Federal Courts Closely Scrutinizing and Slashing Patent Damage Awards

Michael Kasdan and Joseph Casino discuss recent shifts in reasonable royalty jurisprudence with a particular focus on the recent cases of Cornell, Lucent, and Lansa.  Together, these decisions "indicate an emerging trend to more carefully scrutinize the evidentiary and economic basis of reasonable royalty-based patent damages awards in the setting of the appropriate royalty base, the application of the entire market value rule, and the calculation of the appropriate royalty rate." [Download Kasdan.Casino.Damages]

Other recent Patently-O Patent Law Journal Articles: 

327 thoughts on “Federal Courts Closely Scrutinizing and Slashing Patent Damage Awards

  1. 327

    I’m pretty sure that the internets has become self-aware, and sarah mcpherson is its voice.

  2. 326

    And I am sorry I obsfucated. Let me make it more simple.
    The Chicken is truly dead. And the Caboose is pulling out. And the Fluff is gone, as in flushed down the toilet. And all is right with the world.

  3. 325

    I have dealt with fluff for 15 Years. The fluff was a product of the Engine. The Caboose is hopefully joining the Engine. And as for you NAL I thank you for finally realizing I matter. But, that’s as far as you go with me.
    xxx

  4. 324

    Come on that doesn’t mean you can’t continue. Please I don’t know what I’ll do if you don’t obfuscate.
    Just because I don’t understand it, doesn’t mean you don’t.

  5. 320

    uhoh, the cockroach Ned Heller has survived the “Neutron Nuclear Attack“.

    Steve O, quick, convene the Masons and Knights for a double secret meeting so that we can unleash our deadliest weapon – fricking sharks with fricking lasers on their fricking heads.

    Remember – this is secret – tell no one.

  6. 317

    Steve O, NAL may have gone a bit far with her equal protection argument, but her analysis of the eBay case was spot on. The thesis of the Willtons and the IANAEs is that the the injunction should protect businesses, not the property right. In large measure, this HAS been the result in eBay as most NPEs cannot now obtain an injunction. But this trend seems to violate the majority holding in eBay itself.

    Let’s take a short look at what they held, once more:

    “Neither the District Court nor the Court of Appeals below fairly applied these traditional equitable principlesin deciding respondent’s motion for a permanent injunc-tion. Although the District Court recited the traditionalfour-factor test, 275 F. Supp. 2d, at 711, it appeared toadopt certain expansive principles suggesting that injunc-tive relief could not issue in a broad swath of cases. Most notably, it concluded that a “plaintiff’s willingness to license its patents” and “its lack of commercial activity inpracticing the patents” would be sufficient to establish that the patent holder would not suffer irreparable harm if an injunction did not issue. Id., at 712. But traditional equitable principles do not permit such broad classifica-tions. For example, some patent holders, such as university researchers or self-made inventors, might reasonably prefer to license their patents, rather than undertake efforts to secure the financing necessary to bring their works to market themselves. Such patent holders may beable to satisfy the traditional four-factor test, and we see no basis for categorically denying them the opportunity to do so. To the extent that the District Court adopted such a categorical rule, then, its analysis cannot be squared with the principles of equity adopted by Congress. The court’s categorical rule is also in tension with Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U. S. 405, 422– 430 (1908), which rejected the contention that a court ofequity has no jurisdiction to grant injunctive relief to a patent holder who has unreasonably declined to use the patent.”

    Note the reference to Continental Paper Bag. What did that case have to say?

    “The right which a patentee receives does not need much further explanation. We have seen that it has been the judgment of Congress from the beginning that the sciences and the useful arts could be best advanced by giving an exclusive right to an inventor. The only qualification ever made was against aliens, in the act of 1832. That act extended the privilege of the patent law to aliens, but required them ‘to introduce into public use in the United States the invention or improvement within one year from the issuing thereof,’ and indulged no intermission of the public use for any period longer than six months. A violation of the law rendered the patent void. The act was repealed in 1836. It is manifest, as is said in Walker on Patents, 106, that Congress has not ‘overlooked the subject of nonuser of patented inventions.’ And another fact may be mentioned. In some foreign countries the right granted to an inventor is affected by nonuse. This policy, we must assume, Congress has not been ignorant of nor of its effects. It has, nevertheless, selected another policy; it has continued that policy through many years. We may assume that [210 U.S. 405, 430] experience has demonstrated its wisdom and beneficial effect upon the arts and sciences.

    From the character of the right of the patentee we may judge of his remedies. It hardly needs to be pointed out that the right can only retain its attribute of exclusiveness by a prevention of its violation. Anything but prevention takes away the privilege which the law confers upon the patentee. If the conception of the law that a judgment in an action at law is reparation for the trespass, it is only for the particular trespass that is the ground of the action. There may be other trespasses and continuing wrongs and the vexation of many actions. These are well- recognized grounds of equity jurisdiction, especially in patent cases, and a citation of cases is unnecessary. Whether, however, as case cannot arise where, regarding the situation of the parties in view of the public interest, a court of equity might be justified in withholding relief by injunction, we do not decide.”

    Now, compare what the Supreme Court said in these two cases with what I and NAL have been saying vs. the likes of Willton et al. The issue of non use by the patent owner has been before the Supreme Court before and it has been decided that the right protected is the exclusive right of the patent owner, not his business of producing products. The contrary view is held outside the US, where non use justifies a compulsory license.

    So the trend toward compulsory licensing set off by eBay flies in the face of its actual holding and the still viable and approved Continental Paper Bag case.

  7. 315

    ” the Masons and the Knights fight secretly. The Jews and the Muslems in the open.”

    No one fights entirely either secretly or in the open. Both flanks are always engaged.

    Those who do not fight in both simply stop fighting because they are beaten.

  8. 314

    It’s sort of like being a KNIGHT, or being a MASON. Rules, it’s all about rules. A License is what should have been at least recited to you. And I don’t even know what it says. But every organization, in order to be, has one.
    I received a gift at Christmas, from my sweet daughter in law to be. Some of it was horse pucky. But I learned one thing the Masons and the Knights fight secretly. The Jews and the Muslems in the open.
    That was my lesson. And it changed everything for me.

  9. 313

    No, more like Cranky called you out on making a retodded statement, and we’ve all been enjoying watching you squirm for the last 20 or so comments. You could just admit you were wrong, you know?

  10. 311

    It appears mission accomplished for Cranky and the Naysayers.

    This thread derailed when the naysayers’ principal points were defeated and they had no viable response to the positions advocated by the pro-patent people.

    When losing the debate, derail that debate by any and all means possible. We can christen this the Neutron Nuclear Attack doctrine. The playground remains, but no one is left to play.

  11. 310

    Can you imagine if NAL and Mooney had kids?

    There would be thousands of four page boring articles on every thread.

    No playground would be safe for anyone.

  12. 308

    And yet don’t have the time or inclination to actually read and understand the main point of what I was saying, avoiding any discussion of actual substance (and it wasn’t me alone deciding what was of substance on this thread), glomming on to an analogy (oh, I’m sorry an analogical argument) with the ferocity of a pitbull – …

    Noise, it’s really simple.

    Your statement “It is a violation of Equal Protection to prosecute a trespasser of orchards, but not a trespasser of a factory complex,” is NOT an analogy. OK?

    Your analogical argument is something like the following:

    Premise A: “It is a violation of Equal Protection to prosecute a trespasser of orchards, but not a trespasser of a factory complex.”

    Premise B: Trespass and patent infringement are similar.

    Conclusion: Therefore it is a violation of Equal Protection to grant injunctions to some owners of infringed patents and not others.

    So, you’re analogizing trespass law to patent law. I’ve told you repeatedly that I’m not taking issue with that. Thus, I’m not challenging your analogy. Instead, I’m attacking your premise. A successful attack on your premise invalidates your argument, without addressing the analogy itself. Still with me?

    Thus, when you say, “I withdraw the analogy of Equal Protection Violation for prosecution of trespass against orchards versus prosecution of trespass against factories,” I have no idea what you mean. Do you mean that you’re abandoning the proposition that trespass law can be analogized to patent law? I doubt it, but that’s the only analogy involved. Do you mean that you abandon the premise that “It is a violation of Equal Protection to prosecute a trespasser of orchards, but not a trespasser of a factory complex?” If so, why can’t you just say it, instead of mealy-mouthing it?

  13. 307

    gigi,

    I heard that Cranky got $4.99 for his soul (more than I got), but bought one of those NAL bubbleheads that the devil sells for $50.00, so he’s a little behind now. Still in the hole as it were.

  14. 306

    “your unholy desire to prove me wrong. I hope you got a good price for your soul.”

    Boy, noise; who has in the inflated view of themselves?

  15. 305

    Alex,

    The rabbit in the pot, to coin a phrase, is that it was 11, not eight, and the juicy posts were after the snare caught the little bunny.

    Why does anyone fall for the “All I want is a simple “_____”? Nice job Cranky!

  16. 304

    “I’m amazed that you continue to think we’re sluggish enough not to check your cites”

    We, the proverbial cast of thousands, are amazing and classy slugs. We do not leave behind ordinary slime trials – we leave behind malcolmy trials.

    What happened to Willton? Last he was channeling Jefferson and talking about prostitutes – check the slaves’ quarters someone.

  17. 302

    “Cranky”

    For someone who complains that they cannot tell what I am saying, your own “parsing” paints a true indicator of our little conversation.

    Note that “I never asked for a citation to a case specifically involving orchards and factories.” Is modified with Surely you know that case support for a proposition doesn’t require that the facts are identical. and “I asked only for a citation “to support” your statement.”

    Oh, wait, the “marks” now tell me you only wanted “support.” But it’s not exactly straightforward to tell, since you only sent 8 messages in two days before I withdrew. And then three more after I withdrew.

    “I’m amazed that you continue to think we’re sluggish enough not to check your cites”

    So I guess I am supposed to surely know what this means?

    You list three dates where you actually did not ask for citations, although what you asked for changed so much over the two days, that I had to create a scorecard to keep track:
    (1) – Mar 15, 2010 at 01:32 PM – cite-support
    (2) – Mar 15, 2010 at 06:35 PM – cite-waiting
    (3) – Mar 16, 2010 at 09:28 AM – cite-waiting
    (4) – Mar 16, 2010 at 10:23 AM – cite/withdraw
    (5) – Mar 16, 2010 at 02:33 PM – stand behind/withdraw
    (6) – Mar 16, 2010 at 04:27 PM – stand behind/withdraw
    (7) – Mar 16, 2010 at 05:44 PM – stand behind
    (8) – Mar 17, 2010 at 09:27 AM – stand by/stand behind/withdraw

    I withdraw

    (9) – Mar 17, 2010 at 12:06 PM – stand behind/mush/pathologically unable to admit wrong
    (10) – Mar 17, 2010 at 12:10 PM – Stand behind/admit incorrect
    (11) – Mar 17, 2010 at 12:41 PM – rope

    And yet you cannot fathom the difference in what you wanted me to cite/cite/cite/cite-withdraw/stand behind-withdraw/stand behind-withdraw/stand behind/stand by-stand behind-withdraw between

    It is a violation of Equal Protection to prosecute a trespasser of orchards, but not a trespasser of a factory complex.

    And

    I withdraw the analogy of Equal Protection Violation for prosecution of trespass against orchards versus prosecution of trespass against factories.

    Really?

    You dare state “my patented obfuscation” – when your citation-support (but-wasn’t-specifically-or-those-exact-facts-don’t-you-know-that-but-you-are-the-one-misdirecting-citation) morphed into citation-waiting morphed into cite/withdraw morphed into stand behind-but-is-it-stand-behind-those-exact-facts-or-not-specifically-don’t-you-know/withdraw morphed into stand behind-without withdraw morphed into stand by morphed into stand by/stand behind/withdraw,

    At which point I did withdraw – but was that the end of it?

    Of course not – and then after I withdraw

    morphed again into stand behind/mush/pathologically unable to admit wrong and stand behind-admit incorrect and finally rope.

    WOW – nice to pull out the pathological wrong and admit incorrect after I have withdrawn – classy!

    And what if anything has rope got to do with this? Did you run out of things to say?

    And yet don’t have the time or inclination to actually read and understand the main point of what I was saying, avoiding any discussion of actual substance (and it wasn’t me alone deciding what was of substance on this thread), glomming on to an analogy (oh, I’m sorry an analogical argument) with the ferocity of a pitbull – You call me shameless and all you want is “Just a simple “I stand by my statement” or “I withdraw it.””. I withdraw in nearly the same words I put forth, yet “all you want” is two more swipes and the final morph into “admit incorrect”.

    What happened to the simple I withdraw that would satisfy you? No – the true aim of your obsessive behavior, the truly pathological one here stands revealed as your unholy desire to prove me wrong. I hope you got a good price for your soul. The level of effort you have gone to, to salve your bruised ego says more about your lack of character than my withdrawing in nearly the same language as the analogy (oops – sorry analogical argument).

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