by Dennis Crouch
Apple v. Motorola (N.D.Ill. 11–cv-8540) (Order by Judge Posner, June 2012)
Compensating for Harm: In most tort cases, the harm is easy to identify (if not prove). A negligent driving accident results in property damage. Tortious battery leads to medical bills. However, the non-rivalrous nature of intellectual property often makes the harm more difficult to ascertain. No one is directly injured per se when a third party begins to use an inventor's idea without authorization. Rather, the idea is still available and a third party's separate use of the invention does not prevent the inventor from continuing use the invention as well. Competitive injury sometimes comes into play. Of course, in most situations we don't think of competitive injury as an actionable harm, but rather classify it as beneficial competition – survival of the fittest. And, in most US patent lawsuits, the patented invention does not relate to any ongoing market competition between the parties. The legal harm does exist, but it comes from the statutory exclusive right that guarantees an exclusive entitlement to the patentee along the potential for injunctive relief and a reasonable royalty. Patentees expect to collect rents if others use their patented inventions. Litigation damages are those rents.
Judge Richard Posner is sitting by designation as a trial court judge in a pending infringement lawsuit between Apple and Motorola. (N.D.Ill. 11–cv-8540). Judge Posner's opinions are always interesting to read and this case is no exception. In a recent order, Judge Posner canceled the jury trial scheduled for this week and instead opined that the case is moot because there are no damages and therefore, “neither party can establish a right of relief.” In the order, Judge Posner indicated that a full opinion would be forthcoming, likely within the week.
The crux of the order is that, even if Apple's asserted patents are valid and infringed, Apple cannot prove any damages stemming from the infringement nor can it prove that the harm of ongoing infringement is sufficient to demand injunctive relief.
Damages not an Element: For some causes of action, harm is considered an element of the offense that must be proven before liability is found. Ordinary defamation requires harm. Likewise, murder requires a death. However, many other causes of action (including patent infringement) do not require a showing of harm for the substantive case. Rather, the the usual approach in patent cases is to first determine whether infringement has occurred (without regard to the damage caused) and then determine the appropriate damages. This approach is derived by the patent statute that defines infringement in 35 U.S.C. 271 without regard to damages. A separate provision (discussed below) then suggests a damage calculation method.
Patent Infringement but No Damages?: Section 284 of the Patent Act briefly defines the scope of damages available for infringement. The statute indicates that damages should be “adequate to compensate for the infringement but in no event no less than a reasonable royalty for the use made.” Many see the statute as offering a minimum statutory damage award of at least a reasonable royalty. In my view, one implication of the statute is that damages will never be properly calculated as zero. Rather, even a nominal infringement should result in at least a few pennies as the reasonable royalty.
Proving Damages: It is easy to reconcile my notion that infringement damages are always posigive with Judge Posner's conclusion that no damages exist in this case. The missing linkage is the procedural reality that it is the patentee's burden to prove damages. A planitiff that cannot prove damages should not expect a court to speculate on the proper award. Rather, without that proof, the proper award is zero (or perhaps a nominal award of $1). Here, because Apple's damages experts have either been rejected by the court or else have provided unbelievable reports, Apple's award will be zero.
The official order came out:
link to scribd.com
First step: compulsory licensing.
Second step: banning patents outright.
IANAE, I believe the Supreme Court in eBay premised this upon the suggestion that the patentee was willing to license the patent. You now apply the principle of eBay to require compulsory licensing?
I think you got the policy backwards.
Mr. Odds, I think Apple's counsel just redeemed himself from the embarrassment of May 22, assuming it was the same counsel.
And yet another place where a redux is applicable:
Fools No One said in reply to IANAE…
“until you get caught with a question you can’t answer.”
LOLZ,
So says the reigning spiked-in-the-face-and-leave-the-game Calvinball champion.
Are you taking lessons from MM on how to accuse others of what you do?
The masters of being hypocrites: MM and IANAE.
If a patent holder is unwilling to license his patent, and the infringer’s infringement is ongoing, just how is the harm to the patent owner reparable?
In money, unless the patent owner can show that the infringement actually costs him more than money.
You’re confusing what the patent owner subjectively wants with what the law entitles him to get.
“Apple’s counsel said that it’s the company’s right to choose to pursue an injunction against Motorola devices rather than seek compulsory licensing from the court”
At least (still) in the US, the law does not demand compulsory licensing.
“the judge did not make any rulings today”
Maybe he learned a lesson.
“Yes, but in accordance with the principles of equity (which is also in the statute), not all violations of rights are worth preventing by injunction – only the ones that would cause irreparable harm.”
Not quite, Mr. Strawman.
The principles of equity have an even more basic principle that you never quite seem able to get your head wrapped around: make the aggrieved whole.
As Inviting Body Punches schools you, and as others continue to school you, you need to understand the nature of a patent and apply all of the principles of equity (and not just the ones that suit your ill-begotten h_atred of patents).
IANAE, "one violations that cause irreparable harm … according to principles of equity."
OK.
If a patent holder is unwilling to license his patent, and the infringer's infringement is ongoing, just how is the harm to the patent owner reparable?
IANAE, “Can’t” is not the same thing as “didn’t.”
It’s close enough for jazz, if you know it’s an element of the test for the remedy you want. You don’t have to show a dollar amount to get an injunction, but you do have to show harm.
Would you prefer if “can’t” disentitled you to an injunction for lack of irreparable harm, and “didn’t” disentitled you to an injunction for waiver?
“…to prevent the violation of any right secured by patent….”
Yes, but in accordance with the principles of equity (which is also in the statute), not all violations of rights are worth preventing by injunction – only the ones that would cause irreparable harm.
Even Ned gets in the Calvinball game of spiking IANAE in the face.
IANAE, "Can't" is not the same thing as "didn't."
Also, one can sue for an injunction and not sue for damages. The failure of proof of damages is legally irrelevant to the issue of harm.
The harm wrt a patent is specified in the statute which reads,
Section 283 reads in material part, "…to prevent the violation of any right secured by patent…."
The violations and rights are specified in Section 271. Not a single one of these rights depends in any way on harm to the patent owner.
Posner seems to believe that if one does not prove damages there legally is no possibility of an injunction.
If you can’t show harm, you can’t show irreparable harm.
Mr. Easily, I fully agree with this post. Posner seems to believe that if one does not prove damages there legally is no possibility of an injunction. While he has yet to explain why, let us assume for the moment that he thinks that the failure to prove damage is a failure to prove liability, the first prong of the four that establish a right to an injunction.
If so, he is dead wrong.
Jeff, Every sale of a patent is subject to prior grants and legally vested rights. The new patent owner here cannot sue anyone who legally owns a patented product from using and selling that product. That is the law.
Summary of yesterday’s hearing on injunctions.
link to androidauthority.com
Comment: If Posner didn’t have such a big reputation, I would suggest that either he doesn’t have a clue about patent law, or that he knows something about patent law that nobody else knows.
Just for example, Apple points out that all it wants is for Motorola to remove the patented features from it phones, which even Motorola testified was easily done at minimum cost. Posner suggests however that this would be devastating to Motorola. What? Why? If these patents are critical to Motorola’s continued survivability in the cell phone market as suggested by Posner’s statement, it would seem that there is or was something fundamentally flawed in Posner’s discussion of the damages issue regarding Apple’s patents.
Turning to Motorola patent: Motorola is willing to license the patent on FRAND terms which are stated to be 2.2% Apple is unwilling to pay this rate. So is that justification for not issuing an injunction?
What if Apple continues to infringe and continues to not pay the 2.2%. Why aren’t Motorola’s damages in any future litigation that 2.2%. Is Apple’s continued infringement willful? Are they not risking the treble damages?
Posner has to know something we observers do not know, otherwise he seems way out there.
Eye dont see how it should be the responsability of the plaintiff to prove damages in infringement if the defendants dident consider it valuable then they wouldent have stolen it in the first place. Each feature has a value revelant to the overall consumer willing to pay price.
Tripple damages is something that should be inforced in inventorship disputes where the oposing party is using there monatary abilities to overwhelm the ability of the indegent to fight a protracted legal battles it should be assesed in order for the underdog to afford legal representatives
hypothetical “no damages” infringement or perhaps a case where patent exhaustion applies:
Company A owns a Patent for an automobile accessoy. they go bankrupt. their assets in bankruptcy are two protypes of their patented product that they acquired during the time they owned the Patent and the Patent itself. The bankruptcy trustee sells the naked Patent and nothing else to buyer B. the trustee next wants to sell the remainder of the bankruptcy estate, which is the two prototypes. the buyer of the Patent “B” threatens to sue the trustee for infringement if trustee transfers the protoypes to anyone but “B”. are the remaining prototypes protected by the patent exhaustion doctrine? even if it is an act of infringement, are “B”‘s damages nominal as they never had any ownership interest in the prototypes?
IBP, I agree with this analysis, but consider the question. In determining the right to an injunction, one must consider whether a legal remedy is adequate. When I went to school, an ongoing infringement or tort or nuisance was the very thing that one looked for to determine whether a legal remedy was adequate. I don't know why this basic law should not apply to patents.
Recall, please, that one may seek an injunction as the only remedy in an infringement case. One does not have to seek damages and in some, if not many, cases, damages are not available due to lack of notice of infringement. Therefor, the failure of proof of damages seems irrelevant to whether there should be an injunction, assuming of course, that infringement itself is a violation of the law and of one's exclusive rights.
Posner's original dismissal seem to suggest that infringement itself is irrelevant to the analysis and that one must always prove damages before there is a legal wrong. I find this thinking extraordinary given Art. 1, Section 8 of the constitution, 35 USC 271 and 283. The later reads,
"…[C]ourts … may grant injunctions … to prevent the violation of any right secured by patent…."
Without an injunction, the parties can simply file suit once again for acts of infringement that took place since the filing of the lawsuit in the first place. Why? Infringement is a statutory violation of the law.
The legal remedy of damages requires proof of loss. In order for any such proof to be available, the loss must have actually been incurred, otherwise it is merely speculative and cannot be proven.
AFAIK there are no legal remedies for damages to be incurred in the future.
For instance, how would you ever know that infringement is actually ongoing? It could stop at any time. Even if the defendant declares in the morning their intention to continue infringing, their plant and warehouse might burn to the ground tomorrow.
Reasonable royalty going forward could conceptually be construed as a present quantification of future damages, with the condition precedent that infringement will have occurred–but that is not a legal remedy.
And, just because a remedy is spelled out in statute does not mean that it is a legal remedy, injunction in 35 USC 283 being a prime example.
So, the legal remedy of damages is only legally adequate to compensate for loss already incurred and able to be proved, IMO.
IANAE–
Once again, the essential test for any equitable remedy is whether, after all legally available remedies have been considered, there remains an unremedied unfairness to the plaintiff. Of course, the plaintiff must come to equity with clean hands.
If a particular equitable remedy offers a type of remediation that could both accurately and precisely make the plaintiff whole with regard to the type of loss proved, then it must be considered by a court, either if the issue has been properly placed before the court, or sua sponte based on the inherent equitable jurisdiction of the court, and the equitable factors then considered.
And as far as “reasonable royalty” is concerned, it is not a statutory remedy as used in 35 USC 284. It is mentioned merely as a method of determining a lower limit of a damages award that compensates for past infringement, where lost profits cannot be proved to the satisfaction of the court.
“A reasonable royalty going forward”, as used by Posner, that does not compensate for any incurred loss actually able to be proved by the plaintiff, is an equitable remedy, and not a statutorily-provided legal remedy. It provides remediation of the same type of loss as that remediated by injunction, only it is not as well-matched to the nature of that loss as is injunction. To achieve the gold standard of loss-remedy matching afforded by injunction, the ebay factors need to be proved, in addition to general equitable factors. In a situation where they cannot all be proved, yet unfairness to the plaintiff remains, the equitable remedy of reasonable royalty going forward remains, akin to the equitable remedy of unjust enrichment.
It is the silver standard of loss-remedy matching, and is entirely within the inherent equitable jurisdiction of the court to raise sua sponte.
Good for Posner.
“everybody else gets to infringe these “exclusive rights” for money”
That’s some serious straw.
I wasn’t aware that there were other infringers out there, let alone everybody else.
You do realize that a contracted licensee is not an infringer, right?
Maybe that “Infringers’ Rights” guy is on to something…
IBP,
If infringement is ongoing, when is a legal remedy adequate?
Blatant misunderstanding of the nature of patents.
Back to the IANAE we all know and love.
And I thought that IANAE had gone soft because of his love of all things Monsanto.
Now back to your tower with you.
Does fairness require that the character of the remedy match the character of the loss?
IMHO, the answer to this is yes,
In the humble opinion of the law, the answer to this is “no”, and has been for centuries, and that answer could not be clearer. If the answer were “yes”, then not only would MercExchange have gotten its injunction against eBay, but the actual test for an injunction (not only in patent law, but in all areas of law) would be “did you win your case?”
equitable remedy of reasonable royalty
You mean the statutory remedy of reasonable royalty?
Yes, they are to address it, and in particular they are to address why in the world they should be getting an injunction if everybody else gets to infringe these “exclusive rights” for money.
Leo–
Ah, the game is afoot! Thank-you for actually reading and responding meaningfully to a post. (IANAE, are you listening?) I will consider your points in the order in which they were made.
The second ebay factor “…requires a plaintiff to demonstrate…that remedies available at law are inadequate to compensate for that injury…” has a factual predicate that must be determined before any consideration can be made as to whether the factor is satisfied; that factual predicate is that there exist “remedies available at law”. The belief of a party as to the adequacy of any such remedy can only be properly considered after the “availability” of said remedy has been established as a matter of fact, otherwise any such opinion will have no logical factual basis.
So, as we both know, we are left to determine what is meant by “remedies available at law”. This has usually been understood to generally refer to “legal remedies”, as distinguished from “equitable remedies”, such that the factor has been understood to mean that an equitable remedy is only appropriate when no legal remedy is adequate.
If one accepts this understanding, then the factor pivots on the concept of adequacy, as it is used with regard to equitable remedies. Equity is all about “fairness”. What is fair, as far as a reasonable aggrieved patent infringement plaintiff is concerned? Does fairness require that the character of the remedy match the character of the loss?
IMHO, the answer to this is yes, inasmuch as the goal of remediation is to, as far as is possible, make whole the party who has suffered the loss, something for which injunction is always perfectly suited in a case of proven patent infringement.
In a patent infringement scenario in which there is a proven loss, at least a portion of that loss will always be a loss of control over use and possibly disposition of the property. The equitable remedy of injunction is PERFECTLY tailored to restore that particular loss of control that was taken, from the party that took it unlawfully, and back to the party to whom it rightfully belongs. The EXACT control that was lost is returned, and the remediation, with respect to control, is perfect.
If evidence proving the adequacy of damages is insufficient to survive a SJ motion, a legal determination has been made that damages are unavailable to the plaintiff. With respect to damages, as opposed to injunction, a mere legal finding of infringement is insufficient evidence to prove adequacy.
However, for infringement, it is entirely sufficient. A finding of infringement is also sufficient to support other species in the genus of equitable remedies, and though species other than injunction might only imperfectly match the character of the loss, they are nevertheless appropriate, because equity is all about fairness, and there has been a proven loss sustained that is not compensible by monetary damages, and to not compensate in that situation would be unfair, if the equitable factors are met. Therefore, once infringement has been found, and damages ruled unavailable, a court is required to consider any and all equitable remedies asked for by the plaintiff.
Note that Posner has reversed his decision, and has put the parties on notice that they should address the equitable remedy of reasonable royalty in addition to that of injunction. This was an excellent ruling by Posner, and perfectly appropriate to the situation, IMO. You said “…assuming he backs it up in his final judgment, I don’t see any error in his approach.” Do you see the error now?
Here is the text of his order:
“I have decided to grant Apple’s request made at the June 7 hearing, for “a hearing at which the parties could attempt to satisfy the eBay factors and do a traditional injunction hearing.”…Each party may argue that it would be entitled to injunctive relief as to its patent or patents were the other party found to have infringed. The parties may submit briefs, if they wish…. The parties should be prepared to address the possibility of substitution for an injunction of an equitable decree for a reasonable royalty going forward. They should indicate any evidence in the existing record (for it is too late to supplement the record) bearing on the question of injunctive or other equitable relief. And if Motorola means to argue for injuunctive relief it should be prepared to address the bearing of FRAND on the injunction analysis.”
If you feel contumacious (or not).
See:
link to fosspatents.com
He changed his mind. Posner…
Ned says: “Anon, I just responded in the other thread.”
Note to Ned regarding communication skills: When Anon chastises you for giving “responses” instead of giving “answers,” DO NOT give more “responses” instead of the “answers” you have Ben asked for.
Anon, I just responded in the other thread.
Will Posner singlehandedly force an end to the endlessly-escalating mobile patent wars? Let’s hope so. At the very least, his opinion seems to indicate that he realizes the ridiculous (and, often, baseless) nature of all of this never-ending patent litigation.
I respond on this thread as well as the Survey Response thread to point out that your response (as I cannot yet call it an answer) does not and cannot take the place of your answer, which is as yet not been forthcoming.
But here is my response to your response:
You state “if you need 200 words…” in a misleading turn of phrase, as I explicitly began my piece with “Ned, let’s put this on the table in its entirety.”
I did this for several reasons, not the least of which is your tendency to misconstrue context. And misconstrue you continue to do.
My several paragraphs on the critical difference between singular and group is completely ignored. Somehow you want to make the distinction between the top level category only and all else. That is simply legal error and is unfounded and unsupported by any legal theory or notion except for your agenda.
Further, “I believe I have responded to that post, just not like you wanted” is indeed correct. And you still have not. I did not call for a mere “response” – I called for answers.
You have not yet given me answers.
First point: consistency. When I say consistency, I do not mean the consistency of your attack on the distinct and particular category of business methods. You are only consistent in your inconsistency. I clearly indicated that the consistency that I am calling your attention to is consistency BETWEEN categories. This is plainly evident with my mention of medical methods – another point you have simply ignored. It was only in half-jest my mention of having a summer intern catalogue your responses and tally how lopsided against a psrticular category of methods patents – and in fact how inconsistent you are when it comes to discussions of categories. I really don’t need any such research. I no longer wait for you stipulation. It is a fact that you are inconsistent.
This brings me to the question you STILL have not answered: Why? Note in particular that I am not asking “whether?” which is the question you insist on answering – and answering falsely. There is no question as to whether. The question is “why?”
Why do you single out as a topic business methods?
Why the inconsistency in the disparate treatment of categories of methods?
Why the agenda against business methods in particular?
Merely saying feebly in your response that you do not do so is as unavailing as it is untrue.
Your statement of “I speak out endlessly about any statement that a particular class of subject matter other than the four listed classes ARE patent eligible subject matter without any qualification whatsoever.” is false on several levels. It is false as a statement onto its own, as even the four classes must still be vetted for patent eligibility – your use of “categorically” continues to be false and misleading. It is false as you speak out endlessly only on one particular class and have never spoken out on any other particular class.
AS I look at the sum total of comments on this subject, there is also a major difference between us Ned and one that leads to my superior position in this debate and in my general knowledge of law.
I look at people’s inputs and absorb them. You choose to ignore anything that you don’t like. You try to stick to your position even when such is shown to be weak and misguided. Take for example the discussion on set theory and the Supreme Court choice of language. A clear and rational expression of how the different abstract layers have been and should be viewed and you choose to ignore in its entirety with no logical reason given. You choose to mock that person and tell them to tell that to the Court – as if the Court would reproach that theory. In the court’s chosen language, the facts concerning the Supreme Court and their lessor level of patent law expertise only serves as a “obligatory fulmination” when perfectly valid rationale is supplied for reasons to choose better language.
Your vehemence is sorely misplaced.
“Obligatory fulmination” indeed, especially as can be seen that it is you that is ignoring the meaning of the words, and purposefully taking the discussion of eligibility out of the proper context of singular instance to category discussion as well as you continue to play word games with the improper use of the word categorically versus as a category.
Ned, the questions you need to ANSWER – and not just respond to – are:
1) Why do you inconsistently – and improperly – apply a category level view of eligibility to one category – at an abstraction level below the four enumerated categories
2) Why do you have an agenda against this particular (sub-)category of subject matter?
Answers (and not mere responses) are still required.
We are appraoching the month mark since I first posted these straight forward questions to you. The fact that you have not given straight forward answers screams so loudly, that your meager “responses” cower and hide in the absence of truth from you.
FRAND
1. Motorola has a patent that is considered essential for 3G AT&T type networks by the standards committee. Motorola apparently has agreed to license all comers at a standard rate, 2.2%.
2. Apple does not have a license.
3. I don’t know Apple position on liability. I assume it has no serious position on validity and infringement, but was simply contesting damages.
What should Posner do?
And, tell me, please, if 2.2% is an establish FRAND royalty, just why this royalty was not the measure of damages?
Can Posner dismiss Motorola’s infringement case under these circumstances?
Even if he does, Motorola can refile tomorrow because Apple’s infringement continues. The infringement should be considered willful. What is a judge to do when Motorola requests a preliminary injunction?
There is a lot about this case that simply does not make sense.
“While both companies originally came to this case with lists of patents that the other had infringed, Judge Posner got Apple to whittle its list down to four patents, and forced Motorola (now owned by Google) to narrow its list down to one patent, which concerns a “method for performing a countdown function during a mobile-originated transfer for a packet radio system.” That method is considered “3G-essential” according to FOSS Patents, and must adhere to FRAND (fair, reasonable, and non-discriminatory) licensing terms. Judge Posner noted that, “if Motorola means to argue for injunctive relief it should be prepared to address the bearing of FRAND on the injunction analysis.”
Mike “couldn’t …prove damages?”
Not couldn’t. Didn’t.
There is a major difference. Read the May 22 order.
link to arstechnica.com
Order Apple to pay Motorola the FRAND royalty to which Apple obviously objects?
Ummm… yes? Unless there’s some sort of rule that judges can’t impose a remedy unless both parties agree.
IANAE, but what is Posner supposed to do? Order Apple to pay Motorola the FRAND royalty to which Apple obviously objects?
Leo, agreed on both points.
More straw from IANAE.
While it is true that this is not France, it need not be France to realize that patents are not contracts.
It’s amazing that practically everything you have posted on this thread is simply wrong. Have you been taking 6 lessons?
“So what if your bicycle is also pink but patents are only black and white? That’s not the attribute we’re talking about.”
New straw harvest come in IANAE?
It’s true that’s not the attribute that we’re talking about, so I don’t know why you feel the need to infuse that particular straw into the discussion.
Let me know when you realize how patents are different from physical property. Until then, please STFU.
(hint: if the remedy that makes the transgressed whole is exactly like the right itself, the remedy is not “harsh”)
LOL. Look up “specific performance” as a remedy in contracts. Essentially an injunction which is exactly like the right itself. You pretty much never get it at common law. And that’s a right the defendant agreed to perform in writing.
This isn’t France. You don’t get an order compelling the defendant to perform your right, unless you have a very specific reason why you need it. You get compensated for your loss, a pat on the head, and sent on your way. But seeing as you’ve been compensated for all the loss you could prove, you really shouldn’t be whining about it.
It would seem on its face that denying Apple such an injunction under these circumstances is an abuse of discretion.
It depends on what those few lines of code actually do. If they’re essential to a widely-used standard, an injunction is probably highly inappropriate. If they’re subject to FRAND, an injunction is certainly highly inappropriate.
they are subject to FRAND obligations.
Then their infringement can be fully compensated with monetary damages. If the royalty rate isn’t reasonable, they can go ahead and argue about that.
Perhaps, but a bicycle has positive attributes, whereas a patent only has negative attributes.
Yes, but a lawsuit demanding an injunction only ever asserts the negative attributes, i.e. someone else doing what you want them to stop doing. So what if your bicycle is also pink but patents are only black and white? That’s not the attribute we’re talking about.
I wonder if this is really more of a procedural maneuver by Judge Posner and the litigants. Does anyone have the order excluding Apple’s experts?
It could be that Apple’s theory of damages was the reason for the exclusion. If that is the case, Apple would want to appeal the decision, but the Seventh Circuit does not permit interlocutory appeals on Daubert issues.
It could be that the admission of the expert testimony will, in effect, be dispositive in this case. If so, Judge Posner opens the door to an appeal to the Federal Circuit on the expert witness issue without having to hold a trial first.
“I know that there are many (two?) on this board”
Lolz at the svckpuppet himself.
The harm to Motorola from an injunction is virtually nill.
Well, we can wait to see the Judge’s opinion, but I think you’re underestimating the cost of undoing the simple programming, updating phones in the field, revising user guides, etc. This wouldn’t be a break-the-company problem, but it’s a lot more than nil. And that has to be weighed against the fact that Apple was apparently unable to prove any harm caused by the infringement. Yes, I know that there are many (two?) on this board who count the infringement itself as a grievous harm, but eBay is what it is.
And why won’t you answer anon’s questions?
I kid – you really ought to stop talking to that crowd.
“The real rates an infringer would likely pay in an arms length transaction ”
The focus on infringer is a dead giveaway that “Mike” is a front for that patent h_ater IANAE.
Another quote to add to the despised roles.
Most people wish IANAE would go away altogether.
Leo, I agree the issue is whether damages are an adequate remedy. Whether they are proved or not is entirely beside the point. Apple and Motorola are direct competitors, such that the harm to Apple is not subject to quantification. This should weigh in favor.
Furthermore, the balance of harm has to be weighed.
Here, it seems, that Apple’s patents are easily avoided by simple programming. The harm to Motorola from an injunction is virtually nill.
I think Posner has no grounds for avoiding an injunction against Motorola.
The more problematical situation is with Motorola’s FRAND patents. An injunction would force Apple off of AT&T, causing Apple a great deal of damage. But if Apple is unwilling to pay the standard FRAND royalty of 2.2%, what recourse does he have?
1. According to the May 22 order, it seems that all of Apple’s patents can be designed around by a few seconds of programming. While damages are not proved, I have no idea why Posner would suggest that an injunction should not issue. All that would do would be to force the very simple reprogramming to be cut in or get Motorola to make a substantial offer to Apple if it really wanted the patented feature in its phones.
2. On the other hand, Motorola’s patents are required for Apple to use AT&T’s network. Motorola licenses the patents FRAND for 2.2%. I see no justification for Posner not to issue an injunction so that Apple begins to either pay the FRAND royalty or get off of AT&T.
IANAE, I would urge you to read Posner’s May 22 order. It shows that in all cases, Apple’s patent are easily avoided by a few seconds of programming. All an injunction would do would be to force Motorola to actually cut in that programming, if they have not already done so. It would seem on its face that denying Apple such an injunction under these circumstances is an abuse of discretion.
Regarding Motorola’s patents, they are subject to FRAND obligations. But the royalty rate is very high, 2.2%. But Motorola’s patents are only required for AT&T connectivity. An injunction would force Apple off AT&T entirely.
Here, I think Apple should be required to pay an ongoing royalty of 2.2% for new AT&T phones, or stop selling them.
I don’t know how Posner can reasonably avoid a trial on Motorola’s patents.
IANAE seems to wish patents would go away altogether.
“entitled to the more harsh equitable remedy of an injunction”
(sigh)
IANAE has sprouted a minion who liekwise does not understand the nature of patents (hint: if the remedy that makes the transgressed whole is exactly like the right itself, the remedy is not “harsh”)
Errr… no. His preliminary order says that the patent owner couldn’t even prove there were any damages. That’s not the same thing as damages were not an available remedy. It’s also a huge leap to take the absence of any damages to mean that a plaintiff is entitled to the more harsh equitable remedy of an injunction.
Thanks for the comment, IBP. I respectfully disagree, for a couple of reasons.
He then used the parties’ belief that damages was an adequate remedy to conclude that, therefore, injunction was not.
I don’t think this is correct. He says that the parties’ belief that damages would be adequate weighs against the second factor in the injunction analysis. That seems pretty straightforward to me. The fact that the plaintiff was incapable or unwilling to proffer competent evidence as to the quantity shouldn’t change this analysis, and it certainly shouldn’t operate in the plaintiff’s favor.
For what it’s worth, I also think it makes little sense to view injuctive relief and legal remedies as substitutes for one another (as in, “well, if I can’t have money damages then I’m somehow entitled to an injunction.”). These seem to me to be fundamentally different types of relief addressed to different types of harm. In effect, an injunction gives the court a sort of police power over the defendant, extending into the future. That seems to me to be a good reason to view the injunction as a tool of last resort, and another reason why an injunction shouldn’t be given as a reward to the plaintiff for failing to establish the entirety of its case.
The crux here is that the second factor reads: “remedies available at law are inadequate”. THE POINT IS THAT POSNER FOUND THAT DAMAGES WAS NOT A REMEDY AVAILABLE AT LAW IN THIS CASE, NOTWITHSTANDING THE BELIEF OF THE PARTIES.
I don’t think this is correct, either. The plaintiff failed to avail itself of the remedies (a reasonable royalty or actual damages) that are available as a matter of law. Given a finding of infringement, the plaintiff is entitled to the remedy of a reasonable royalty, at a minimum, BUT the plaintiff must prove what a reasonable royalty. The remedy isn’t “unavailable at law” because the plaintiff fails to meet his burden. Instead, this plaintiff loses its entitlement, as a matter of law, because it fails to meet its burden.
There’s a difference between a “remedy available at law” and “this (available) remedy is now unavailable to YOU, because you failed to produce enough evidence to demonstrate your entitlement to it.” This is necessarily the case – it is certainly possible to pursue an injunction alone, and there is no need to establish the exact quantity of a reasonable royalty or the extent of the actual damages to decide the “inadequacy of available remedies” prong of the analysis. This prong isn’t about whether the quantity of the legal remedies is adequate; it’s about whether the nature of the harm suffered is remediable with money. Like it or not, eBay says that this must be addressed on a case-by-case basis. Judge Posner’s order says that the plaintiffs are probably going to lose in this particular instance. Again, assuming he backs it up in his final judgment, I don’t see any error in his approach.
Perhaps, but a bicycle has positive attributes, whereas a patent only has negative attributes.
Mighty convenient of you to stuff straw and forget about the critical differences in your equitable analogies when it suits you. And yes, we are talking about patents and not about property “in general.”
You seem to keep forgetting what patents are.
One of the best posts that I have read in some time.
+10
that’s not what the “exclusive right” is when it comes to patents.
Does a property right in a bicycle, for example, not include the right to exclude others from using, offering for sale, or selling that bicycle?
Leopold–
Damages are a form of remedy, as is injunction. Initial filings are essentially a claim for relief, and must identify, among other things, the type of relief sought. Post-filing and pre-trial, a plaintiff must adduce some evidence that the remedy sought is appropriate–this requires evidence of loss, and evidence that the remedy sought would adequately remediate said loss.
Such evidence is not offered to “establish a [general] right of relief”, in Posner’s words, but to establish that the court has the actual ability to grant such relief, should the right thereto be first established–which is a different issue entirely.
If damages were the only remedy sought, and no such evidence was adduced with regard to damages, a court could very well, and logically, cancel the trial, or possibly allow amendment of the complaint.
However, in this instance both damages and injunction were sought as remedies. Arguendo, let’s accept Posner’s finding that the evidence establishing that the remedy of damages would adequately remediate the loss was insufficient to withstand a motion for SJ–that leaves us with the injunction remedy. The same construct applies for the remedy of injunction, as was applied to the remedy of damages above.
Posner states that he “cannot find a basis for an award of injunctive relief”. IF there was actually no evidentiary basis for the adequacy of the remedy of injunction, the case could logically, and legally, be dismissed.
However, when the nature of the harm and loss in a patent infringement case is considered, the remedy of injunction is, initially, ALWAYS an adequate remedy, for at least that component of the harm that is comprised of a loss of control of use and disposition of the property. This logic seems to me unassailable–remember, I said that injunction is INITIALLY always an adequate remedy.
So in view of this, how did Posner conclude that he could not find a basis for an award of injunctive relief? He did it by cursorily going through the 4-factor test, and by relying on a false premise–that the adequacy of the remedies of damages and injunction are mutually exclusive, and that if one was adequate, therefore the other was not. He then used the parties’ belief that damages was an adequate remedy to conclude that, therefore, injunction was not.
This reasoning is faulty, as it rests upon the unsupportable premise that the remedies of damages and injunction are mutually exclusive. That premise ignores the actual nature of the loss suffered for which relief is sought. In a patent infringement case, there can be multiple types of loss–those for which damages are initially appropriate as a remedy, and those for which injunction is initially appropriate as a remedy. As the multiple types of loss can be suffered concurrently, they are not mutually exclusive–and by extension, neither are their respective adequate remedies mutually exclusive, and Posner’s premise is incorrect.
The only way his construct could make sense would be if one believed that the remedy of damages would always be adequate to remediate the type of loss that would normally be adequately remedied by injunction. Can this in fact be the prevailing view? If that were the case, then in situations where a plaintiff sought BOTH the remedies of damages and injunction, the second of the 4 equitable factors would never be satisfied, effectively forcing a plaintiff to choose, before the initial filings stage, between damages or injunction.
Injunction would have to be the sole remedy sought, such that the remedy of damages was not mentioned in the case and was hence not a remedy available at law.
The crux here is that the second factor reads: “remedies available at law are inadequate”. THE POINT IS THAT POSNER FOUND THAT DAMAGES WAS NOT A REMEDY AVAILABLE AT LAW IN THIS CASE, NOTWITHSTANDING THE BELIEF OF THE PARTIES.
His mistake is that he relies on the beliefs of the parties rather than upon his own conclusion of law in considering the 4 factors, a consideration that clearly requires the latter.
Does this constitute reversible error? Maybe not, if the total consideration he undertook of the 4 factors was insufficient to survive a SJ motion–but his stated reason for dismissing the case was that neither party could establish a right to relief, which is erroneous.
I maintain my original opinion that Posner has erred. Since I haven’t read the entire file, I offer no opinion as to whether that error constitutes reversible error.
“Pretty much every right is an exclusive right, not only patents.”
Nice strawman, except that’s not what the “exclusive right” is when it comes to patents.
But you know that already, don’t you?
In case you need a little help: (the right to exclude)
35 U.S.C. 154 (a)(1)
Every patent shall contain a short title of the invention and a grant to the patentee, his heirs or assigns, of the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States, and, if the invention is a process, of the right to exclude others from using, offering for sale or selling throughout the United States, or importing into the United States, products made by that process, referring to the specification for the particulars thereof.
the damage to the exclusive right
Do you people never listen to the Supreme Court?
Pretty much every right is an exclusive right, not only patents. The mere fact that you win your case is not a basis for a particular remedy, and never has been.
Unless you can show actual harm, the “damage to the exclusive right” is nothing more than the patentee being a bit sad that someone else is doing something that doesn’t adversely affect him but he he still wishes they wouldn’t do. Any sane judge will send you packing if that’s your whole case on damages – once he stops laughing.
Zero is also the wrong number as damages include more than monetary damages and the damage to the exclusive right has been noted.
Do you really want to play Calvinball IANAE? You seem to be doing a fine job of spiking yourself in the face all on your own.
Should he be denied an injunction then?
Yes, unless he can show irreparable harm and otherwise establish his entitlement to that remedy.
I hope you do it in private.
I see that problem, but also think in the interest of judicial economy that Judge Posner considers important the patentee could say, I really am not seeking damages, just an injunction, to simply trial. Should he be denied an injunction then?
if damages cannot be calculated,
Zero is a number.
Are you suggesting that all the patentee needs to do is fail to present admissible evidence of a reasonable royalty rate, and then he’ll be entitled to an injunction every time? I hope you can see the obvious problem with that.
Or, to be more on point with the case at hand, if damages cannot be calculated, that is cause for an injunction.
“True, but I make good use of myself.”
Assumes evidence not presented.
True, but I make good use of myself.
Curious, assume further that you wanted an injunction to stop the trespass. Would it be relevant at all just how much you used the bike?
IBP, can we summarize you post this way?
Harm is a tort concept; the damage caused to one’s person, business or property by the tortfeasor.
Rent is a property concept, the charge is for using one’s property without consent.
Regardless of harm to the patent owner, the infringer still owes rent for the use of the invention.
Take it to the next level: injunction. The injunction should be available regardless of any showing of tort-like harm to the patent owner.
Leo, just in case you haven’t read the May 22 order, here it is. It makes everything clear.
link to scribd.com
I responded to anon. Monday.
Leo, point conceded.
Kaiser Aluminum & Chemical Corp. v. Bonjorno, 494 US 827 – Supreme Court 1990
Interest may be provided by State Statutory Law, depending, or by Federal Statute:
http://scholar.google.com/scholar_case?case=7851042559639234408&q=what+is+the+default+interest+rate+for+damages+in+federal+casess&hl=en&as_sdt=2003
Ned,
Why are you reading this instead of responding to Anon?
What excuse are you going to come up with next?
LOL. Nice job proving that you’re as apt as MM.
(I come out WAY ahead in that exchange)
semi, good read and almost hilarious.
Ruined reputations:
The damage experts.
Litigation counsel.
Inside counsel who are ultimately responsible; and
Management who authorized the lawsuits and who failed to supervise.
I hope it wasn't Steve Jobs.
Don’t forget to ask the FTC how “market competition” should be defined. Hint: NPEs would be included in market competition, making the Professor’s statement even more dubious.
“And, in most US patent lawsuits, the patented invention does not relate to any ongoing market competition between the parties.”
Anyone else take exception with this statement by Professor Crouch?
Where does it come from? Trolls (`scuse me, “NPEs”) aside, that is.