## Facts

- American Medical Systems, Inc. (AMS) owned U.S. Patent No. 4,597,765 covering a penile prosthesis for treating erectile dysfunction.
- Medical Engineering Corporation (MEC) manufactured and sold competing prosthetic devices later found to infringe.
- AMS shipped thousands of prostheses without patent marking before and after the patent issued; it began marking on October 15, 1986.
- AMS sued MEC for patent infringement on October 28, 1986; the lawsuit was MEC’s first actual notice of AMS’s infringement claim.
- MEC knew of the patent, pursued a design-around (the “Ultrex”), and continued selling infringing products while doing so.
- MEC asserted counterclaims including declaratory judgment (invalidity/noninfringement), breach of warranty, and misrepresentation theories tied in part to a prior “Hakky agreement.”

## Issues

1. Whether the district court clearly erred in finding MEC’s infringement willful and whether enhanced damages were justified.
2. Whether the district court erred in rejecting MEC’s breach-of-warranty counterclaim based on the Hakky agreement and related dealings.
3. Whether MEC was denied a Seventh Amendment right to a jury trial.
4. Whether 35 U.S.C. § 287(a) limited AMS’s recoverable damages only to infringement occurring after the complaint was filed, rather than from the date AMS began compliant marking.

## Decision

- The Federal Circuit affirmed the finding of willful infringement as not clearly erroneous.
- The Federal Circuit affirmed the 1.5× enhancement of damages as not an abuse of discretion.
- The Federal Circuit affirmed rejection of MEC’s breach-of-warranty counterclaim, finding no contractual duty requiring disclosure of the ’765 application under the Hakky arrangement.
- The Federal Circuit affirmed that MEC waived any jury-trial right by its procedural conduct.
- The Federal Circuit reversed the district court’s § 287(a) damages limitation and remanded for recalculation of damages beginning when AMS commenced compliant marking (rather than only from the filing date).

## Legal Principles

- A willfulness finding is reviewed for clear error; enhancement of damages is reviewed for abuse of discretion.
- Continued sales in the face of actual knowledge of the patent and a high risk of infringement can support a willfulness finding even if the accused infringer pursues a design-around.
- Enhanced damages may be imposed when the trial court reasonably weighs misconduct-related factors and explains its exercise of discretion.
- Contract-based warranty or disclosure obligations require proof of a duty within the agreement; an unrelated patent application need not be disclosed absent a contractual requirement.
- Seventh Amendment jury-trial rights may be waived through litigation conduct and procedural choices.
- Under 35 U.S.C. § 287(a), a patentee who sells patented articles cannot recover damages for infringement occurring before either (a) compliant marking begins or (b) actual notice is given; once compliant marking begins, damages may accrue from the date of compliance, not merely from the date suit is filed.

## Conclusion

The Federal Circuit largely upheld the infringement judgment, including willfulness and enhanced damages, but corrected the damages start date under § 287(a), holding that compliant patent marking permits recovery from the marking date and remanding for recalculation on that basis.


American Med. Sys., Inc. v. Med. Eng'g Corp., 6 F.3d 1523 (Fed. Cir. 1993)