe some view that what happened in 1952 for some of the reasons the Justice Breyer gave is perhaps not the most relevant thing. If you were doing a just on policy, would you come up with this same test? Yes, we would and the PTO would. We think that the- the policy concern that Congress had in mind of ensuring deterrence and punishment is outweighs some of the considerations that have been raised by Justice Breyer and others. As long as we realize that- as long as you have a good faith and reasonable defense, that will be a defense to liability. And as long as we realize that you need to have the kind of intentional or reckless conduct, that you know, it's a very high standard. If- if- you need to have that kind of conduct in order to warrant enhanced damages. Thank you, Council. Mr. Phillips, thank you, Mr. Chief Justice, and may it please the Court before I get into the substance of my argument. At one point, it seems to me to cry out at least in response to the characterizations by my friend, Mr. Wall, where he repeatedly described Zimmer's conduct as copying the invention in this case. What- what the Zimmer Corporation copied was the product itself

. The patent wasn't released or issued until two years after that initial copying. There is nothing inherently wrong with finding that a competitor has built a new product, not know anything about the patents or any patent ability, no evidence of any patents. And think you're going to copy it. I thought he said- I'm sorry? I thought he said the product was marked. And after 2000, it was marked, but the- but the actions taken by Zimmer at the time were 1998, two years before the patent even issued. I just want to clarify that. I also want to go back to the point that- They had been- they had been a patent application, no. Right, but there was no evidence whatsoever that Zimmer at that time had any knowledge of anything in the patent- in the- Sorry, it doesn't the- doesn't the statute exempt out enhanced damages for pending applications? Yes, it does. And so- So why are you here if you're- No, no, no. All I'm suggesting is that- that it's a mischaracterization of the facts to say that this involves purely copying beginning from the very outset of the process. That's not to say that there couldn't be an argument somewhere along the line that they- that there might have been an argument of willfulness, but this is not a classic copying case. I mean, a lot of ways this case comes down to sort of trolls versus pirates in terms of how you want to analyze it. And our view is- and- and- and I thought the example that the solicitor general's office just offered you tells you everything you should know about this. His criticism is that a good lawyer is hired and goes off in searches in the German libraries and finds some basis upon which to challenge legitimately the validity of that patent. Now, if- it had turned out that those German sources, they had in fact demonstrated that that patent was invalid. The position of the world would be that's great, because this patent should be declared invalid, and the monopoly that attaches to it should be declared null and void and unenforceable. The fact that they found it and it turns out not to get you over the hump shouldn't be by any stretch of the imagination lead to a standard of the law that discourages us from going out and trying to find both the limits of the meets and bounds of the patent itself as defined by the patent holder and to challenge the validity of those patents under all circumstances. And Justice Breyer, I mean, that goes to the core point that you were making. We're not talking about a situation here where it's obvious when something is infringed. There are thousands of patents, hundreds of thousands of patents. There are lots of entities creating new products every day, new services, if you want to go beyond the products in the patent law. And I mean, I mean, my empirical information, haha, I put it, laughs at least, is coming out of the briefs which you do have to admit has an interest. The, the, the, the, but I have assumed, and is there stuff that I could look at that back this up, that in a world of patent and copyright protection, I think it's unfortunate that Congress hasn't passed a special regime for those kinds of patents, but they have. In that such, in that a world like that, we're seeing more and more companies that have more and more and continuously more patents. And if all that happens is you send a letter to somebody who has something that's trying to break into the industry and they don't have enough money to hire many lawyers, that becomes a serious barrier. And that the government's rule in your view and the opponent's rule in your view will raise those barriers to entry. Now, that's a very elementary kind of assumption. And I do admit it's supported by the briefs on your side

. And is there anything you would refer me to that would suggest that maybe I have a point and your briefs have a point? Well, the briefs that I thought were particularly effective Justice Breyer or the Amicus Brief of Public Knowledge and the- Yes, of course. I've looked through them and I understand that they're effective. I just feel a little bit more comfortable when I could read something that isn't participating in the litigation. And it too bears out this view. Well, Professor Lemley has written on his subject repeatedly and- Lemley has also said quite a lot that he's worried about the lawyers coming in and inventing various things that make the patent look weak after the event. You see, he's not totally with you on this. Right, but there are two separate issues here. So I'll take those in turn. The first one is, is there empirical evidence that there is a significant amount of activity out there in which patents are asserted in more or less specific ways? You'll recall the example given by my friend was you receive a letter that identifies the precise claims, identifies exactly how you infringe it and it's ignored. Well, I can assure you that is not the standard letter and that's not the kind of letters that are involved in this case. The letter we got said we have patents, would you like to- would you like to pay a royalty for those patents? It didn't identify the claims, it didn't tell us anything about them. We handed them to an engineer, the engineer looked at them, said it looks the same as the product. We're already producing, put it aside. We went forward with it and we find out later we- Is there a way of compromising this in this way, say to the circuit, we see your point, okay? And by and large we accept it. But there can be very big companies that make a habit of getting those letters and giving the things to engineers as we saw right now in this case. And we're something like that goes on normally. Then a refusal deliberately to do it for fear it comes back with the wrong answer. Or you do do it and you get the wrong answer and you go ahead anyway. That may be worth willful damages even though in fact there was a slight flaw with this patent. Justice Breyer- And about that, giving them some leeway around the edges. Justice Breyer, I understand the desire to always be in a position where you can sort of catch that one party that's out there and I think the real issue there is twofold. One is, is it worth the candle to go, I mean, you really need to go find the circuit- The circuit's already decided, I think this is- Why have they had that squarely facing them where they had, and they did, did they have that issue? I mean they had the facts in this case where if you accept obviously the plaintiff's version of it, there was a fair amount of him for it. And your other one, we just about to make a second point. Do you remember? You see if it wasn't thing it's easy, it was a good point too. I always appreciate it when you anticipate I'm going to make a good point before I make good point. But, Mr. Phillips, I- There's a whole lot of worry articulated by Justice Breyer and reflected in your briefs about protecting innovation. Yes, Your Honor. But there's not a whole lot of worry about protecting the patent owner. I can't forget that historically enhanced damages were automatic. And they were automatic because of a policy judgment that owning a patent entitled due to not have people in fringe willfully or not willfully. And I accept that at some point there was a different judgment made that good faith in fringers should be treated differently than other infringers, willful infringers. But I don't know that that's swung thing so far the other way that it can only be that if you come up with something any defense whatsoever in a litigation, that's not frivolous, that that gets you out of enhanced damages. Let me just say, I'm there. I'm there. And I don't think that the C-gate test is appropriate, but I am still in the balance of how do we get a similar protection without an artificial test that I don't think is right. Where do I go? Well, let me at least correct one portion of the statement because you said enough to put forward that it's not frivolous. I don't think that's the appropriate standard. Objective reasonableness is the requirement that the Federal Circuit has looked at. And I think that's more than simply the ability to satisfy rule 11. I think there has to be a substantial defense. And substantial defenses were put forward in both of these cases. Indeed, these were both instances close cases. So I would hope that that's where the Court would focus its attention. The Court thought differently in the second case. Right. But again, I think it's important to look at the way the Court of Appeals analyzed it. And the reality is, I think if you stand, it's the reason why you have to have an experienced an expert Court of Appeals looking at these issues on an objective, on an, on the basis of an objective analysis. Because they're the ones who have seen these kinds of claim construction issues, have seen these kinds of infringement issues, are in the best position to be able to say this is objectively reasonable and therefore not something on which enhanced damages should be added. What I think it's important to put in context is you're going through the history of this, is again, to look at the difference between Section 284 as it evolved and the, and the meaning of Section 285. I mean, this Court last term said Section 285 has now, has now, not essentially or effectively has completely made the enhanced damages purely punitive because every other piece of conduct goes into the portion that talks about whether you get the attorney's fees. That's what makes an extraordinary case, yes, Your Honor. I'm sorry. We are after dealing with statutory language. I'm not sure it's been quoted yet. It says, the Court may increase the damages up to three times the amount found or assessed period

. But there's not a whole lot of worry about protecting the patent owner. I can't forget that historically enhanced damages were automatic. And they were automatic because of a policy judgment that owning a patent entitled due to not have people in fringe willfully or not willfully. And I accept that at some point there was a different judgment made that good faith in fringers should be treated differently than other infringers, willful infringers. But I don't know that that's swung thing so far the other way that it can only be that if you come up with something any defense whatsoever in a litigation, that's not frivolous, that that gets you out of enhanced damages. Let me just say, I'm there. I'm there. And I don't think that the C-gate test is appropriate, but I am still in the balance of how do we get a similar protection without an artificial test that I don't think is right. Where do I go? Well, let me at least correct one portion of the statement because you said enough to put forward that it's not frivolous. I don't think that's the appropriate standard. Objective reasonableness is the requirement that the Federal Circuit has looked at. And I think that's more than simply the ability to satisfy rule 11. I think there has to be a substantial defense. And substantial defenses were put forward in both of these cases. Indeed, these were both instances close cases. So I would hope that that's where the Court would focus its attention. The Court thought differently in the second case. Right. But again, I think it's important to look at the way the Court of Appeals analyzed it. And the reality is, I think if you stand, it's the reason why you have to have an experienced an expert Court of Appeals looking at these issues on an objective, on an, on the basis of an objective analysis. Because they're the ones who have seen these kinds of claim construction issues, have seen these kinds of infringement issues, are in the best position to be able to say this is objectively reasonable and therefore not something on which enhanced damages should be added. What I think it's important to put in context is you're going through the history of this, is again, to look at the difference between Section 284 as it evolved and the, and the meaning of Section 285. I mean, this Court last term said Section 285 has now, has now, not essentially or effectively has completely made the enhanced damages purely punitive because every other piece of conduct goes into the portion that talks about whether you get the attorney's fees. That's what makes an extraordinary case, yes, Your Honor. I'm sorry. We are after dealing with statutory language. I'm not sure it's been quoted yet. It says, the Court may increase the damages up to three times the amount found or assessed period. Right. And yet the Federal Circuit Standard, you've got, you know, you've got a heightened burdens of proof, particularly articulated. I mean, the way, the courts have been used to dealing with discretionary standards for a long time. And the way it works is historically, you know, the exercise of discretion in a lot of cases, you know, wears a channel which kind of confines the exercise of discretion. I think the other side's argument is based on that history. Right. Over time, this is what discretion has given us in this area. And therefore, you get beyond that. It's an abuse. But to erect this fairly elaborate standard on the basis of that language, I think, is surprising. I understand that. And that's why I think you have to take it one step at a time. For as long, you quoted one portion of the language of 284. The portion that I focus on, particularly, is the, so you begin with damages adequate to compensate for the infringement. So the 284 is now, you know, and since 1952 has been focused exclusively on the infringement. It's not any other kind of ancillary conduct. It's only enhanced damages for the infringement, because those are the only damages, you know, that those damages are one and the same. Then you get to the point where Seagate says, if we don't have a strong enough standard of recklessness and willfulness and an objective standard that can be examined by us independently, the downside risks and the harm to the economy is very substantial. There have been, there are huge numbers of these letters being sent, litigation, excuse every aspect of it. And then Congress comes back in the American Invent Act. And through the process leading up to the American Invent Act, Seagate comes into being. And the Federal Circuit takes a very hard look at it. Congress looks at that and says, we're not going to change Section 284, because in light of Seagate, that willfulness standard, which is the standard the Court was very explicit about, that helps solve the problem that all of us have been concerned about. The Congress didn't just leave it at where you have to infer this from silence or inaction by Congress. Congress passes Section 298. And in Section 298 it talks about opinions of counsel and what role they play in the willfulness determination. It seems to me in order to give Section 298 any significant meaning, you have to have concluded, then, that 284 necessarily incorporates a standard of willfulness. Even though, obviously, it's not in the language, but test

. Right. And yet the Federal Circuit Standard, you've got, you know, you've got a heightened burdens of proof, particularly articulated. I mean, the way, the courts have been used to dealing with discretionary standards for a long time. And the way it works is historically, you know, the exercise of discretion in a lot of cases, you know, wears a channel which kind of confines the exercise of discretion. I think the other side's argument is based on that history. Right. Over time, this is what discretion has given us in this area. And therefore, you get beyond that. It's an abuse. But to erect this fairly elaborate standard on the basis of that language, I think, is surprising. I understand that. And that's why I think you have to take it one step at a time. For as long, you quoted one portion of the language of 284. The portion that I focus on, particularly, is the, so you begin with damages adequate to compensate for the infringement. So the 284 is now, you know, and since 1952 has been focused exclusively on the infringement. It's not any other kind of ancillary conduct. It's only enhanced damages for the infringement, because those are the only damages, you know, that those damages are one and the same. Then you get to the point where Seagate says, if we don't have a strong enough standard of recklessness and willfulness and an objective standard that can be examined by us independently, the downside risks and the harm to the economy is very substantial. There have been, there are huge numbers of these letters being sent, litigation, excuse every aspect of it. And then Congress comes back in the American Invent Act. And through the process leading up to the American Invent Act, Seagate comes into being. And the Federal Circuit takes a very hard look at it. Congress looks at that and says, we're not going to change Section 284, because in light of Seagate, that willfulness standard, which is the standard the Court was very explicit about, that helps solve the problem that all of us have been concerned about. The Congress didn't just leave it at where you have to infer this from silence or inaction by Congress. Congress passes Section 298. And in Section 298 it talks about opinions of counsel and what role they play in the willfulness determination. It seems to me in order to give Section 298 any significant meaning, you have to have concluded, then, that 284 necessarily incorporates a standard of willfulness. Even though, obviously, it's not in the language, but test. Kagan, I don't know how far that gets you, Mr. Phillips, because Mr. Martinez just told us that he'd be happy to call willfulness his test. And willfulness has meant different things to different people here. Yes. And there's nothing that Congress did that suggests that when it used that word willfulness, it really meant the Seagate test. Well, the only test in front of it at the point, at that point in time, was Seagate, because Seagate was the definition of what 284 was about and what the standard of willfulness was about. But I think what's equally important, Justice Kagan, is I'll concede that willfulness can have a lot of different meanings. But the meaning that the Seagate court adopted was the meaning this court adopted in safe co. And it's interesting, because my friends did not say the word safe co at all in there, 25 minutes of presentation. But, and this is why it's not such a big jump, Mr. Chief Justice, because what Seagate said is, what's the best source for trying to come up with a sensible way of applying willfulness? And they looked at safe co. And they said, you know, the best way to do it is with a recklessness standard, that's an objective determination. And the fact that there may be subjective bad, bad intent is off the table. I mean, that's footnote 20 of the safe co opinion. And the court said, that's the best way to enforce this statute. So we at least feel of the clear and convincing evidence, who seems to come out of nowhere. And that the standard is they know-of-review rather than abusive discretion? I would desperately ask you not to take out the no-of-o review, because we're talking about an objective standard. It's really almost, it's essentially a question of law. The issue is that it's an objectively reasonable basis for what's been done here. Don't believe that's a standard that's been asked for, actually. How about the opinion evidence you can? Well, the clear and convincing standard, I don't think is, is particularly relevant to how this case got decided. Because at the end of the day, it's not because it was clear and convincing. At the end of the day, it was because there was objectively reasonable defenses that were put forward in both of these cases. In a proper case, obviously, you'd have to fight that fight. The only thing I can say, well, it's not the only thing. The two things you can say in defense of clearing and convincing. First, it was in existence in 1985

. Kagan, I don't know how far that gets you, Mr. Phillips, because Mr. Martinez just told us that he'd be happy to call willfulness his test. And willfulness has meant different things to different people here. Yes. And there's nothing that Congress did that suggests that when it used that word willfulness, it really meant the Seagate test. Well, the only test in front of it at the point, at that point in time, was Seagate, because Seagate was the definition of what 284 was about and what the standard of willfulness was about. But I think what's equally important, Justice Kagan, is I'll concede that willfulness can have a lot of different meanings. But the meaning that the Seagate court adopted was the meaning this court adopted in safe co. And it's interesting, because my friends did not say the word safe co at all in there, 25 minutes of presentation. But, and this is why it's not such a big jump, Mr. Chief Justice, because what Seagate said is, what's the best source for trying to come up with a sensible way of applying willfulness? And they looked at safe co. And they said, you know, the best way to do it is with a recklessness standard, that's an objective determination. And the fact that there may be subjective bad, bad intent is off the table. I mean, that's footnote 20 of the safe co opinion. And the court said, that's the best way to enforce this statute. So we at least feel of the clear and convincing evidence, who seems to come out of nowhere. And that the standard is they know-of-review rather than abusive discretion? I would desperately ask you not to take out the no-of-o review, because we're talking about an objective standard. It's really almost, it's essentially a question of law. The issue is that it's an objectively reasonable basis for what's been done here. Don't believe that's a standard that's been asked for, actually. How about the opinion evidence you can? Well, the clear and convincing standard, I don't think is, is particularly relevant to how this case got decided. Because at the end of the day, it's not because it was clear and convincing. At the end of the day, it was because there was objectively reasonable defenses that were put forward in both of these cases. In a proper case, obviously, you'd have to fight that fight. The only thing I can say, well, it's not the only thing. The two things you can say in defense of clearing and convincing. First, it was in existence in 1985. Congress, a past American Ventsack, didn't modify it. And so may have in that sense either acquiesce or ratified it under those circumstances. And second, we're talking about punitive damages. And therefore, under normal circumstances, it's certainly not a matter of indifference when you're talking about allowing a plane to go forward. And the skew completely the entire litigation process has a concept of having access to troubled damages. In that context, some height and standard might make sense. In this context, it's hard for me to get excited about one way or the other because these are not really factual questions. If you were in a subjective intent standard, that would be a different issue. And the context of objective is. I'm sorry? You care about they know where we view in the Federal Circuit rather than testing the district courts' determination for abuse of discretion. Yes, Justice Ginsburg. I think it is critical. The two elements of this that are absolutely critical, and I've spoken some ways that goes to the question you asked Justice Sotomayor. What are the absolute critical elements that you need to take out of C gate to apply in these cases? And candidly, both would lead you to affirm in both instances on the facts of these cases. One, you need to have an objective assessment of whether or not there is a reasonably objective set of circumstances that allow the defendant to say, this either these patents are invalid or we do not infringe those patents. And two, you have to have that reviewed non-deferentially by the Federal Circuit in order to ensure that the 500 or 400, I forget how many district court judges there are, do not sort of go off on a tangent and that we get the consistent review by the objective and expert body that the Federal Circuit is. The recklessness decision here seems different from those that generally come up. But maybe you can provide an example where this occurs outside of this context. Usually, to determine whether someone was reckless, you have to assess the nature of the risk, the severity of the risk. And in the typical tort case, the severity of the risk may seem greater at the time of trial than it did at the time of the tort fuser's action because someone has been harmed. But in this situation, the degree of the risk seems smaller at the time of the determination of enhanced damages than it may have been at the time of the infringement. And I can't think of another because it's a legal risk. And the first determination may not have been made with the assistance or very intense analysis by attorneys. And then the latter time the attorneys are very much involved. So is there any other situation where a recklessness determination has those character risks? Well, I think the copyright would probably be the other one that sort of attends to it in the same way because it's essentially the same kind of an inquiry. Part of the problem is it's the nature of the continuing tort action. And it's also the fact that the infringement determination is a matter of strict liability. So there are a thousand, obviously, different ways of different situations that can arise

. Congress, a past American Ventsack, didn't modify it. And so may have in that sense either acquiesce or ratified it under those circumstances. And second, we're talking about punitive damages. And therefore, under normal circumstances, it's certainly not a matter of indifference when you're talking about allowing a plane to go forward. And the skew completely the entire litigation process has a concept of having access to troubled damages. In that context, some height and standard might make sense. In this context, it's hard for me to get excited about one way or the other because these are not really factual questions. If you were in a subjective intent standard, that would be a different issue. And the context of objective is. I'm sorry? You care about they know where we view in the Federal Circuit rather than testing the district courts' determination for abuse of discretion. Yes, Justice Ginsburg. I think it is critical. The two elements of this that are absolutely critical, and I've spoken some ways that goes to the question you asked Justice Sotomayor. What are the absolute critical elements that you need to take out of C gate to apply in these cases? And candidly, both would lead you to affirm in both instances on the facts of these cases. One, you need to have an objective assessment of whether or not there is a reasonably objective set of circumstances that allow the defendant to say, this either these patents are invalid or we do not infringe those patents. And two, you have to have that reviewed non-deferentially by the Federal Circuit in order to ensure that the 500 or 400, I forget how many district court judges there are, do not sort of go off on a tangent and that we get the consistent review by the objective and expert body that the Federal Circuit is. The recklessness decision here seems different from those that generally come up. But maybe you can provide an example where this occurs outside of this context. Usually, to determine whether someone was reckless, you have to assess the nature of the risk, the severity of the risk. And in the typical tort case, the severity of the risk may seem greater at the time of trial than it did at the time of the tort fuser's action because someone has been harmed. But in this situation, the degree of the risk seems smaller at the time of the determination of enhanced damages than it may have been at the time of the infringement. And I can't think of another because it's a legal risk. And the first determination may not have been made with the assistance or very intense analysis by attorneys. And then the latter time the attorneys are very much involved. So is there any other situation where a recklessness determination has those character risks? Well, I think the copyright would probably be the other one that sort of attends to it in the same way because it's essentially the same kind of an inquiry. Part of the problem is it's the nature of the continuing tort action. And it's also the fact that the infringement determination is a matter of strict liability. So there are a thousand, obviously, different ways of different situations that can arise. But if you're in a situation where you've come out with a product, you think it's a perfectly good product. You may or may not have been looking at pens. You didn't see anything that creates a problem for it. You put it in the market two, three years later, somebody sends you a letter. And then the letter is not very specific. And then you say, I don't see anything here. I don't envision it. You keep going forward. And then you get a very specific letter. And you look at that and you say, well, gee, okay, I see that. I mean, part of the problem with the notion of looking at these things and saying we're not going to have a post-hoc analysis is it's almost impossible to define post-hoc from when. Because it works in tort law. Well, tort law, I mean, so you can imagine the situations where when the actor takes a risk, it looks tremendously great. By the time trials over, it was pretty small. It happened. But, you know, eggshell skull, he thought almost certainly had one. And he did, but the chances of his having one were a million to one against it. Punitive, how does the reckless, do you have any idea? Well, you take, I mean, obviously you take the plaintiff as you. Yeah, you've been deterring it. Turns out as you found it, well, I'm very bad. And what you thought you were going to find him was just terrible. This must come up. Right. My guess is, in those circumstances, just as prior to that, there aren't punitive damages. There are? There are not. You're not. Probably act reasonably on that. Well, then we would have an analogy on your side if he goes the other way, be it an analogy

. But if you're in a situation where you've come out with a product, you think it's a perfectly good product. You may or may not have been looking at pens. You didn't see anything that creates a problem for it. You put it in the market two, three years later, somebody sends you a letter. And then the letter is not very specific. And then you say, I don't see anything here. I don't envision it. You keep going forward. And then you get a very specific letter. And you look at that and you say, well, gee, okay, I see that. I mean, part of the problem with the notion of looking at these things and saying we're not going to have a post-hoc analysis is it's almost impossible to define post-hoc from when. Because it works in tort law. Well, tort law, I mean, so you can imagine the situations where when the actor takes a risk, it looks tremendously great. By the time trials over, it was pretty small. It happened. But, you know, eggshell skull, he thought almost certainly had one. And he did, but the chances of his having one were a million to one against it. Punitive, how does the reckless, do you have any idea? Well, you take, I mean, obviously you take the plaintiff as you. Yeah, you've been deterring it. Turns out as you found it, well, I'm very bad. And what you thought you were going to find him was just terrible. This must come up. Right. My guess is, in those circumstances, just as prior to that, there aren't punitive damages. There are? There are not. You're not. Probably act reasonably on that. Well, then we would have an analogy on your side if he goes the other way, be it an analogy. Well, all of my friends on the other side come forward with tort cases in which the egg shell plaintiff gets punitive damages because of the defendant over. Is there any way to allow some consideration for a subjective intent to infringe in an egregious case as an additional element for, as an additional way to define, woefulness without completely wrecking the C.Gate standard? I think if you are in a situation where your past recklessness, that is, there is no defense. There's no objective. You know, this is a true pirate. No objectively reasonable argument. They saw the product. They build it. Maybe they don't operate within the United States. They just sell here. They operate outside the United States. They think they'll never get caught, et cetera. And then those circumstances, they don't have a defense. And then you also can prove that they acted with absolute intent and knowledge of the patent, et cetera. Then, of course, would you take that to the max to three times because that's where the discretion lies. No, but take a case where there's somebody who absolutely wants to copy a product. He says, Mr. Jones. Copy a product or copy a patent? Patent-to-product. All right. So same thing. Let's call it. Mr. Jones sells a product that involves a patent and it's selling very well and Mr. Smith comes along and says, I want a copy, that patent and that product, and sell the same thing so that I can reap those profits, too. And does that? Now, the Seagate test says that as long as his lawyer can come along at the end and raise some kind of doubt about the patent's validity, the fact that I forget whether it was Mr. Smith or Mr. Jones

. Well, all of my friends on the other side come forward with tort cases in which the egg shell plaintiff gets punitive damages because of the defendant over. Is there any way to allow some consideration for a subjective intent to infringe in an egregious case as an additional element for, as an additional way to define, woefulness without completely wrecking the C.Gate standard? I think if you are in a situation where your past recklessness, that is, there is no defense. There's no objective. You know, this is a true pirate. No objectively reasonable argument. They saw the product. They build it. Maybe they don't operate within the United States. They just sell here. They operate outside the United States. They think they'll never get caught, et cetera. And then those circumstances, they don't have a defense. And then you also can prove that they acted with absolute intent and knowledge of the patent, et cetera. Then, of course, would you take that to the max to three times because that's where the discretion lies. No, but take a case where there's somebody who absolutely wants to copy a product. He says, Mr. Jones. Copy a product or copy a patent? Patent-to-product. All right. So same thing. Let's call it. Mr. Jones sells a product that involves a patent and it's selling very well and Mr. Smith comes along and says, I want a copy, that patent and that product, and sell the same thing so that I can reap those profits, too. And does that? Now, the Seagate test says that as long as his lawyer can come along at the end and raise some kind of doubt about the patent's validity, the fact that I forget whether it was Mr. Smith or Mr. Jones. He's like the fact that- I want of them. The fact that he went and said, I am going to copy this patent so that I can reap the benefits of some other person's work, that doesn't make a difference. And that's, I think, the question that Justice Kennedy was asking. It seems to stick in the CROA a bit. Right. Well, one answer to Justice Kennedy is there is a role for that kind of subjected bad faith, but it's only after you make the determination that- Right, but that's not enough because, you know, if I'm- I'm saying, is it worth my while to go copy this patent? And I think, you know what? A lot of patents are not valid. I'll take this risk. I will- I will make a lot of money selling this patent to the product. And if somebody calls me on it, I'll go hire myself a lawyer, and that lawyer will come up with some kind of argument about why the patent's not valid after all. Okay. And that seems like- that seems like a bad incentive. Right. Justice Kagan, the two basic points I would make to that. First of all, the- and I remember Mr. Jones or Mr. Smith, but the bad actor we'll call- the bad actor in that circumstance obviously has to pay the full compensation for the infringement, which is in some instances tens of millions of dollars, will almost certainly be subject to attorneys fees under Section 285. So it's not as though you're getting a pass under that situation. Now, I understand the desire to- to have enhanced damages against that particular bad act is why I say- in a lot of ways this case comes down to what do you worry about more pirates or trolls? My assessment of this, and I think it's borne out by the way the Federal Circuit has looked at this problem. Is it not that very- not very many pirates out there? And if you keep a rule that is designed simply to get the one and a billion pirates, I would call them unicorns, but one and a million pirates, you end up with a rule that will allow the trolls to go after every legitimate producer of products and services in this country. And that's the price you'd have to pay to get at the really bad actor- You say the question, I know this is not exactly a question, but we've seen in your briefs, we see countering in your brief, is there was a company. And the company made, I think, cotton goods. And an individual thought that he could make a lot of money by taking those cotton goods in the machinery that they were used and selling it all over the United States. And so he did it. I think it was Alexander Hamilton. I'm not sure. And as a result, New England grew rich. Now, I suppose he got in a letter one day that said we have a patent. We have a patent and it would have cost him $10 million to look into it and he didn't have all that money, so he thought he'd run his chances

. He's like the fact that- I want of them. The fact that he went and said, I am going to copy this patent so that I can reap the benefits of some other person's work, that doesn't make a difference. And that's, I think, the question that Justice Kennedy was asking. It seems to stick in the CROA a bit. Right. Well, one answer to Justice Kennedy is there is a role for that kind of subjected bad faith, but it's only after you make the determination that- Right, but that's not enough because, you know, if I'm- I'm saying, is it worth my while to go copy this patent? And I think, you know what? A lot of patents are not valid. I'll take this risk. I will- I will make a lot of money selling this patent to the product. And if somebody calls me on it, I'll go hire myself a lawyer, and that lawyer will come up with some kind of argument about why the patent's not valid after all. Okay. And that seems like- that seems like a bad incentive. Right. Justice Kagan, the two basic points I would make to that. First of all, the- and I remember Mr. Jones or Mr. Smith, but the bad actor we'll call- the bad actor in that circumstance obviously has to pay the full compensation for the infringement, which is in some instances tens of millions of dollars, will almost certainly be subject to attorneys fees under Section 285. So it's not as though you're getting a pass under that situation. Now, I understand the desire to- to have enhanced damages against that particular bad act is why I say- in a lot of ways this case comes down to what do you worry about more pirates or trolls? My assessment of this, and I think it's borne out by the way the Federal Circuit has looked at this problem. Is it not that very- not very many pirates out there? And if you keep a rule that is designed simply to get the one and a billion pirates, I would call them unicorns, but one and a million pirates, you end up with a rule that will allow the trolls to go after every legitimate producer of products and services in this country. And that's the price you'd have to pay to get at the really bad actor- You say the question, I know this is not exactly a question, but we've seen in your briefs, we see countering in your brief, is there was a company. And the company made, I think, cotton goods. And an individual thought that he could make a lot of money by taking those cotton goods in the machinery that they were used and selling it all over the United States. And so he did it. I think it was Alexander Hamilton. I'm not sure. And as a result, New England grew rich. Now, I suppose he got in a letter one day that said we have a patent. We have a patent and it would have cost him $10 million to look into it and he didn't have all that money, so he thought he'd run his chances. Suddenly, I'm not so sure which way the equities work out. That's your point. Both of you have a point. And that's why I'm looking for, is there some way we can get the real worst ones without destroying what you don't want to have destroyed, and yet where he's really worried about the real worst ones? And I think the answer at the end of the day is Congress made the choice, I think. Well, they just used the word willful. I'm not going to do it. No, no, but it did it against the backdrop of the Seagate standard, because Seagate clearly made a judgment that has between a raft of claims by non-practicing entities rising out of the raft of letters and everything that goes with that, between that and the risk of a true pirate out there that Congress that it thought the better answer clearly was that we should protect and limit the scope of the patents and make sure that they are being properly challenged in a regular way. The choice is reflected in the statute, which leads a lot of discretion to the district courts. And I think all, a lot of the arguments we've heard today are the sort of arguments that can be made to the district court's discretion in a particular case. Saying, you know, this is one of those pirates or, you know, trolls and it's a serious one or it's less serious one, and you have these standards to apply, and the district court will exercise the discretion. And if it's out of the channel of discretion, then the court can review it on that basis. Mr. Chief Justice, I think the problem with that is, is that unless you come up with, you know, recklessness or egregiousness, I don't know what egregiousness means, and I don't know how you evaluate that on review. I do know what it means to take an objectively reasonable position. It's more than simply something that's beyond frivolous. It is a substantial argument that either the patent doesn't extend to my particular product or the patent itself is invalid. And circumstances where that is true, my hope would be that the court recognizing the extraordinary importance of limiting patents and the monopolies that flow from there would drive the legal decision in this context, so the legal standard in this context is exactly where the court adopted it and C.gate. That's the court that has the experience and expertise, and I would hope under these circumstances, in this very unusual situation, because patent law in this context, I do think, is very different than almost any other tort context. I would hope in the one, and the decidedly one-sided approach, the 284, is where it only gives to the plaintiffs the ability to do what they can do and what they want, that the court would adopt the kind of rigorous objective standard that allows both for the determination that the patent is invalid or doesn't in French and that that's examined on an objective basis. If there are no further questions, Your Honours, I urge the court to affirm. Thank you, Mr. Phillips. Mr. Wall, you have four minutes remaining. Mr. Chief Justice, I have two fairly simple points. The first is, as we and the PTO and many of respondents on the Miki recognize, the system as it currently stands is out of balance

. Suddenly, I'm not so sure which way the equities work out. That's your point. Both of you have a point. And that's why I'm looking for, is there some way we can get the real worst ones without destroying what you don't want to have destroyed, and yet where he's really worried about the real worst ones? And I think the answer at the end of the day is Congress made the choice, I think. Well, they just used the word willful. I'm not going to do it. No, no, but it did it against the backdrop of the Seagate standard, because Seagate clearly made a judgment that has between a raft of claims by non-practicing entities rising out of the raft of letters and everything that goes with that, between that and the risk of a true pirate out there that Congress that it thought the better answer clearly was that we should protect and limit the scope of the patents and make sure that they are being properly challenged in a regular way. The choice is reflected in the statute, which leads a lot of discretion to the district courts. And I think all, a lot of the arguments we've heard today are the sort of arguments that can be made to the district court's discretion in a particular case. Saying, you know, this is one of those pirates or, you know, trolls and it's a serious one or it's less serious one, and you have these standards to apply, and the district court will exercise the discretion. And if it's out of the channel of discretion, then the court can review it on that basis. Mr. Chief Justice, I think the problem with that is, is that unless you come up with, you know, recklessness or egregiousness, I don't know what egregiousness means, and I don't know how you evaluate that on review. I do know what it means to take an objectively reasonable position. It's more than simply something that's beyond frivolous. It is a substantial argument that either the patent doesn't extend to my particular product or the patent itself is invalid. And circumstances where that is true, my hope would be that the court recognizing the extraordinary importance of limiting patents and the monopolies that flow from there would drive the legal decision in this context, so the legal standard in this context is exactly where the court adopted it and C.gate. That's the court that has the experience and expertise, and I would hope under these circumstances, in this very unusual situation, because patent law in this context, I do think, is very different than almost any other tort context. I would hope in the one, and the decidedly one-sided approach, the 284, is where it only gives to the plaintiffs the ability to do what they can do and what they want, that the court would adopt the kind of rigorous objective standard that allows both for the determination that the patent is invalid or doesn't in French and that that's examined on an objective basis. If there are no further questions, Your Honours, I urge the court to affirm. Thank you, Mr. Phillips. Mr. Wall, you have four minutes remaining. Mr. Chief Justice, I have two fairly simple points. The first is, as we and the PTO and many of respondents on the Miki recognize, the system as it currently stands is out of balance. And we have tried, and I believe we have succeeded, in crafting an approach that balances the court's concerns with the need to respect the rights of patentees, including small companies like Halo, and we've done it in a couple of different ways, reasonable good faith efforts to challenge patents are not going to result in enhanced damages, and intent and recklessness are not going to be and should not be easy to show. Now the Federal Circuit hasn't adopted a contrary approach based on its expertise. It thought it had to, in light of this court's decision in Safe Co, which it has misread. Safe Co says, if you adopt a reasonable view of the law at the time, you're not acting willfully. It doesn't say if you subjectively and correctly believe that you are violating the law, you are held not to be willful because you have hired a good lawyer and come up with a defense later. And that approach is what has skewed the incentives in the patent system and taken us out of balance. Our approach in Synovis is good, commercially reasonable behavior under the full set of circumstances at the discretion of the district court, their approach is in Synovis in good litigation. And the second point I just want to make quickly is we do have the evidentiary burden and the standard of review in this case. I think it's clear that there isn't any basis for the clear and convincing standard. On the standard of review, I think High Mark resolves it and I think Pierce feet underwood resolves it. These are determinations that are bound up with the facts. And just as the court said in Pierce, whether a litigating position is substantially justified is a mixed question of fact in law. So to the questions here, these should be reviewed for abusive discretion and it's very important for the court to say that. Halo should go back to the district court and be analyzed under the right standard so the evidentiary burden matters. In Striker, the district court actually got to the discretionary weighing, did it, and on appeals Zimmer never challenged that as an abusive discretion. It just argued about the objective prong. When this court takes that out of the analysis as it should, there's no basis to disturb the district court's discretionary ruling. And as the court knows from looking at it, it's a thorough and reasonable opinion. One point, Mr. Phillips, brought up that you didn't address in your initial argument. Maybe you could say word about it as section 298 of the American Inventes Act. Under your reading could evidence of the failure to obtain or introduce advice of counsel be used to prove that the defendant infringed in bad faith? No, the patentee cannot put that issue affirmatively. All 298 does is adult with that very narrow problem. And when the patentee comes in and wants to show intent or recklessness, it can point to your copying of the patent, it can point to the fact that it gave you really extensive, very detailed notice, it tried to license with you, you didn't do anything, it cannot put it issue whether you talk to counsel. Now, the defendant made the decision. It gets to that point under the language of 298. Because 298 just says when you're proving up wolffulness, whether it's a factor as it is on our approach, whether it's the end all be all as it is on their approach, whenever the patentee is trying to prove that up, you can't affirmatively put that issue. And as polls candidly, and I think honestly concedes in its brief, you can read 298 to have effect on either side's view of how you ought to treat the enhancement statute

. So I don't think 298 cuts either way. And I would just stress for the court that Congress at the time looked at putting wolffully in the statute, and it looked at putting something virtually identical to seagate in the statute, it didn't do either one. So I don't think you can be taken to have ratified the Federal Circuit's current approach. Thank you, counsel. The case is submitted