June 26, 2012

Poof to Proof

In one of many patent battles in the mobile phone war, Apple and Motorola squared off in Eastern Illinois, with stellar law firms as representation, naturally. Judge Posner dismissed the matter, finding that neither side had shown damages. Quotes from that decision: "Apple argues last-minute that any act of infringement, even if it gives rise to no measurable damages, is an injury entitling it to a judgment... Any intimation that proof of infringement is alone enough to warrant a remedial order was scotched by the Supreme Court in eBay Inc. v. MercExchange, L.L.C.,... 'Going for broke' is the inescapable characterization of Motorola's damages claim... Motorola has provided no evidence for calculating a reasonable royalty... The problem is not that damages cannot be calculated, but that on the eve of trial, with the record closed, it became apparent that the parties had failed to make a responsible calculation... Without an actual or prospective tangible injury, a federal court has no subject-matter jurisdiction. It would be ridiculous to dismiss a suit for failure to prove damages and allow the plaintiff to refile the suit so that he could have a second chance to prove damages. This case is therefore dismissed with prejudice."

Posted by Patent Hawk at 11:15 AM | Damages

November 29, 2011

As The Wheel Turns

Docket Navigator, which is a great patent service, reports: "The court granted defendants' motion for a new damages trial following remand even though defendants had not objected to the use of the 25% rule at trial. "Given the widespread acceptance of the 25 percent rule, it would not have been unreasonable for [defendant] to have failed to raise the issue before the Court. . . . [T]he Federal Circuit had implicitly upheld the use of the 25 percent rule prior to [Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir. 2011)], and Defendant had no notice that an objection to its use would have been fruitful in light of the Federal Circuit's previous treatment of the rule. The law does not speak in absolutes and recognizes that a litigant might not be aware of the necessity of making an objection at trial where the great weight of the case law suggests that an objection is not worth making." Spine Solutions, Inc. v. Medtronic Sofamor Danek, Inc., et. al., 2-07-cv-02175 (TNWD November 23, 2011, Order) (McCalla, J.)."

Posted by Patent Hawk at 1:09 PM | Damages

June 13, 2011

Commercial Success

Spectralytics sued Cordis and Norman Noble for infringing 5,852,277, claiming a manufacturing technique for a coronary stent. A jury found the patent valid and willfully infringed, to the tune of a 5% royalty. Appeal covered judgment as a matter of law (JMOL), damages, obviousness, willfulness, and award of attorneys fees.

Continue reading "Commercial Success"

Posted by Patent Hawk at 7:58 PM | Prior Art

February 26, 2011

Damages Detector

Poistron emission tomography (PET) gives a partial snapshot of organs in its view. To get the snapshot, a patient consumes a dose of radioactive juice that decays, emitting positrons that the PET picks up. 4,958,080, owned by Siemens, claims a detector useful for PET scans. Siemens sued Saint-Gobain for infringement, winning a jury award of $52.3 million, reduced post-trial to $44.9. Saint-Gobain appealed with a set of arguments that were scanned for decay.

Continue reading "Damages Detector"

Posted by Patent Hawk at 3:47 PM | Damages

January 4, 2011

Locking Up Damages

Uniloc sued Microsoft over its product activation software, infringing Uniloc's 5,490,216. Uniloc convinced a jury of willful infringement, to the tune of $388 million, plus $86 million in interest. Microsoft then swayed the district court judge to pitch the jury verdict. The inevitable appeal furthered court reform of the patent laws, particularly damages methodology. Goldscheider and his dedicated flock of followers are belatedly shoved into oblivion, and the whole hog market rule is butchered again.

Continue reading "Locking Up Damages"

Posted by Patent Hawk at 4:08 PM | Damages | Comments (4)

November 5, 2010

Secured

Talk about a plaintiff's dream. Finjin sued Secure Computing and Webwasher for infringing anti-malware scanning software patents 6,092,194; 6,804,780; and 7,058,822. Defendants counterclaimed 6,357,010 and 7,185,361. "A jury found that none of the patents was invalid, that Finjan did not infringe Defendants' patents, and that Defendants willfully infringed all asserted claims of Finjan's patents. The district court awarded damages to Finjan, enhanced the award under 35 U.S.C. § 284, and imposed a permanent injunction against Defendants." Appeal only slightly tarnished the victory.

Continue reading "Secured"

Posted by Patent Hawk at 12:38 PM | Claim Construction | Comments (12)

September 10, 2010

Backbreaker Broken

Spine Solutions, Inc. (SSI) sued Medtronic for infringing 6,936,071, which claims a spinal implant, "used to replace discs between vertebrae in the spinal column that have degenerated or become diseased." Summary judgment of infringement for claims 1 and 2, and dismissal of "all of Medtronic's 35 U.S.C. § 112 defenses" led to stipulated capitulation by Medtronic, setting up a trial on damages and obviousness. SSI was going for lost profits even though it didn't sell or make any device covered by '071. But SSI's sister companies did. SSI was allowed to amend its complaint to include them. The jury found '071 not invalid, and willfully infringed, to the $5.7 million in lost profits, and an 18% reasonable royalty on $9.1 million in infringing sales. Whereupon the district court doubled the damages and awarded attorneys fees. Adding insult to injury, the court entered a permanent injunction. All that left Medtronic a lot to appeal. And some of it was appealing to the CAFC.

Continue reading "Backbreaker Broken"

Posted by Patent Hawk at 11:32 PM | Case Law | Comments (1)

July 6, 2010

Garbage Bits

Telcordia sued Cisco for infringing network data transfer patents 4,893,306; 4,835,763; and RE36,633. '306 was knocked out by noninfringement in summary judgment. '763 and '633 ran the gauntlet through trial to a $6.5 million damages award. The district judge then tacked on prejudgment interest, an accounting for interim sales, and "ordered the parties to negotiate the terms of a royalty that would apply to the accounting and to post-judgment sales." Telcordia appealed the '306 claim construction. Cisco cross-appealed '306 and '763 validity, as well as the post-trial damages award and ongoing royalty negotiation dictate.

Continue reading "Garbage Bits"

Posted by Patent Hawk at 8:47 PM | Claim Construction | Comments (1)

June 1, 2010

Photo Finish

Jack C. Benun must really have wanted to be in pictures. Benun had a string of companies in film roll processing (lens-fitted film packages (LFFPs)), which digital technology has rendered obsolete. In the process of processing, Benun infringed Fujifilm patents. This episode, after injunction, interdicted shipment, illicit re-importation, bankruptcy, damages, and a finding of contempt, "is the sixth appeal from decisions finding liability for infringing Fuji's LFFP patents by Benun and companies under his control."

Continue reading "Photo Finish"

Posted by Patent Hawk at 12:09 PM | Damages

March 7, 2010

Whole Wallet

Taking a break from the frigid east Washington winter, CAFC Judge Rader has been marshalling in Marshall. Rader's adjudicating an East Texas patent brawl between IP Innovation and Linux vendors Red Hat and Novell. Judge Rader takes no wooden nickels as the Linux twins sought to toss IPI's damages expert as a Daubert deuce. Herein the good Judge smokes one.

Continue reading "Whole Wallet"

Posted by Patent Hawk at 12:47 PM | Damages | Comments (2)

February 8, 2010

Unpublished

ResQNet sued Lansa in 2001 for infringing five patents related to terminal emulation. Lansa found art, two unpublished user manuals for a software product called Flashpoint, that it argued anticipated one of the asserted patents, 6,295,075. But the district court wouldn't admit the art as public, and hence not legally prior art. Lansa tried to argue that NewLook 1.0 anticipated '075 by being sold more than a year prior to 075's filing date, but NewLook 1.0 "lacked an essential limitation," so was not found to be invalidating prior art. Alas for Lansa, a later version of NewLook was found to have the feature, and so infringed. Then there were the issues of damages, and sanctions....

Continue reading "Unpublished"

Posted by Patent Hawk at 2:52 PM | Prior Art | Comments (1)

December 22, 2009

Unpreserved

i4i sued Microsoft for a pissant feature in Word: editing custom XML. But to i4i's business, the feature was puissant. A seven-day trial found Microsoft willfully infringing a valid patent, with a jury award of $200 million. "Although statutorily authorized to triple the jury's damages award because of Microsoft's willful infringement, the district court awarded only $40 million in additional damages. It also granted i4i's motion for a permanent injunction." The inevitable appeal, widely expected to go more Microsoft's way than not, did not. Procedural fumbling by supposedly the best lawyers money can buy sold Microsoft short. Herein, CAFC case law heavy on burden and sufficiency, in a case practically covering the gauntlet of patent enforcement.

Continue reading "Unpreserved"

Posted by Patent Hawk at 8:57 PM | Case Law | Comments (1)

September 11, 2009

Form Fitting

In the salad days of personal computing, Ben Day came up with a "touch screen form entry system" while working at AT&T. 4,763,356 resulted. Current owner Lucent disingenuously sued Dell and Gateway over it, while Microsoft software was the real culprit. Microsoft indemnifies its big corporate customers, and so stepped in. And lost. To the tune of $358 million. Bad tune. So bad, the CAFC called it tone deaf. Herein, two teams of randomly competent lawyers dance bad ballroom.

Continue reading "Form Fitting"

Posted by Patent Hawk at 5:31 PM | Damages | Comments (1)

August 21, 2009

Ticker

Cardiac Pacemakers sued St. Jude Medical for infringing 4,407,288, claiming an implantable cardiac defibrillator (ICD). On second appeal, while multiple issues get the ticker running quicker, what really pumps is excluding method claims from Section 271(f).

Continue reading "Ticker"

Posted by Patent Hawk at 11:56 PM | Case Law | Comments (5)

June 30, 2009

B+

Monday, an East Texas jury awarded $1.67 billion for infringing a single patent: 7,070,775, which Centocor and New York University jointly own. '775 claims an "antibody or antigen-binding fragment." The patent applies to an arthritis drug. Abbott was the infringing party. $1.17 billion was for lost profits, plus $504 million for reasonable royalty damages. Abbott continues to swear non-infringement. The infringing product, Humira, sold more than $4.5 billion in 2008, Abbott's top seller, accounting for 15% of its revenues last year. Centocor's competing arthritis drug is Remicade.

Posted by Patent Hawk at 11:58 PM | Damages

June 16, 2009

Order of Magnitude

Heeling Sports has an enforcement campaign against infringers of its roller skate shoes. It botched the first round requesting damages for default judgment. As a result, Central California District Court Judge Florence-Marie Cooper awarded only $280,000 in damages, without explanation. Heeling appealed, which resulted in a remand for the judge to explain herself. Yesterday she did... not explain herself, when she changed her mind and awarded Heeling the $2.8 million it had asked for in the first place. Because sometimes, when money talks, that's all need be said.

Posted by Patent Hawk at 10:00 PM | Damages | Comments (1)

May 20, 2009

Wow Bow

Leon Russell once wrote: "Stray dogs that live on the highway walk on three legs. They learn too slow to get the message." Today, a jury awarded Toronto-based i4i $200 million for Microsoft's infringing 5,787,449. Last month, Singapore-based Uniloc scored a $388 million verdict from Microsoft infringing 5,490,216. Oozing denial, but with raucous squeals, Microsoft vows appeals.

Continue reading "Wow Bow"

Posted by Patent Hawk at 3:26 PM | Damages | Comments (1)

May 2, 2009

Reasonable Royalty

35 U.S.C. §284 awards damages "in no event less than a reasonable royalty for the use made of the invention by the infringer." Reasonable royalty is thus the lowest award possible for patent infringement, and in no way bounds what infringement should cost. §284 also allows award of enhanced damages, regardless of willfulness: "[T]he court may increase the damages up to three times the amount found or assessed." Herein, a gander at the damages floor: reasonable royalty.

Continue reading "Reasonable Royalty"

Posted by Patent Hawk at 3:27 PM | Damages | Comments (2)

April 5, 2009

Skating

Figuring infringement damages can be tricky. But, as with everything else, one can also be stupid about it. Heeling Sports successfully, by default judgment, sued footwear importers and distributors for infringing patents for roller skate shoes. When it came to damages, the skating terrain turned problematic.

Continue reading "Skating"

Posted by Patent Hawk at 9:04 PM | Damages

March 17, 2009

Canned

Crown Packaging and Rexam Beverage Can are trying to pop patents on each other. Crown tried to crown Rexam with 6,935,826, while Rexam counterclaimed to cane Crown with 4,774,839. Both came a cropper in summary judgment of non-infringement. From the appeal came a squeal of "no deal," with a toot of there being a dispute in fact.

Continue reading "Canned"

Posted by Patent Hawk at 11:21 PM | Claim Construction

March 9, 2009

Continuing Royalty

H. Tomás Gómez-Arostegui, Assistant Professor of Law, Lewis & Clark Law School, Portland, Oregon -

In eBay Inc. v. MercExchange, L.L.C. (2006), the Supreme Court held that traditional equitable factors apply to injunctions in patent and copyright cases, and that therefore the mere fact a defendant has infringed a patent or a copyright does not necessarily mean a final injunction must issue. In the three years since, lower courts have denied final injunctions more frequently than before and are now struggling with what relief, if any, to give prevailing plaintiffs in lieu of an injunction. Some courts permit plaintiffs to sue again later. But most award prospective relief to plaintiffs--sometimes a lump-sum damages award or more commonly a continuing royalty--to compensate plaintiffs for the defendant's anticipated post-judgment infringements. Plaintiffs often object to prospective-compensation awards as constituting compulsory licenses.

Continue reading "Continuing Royalty"

Posted by Patent Hawk at 8:44 PM | Damages

February 22, 2009

Damages Derision

While Alactel-Lucent and Microsoft have settled much of their patent spat, one outstanding battle, rushing headlong towards a CAFC cliffhanger, worries over damages method. The case involves a $511.6 million award to Alactel-Lucent over a calendar function. Microsoft filed the appeal over the whole gumbo: validity, infringement, and award, as is the norm. A Microsoft-supportive amici brief chimed in,suggesting patent damages were out of control. This brief came from other serial infringers, including Apple and Oracle, that figure they pay more than they make on patents, and so want to cut their infringement costs by rigging the system to their advantage. On February 9th, a diverse group pounced on that, with derision.

Continue reading "Damages Derision"

Posted by Patent Hawk at 1:18 AM | Damages

January 15, 2009

Damaging Apportionment

Scott Shane has thrown another log in the fire roasting the idea of apportionment as a means for figuring patent damages. Apportionment was found to be bad news for patent value, naturally, but also R&D, company valuation, and jobs. The harm would purportedly be unevenly spread, affecting more industries reliant upon innovation.

Continue reading "Damaging Apportionment"

Posted by Patent Hawk at 10:52 AM | Damages

December 20, 2008

Loop in the Lasso

35 U.S.C. § 271 defines "infringement of patent." ¶ (f) closed a dodge: foreign assembly that would be infringing if done domestically. The Supreme Court, in Microsoft v. AT&T, declared software an exception to that - one could skirt process infringement by shipping a software disc out of the country. Did that leave the 2005 CAFC ruling in Union Carbide v. Shell Oil standing, where "Section 271(f) applies to components used in the performance of patented methods and processes"? For now, in another highlight of the illogical incongruities in U.S. patent law.

Continue reading "Loop in the Lasso"

Posted by Patent Hawk at 2:22 PM | Damages

October 19, 2008

Damaged Damages

A judge in the panhandle state pandered to his prejudice by capriciously denying Floyd Minks $1.3 million in jury-awarded patent damages against Polaris, instead parceling Minks a measly $55,000, but granting attorneys fees, albeit half the amount requested without offering a new trial. In vacating and remanding, the CAFC gives a lesson in reasonable royalty while putting a lid on judicial juggling of fact and law.

Continue reading "Damaged Damages"

Posted by Patent Hawk at 11:18 PM | Damages | Comments (2)

August 28, 2008

Heated Argument

Lexion Medical sued Northgate for infringing 5,411,474 and 6,068,609, which claim techniques for heating a patient's gut in preparation for laparoscopic surgery. '609 was stomped by Obzilla JMOL, while '474 eked out $721,662 in jury-awarded damages. On appeal, an overturned claim construction vacated the award, but Obzilla remained triumphant.

Continue reading "Heated Argument"

Posted by Patent Hawk at 2:41 PM | Claim Construction

August 22, 2008

Shoe Shoo

DSW sued Shoe Pavilion for infringing 6,948,622 and D495,172, claiming a shoe display rack. Shoe Pavilion responded by removing the offending racks. The district court booted the case. The CAFC booted the district court, for importing a limitation into claims unjustifiably, and not properly awarding damages. Shoe Pavilion owed for the time it was infringing. "Because patent infringement is a strict liability offense, the nature of the offense is only relevant in determining whether enhanced damages are warranted."

Continue reading "Shoe Shoo"

Posted by Patent Hawk at 1:04 PM | Damages

August 18, 2008

In the Aorta

Dr. Jan K. Voda, M.D., sued Cordis for infringing two catheter patents: 5,445,625 & 6,083,213, getting a 7.5% royalty, and even enhanced damages and attorneys fees for willfulness. In light of eBay, Voda overreached for a permanent injunction. In a ruling replete with succinct case law infusions, appeal of most everything found the district court ruling in the right vein, except, most notably, willfulness in light of Seagate.

Continue reading "In the Aorta"

Posted by Patent Hawk at 11:16 AM | Injunction

July 22, 2008

Prove It

In its battle to pry open Microsoft's wallet, Alcatel-Lucent has two parallel patent cases. Yesterday it filed an identical motion in both cases, seeking full production of all Microsoft's patent license agreements with third parties. Such agreements are almost always confidential, as a condition of settlement. Alcatel doubts whether Microsoft has been truthful with regard to its settlements.

Continue reading "Prove It"

Posted by Patent Hawk at 1:28 PM | Damages

June 23, 2008

In A Huff

Southern California Judge Marilyn L. Huff, upholding a jury finding, ruled that Microsoft must pay Alcatel-Lucent $357.7 million for infringing 4,763,356, claiming a user interface for choosing a calendar date from a menu, used in Microsoft programs Outlook, Money, and Windows Mobile. Further, infringing stylus patent 5,347,295 with Windows XP Tablet PC Edition comes with a $10.35 million price tag. The $368 million tab inflates to $511.6 million with prejudgment interest ($139.5 million). Needless to say, Microsoft vows appeal.

Continue reading "In A Huff"

Posted by Patent Hawk at 10:23 PM | Damages

June 2, 2008

Coin of the Realm

The candy company Mars sucessfully sued Coinco for infringing 3,870,137 and 4,538,719, claiming ways to validate coins put in vending machines. Mars wanted damages on lost profits. After 15 years of enforcement action, those damages looked more like a lost cause.

Continue reading "Coin of the Realm"

Posted by Patent Hawk at 4:33 PM | Damages

March 19, 2008

Willfully

Australian patent-holding company QPSX Developments 5 sued Nortel, Juniper Networks, Lucent, Cisco and Alcatel in June 2005 for infringing 5,689,499, in east Texas. All settled but Nortel. Nortel lost.

Continue reading "Willfully"

Posted by Patent Hawk at 11:19 PM | Damages

March 18, 2008

Dish Wishing

Dish Network, formerly EchoStar, remains in denial, now begging the CAFC for a reversal of its upholding a $73.9 million jury damages award for infringing TiVo patents. Dish points to an expert witness they claim was self-contradictory, thus leaving infringement in doubt. What's most in doubt is whether Dish will get anything beyond a deaf ear to its plea.

Continue reading "Dish Wishing"

Posted by Patent Hawk at 7:03 PM | Damages

March 15, 2008

Half Blind

35 U.S.C. §284 sets patent award "damages adequate to compensate for the infringement but in no event less than a reasonable royalty for the use made of the invention by the infringer." Georgia-Pacific v. United States Plywood enumerated 15 factors upon which royalty determination may be made, and has become the bedrock of damages case law. A reasonable royalty is judicially defined as that amount which would have been set based upon a hypothetical negotiation between willing parties. How would such a negotiation be conducted between an infringer and a purely economic patentee (PEP), a patent holder that is not practicing the infringed invention?

Continue reading "Half Blind"

Posted by Patent Hawk at 8:02 PM | Damages | Comments (1)

Damages Trends

Contrary to propaganda, patent damages are not burgeoning; rather, remaining fairly constant. On average, awarded damages in software cases are less than for mining patents, and almost a third less than telecom patent cases. Juries award larger damages, but that may be a statistical anomaly for the types of cases tried before jury rather than at the bench. As purely economic patentees (PEPs) participate more in the patent market in this decade, reasonable royalties becomes more the basis for awards than lost profits.

Continue reading "Damages Trends"

Posted by Patent Hawk at 2:43 PM | Damages | Comments (1)

February 26, 2008

Down Boy

Medtronic's lawyers were hammered for malpractice in patent suit against BrainLAB last week. Now a different legal crew barking for Medtronic has been slapped a $10 million fine for similar malfeasance.

Continue reading "Down Boy"

Posted by Patent Hawk at 4:38 PM | Litigation | Comments (1)

Relief

Carlos Amado owns 5,293,615, which claims an interface method between spreadsheet and database programs. Amado sued Microsoft for its Office product infringing, and won 4¢ per copy royalty, and an injunction. The injunction was stayed pending post-trial motions, during which Amado got 12¢ per copy royalty. In wake of the SCOTUS eBay decision, the injunction was dissolved by the district court. On second appeal, the CAFC affirmed the district court handling of injunction, while a spat about spare-change royalty rate was remanded.

Continue reading "Relief"

Posted by Patent Hawk at 11:19 AM | Damages | Comments (1)

Willful

Monday, the Supreme Court snubbed certiorari for the CAFC en banc Seagate decision that practically eviscerated willful patent infringement. Nor reason was given. To seek enhanced damages, the Seagate standard requires that a patent holder prove that an infringer was "objectively reckless" in knowingly infringing a patent. Damages deflation ahead.

Posted by Patent Hawk at 12:20 AM | Damages

February 23, 2008

Blackboarded

Blackboard suing competitor Desire2Learn for infringing 6,988,138 spurred academic outrage, but a hillbilly east Texas jury paid the pointy-heads no heed, awarding $3 million in damages.

Continue reading "Blackboarded"

Posted by Patent Hawk at 7:04 PM | Damages | Comments (1)

February 17, 2008

Interest

As reported last week, Dr. Bruce Saffron nabbed Boston Scientific for patent infringement to the tune of $432 million. Friday, the presiding judge tacked on $69 million in pretrial interest. Saffron's lead attorney pipped: "$69 million is a nice amount." Prejudgment interest is common, but not a given.

Continue reading "Interest"

Posted by Patent Hawk at 3:29 PM | Damages

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."

Continue reading "Apportion This"

Posted by Patent Hawk at 5:14 PM | Damages

February 12, 2008

Stent for Rent

Over a decade ago, radiologist Dr. Bruce Saffran invented a drug-eluting porous sheet, and was granted 5,653,760. Boston Scientific liked the idea. Imitation resulted in flattery costing $431.9 million, an 8% royalty on U.S. sales, and 6% on foreign sales, from 2004 through last September. The award was reputedly the sixth largest in history. Hard-nosed BS will try to get presiding Eastern District of Texas Judge T. John Ward to overturn the jury verdict; barring that, appeal.

Continue reading "Stent for Rent"

Posted by Patent Hawk at 6:31 PM | Damages | Comments (10)

February 9, 2008

Vision Correction

CIBA Vision, maker of extended-wear contact lenses, was short-sighted: its ophthalmologist, Rembrandt Vision Technologies, corrected CIBA's vision. The tab was $41 million. That's a 6+% royalty for past sales of contact lenses infringing 5,712,327, which claims contact lenses with superior water absorption. Rembrandt now has superior lucre absorption.

Continue reading "Vision Correction"

Posted by Patent Hawk at 1:17 PM | Damages

January 30, 2008

Restraint

American Seating sued USSC Group for infringing 5,888,038, claiming a wheelchair restraint system for buses. On the second wheeling to the appeals court, invalidity by prior public use and lost profits damages were the issues.

Continue reading "Restraint"

Posted by Patent Hawk at 2:21 AM | Prior Art

January 28, 2008

Dr. PatentLove

ScaledStrangelove.JPG or: How I learned to Stop Worrying and Love Proposed Damages Apportionment Law

The blawgosphere is alive with discussion of proposed patent reform.  Patent Troll Tracker today mocked Dennis Crouch for his support of the status quo.  Here at Patent Prospector, we maintain a healthy amount of skepticism about the proposed legislation.  Patent Hawk earlier pointed out how the new damages apportionment rules could potentially raise the cost of litigation for accused infringers by requiring the disclosure of more (highly proprietary) information about the cost, revenue, and profit of accused products and processes.  For my part, in an earlier post I called the new damages apportionment rules "the crudest and most error-prone way to handle bad patents."  The worry is that judges and juries will tend to "split the baby" by lowering some damages awards, which in may cases are properly justified by the economic value of a patented technology.  The political reality is that a Congressional amendment to the law suggests the inference that current reasonable royalty awards have been too favorable to patentees.  (See, for example, how many injunctions have been awarded to non-practicing entities since Mercexchange v. eBay.)  Information asymmetries between judge or jury and the expert witnesses and parties should be part of the equation in designing the rules, as some recent antitrust law scholarship suggests.

Despite this skepticism, I cannot agree with Dennis that "the proposed patent reforms now being debated by the Senate do virtually nothing to address these serious problems and instead potentially cause harm to the current regime."  Specifically, Dennis points out "massively overlapping claims" as a problem for the current patent system.  Since earlier posting strong criticism of the proposed damages apportionment rules, I've come around to seeing how the proposed rules could actually improve the efficiency of patent markets afflicted with the transactions costs associated with "massively overlapping claims."  Here's how:

Continue reading "Dr. PatentLove"

Posted by Michael Martin at 4:43 PM | Damages | Comments (7)

Earmarked

Daiichi Sankyo sued Apotex for infringing 5,401,741, which was found obvious on appeal. In securing a temporary injunction at the outset of litigation, Daiichi had posted a $5 million security deposit. New Jersey district court judge Susan Wigenton last week awarded the deposit to Apotex, "to recover damages for wrongful injunction." Daiichi gets to keep the interest paid on the deposit.

Posted by Patent Hawk at 1:00 PM | Damages | Comments (1)

January 22, 2008

Damages Apportionment Blowback

The presently proposed Senate revision to awarding patent infringement damages incorporates an old concept in new clothing: damages apportionment. Prior to the patent act of 1946, § 284 provided for such hair-splitting, and was referred to by the patent commissioner at the time as "one of the sorest spots in the enforcement of the law in the United States." What could it mean this time around?

Continue reading "Damages Apportionment Blowback"

Posted by Patent Hawk at 11:04 PM | Damages | Comments (2)

October 18, 2007

Drive Train

Paice sued Toyota over three hybrid electric vehicle drive train patents: 5,343,970; 6,209,672; 6,554,088. Paice scored a doctrine of equivalents (DOE) win, with $4.3 million in damages. The district court sua sponte imposed an ongoing royalty on Toyota. Toyota appealed the infringement verdict, while Paice wanted a permanent injunction; neither got in gear. But the CAFC remanded for the district court to justify its ongoing royalty rate, though considered it permissible for a court to set such a rate, albeit gently discouraging it as general practice. Dissenting judge Rader thought better: that the court setting the rate without the parties' input smacked of a compulsory license.

Continue reading "Drive Train"

Posted by Patent Hawk at 9:59 PM | Damages

October 17, 2007

Willful Wavering

Owing to the Seagate CAFC ruling this past August, essentially scuttling patent infringement willfulness, Southern California U.S. District Judge James Selna mulled a new trial for Qualcomm in its double-damages loss of $39.3 million to Broadcom. "It would be an understatement to say that the Federal Circuit rewrote decades of case law interpreting the requirements for demonstrating willful infringement," Selna penned in his opinion.

Continue reading "Willful Wavering"

Posted by Patent Hawk at 12:43 PM | Damages | Comments (3)

September 26, 2007

Ears Ringing

Vonage, the best of the VoIP providers, had its bell rung twice for patent infringement in the past couple of days. Yesterday, a jury found Vonage infringed Sprint patents; a $70 million tab in the offing. Vonage will, of course, appeal. But, with history as a guide, that offers little succor, as Vonage lost its appeal for two of three Verizon patents it infringed, and the third still looms. Being the best by snitching others' IP is running the company into the ground.

Continue reading "Ears Ringing"

Posted by Patent Hawk at 12:15 PM | Claim Construction | Comments (1)

September 17, 2007

Calling Card

An Eastern Texas jury slapped AT&T with a tab of $156 million for willfully infringing calling card patents owned by TGIP (Thank Goodness IP?). That tab could be tripled by the court. As it is, the award ranks as one of the largest by a jury in the district.

Continue reading "Calling Card"

Posted by Patent Hawk at 11:53 PM | Damages

September 5, 2007

Calibration

4,743,902, owned by Mitutoyo, claiming a device for electronically measuring an object's movement, has been a hex to Central Purchasing. Central settled with Mitutoyo in 1994 over a 1992 assertion of '902, agreeing not to further infringe. Central lost a declaratory motion in 1995 that sought to invalidate the patent. In a suit filed in 2003, Central got collared for infringing again. Of course, Central appealed. Mitutoyo also appealed, as its pitch for willful infringement got tossed by the trial court.

Continue reading "Calibration"

Posted by Patent Hawk at 11:46 PM | Litigation

August 22, 2007

Waiving Under Willfulness

Seagate appeals an order to disclose what would ordinarily be privileged attorney-client communications between it and trial counsel. The springboard for waiving the privilege by the district court is a finding of willful patent infringement. The issue before the appeals court is proper scope of discovery when relying upon advice of counsel, and the advice sours. But the CAFC goes far beyond that: in a unanimous en banc reversal of its own precedent of waiving privilege, the appeals court gratuitously furthers the recent judicial trend in eviscerating patent enforcement, redefining willful infringement without provocation, an issue orthogonal to that which it put before itself.

Continue reading "Waiving Under Willfulness"

Posted by Patent Hawk at 1:48 PM | Case Law

July 12, 2007

Teardrop

Visudyne is a light-activated drug treatment for a particular form of age-related vision loss, specifically, "wet" macular degeneration. Visudyne's development began with a serendipitous discovery, and ended in acrimony between the those involved in development of the treatment that came to fruition over a decade after initiation. A blockbuster with cumulative sales over $2.3 billion from product launch in 2000 through March 2007, there was plenty of money to go around. Tuesday, Judge William Young of Massachusetts district court adopted a patient jury's verdict in sorting out a very complex story to set a reasonable royalty, and, as a kicker, scolding the litigants for their pettiness. (MA 10783-WGY)

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Posted by Patent Hawk at 1:29 AM | Damages

June 26, 2007

Middle Ground

Considering the injunction facing Vonage from infringing Verizon patents, an injunction that could effectively force Vonage out of business, in oral arguments today before a CAFC three-judge panel, Judge Timothy Dyk wondered aloud about a middle ground.

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Posted by Patent Hawk at 12:18 PM | Litigation

June 13, 2007

Undertaking

A couple of nails showed up near the coffin of the Patent Reform Act of 2007, placed by CAFC Chief Judge Paul Michel, who is turning into quite the patent mover and shaker (last month's letter). Michel's keyboard begs to type the adjective "stupid" in describing the proposed revision to § 284 on damages, something Michel himself parlays with but a tad more reserve.

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Posted by Patent Hawk at 4:15 PM | Damages

May 26, 2007

Gone to Seed

After illicitly squirreling away seeds, farmer Homan McFarling relentlessly fought Monsanto over the licensing terms he agreed to. In the third appeal of the case, the damages are assessed (CAFC 05-1570).

In reviewing damages awards in patent cases, we give broad deference to the conclusions reached by the finder of fact. [A] jury’s damages award “must be upheld unless the amount is grossly excessive or monstrous, clearly not supported by the evidence or based only on speculation or guesswork.”

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Posted by Patent Hawk at 12:57 AM | Damages

May 11, 2007

Damaging Damages

Belying its own legislative heritage, the bipartisan Patent Reform Act of 2007 grossly complicates patent infringement compensation, moving from the current reasonable royalty to an outrageous conjecture for a damages award "applied only to that economic value properly attributable to the patent’s specific contribution over the prior art." This economist throws his head back in laughter at this little obscenity of insensibility, reminiscing about the scalding apportionment suffered over 60 years ago.

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Posted by Patent Hawk at 12:01 AM | Damages

April 6, 2007

Hung Up

District court Judge Claude Hilton slapped a odd order on Vonage today, stopping it from signing up new customers. Vonage had been found to have infringed three Verizon patents. Verizon gave the judge the idea. Besides the headache, this gives Vonage one more thing to appeal.

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Posted by Patent Hawk at 11:55 AM | Litigation

March 8, 2007

Hang Up

Losing business because of lousy service, Goliath Verizon nailed David Vonage for infringing three patents. The immediate damage to Vonage: $58 million, 70% less than the $197m sought, and an ongoing 5.5% royalty if Vonage doesn't figure a workaround. The infringement was found not willful. Verizon is seeking a permanent injunction. This is but the first patent attack which Vonage must weather, or wither.

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Posted by Patent Hawk at 4:10 PM | Damages

February 22, 2007

High Roller

Microsoft would like nothing more than to eviscerate patent enforcement. Unlike its erstwhile hardware brethren, IBM, Microsoft has struggled rather fruitlessly monetizing its own patents. Constantly hammered for infringement, astonishingly dim in handling settlement negotiations, Microsoft as town crier may have found a willing audience in its appeal to the Supreme Court of its loss to AT&T, though no credit to the bozo Microsoft had as its mouthpiece. Now it's lost the first round in its wide-ranging battle against Alcatel-Lucent, nailed with a tab of $1.52 billion. But that's just the start of it.

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Posted by Patent Hawk at 7:23 PM | Litigation

December 20, 2006

Flagrant

In 2003, Visto sued Seven Networks in the Eastern District of Texas for infringing three secure email patents: 6,023,708; 6,085,192; and 6,708,221. Seven was found guilty in April, with the jury awarding a royalty rate of 19.75% on infringing product revenue, a tab of $3.6 million. Tuesday, found willful, the tab has been doubled, and then some.

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Posted by Patent Hawk at 4:48 PM | Damages

December 14, 2006

Jabbed

DSU Medical sued Japanese medical supply company JMS and SE Asian manufacturer ITL for direct, inducement, and contributory infringement of 5,112,311 and 5,266,072, which claim a guarded winged-needle device that reduces the risk of getting stuck with the needle. The defendants avoided getting stuck with claims 46-47 and 50-52 of '311 by proving invalidity, but JMS got jabbed $5 million for infringing '311 claims 49, 53-54. Though long-winded in doing so, the CAFC (04-1620) wholly concurred with the trial court.

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Posted by Patent Hawk at 11:09 AM | Claim Construction

October 10, 2006

Power Up

Power Integrations zapped Fairchild Semiconductor for willfully infringing four patents. Tuesday, a Delaware jury awarded almost $34 million in damages, at a strikingly high 15% "reasonable" royalty rate.

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Posted by Patent Hawk at 10:50 PM | Damages

October 2, 2006

Blowup

Aero Products, which makes & sells inflatable air mattresses, sued Intex Recreation for patent (5,367,726) and trademark infringement. Aero won both, and Intex appealed (CAFC 05-1283). There was a claim construction dispute of interest, as well as an award of double damages on appeal.

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Posted by Patent Hawk at 2:00 PM | Damages

September 23, 2006

Taking the Fifth

It can be disgustingly impossible to hold the government accountable. Here we have a tale of evasion by the U.S. government, that the Fifth Amendment's takings clause no longer applies to patents, sanctioned by the federal courts (CAFC 04-5100), with a vigorous dissent by renowned gadfly Judge Newman.

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Posted by Patent Hawk at 7:42 PM | Damages | Comments (2)

August 18, 2006

Tissue Issues

Cook Biotech, exclusive licensee, and Purdue Research Foundation, owner of 5,554,389, sued ACell for infringement. In the appeal (CAFC 05-1458), there was a significant issue of claim construction, an interesting insight into seeking damages, and an applied corollary to the "all limitations" rule in figuring infringement under the doctrine of equivalents.

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Posted by Patent Hawk at 12:33 PM | Case Law

July 28, 2006

Prudent Rambus

Rambus took the bird in the hand, accepting a lowered damages award in its infringement case against Hynix Semiconductor for infringing computer memory patents.

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Posted by Patent Hawk at 3:08 PM | Damages

July 19, 2006

Rambus Damages Axed

Rambus successfully sued Hynix Semiconductor for patent infringement, and was awarded $307 million in damages by a jury. Calling that sum "exaggerated," presiding judge Ronald Whyte reduced the award (court order) on Monday to $133.6 million.

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Posted by Patent Hawk at 12:44 PM | Damages

July 7, 2006

Willful TV

In June, DirecTV got beamed $78.9 million for infringing 5,404,505, a Finisar patent on digital transmission. Now DirecTV has been found to have willfully infringed, adding $25 million to the tab, plus 6% interest since April 4, 1999 ($12m), and an ongoing royalty of $1.60 per set-top box until the patent expires in 2012.

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Posted by Patent Hawk at 11:46 PM | Damages

April 19, 2006

Universal Remote Control

Phillips sued Contec and its suppliers for infringing two patents related to universal remote controls. The appeals court (CAFC 05-1351) upheld the Delaware district court's summary judgment split decision based upon claim construction.

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Posted by Patent Hawk at 1:40 AM | Claim Construction

April 13, 2006

Desperate Victory

TiVo pulled out a $74 million win from larger rival EchoStar Communications in patent-holder heaven, the Eastern District of Texas, but the victory smacks of desperation.

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Posted by Patent Hawk at 8:55 PM | Damages

January 24, 2006

Blunt Instrument

United States Surgical appealed a lower court patent infringement decision in favor of Applied Medical over 5,385,553, feeling a bit put out about the $64.5 million judgment for enhanced willful infringement damages, the vig (known as "interest" to you non-mafioso), and attorneys fees. Scalpel not in evidence, the CAFC (05-1149) used a blunt instrument.

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Posted by Patent Hawk at 11:18 AM | Damages

July 8, 2005

Hypothetical Projections

Honeywell sued Hamilton Sunstrand Corp. (“HSC”) for patent infringement. Never mind the technicalities; the juicy fruit relates to infringement damage calculation, specifically "...the question presented to the court is whether sales projections that were unavailable at the time infringement began may be used as a royalty base to calculate damages." (District of Delaware July 5, 2005 decision in case 03-1153)

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Posted by Patent Hawk at 12:00 AM | Damages | Comments (1)

April 26, 2005

Patent Infringement Damages Out of Line

Last Saturday, in advocating changes in patent law to grant leniency for patent infringement, Sanjay Prasad, Chief Patent Counsel for Oracle, asserted that the courts have been awarding damages for infringement that are out of line with the patent's real value. "No reasonable business person would ever agree to" pay those sums in licensing fees, Prasad observed at a conference sponsored by the Association for Competitive Technology, to which a murmur of "duh" was heard in the room. "There's a large distortion between the value provided realistically, and how that comes out in court." Sanjay presented no evidence to support his assertion.

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Posted by Patent Hawk at 1:32 AM | Damages

March 24, 2005

Infringement Damages Primer

Courts are willing to grant a patent holder compensation for all economic losses that are reasonably attributable to infringement, but the patentee shoulders the burden of convincing the court of the causality and measure of loss. More often than not, damage assessment is simplified to a reasonable royalty.

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Posted by Patent Hawk at 11:07 AM | Damages