JUSTICE MARSHALL, delivered the opinion of the Court.
This case concerns the proper standard governing the award of prejudgment interest in a patent infringement suit under 35 U. S. C. § 284.
In 1956 respondent Devex Corporation (Devex) filed a suit for patent infringement against petitioner General Motors Corporation (GMC) in the United States District Court for the Northern District of Illinois.
The case was then transferred to the United States District Court for the District of Delaware. After a trial the District Court ruled that there had been no infringement. 316 F.Supp. 1376 (1970). The United States Court of Appeals for the Third Circuit reversed, holding that the patent was infringed by GMC's use of certain processes in the production of bumpers and cold-extruded nonbumper parts. 467 F.2d 257 (1972), cert. denied, 411 U.S. 973 (1973).
On remand the case was referred to a Special Master for an accounting. The Special Master ruled that three major divisions of GMC had used infringing processes in the manufacture of bumper parts, and selected a royalty rate "by reference to hypothetical negotiations" that it found would have taken place if GMC had sought to obtain a license from Devex. Special Master's Report, at 71. See 667 F.2d 347,
Prior to 1946 the provision of the patent laws concerning a plaintiff's recovery in an infringement action contained no reference to interest.
In 1946 Congress adopted amendments to the provision of the patent laws governing recovery in infringement actions. Act of Aug. 1, 1946, § 1, 60 Stat. 778, 35 U. S. C. §§ 67, 70 (1946 ed.).
The Courts of Appeals have reached differing conclusions as to whether § 284 incorporates the Duplate standard and more generally as to the standard governing the award of prejudgment interest under § 284.
There is no basis for inferring that Congress' adoption of the provision concerning interest merely incorporated the Duplate standard. This is not a case in which Congress has reenacted statutory language that the courts had interpreted in a particular way. In such a situation, it may well be appropriate to infer that Congress intended to adopt the established judicial interpretation. See, e. g., Herman &
Having decided that § 284 does not incorporate the Duplate rule, we turn to a consideration of the proper standard for awarding prejudgment interest under that provision. Although the language of § 284 supplies little guidance as to the appropriate standard, for the reasons elaborated below we are convinced that the underlying purpose of the provision strongly suggests that prejudgment interest should ordinarily be awarded where necessary to afford the plaintiff full compensation for the infringement.
Both the background and language of § 284 provide evidence of this fundamental purpose. Under the pre-1946 statute, the owner of a patent could recover both his own damages and the infringer's profits. See Aro Mfg. Co. v. Convertible Top Co., 377 U.S. 476, 505 (1964); n. 4, supra. A patent owner's ability to recover the infringer's profits reflected the notion that he should be able to force the infringer to disgorge the fruits of the infringement even if it caused him no injury. In 1946 Congress excluded consideration of the infringer's gain by eliminating the recovery of his profits, Aro Mfg. Co., supra, at 505, the determination of which had often required protracted litigation. H. R. Rep. No. 1587, 79th Cong., 2d Sess., 1-2 (1946); S. Rep. No. 1503, 79th Cong., 2d Sess., 2 (1946); 92 Cong. Rec. 9188 (1946) (remarks of Sen. Pepper). At the same time, Congress sought to ensure that the patent owner would in fact receive full compensation for "any damages" he suffered as a result of the
The standard governing the award of prejudgment interest under § 284 should be consistent with Congress' overriding purpose of affording patent owners complete compensation. In light of that purpose, we conclude that prejudgment interest should ordinarily be awarded. In the typical case an award of prejudgment interest is necessary to ensure that the patent owner is placed in as good a position as he would have been in had the infringer entered into a reasonable royalty agreement.
This very principle was the basis of the decision in Waite v. United States, 282 U.S. 508 (1931), which involved a patent infringement suit against the United States. The patent owner had been awarded unliquidated damages in the form of lost profits, but had been denied an award of prejudgment interest. This Court held that an award of prejudgment interest to the patent owner was necessary to ensure "complete justice as between the plaintiff and the United States," id., at 509, even though the statute governing such suits did not expressly provide for interest. Just as § 284 provides that the court shall award "damages adequate to compensate for the infringement," the statute at issue in Waite provided that the patentee shall receive "reasonable and entire compensation." 35 U. S. C. § 68 (1940 ed.). In addition, § 284 contains a specific provision concerning interest. Waite thus provides strong support for our conclusion that prejudgment interest should ordinarily be awarded under § 284.
We do not construe § 284 as requiring the award of prejudgment interest whenever infringement is found. That provision states that interest shall be "fixed by the court," and in our view it leaves the court some discretion in awarding
Because we hold that prejudgment interest should ordinarily be awarded absent some justification for withholding such an award, a decision to award prejudgment interest will only be set aside if it constitutes an abuse of discretion. The District Court held that GMC infringed Devex's patent over the course of a number of years and awarded Devex a reasonable royalty as compensation. While GMC contends that Devex was guilty of causing unnecessary delay, the District Court rejected this contention when it concluded that "Devex has done no worse than fully litigate its claims achieving a large judgment in its favor" and awarded Devex costs on the basis of this conclusion. 494 F. Supp., at 1380.
JUSTICE STEVENS, concurring.
The 1946 amendments to the patent laws replaced the Duplate standard with a presumption favoring the award of prejudgment interest in the ordinary case. As the Court correctly holds, however, § 284 does not automatically require an "award of prejudgment interest whenever infringement is found." Ante, at 656. In exercising its discretion to deny such interest in appropriate cases, the trial court may properly take into account the nature of the patent and the strength of the defendant's challenge.
In other contexts we have noted the public function served by patent litigation. In Lear, Inc. v. Adkins, 395 U.S. 653, 670 (1969), Justice Harlan, writing for the Court, explained:
Hence, a patent challenge in the courts permits a more informed decision regarding the merits of a particular patent. And, as we have long recognized, "[i]t is as important to the public that competition should not be repressed by worthless patents, as that the patentee of a really valuable invention should be protected in his monopoly . . . ." Pope Manufacturing Co. v. Gormully, 144 U.S. 224, 234 (1892).
Of course, the general public interest in patent litigation does not justify denial of prejudgment interest in the typical
"The process of working ferrous metal which comprises forming on the surface of the metal a phosphate coating and superimposing thereon a fixed film of a composition comprising a solid meltable organic binding material containing distrubted there through a solid inorganic compound meltable at a temperature below the melting point of the ferrous metal phosphate of said coating and having a hardness not exceeding 5 on the Mohs' hardness scale, and thereafter deforming the metal."
In less technical terms, the Devex process employed "phosphate, soap and borax . . . to lubricate the pressure-forming operation, preventing harmful contact between the metal products and the machinery with which they are formed . . . . [T]he phosphate, soap and borax combination is especially beneficial because it may be easily cleaned from the metal product following its formation." 494 F.Supp. 1369, 1372 (Del. 1980).
"[U]pon a decree being rendered in any such case for an infringement the complainant shall be entitled to recover, in addition to the profits to be accounted for by the defendant, the damages the complainant has sustained thereby."
Section 284 derived from a House bill which specifically provided for an award of interest "from the time the infringement occurred." H. R. 5311, 79th Cong., 2d Sess. (1946); see H. R. Rep. No. 1587, 79th Cong., 2d Sess., pt. 2, p. 1 (1946). The bill as modified by the Senate Committee and enacted into law replaced this language with the language currently contained in § 284. The legislative history suggests that the language substitution was intended solely to make the award of attorney's fees discretionary rather than mandatory; there was no indication that the Senate Committee intended any substantive change in the treatment of interest. See S. Rep. No. 1503, 79th Cong., 2d Sess., 2 (1946). The passage of the Senate bill in the House was preceded by an assurance by Representative Lanham, who managed the bill, that the only substantive modification of the House bill concerned the attorney's fees provision. 92 Cong. Rec. 9881 (1946).