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February 13, 2008

Apportion This

The Innovation Alliance sports a study by Prof. Paul Janicke that concludes: "There is no pattern of runaway jury verdicts in patent cases." What's more: "Despite what some argue, under our system of justice, judges do not simply "rubber stamp" a jury's damage award."

The study was of jury damage verdicts in patent cases from January 2005 through November 2007.

This analysis of the records in each of the 93 patent cases where a jury returned a verdict on damages shows the following:
  • In 22 of the 93 cases, the jury returned verdicts of no damages.
  • In 13 of the 93 cases, the jury found monetary damages of $500,000 or less.
  • In 47 of the 93 cases, the jury found damages of $2,000,000 or more.

Of the 47 patent cases where the jury found damages of $2,000,000 or more:
  • In 1 case the parties had stipulated to the amount of damages.
  • Of the remaining 46 verdicts, in 9 cases the damages were based on a calculation of lost profits.
  • Of the remaining 37 verdicts, in 9 cases the damage verdict was set aside by the trial judge or on appeal.
  • Of the remaining 28 verdicts, in 3 cases the trial judge found the damages awarded were not supported by the evidence.
  • Of the remaining 25 verdicts, in 4 cases the trial judge increased the damage award based on the defendant's willful infringement.
  • The remaining 21 verdicts are still under review, either at the trial court or on appeal.

Judges had no problem finding a problem with jury verdicts when there was one:

Lucent $1,500,000,000 Trial judge set aside the verdict.
Rambus $306,900,000 Trial judge found the jury verdict was not
supported by the evidence and granted a new
trial on damages, subject to a remittitur,
allowing the plaintiff to accept $133,500,000
instead.
Medtronic $226,300,000 Jury verdict was based on lost profits. The
trial judge has post trial motions under
consideration.
AT&T $156,000,000 Trial judge set aside the verdict.
Z4 $133,000,000 Trial judge reviewed the verdict, let it stand,
and increased the award by $25,000,000 for
the defendant's willful infringement.
Freedom Wireless $128,025,000 Trial judge denied the post trial motions and
the parties settled without an appeal.
Alcon $94,800,000 Trial judge reviewed the verdict and trebled
the damages to $234,531,784 based on the
defendant's willful misconduct.
Translogic $86,500,000 Court of Appeals set aside the verdict based
on the Patent Appeals Board's rejection of the
patent.
DirectTV $78,920,250 Trial judge denied defendant's post trial
motions and the Court of Appeals affirmed the
judgment.
Asyst $74,700,000 The trial judge set aside the verdict, finding
the patent obvious.

The bottom line -

Georgia Pacific is under attack in Congress but not in the courts.

In the z4 case, the jury returned with a verdict of $133,000,000. In the Finisar case the jury returned with a verdict of $78,920,250. In each case, the jury's verdict was based on a calculation of a reasonable royalty. And, in each case, the jury was instructed to look to the Georgia Pacific factors in reaching a verdict. In each case the defendant appealed the judgment to the Federal Circuit. However, in neither case did the defendant challenge the jury instruction on how to determine a reasonable royalty. If Georgia Pacific is, in fact, a formula for unreasonable royalties that leads juries to these verdicts, one would expect defendants to raise the issue with the courts. They don't. The information in the table above suggests that George Pacific as applied by the courts works well.

[T]he notion that the principles in Georgia Pacific are not working, this survey of jury verdicts suggests we may have a solution in search of a problem.

Patent Prospector Infringement Damages Primer

Posted by Patent Hawk at February 13, 2008 5:14 PM | Damages

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