Posts Tagged: "patent damages"

On November 21st, a jury verdict entered in the Eastern District of Texas awarded $12.3 million in damages to Tinnus Enterprises and ZURU Ltd. in a patent infringement case against major U.S. telemarketing firms Telebrands and its subsidiary Bulbhead.com. The verdict, which also carries a finding of willful infringement of the patents-in-suit, further upheld the validity of patents owned by Tinnus in stark contrast to findings which have issued by the Patent Trial and Appeal Board (PTAB) on those patents.

In determining indefiniteness of a claim based on a testing method referenced in the patent, courts will evaluate whether the method is well known in the art and could reasonably be adapted for the claimed purpose. Intervening rights is an affirmative defense that may arise when claims are substantially changed after an intervening reexamination. For lost profits, a non-infringing alternative does not have to be a direct substitute; it can be an alternative in a hypothetical market absent the infringing product. Enhanced damages are discretionary and may be declined when willful infringement is not egregious, e.g. in light of its defenses and when patentee amended its claims in reexamination. Irreparable injury based on an erroneous lost profits finding will not stand. Further, a permanent injunction may be reconsidered by evaluating the sales in the actual market after the grant of an injunction.

Enforcement of patents through litigation occurs when licensing has failed to result in an arms length negotiated resolution. In other words, patent owners resort to litigation when there is a market failure… When Keller says that the value of a patent is inextricably tied to the value obtainable through litigation that is just an economic truism. If the patent has no value when enforced in litigation, whether because the subject matter of the innovation has become patent ineligible, or because of a bias that tends toward finding practically everything obvious, the patent has no enforcement value. These litigation realities spill over into the business dealings because a patent that has no enforcement value will have necessarily have no licensing value.

On August 8th, a memorandum opinion entered in the District of Nebraska overturned a jury verdict award of more than $30 million handed to Omaha, NE-based intellectual property licensing firm Prism Technologies LLC back in June 2015. After Prism won the multi-million damages award from Overland Park, KS-based telecommunications company Sprint (NYSE:S), a decision by the Court of Appeals for the Federal Circuit upheld findings of patent invalidity in a different case involving the patents asserted by Prism. That Federal Circuit decision was applied to Prism’s case against Sprint in a way which shows patent owners that their intellectual property rights are seemingly never safe under the current U.S. patent policy regime.

In the calculation of design patent infringer profits, two key issues are the definition of the article of manufacture and the methodology for calculating total infringer profits… Depending upon the case, infringer profits may be based on the entire accused product or may be limited to a component of the accused product, but there is no test or guidance at this point for how to determine if the entire product is the article of manufacture or if only a component or certain components comprise the article of manufacture. Therefore, it may be prudent, depending upon the case, to calculate infringer profits based on one or more alternative assumptions as to what the article of manufacture is comprised of in the specific situation. In some cases, the design patent will cover most or all of the product in question but in other cases such as in the Apple case, it will cover only a minor portion of the product.

In a strong reversal of the Federal Circuit, the US Supreme Court held in SCA Hygiene Products Aktiebolag v First Quality Baby Products, LLC, No. 15-927 (March 21, 2017), that delay by a patentee will not give rise to a laches defense during the statutory six-year damages period under 35 U.S.C. § 286. Justice Samuel Alito authored the 7–1 majority opinion, extending the court’s decision in Petrella v. Metro-Goldwyn-Mayer, Inc. (2014), which held that laches is inapplicable for copyright infringement, a provision similar to Section 286 of the Patent Act… The Supreme Court noted that its determination regarding laches does not preclude a defense based on equitable estoppel…

Various Synopsys parties and EVE-USA, Inc. (collectively “Synopsys”) sued Mentor Graphics, seeking a declaration that Mentor’s ’376, ’531, and ’176 patents were invalid and not infringed. Mentor counterclaimed for willful infringement of those three patents, and also asserted infringement of two more (the ’526 and ’109 patents). The court consolidated the case with another involving a fourth patent owned by Mentor (the ’882 patent)… A jury does not have to further apportion lost profits to patented features of a larger product after applying the Panduit factors, which implicitly incorporate apportionment into the lost profit award. Claim preclusion applies when a claim was asserted, or could have been asserted, in a prior action. It does not bar allegations that did not exist at the time of the earlier action.

Activist Supreme Court decisions in the last decade have been principally responsible for these changes, stimulated by aggressive technology company incumbent lobbying. The combination of these decisions has had a far greater effect on the patent system and the economy than the Court originally intended. The U.S. is now in a compulsory licensing regime in which large technology incumbents that control at least 80% of collective market share employ an “efficient infringement” model of ignoring patents and forcing patent holders to enforce patent rights in the courts.

The relatively short opinion by Supreme Court standards – just over eight pages – puts it simply: “The text resolves this case. The term ‘article of manufacture,’ as used in §289, encompasses both a product sold to a consumer and a component of that product.”

On Tuesday, December 6, 2016, the U.S. Supreme Court issued a decision in Samsung Electronics Co. v. Apple which found by a unanimous 8-0 vote that a damages award for design patent infringement may be limited to revenues attributable to a component of an article of manufacture and not the entire article itself. Tuesday’s SCOTUS decision overturns a judgment reached in May 2015 at the U.S. Court of Appeals for the Federal Circuit, which would have awarded nearly $400 million in damages to Apple Inc. (NASDAQ:AAPL) for the infringement of three design patents by mobile devices marketed by Samsung Electronics (KRX:005930).

It is that time once again when we look back on the previous year in preparation to close the final chapter on 2016 and to look ahead toward 2017. With patent reform surprisingly stalled, the biggest news stories of the year may have been the Patent Trial and Appeal Board (PTAB)… As 2016 started and through at least the first half of 2016 it seemed as if the PTAB had become rather all-powerful and completely unsusceptible to judicial restraints. As we close 2016 and look forward to 2017 a decidedly different picture seems like it is emerging… The other big news story of 2016 was with respect to patent eligibility…

The Supreme Court need not wait for Congress to act. This is a case of first impression in interpreting the provision. Guided by its own law on design patent infringement and legislative history, the Court can reach the common sense result provided by the provision’s wording. Design owners should be made whole, but not unjustly enriched. Awarding the infringer’s total profits regardless of the contribution of the design to the end product’s value subverts patent law’s mandate to promote technological progress.

On Thursday, October 20, 2016, from 2pm to 3pm ET, Gene Quinn will host a free webinar discussion that will explore the genesis of the patent battle between Apple and Samsung, focusing on the design patent infringement fight currently at the United States Supreme Court. In addition to taking as many questions from the audience as possible, we will: (1) Ask the question “how did we get here” and provide a business/tech perspective on the battle. (2) Provide a quick primer on design patents and the test for determining if there is infringement. (3) Discuss the positions taken by Apple, Samsung and the Solicitor General at the Supreme Court. (4) Make predictions regarding what the Supreme Court will ultimately decide.

The U.S. government weighs in on Life Technologies’ side because “the application of U.S. patent law to participation by U.S. exporters in foreign markets also raise issues concerning the competiveness of American companies abroad and the respective roles of the United States and other nations’ patent laws.” The government argues that the Federal Circuit has not given a workable definition to determine when a component is sufficiently important or essential as to be “a substantial portion of the components.” The government also argues that, in legislating § 271(f), Congress’s purpose was to outlaw evasion of a U.S. patent by conduct that tantamount to manufacturing the patented invention in the U.S. for export. The government argues that there is no clear expressed Congressional intent for § 271(f) to reach supplying a single staple article: when the product is made abroad except for such a staple article, Congress left that predominantly foreign conduct to be regulated by foreign law. Finally, the government argues that the presumption against extraterritoriality requires the courts to assume both that “legislators take account of the legitimate interests of other nations” and “foreign conduct is generally the domain of foreign law.”