Stryker Corp v. Zimmer, Inc. (W.D. Michigan 2013) ( Download StrykerVerdict )
I was just looking at the jury verdict in this patent infringement case. Stryker sued on about twenty claims patents coming from three different patents. The jury found the patents infringed and not invalid.
The damages section of the verdict has three interesting elements.
Backup Award: The court asked the jury to decide both lost-profits and, as a backup, a reasonable royalty. That approach stems from the patent statute that sets reasonable royalty as a floor for compensatory damages. The jury found that Stryker had proven lost profits of $70 million and alternatively should be awarded 25% royalty on Zimmer's the $254 million in revenue from infringing sales. Assuming the verdict holds up, Stryker should receive $70 million lost profit award since it is greater than the $63 million reasonable royalty calculation. This is area where a more detailed verdict form actually helps the plaintiff.
Creating Its Own Form: Part of the power of jury verdicts is that they operate as a black-box decision making tool. Since the jury does not explain its decision, it is difficult to point out errors in that decision making process on appeal. The losing party often has to resort to the difficult task of proving that no reasonable jury could have reached the ultimate conclusion based upon the evidence. In this case, the jury may have given the defense a bit of a boost. In addition to setting the reasonable royalty at 25%, the jury added its own explanation – writing that the 25% is "double initial percentage of [a low comparable] license as we felt 32.2% [requested by the plaintiffs] was too high." We'll see whether the defense is able to use this added tidbit to challenge the verdict.
Three Patents, One Royalty: The theory for calculating damages when multiple patents is a bit dicey and ill defined. Here, three patents were at stake and the jury was asked "Do you find that the reasonable royalty rate would be any different if fewer than all three of the patents in suit are valid and infringed?" The jury answered "no." That response creates some hypothetical problems – most pointedly would be whether this result is the same if the patents were each held by a different entity.