If you're reading this, you're currently using surface-mount technologies. These extremely small apparatuses are components of almost every technological device, from the flash drive in your pocket, to the phone in your bag and the computer in front of you, to the television flashing in front of you, the stereo in the background, and even the car outside your house. STMs were revolutionary when they were first invented in the 1960s, but they have now become commonplace facts of modern life.
Maybe that's why it's surprising that these diminutive devices are at the heart of a currently pending Supreme Court case poised to potentially redefine the standards federal courts use to determine whether punitive damages are appropriate. On February 23rd, the Supreme Court heard oral arguments in Halo Electronics v. Pulse Electronics
(14-1513). This case, originating in the U.S. District Court for Nevada, deals on its face with the alleged infringement of Halo's patents for three types of STM by Pulse, which, the district court found, occasioned enhanced damages.
Although this case might seem, at first, to be technical and narrow in its scope, in reality it could profoundly affect the controversial issue of judicial discretion. The trial order and the Federal Circuit's eventual decision were both rather vague on this question, and during oral arguments the Supreme Court remained equivocal as to its view of the subject. Therefore, I invited Carter G. Phillips, the respondents' counsel, to share his perspective on the case with us.
During the argument, Phillips seemed concerned about the fairness of the relevant statute, 35 U.S. §284, which only plaintiffs in patent actions can invoke. When I asked, he expressly named that as the factor that differentiates this case from Octane Fitness v. ICON Health
, 134 S. Ct. 1749, which was argued and decided in 2014. The Court's issuance of another certiorari
writ in circumstances so similar to Octane
except for this fact seems to establish this as the central contention, a fact that could favor the respondents. In the past, the Court has rejected practices that have acted as disproportionate obstacles to either party, down to and including the traditional burden of proof (see Adickes v. S.H. Kress & Co.,
398 U.S. 144 (1970)), and without Justice Scalia it is unclear whether the Court could return to its Adickes-
era vision of substantial justice.
Another major issue is the Seventh Amendment quandary stemming from the fact that these enhanced damages are a question both of law and of fact. If the Court was to decide on this, it could set itself up to re-examine the controversial divide between judicial power and jury discretion. Phillips, however, believes this is unlikely: "Facts are generally for the jury under the Seventh Amendment. So to avoid that problem, the Court should stick with de novo
review and recognize that the question is really a legal issue." The Justices' interests in oral argument further hinted that they are unlikely to conclusively decide this.
The dynamics of this argument are also fascinating. The intervention of the United States in what would otherwise seem to be a settled matter signals the importance of this case as a precedent in the area of judicial discretion, and materially changes the atmosphere of argument. As Phillips put it, "The United States invariably captures the Justices and law clerk's attention. That is a brief that will always be read carefully." The participation of the US was also unusual because the respondents' time was not divided, even though Phillips maintains that the facts of Halo
do differ from those of its companion case, Stryker v. Zimmer
. Once again, though, the Justices maintained a narrower view of the case, choosing not to probe deeply into these discrepancies.Halo
is the first case Phillips has argued in the S.C. since Justice Scalia's passing, and I had to ask how the Justice's famously rigorous questioning impacted his style of advocacy. He told us that he was personally able to anticipate most of their exchanges over the years: "I sometimes misjudged how he felt about a particular case, but the questions that flowed from what he thought about the merits were generally pretty predictable." He also said that Scalia's "absence did not seem to affect the pace of the argument, except perhaps both sides were given a little more of an opportunity to answer each question." Subsequent events, most notably the shattering
of Clarence Thomas' long silence, prove that perhaps there will also be more opportunities to ask questions in the future.
Though on its surface Halo
may appear to be an unexceptional dispute between two corporations over the particulars of patent infringement penalties, in reality the precedent it sets could deeply influence the future of American civil procedure.