Alfred E. Mann Foundation & Advanced Bionics v. Cochlear Corporation, Docket No. 19-01201 (Fed. Cir. 2020). This case involves a $268 million damage award that the Federal Circuit affirmed on appeal in no-opinion R.36 judgment. The appeal focused on the damages calculations associated with Mann’s patented cochlear implant testing system. U.S. Patent Nos. 5,609,616 and 5,938,691. Following the R.36 affirmance, Cochelar then petitioned for en banc rehearing that has now also been denied (again without opinion).
The petition delves into the patent damages ‘book of wisdom.’ With the ‘book of wisdom’ courts recognize that the their judgment of the ‘hypothetical negotiation’ could be informed by post-infringement information that may reveal the underlying state of affairs at the time of infringement. The Supreme Court first explained its use of the term in Sinclair Refining Co. v. Jenkins Petroleum Process Co., 289 U.S. 689 (1933):
… if years have gone by before the evidence is offered. Experience is then available to correct uncertain prophecy. Here is a book of wisdom that courts may not neglect. We find no rule of law that sets a clasp upon its pages, and forbids us to look within.
Id. Mann, the district court relied upon post-infringement stock-prices of the patentee to help calculate the reasonable royalty, the the defendant argued that was improper (not to mention that the particular price chosen was improperly cherry picked). Over the course of six years, Advanced Bionics’ stock price rose from $2.80 to $100+, and that rise was seen as a measure of the value of the patented invention.
Petition. I expect to see a Supreme Court petition coming in the case over the summer.
R.36 judgements are not very satisfying.
The infringer infringed. Now it wants to pretend that instead, it entered into a negotiation prior to infringing, and to set damages based on what it – or rather, a hypothetical third party – would have been willing to (hypothetically) pay.
The infringer’s argument is like saying, I didn’t know in 1982 that Microsoft stock would eventually soar, so I deserve to buy that stock now at the 1982 price.
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