Connolly’s Willfulness Ruling Risks Scuttling Patent Settlements

A ruling by Delaware’s top federal judge could make patent cases harder to settle early and spur more pre-suit maneuvering, reshaping how one of the nation’s busiest patent courts handles allegations of willful infringement.

Chief Judge Colm F. Connolly’s Oct. 15 decision will likely reverberate far beyond the case that prompted it after he ruled that requests for enhanced damages for willful patent infringement aren’t standalone claims that can be tossed quickly through a motion to dismiss—reversing his earlier approach.

Allegations of willful infringement go to remedies—the potential treble damages—and can’t be dismissed early for failing to state a claim if the underlying infringement allegations move forward, Connolly ruled in Inari Medical Inc.’s suit against Inquis Medical Inc. The case centers on patents covering clot-removal and blood-filtration devices.

Leaving the threat of enhanced damages unresolved could make early settlements tougher to reach by widening the gap between how plaintiffs and defendants value cases, said David O. Taylor, a former litigator who teaches patent law at Southern Methodist University’s Dedman School of Law. The opinion may be “effectively insulated from review,” because it came before final judgment and will probably be overshadowed by infringement or validity questions if the case is ultimately appealed, he said.

Because Delaware handles a large share of US patent cases, other judges may soon be asked by litigants to follow—or reject—Connolly’s reasoning, potentially creating divergent approaches on early-stage motions. Edward Reines, a partner at Jones Day, said how the opinion is received by other judges is “worthy of close monitoring by patent litigators” in Delaware and beyond.

If adopted in other courts, Connolly’s approach could embolden patent owners to send more pre-suit demand letters alleging willfulness or inducement, potentially pushing accused companies to file declaratory-judgment actions in favorable venues, Reines said. Connolly is “an important jurist in the patent field,” he said, “and so a published opinion by him on these recurring issues is necessarily influential.”

The change is “effectively a 180-degree turn” from Connolly’s prior policy, Shaw Keller LLP partner Andrew Russell said. Russell—the founder and editor of a blog associated with Shaw Keller focusing on intellectual property litigation in the federal District of Delaware—said patent owners can now “plead willfulness for free” in cases before the chief judge, since such allegations can’t be dismissed at the pleading stage.

The bigger test, Russell said, will come later—at summary judgment—when those plaintiffs “will have the benefit of willfulness discovery” to bolster their claims.

Still, the ruling wasn’t a total win for the plaintiffs’ bar. The opinion builds on Connolly’s prior rulings that a complaint can’t itself supply the knowledge needed to establish post-suit willfulness or indirect infringement. That means plaintiffs still must show that defendants knew of the asserted patents before suing to win enhanced damages or sustain a secondary infringement claim.

“The true impact will depend on whether other judges follow suit,” Russell said. “Other than in related cases, plaintiffs cannot control which judge may be assigned, and for some period of time Judge Connolly may be the only judge applying this rule.”

The case is Inari Medical Inc. v. Inquis Medical Inc., D. Del., No. 24-cv-1023.