Finisar v. DirecTV: Compulsory Patent Licensing

Finisar v. DirecTV (Fed. Cir. 2007 — On appeal)

A jury found Finisar’s patent willfully infringed. However, the Eastern District of Texas denied injunctive relief. Instead, the court entered a compulsory licensing scheme that gives DirecTV a right to continue to infringe after paying a fee.[Link] On appeal, Finisar lays out its claim for injunctive relief.

Short Facts: Finisar does not practice its patented invention and is unlikely to ever practice its invention. Likewise, Finisar has not licensed its invention. An injunction blocking DirecTV from selling its infringing satellite television services would potentially create a monopoly for EchoStar. And, DirecTV has money to pay for any damages.

In eBay v. MercExchange, the Supreme Court held that injunctive relief in patent cases requires satisfaction of the traditional four factor test of equitable relief. In eBay, the Supreme Court also made clear that the injunction decision must be made on a case-by-case basis without any bright-line rules or Litmus tests.

About Money: The sufficiency of monetary damages relates to both of the first two eBay factors: (1) whether an injunction would protect against irreparable harm to the patentee and (2) whether damages at law are adequate to compensate the patentee for any continued infringement. Finisar first argues that these two these factors must be wrapped together. The argument is simple – a failure of relief at law results in irreparable harm and vice-versa. Tying the two factors is useful for a patentee because it would then only need to prove one of the two factors primary factors.

Particularly focusing on money damages, Finisar argues that damages are inadequate because the calculation of future royalties is speculative and too uncertain. This type of argument, if factually true, regularly supports injunctive relief.

EBay also declares that the factors must be determined on a case by case basis rather than applying categorical rules. Thus, the fact that a plaintiff is only truly interested in a monetary reward may be a legally insufficient reason to deny relief.

Presumption of Irreparable Harm: Although it avoids using the word ‘presumption,’ Finisar argues that the finding of patent infringement creates a presumption of irreparable harm. This presumption issue was not answered by the eBay decision. In fact, that issue could be seen as the dividing point between the two concurring opinions by Roberts and Kennedy. Following this theme, Finisar argues that the particular harm created by allowing ongoing infringement includes: (1) destroying Finisar’s ability to grant an exclusive license; and (2) hurting Finisar’s ability to license to others because the compulsory license does not deter infringement. A well paid damages expert could calculate the value of those harms and include them in the monetary damage award. I would include the further argument in favor of relief: that long-held precedent would require a presumption of irreparable harm.


53 thoughts on “Finisar v. DirecTV: Compulsory Patent Licensing

  1. 52

    No one ever said anything about a professional search attached to monitoring patent apps. and issued patents- my point-very easy to monitor either in this age of cybor- then you apply common sense-its either good or a rube goldberg-if one is in tune to a certain classification or otherwise, its not hard to figure out if it has merit or value. Yes, there are plenty of rube goldberg patents being issued. I say -so what-its their money and right to get a patent.If they never make a dime on it-why should it bother anybody?

  2. 51

    If I was younger, I would become a patent attorney,

    Of course I do that. That is not a professional search however. Hell, if I find something well-written I may steal the language in question and incorporate it into my application.

    However, assuming you work for a sizable company, I doubt your company spends hours researching and reviewing the patentability of every one of the the thousand or more invention disclosures you receive each year.

  3. 50

    Ben – Malcolm was quoting me. Although Mr. Shlonecker correctly chastised me for my imprecise use of the word “bogus,” my point was that attempts to analogize between real property and intellectual property are generally legally unsupported. As others have noted, there are substantial actual differences between real property and intellectual property, and there is certainly a substantially different legal history.

    You’re certainly entitled to your opinion. And I might even agree with you, to an extent. But I don’t think your apparent suggestion that anything that has value is property, and thus should be subject to private ownership and protection is supportable, whether by appeal to law, economics, natural rights, or the like.

    By the way, how on earth can you prepare and file a non-provisional patent application for a flat fee of $1950? How much time do you spend on a typical case?

  4. 49

    “comparing IP to real property is bogus. ” -Moody

    Please explain your rational for such a statement? In my opinion, if thoughts and expressions have value in our society, then those thoughts and expressions are real property. Owners of such property should have the right to protect their property.

    -Ben at

  5. 48

    That sounds simple, If You Were Younger. But, what keywords should somebody like Dell use – “computer”? How about AT&T, or IBM? And once I find these possibly relevant patents or applications, I’m supposed to do a full-blown infringement analysis of each? For what it’s worth, in my inhouse years, many, possibly most, of the infringement claims were so twisted that a good-faith analysis of the patents at issue would never have identified them as problematic.

    Lionel is at least partly right. In some industries, monitoring patents and publications likely makes sense. In others, especially where an OEM is assembling a complex electronics product, it simply can’t be done.

  6. 47

    Lionel, are you braindead? You can see patents or patent apps, by simply punching in keywords relevant to your companies IP- or better yet- search by classification in the OG- it literally takes only minutes-so easy, even a caveman can do it (no offense to our beloved Caveman). Learn how to use your computer, Lionel.

  7. 46

    David French wrote, “I’ve scanned all of the above and I can’t see any reference anywhere to triple damages for willful infringement. Isn’t that an alternative to an injunction? Once a judgment for infringement issues, further infringement can hardly be innocent. Why is no one talking about this?”

    Read Finisar’s Appeal Brief, at 81-83; Directv’s Reply Brief, at 49-54; Finisar’s Reply Brief, at 28-31; (each discussing enhancement of court-ordered post-judgment royalty/damages).

  8. 45

    In all candor, I am not swayed by arguments that the grant of permanent injunctions is a bad thing. Let us be honest, this issue is no more and no less than a decision about who will hold the upper hand in business negotiations…the patentee or the infringer? This issue arises constantly in numerous contexts outside patent law, and I do not see any groundswell in the law to change the differing negotiation positions of parties in such instances.

    Of course circumstances do arise where the issuance of an injunction can have a disastrous effect on the business interests of the infringer, and especially where the patentee is a direct competitor. However, merely because such circumstances may on occassion arise is not a compelling reason to cast aside the logic underlying why injunctions have historically been one of the features of affording a patentee such relief. I subscribe to the notion that if a problem exists, and especially one that is exceptional and not mainstream, then address the specific problem. Prophylactic changes may help assuage the perceived problem, but as with any change there are invariably unintended consequences. Hence, I subscribe to the notion of “peak and tweak”.

    For those who raise the hue and cry of NPEs, might I remind them that two of the largest NPEs are academic institutions and the federal government itself (NIH, DOE, DOD, NASA, and a few others).

  9. 44

    “The bandwidth or page view limit for this site has been exceeded and the page cannot be viewed at this time. Once the site is below the limit, it will once again begin serving as normal.”

    Did Dennis forget to pay his blog bills???

  10. 43

    Oh I did not proofread my post, so therefore its valid to ignore its content. How old are you Malcolm, 5?

    I am quite sure you have very little practical experience filing or you are so caught up in your little niche you fail to see the forest for the trees.

  11. 41


    Please. Are you saying you agree that either (1) big business is aware of patents relevant to its business the day of or the week of issue, or (2) they teal the ideas from those patents.

    Unless your business is suitably esoteric, patent watching doesnt make a lot of sense. There are two many being issued to watch.

  12. 40

    “The statement by a poster that big companies don’t watch patent application publications is absolutely false.”

    I’m quite certain now that Lionel Hutz is a sock puppet for a brilliant parodist. Not only do his posts “make sense” when read in that light, but they are actually wickedly funny.

  13. 37

    The statement by a poster that big companies don’t watch patent application publications is absolutely false. I have talked to some people at companies I wish to get involved with my patents and pending patents- they absolutely do. Its really simple- if i prove to my examiner I have invented something unobvious and novel, I deserve a patent. Also, the dude who said non-practising entities deserve to have their patent rights distributed around- its total BS. There’s reasons that someone doesn’t practice their patent-its called money-machining,tooling, S..t like that all costs money. My patent says I have 17-20 years to pull it off- all in due time ,my pretty.

  14. 36

    Ranting against the Supreme Court’s unanimous KSR decision is unproductive. A more useful LEGAL discussion than above diatribes would be to question whether or not statutory enhanced damages [up to treble damages] for willful infringement should apply to infringing products made or sold AFTER a final decision of validity [actually, insufficiently proven invalidity], enforceability, and infringement? Treble damages should deter most continued infringements by losers and thus can hardly be called a compulsory license.

  15. 35

    No. 666,

    Thanks for your opposing views. We may have to simply have to agree to disagree. (BTW, I’m a second-generation patent attorney, as is my brother.) I’m actually more open-minded to other view points than you seem to suggest, I just don’t necessarily agree with them. That’s what makes America a great country: the ability to agree to disagree, yet speak your piece. Hope you continue to post to Patently-O.

    One last thing: As far as small business contributing to job growth in America (and certainly taking investment risk in research), you need only look at the biotech field. I’m in Ohio, and I can tell you from personal experience that the biotech firms actually doing the research and development there aren’t giants at all. Big pharma is doing less of this “risky” research because they’ve got a bottom line to address and shareholders to please; I’m not saying they’re wrong, just that the drummer they beat to doesn’t generally reward risk-taking anymore in research. I also used to work for a large corporation (and a good one), but job growth is not usually high on their priority list (profit is); witness how many employees have been let go by large corporations.

    Erez Gur: Thanks for adding your 2 cents, too.

  16. 34

    It is unkind to say that the patent prosecutors’ opinions are clouded by their chosen profession. Most patent prosecutors’ believe in the importance of patents because their experience with innovators of all sizes and in many fields has proven that patents are an effective catalyst for innovation.

    The facts you present also support the need for strong patents, and even more so, a single international patent.

    As you point out, production and distribution costs are virtually zero. The only way to provide jobs for Americans is to find a mechanism to protect innovation. Without such a mechanism, a business will be forced to adopt ideas from American inventors and produce products based on the ideas where there are no labor laws, starvation wages and no environmental worries (think alleged production facilities in Chinese prisons).

    You did point out an alternative mechanism to patenting: relying on know-how. That is another word for “trade secret” which is another word for “guild” which is another word for unlimited monopoly, high prices and little motivation for innovation.

    You may be right that people make money from services based on sharing information, but others have made money by keeping information secret and selling it to the highest bidder (see ICQ) or taking it from someone else and selling it (Eolas / Uni. California v Microsoft).

    You praise professors at universities for altruism, but I haven’t seen any in the ivory towers. My experience is that professors will prefer to do interesting basic research rather than boring practical development unless they have a chance to make an additional profit from it, and they are entirely justified. Proof for this can be found by seeing how many patents are issued to universities.

    I personally meet many “little guys” with bags bulging with ideas. They do not intend to donate the ideas to humanity because their profession is to be an inventor and they, justifiably, want to make a decent living from their profession. Without patents, their ideas will be stolen.

    As a last note, if I am not mistaken Indian Pharma flowered because of a weak patent system that allowed it to adopt others’ innovations. With all respect to their excellent scientists, I can’t recall any new API Indian Pharma has found.

  17. 33

    Lionel Hutz reports that no corporation tracks patent issuances. Presumably Seagate will change all that, because tracking the patent applications of your competitors, as soon as they WO/A publish, would be a rational thing to do, in a rational world. Isn’t that indeed what corporations resident in Europe and Asia routinely do? Isn’t the reason US-resident corpns haven’t done it up to now is because of pre-Seagate willful infringement law? Aren’t we already seeing an explosion of offers to companies to do “watching searches” for them?

  18. 32

    David French writes:

    I’ve scanned all of the above and I can’t see any reference anywhere to triple damages for willful infringement. Isn’t that an alternative to an injunction? Once a judgment for infringement issues, further infringement can hardly be innocent.

    Why is no one talking about this?

  19. 31

    Mr. PTO Bar No. 666 (BTW, yours beats mine, which is 29,590)

    It is not that I am ignoring the substance of what you are saying. It is that you are attempting to introduce your views in a manner that is not altogether clear. By restating your post you may very well discover that our respective views are not polar opposites.

    Just a word of advice you are free to treat as you wish. It is never wise to begin a conversation by using phrases such as “non-public-minded”. Not only is it demeaning, it demonstrates a bias that detracts from the positions you advocate, no matter how well-reasoned they may be.

  20. 30

    Are some of you people crazy.

    Before I begin, the article states that Directtv was found to have willfuly infringed. Assuming that was a sound finding, then there is no innocent independent investmnent.

    However, to all you who assume that if a business is found to ave infringed a patent, they probably stole it – you’re crazy.

    I work for a an international company and associate with others who do and it has been my experience generally that they are clueless. I don’t know anyone who tracks patent issuances. The idea that big business is aware of what patents issue each week is laughable.

    Sometimes clients, particularly the engineers designing new products, need to be counseled with respect to new ideas incorporated into products. They might see a competitor’s product on the market and incorporate some concepts without even thinking about the possible IP that competitor may own.

    That is not to say that willful infringement has not nor cannot happen. However, in most cases it is not.

  21. 29

    Mr. Slonecker:

    I’m not quite sure what you’re getting at with your own diatribe, since you seem, like most people who take positions similar to yours in this forum, to ignore the substance of what I’m saying.

    I’ll try to address your statement by saying that “property” evokes a bundle of rights, of which one, as you say, is the right to exclude. This right, of course, is not absolute, but is subject to various regulatory forces like any other government-granted right. The Constitution narrowly empowers Congress to grant exclusive rights in information, only for limited times, and only to the extent they promote innovation – this is the essence of regulatory cost/benefit analysis.

    However, when most people use the word “property,” they mean that bundle of rights that are generally appurtenant to what we call tangible and real property, and argue that those rights have something to do with the basic properties of those items – rivalry and excludability. My point is only that we have abandoned such “natural rights” conceptions of property long ago, and those appeals no longer relevant to our legal and economic discourse. They are further irrelevant to information, which does not share the basic properties of rivalry and excludability. That we have shoe-horned these notions onto information for the past 200 years doesn’t mean we can’t re-examine these assumptions.

    In any case, I’m not sure what the rest of the point of your rant was, but I’m no law professor, just an interested practitioner who is able to see the system with a bit more flexibility than someone who has sold their soul to it, as you seem to have done.

  22. 28


    Amazingly, despite a wall of text, you support my points and provide little support for your own position.

    Increasing patent filings have no connection to actual innovation. The increase could come from a number of factors, not the least of which is a legal framework that encourages patent filings. It’s hard to disentangle the regulation itself from its effects.

    Further, your point about most U.S. job growth coming from small business, and this having anything to do with patents, has no support that I’ve seen anywhere.

    Still further, your comparison to socialist countries in the 1930s-1950s is completely inapt. We don’t live in a world where production and distribution costs are primary barriers, as they were in the first half of the 20th Century. The Internet and networking have driven these costs to near zero for information products. Thus, any comparison to effects on the industrial age are bound to misstate the results of a patent system which, in any case, hasn’t been shown to have been instrumental in the least for industrial advancement.

    Finally, adoption of IP laws internationally has little to do with their efficacy (for example, Indian pharma was doing quite well without strong patents) but more with international agreements like TRIPs that have foisted U.S.-ian strong IP norms on developing countries that don’t need them.

    More to the point, the information age has shown that the proprietary business model (secure exclusive rights, use those to build/sell products) is but one of DOZENS of business models. What would you say to Open Source software developers, people who contribute to Wikipedia, semiconductor manufacturers (who, studies have shown, rely much more on know-how to secure advantages than they ever did on patent rights), and others who have succeeded outside the patent system? One doesn’t per se need a patent when one can produce and sell an innovation without it – people are making money TODAY from services built around open sharing of information.

    Your view, and the views of many people in this forum, are they assume the efficacy of a single model of production. The problems there are two-fold: (1) assuming that exclusive rights are necessary for innovation and (2) that the single model of production is the only good/efficacious/reasonable one.

    In any case, patents aren’t PER SE bad. The point is that, industry-by-industry, we need to analyze the impact of patents on economic growth and innovation. Research has shown (and yes, there is real research, which you could find with a few minutes of searching) that the likely story is patents impeding innovation in certain areas (software) and facilitating it in others (pharma). The story is not the unambiguous one that the pro-patent people seem to take on faith, with no evidence – this is, of course, partly because it is very difficult to account for that segment of innovation that occurred solely because of patenting.

    I find it not surprising in the least that your narrow view is the one trumpeted in a forum made up mostly of patent prosecutors. It’s hard to disengage from the issues and look at them objectively when your world view has been shaped by your career choice. I too am a patent prosecutor, but young enough to recognize that the world has changed and the law is now an anachronism in its face. This is exactly why the people in the CAFC and leading the PTO SHOULD NOT be experienced patent practitioners – we need leaders with open minds who will question the current system and strive to improve it, rather than taking on faith that stronger patents/copyrights/etc are uniformly good for economic and scientific development.

    A final point – U.S. universities, a stable and major source of our innovation, have historically relied little on patenting and much more on what you call “altruism,” a.k.a. public funding. What do you think would happen if every professor patented every idea he had? What if Tim Berners-Lee had patented the Internet? So much of how we live and work today has relied on forces outside of the patent system that it’s amazing to me how one could focus only on patenting as protective of and encouraging innovation.

    By the way, Edison was not only a thief of ideas, but also a tyrant, in the sense that he blocked true innovation in many areas to gain market advantages for his often less-useful inventions – what happened with light bulb filaments is a great example. Funny that he is cited as a standard-bearer for the pro-patent crusade.

  23. 27

    “It’s rather amazing that the the “patents as property” people seem to ignore (1) the text of the patents/copyright clause referring to “exclusive rights” and not “property,””

    Likewise, it is rather amazing that the word “property” first appears in the Constitution in Article 4, and thereafter in two or three Amendments (most notably, of course, the Fifth Amendment). It is also rather amazing that the word “property” does not even appear in the Declaration of Independence.

    I presume that in real property and personal property law courses it was duly noted that “property” in its most fundamental sense is the “right to exclude”. Likewise, I presume is was duly noted that the law does not impose any requirement that one who holds “property” must actually use it for either his/her benefit or that of the public at large.

    As for the remainder of the diatribe, and without agreeing or disagreeing with any of its points, I must say it strikes me as remarkably similar to an outline for an upcoming article in a law review published by one of the “good” law schools. Of course, the author(s) will dedicate it to the public since to do otherwise would be a less beneficial use of the work for the good of our society. Clearly, the many people who created the computer, printer, software, etc. that will be used in its preparation should have likewise had the best interests of the public in mind when they created their various products. Hence, they should be castigated for failing to dedicate them to the public as well.

  24. 26

    “Sad to say, there is no proof (aside from the inevitable weak anecdotes about “independent inventors”) that patents and copyrights, on the whole, benefit society more than they cost it.”

    I don’t agree at all with this statement. Let me say that, as a U.S. patent attorney for over 30 years, and also as one who studied the Soviet system for protecting and encouraging invention in his college days, patents do provide benefit to society beyond the cost. Put it this way, altruism is fine in theory but it doesn’t work in practice. Without patent rights, all that’s left is trade secrets, or worse, no innovation as those with dominant market positions (large corporations) will rule. Say good bye to entrepreneurship (aka small business) which is where most of the new job growth in America is coming from.

    Even the Socialist countries understand that. When the Bolsheviks took power in 1917, they tried altruism by abolishing the Russian patent system. It didn’t work, so the Soviets enacted in 1924 a patent law based on the German patent system. The Soviet patent laws of 1931 and 1941 featured a new right called the Certificate of Authorship which recognized that inventors were entitled to compensation for their inventions (and even their discoveries of laws of nature). There’s got to be a reward for inventing, or innovation just won’t happen. China is slowly but surely coming to that conclusion as well.

    If you accept the proposition that patents aren’t worth the cost, American competitiveness in the world is in serious trouble. The last area where Americans can compete is innovation, and we won’t be competitive if there’s no protection for that innovation. If you don’t believe that, remember that Edison has the record, at least for American inventors, in terms of number patents obtained (over 1000). Do you think Edison could have (or would have) done all this innovation if it could be copied with impunity?

    One last thing. The argument I constantly hear or see is that patents impede the progress of scientific research, including biotechnology or software. That’s absolute hogwash. Where’s the data that shows or supports the view that patents do this? My suspicion is that this data doesn’t exist because it isn’t true, just unsupported conjecture. For example, the number of patent filings seem to be on the increase, especially in the biotechnology and software fields. That suggests research and science is thriving, not dying, because of patents.

  25. 25

    It’s rather amazing that the the “patents as property” people seem to ignore (1) the text of the patents/copyright clause referring to “exclusive rights” and not “property,” (2) the writings and legal traditions of the framers, which showed great distrust for giving anything resembling traditional “property” rights in ideas, (3) the New Deal, which, with the rise of the administrative state, updated our notions of regulation, (4) legal realism, which pointed out that “property” and “markets” are merely constructs of a legal regulatory framework and that nothing about them is “natural” or inherent, and (5) current law and the American legal tradition, which increasingly acknowledges that patents and copyrights, far from resembling any sort of “natural law” are merely a regulatory framework, and one where Congress is Constitutionally only authorized to act to the extent of “promoting progress” (paraphrase, obviously).

    What many of the commenters, likely patent attorneys with years, if not decades, invested in this non-public-minded and arcane craft, are doing is conflating a notion of moral rights in ideas with property rights, and then taking the unwarranted step of conflating those notions with exclusive rights in information. There is no “moral rights” strand in American law as to copyrights and patents, which is partly why we have succeeded where Europe has failed.

    In an attempt to fight the tide of the information age, many people who see their lifeboats slipping away are now turning to moral arguments with almost no foundation in our nation’s legal or economic history, not to mention no foundation in actual economic evidence. Sad to say, there is no proof (aside from the inevitable weak anecdotes about “independent inventors”) that patents and copyrights, on the whole, benefit society more than they cost it. Keep in mind that information, unlike “real property” is (a) non-rival, (b) non-excludable, and (c) the input needed to create more of itself. By imposing exclusive rights regimes, we increase input costs (driving down innovation) while creating some level of incentives to create (driving up innovation). That’s where the balance is broken these days, at least as to software, an industry with low development times/costs and high input requirements.

    See guys, THAT is what we learn in law school these days, at least the good ones.

  26. 24

    Mr. Bloom,

    “If they had considered patent rights to be natural rights, they would have made the Patent Clause mandatory, not permissive. Rob is absolutely correct – comparing IP to real property is bogus. Heck, the term intellectual property is itself a very modern term.”

    Were patent rights “natural” rights, then reason suggests there would have been no need for Article 1, Section 8, Clause 8, and particularly the concept of “limited times”. While I concur that they are not “natural”, the very same can be said about real property. The Constitution is, after all, about “life, liberty and the pursuit of happiness”, and not about “life, liberty, pursuit of happiness, and fee simple title to Lot 28 as recorded at Volume 33, page 1287.”

    While obvious differences exist between intangible and tangible property, I suggest that “bogus” is not altogether accurate. Each is an exclusionary right, one difference being I can shoot some trespassers but not infringers (much as they very well may deserve such an extreme reaction). As a matter of constitutional interpretation, however, it remains to be seen if intangible rights such as patents enjoy the same measure of protection as does real property under the Fifth Amendment.

    If anything is bogus it has to be the phrase “intellectual property”. If Mr. Mooney’s views hold sway, it can hardly be said that many of what he views as “****” patents arose from the exercise of intellect. The same can be said of much that enjoys protection under copyright law.

    The phrase “statutory estoppel” uses an interesting choice of words. Its relevance is not readily apparent, but the phrase is interesting nonetheless.

    As a final note, when I attended law school courses relating to “intellectual property” were generally taught by adjuncts with extensive experience in all facets of the law. Judging by much of what I read as present-day legal scholarship, it appears that such courses have been taken over to a significant degree by those without such experience. In answer to the question then about “What were they teaching when you were there?”, the only logical answer I can give is “the law”.

  27. 23

    “DirecTV is appealing the judgment as well — arguing that the patent is invalid and not infringed.”

    Gosh, I wonder what will happen here?

  28. 21

    YouTube has succeeded because it proved beyond any doubt just how much information a strictly enforced copyright law keeps out of the hands of the public, i.e., YouTube proved that (strictly enforced) copyright laws do not benefit the public at all. They benefit primarily the multinational media megacorps who own the copyrighted materials and who do NOTHING with them for vast lengths of the copyright term.

    The digital age has changed everything. Smart people understand this. Pro-software patent folks are not smart people.

  29. 20

    Atrob, the framers were pretty sensitive to “natural rights.” If they had considered patent rights to be natural rights, they would have made the Patent Clause mandatory, not permissive. Rob is absolutely correct – comparing IP to real property is bogus. Heck, the term intellectual property is itself a very modern term.

    I’m not sure where you’re coming from on the Bill of Rights angle. There were people who were opposed to the Bill of Rights on the grounds that they were redundant. So, no, the Bill of Rights (or at least some of them) are not “estoppel where no right existed.” However, Rob never suggested that they were – only that the Patent Act was “a kind of statutory estoppel.”

    At least, this is what they’re teaching in law school “these days.” What were they teaching when you were there?

  30. 19

    Respectfully, that is why you are a patent attorney and not an entrepreneur. If the youtube (aggressively steal copyrighted material) score hasn’t demonstrated to you that the new world order is get public and/or cash out before the law catches up is the new paradigm for success then nothing will. Heck, you could even make patent infringement criminal like a copyright and the serial infringers would still be deliberately infringing. SCOTUS has revived the era of apportionment so CAFC needs to let us know what line of cases we should be following.

  31. 18


    I’m with you up until the point that Equity requires:

    “the patentee cannot have attempted to use economic circumstances external to the patent itself to seek rent above the true economic value of the technology.”

    I’d like to pull on that thread a little bit. It’s not clear how this statement holds together. Please elaborate.

    Also, please point to a specific reference to the “psychic” value and how it specifically would be differentiated in an patent situation.


  32. 17

    Rob, it’s called a “natural right,” under which the US government was formed to better protect. You are also misinformed as to the “common law rule.” What are they teaching in law school these days? The bill of rights is an estopple where no right existed?

  33. 16

    Big hairy rat, I really didn’t understand your post.

    If your point was that it’s wrong for a company that invests 10 billion to get going to be enjoined by a solo inventor with a patent who has no intention of working the patent, then I disagree.

    I don’t agree that a patent must be used by the patentee or a licensee, or that a patent’s existence must be known to a company.

    If you invest 10 billion to start up a company, why not invest 50 thousand to strictly review the issued patents in the relevant technology? For that 50k, you would no doubt be aware of every relevant U.S. patent.

    In any case, the argument that an infringer can be enjoined only if the patentee or a licensee is a direct competitor is venom that has been spit by the court to protect large corporations.

  34. 15

    The comparison of real property to IP lacks substantial merit. The default common law rule is that there is NO protection in ideas. The Patent Act functions as a kind of statutory estoppel against this default “no protection” rule.

    The statutory scheme provides that injunctions should generally issue following a tribunal’s finding that a patent is valid and infringed. Nevertheless, an injunction is an equitable remedy. And those who seek to benefit from the court’s equitable powers must themselves come into court with clean hands. This means that the patentee cannot have attempted to use economic circumstances external to the patent itself to seek rent above the true economic value of the technology.

    Courts more willingly grant injunctions in the real property context because the common law has traditionally recognized that land may have value to the buyer and/or seller beyond the economic value of the land. Courts traditionally protect this “psychic” value of real property by granting injunctions and by awarding punitive damages for the tort of trespass to land.

    For most forms of IP, courts have never acknowledged the existence of the kind of “psychic” value associated with real property. The mere fact that economic projections are uncertain, standing alone, seems inadequate to invoke equitable relief. This is particularly true when a patentee is not “working” the invention. Most countries have such working requirements, which render patents unenforceable unless the invention is practiced and/or licensed within several years of issuance.

  35. 14

    If an injunction blocking DirecTV from selling its infringing satellite television services would potentially create a monopoly for EchoStar and, DirecTV has money to pay for any damages, why doesn’t DirecTV use that money instead to INVENT NEW TECHNOLOGY? Am I missing something or isn’t that the whole point of the patent system? Of course, DirecTV could argue that KSR v. Teleflex’s elimination of 103 motivation has significantly altered the whole point of the patent system and now is the time to grab that which was patented before KSR ‘cause ain’t nothing new worth having is going to come out of the patent office after KSR. I don’t know. Perhaps it is time we create a free for all on our remaining patent reserves and move onto something else once that is dried up in less than 20 years.

  36. 13

    I change the word “land” to “patent” from the paragraph at link to to post it here for comparison. “The Supreme Court has largely given the public use requirement an expansive interpretation and has allowed takings of private property for reconveyance to other private parties, or in some cases by private parties directly, on the theory that the new owners will put the taken patent to more lucrative uses that are likely to generate more tax revenues. This is known as “economic redevelopment.” It uses eminent domain to enable acquire and then convey patents to commercial development or redevelopment to increase tax revenues. The Supreme Court’s decision in Kelo v. City of New London, 545 U.S. 469 (2005) allowed such takings for land patent grants” and now are allowing such takings for invention patent grants, except they cut out the middleman (government eminent domain). Rarely even cited anymore by the U.S. Supreme Court, the U.S. Constitution text largely is seen as overrated and less known clauses, like the patent clause, have been rearranged to be closer to the perforations that make up its toilet paper use by the Supreme Court.

  37. 12

    Thanks. I agree with the assessment of the NYIPLA reply brief. “In support of neither party” is a little rich.

  38. 11


    please go back to your hole

    You are totally clueless or worse… (shilling for CPF ?)

    If a patent is truly valid (new, useful and unobvious) it’s more than likely that big business will know about it the day it’s published and will steal the invention immediately

    There is no such thing as big innocent infringer of a *valid* patent
    (Well, maybe less than 10 % of all court cases, the rest 90 % are all about deliberate stealing…)

  39. 10

    Dear big hairy rat,

    It is no wonder you call yourself a rat.
    I agree, no argument, you’re a rat.

    Moreover, you have no idea how the real world works, and you never will because your one-track mind, your prejudice, your sheer bias, shines through and through and controls your simple rat-mind.

    Now go eat your cheese.

    PS: Now, why don’t you call me “ordinary.”

  40. 9

    “the option that SHOULD be put to DirectTV – was – ‘pay us the most you are willing to pay to use our patent or shut down'”

    Then the royalty would capture the difference between the going concern value of the business and the liquidation value.

    Let me pose a hypothetical: Suppose there was a patent that was not well known that related to a new business opportunity. The holder of the patent has neither the skill nor the capital to exploit the business opportunity. If the patent were well known to others it would attract only a nominal royalty because of the costs and risks associated with the business opportunity. Along comes a business with skill and capital but no knowledge of the patent and invests Ten Billion dollars in getting established.

    Your measure for damages is the amount of stranded costs incurred by the ignorant infringer but that is not a reliable or justifiable measure of the patentee’s losses or of a royalty rate that would have been negotiated by knowledgeable parties before the infringer committed its money.

  41. 8

    The impact on licensing will be very specific to the particular business space. Each one being affected differently. Many of the semiconductor licenses are made, not under an actual threat of an injunction, but because of the potential of a big jury damages award. From the infringer’s perspective, there is a relatively low probability that the patent holder will really get an injunction, the injunction is too far off in the future, & there are too many ways to get around the injunction before the injunction becomes effective. A big $ damages decision from a jury is why the license deals were done, not the injunction.

  42. 7

    Another nail in the coffin.

    Bottom line – if you can continue to make and sell an infringing product after you’ve been shown to willfully infringe, then the true amount of a royalty/license will not be the final damages number.

    In other words, if the option put to DirectTV – the option that SHOULD be put to DirectTV – was – “pay us the most you are willing to pay to use our patent or shut down”, then the royalty arrived at would be X$.

    But, with the newly judiciated law (ebay), what DirectTV will be forced to pay is whatever a court determines is a fair royalty/license fee, which will be some fraction of X.

    This is particularly obvious when you consider that DirectTV would likely be willing to pay a royalty that made them a break even business in order to stay in business.

    The court, no doubt, will not look at it this way, because they will be shaping the analysis as if the infringer’s survival was not on the line. That is, the court will be viewing DirectTV as a potential licensee of a product that is not covered by a patent. The incorrect question they will ask is, “well, what would disinterested party Z pay to obtain this fine technology?”

    It’s the difference between asking for a person’s top dollar price with a gun held to his head or without.

    And so we wander further to Hank Reardanville

  43. 6

    The filing of amicus reply is not allowed. FRAP 29(f). But if I were DirecTV I would stipulate to allowing it. The brief has a shrill tone, will probably offend the Paice panel members by its characterization of their opinion, and hurts the party supported by association (and it disingenuously labels itself as supporting neither party). With friends like this, who needs enemies?

  44. 5

    I’ve never heard of an amicus filing a reply brief before. Anyone know if that’s allowed? I suspect it generally isn’t without the court’s permission, which would explain why it’s listed as “Not entered by Court.”

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