Damages I Patent Law 4.19.04

Relief Prospective Effect Damages assessed for this period if marking Issuance Final injunction issues Complaint filed in District Court Preliminary injunction hearing Damages assessed for this period if marking (or actual notice)

Remedies: Injunctions Preliminary Injunction -- 4 Factors: 1. Reasonable likelihood of success 2. Irreparable harm 3. Balance of hardships 4. Impact on public interest Permanent Injunction • Presumed

Remedies: Patent Damages § 284 • Marking/Notice (required for patented articles; not machines or processes) - §287 • Standard: adequate to compensate fully for injuries proximately caused by the infringement. • no less than a reasonable royalty • Damage Measures: • Lost Profits • Reasonable Royalty • Treble Damages: Willful Infringement • Other Monetary Relief: • Attorney Fees in exceptional cases • Prejudgment interest

Permanent Injunctions Routinely granted. Foster v. American Mach & Foundry Co. (CB: 1064) Rare case. Balancing the equities.

Damages Two measures: Actual damages & the problem of proof Reasonable royalty Actual damages & the problem of proof Panduit Corp. v. Stahlin Bros. Fibre Works, Inc. – P. 1069

Panduit Technology

Damages Two measures: Actual damages & the problem of proof Patent owner must prove: Demand Absence of substitute Capability Amount of profit Two measures: Actual damages Reasonable royalty Actual damages & the problem of proof Panduit Corp. v. Stahlin Bros. Fibre Works, Inc. (CB:328-29)

Damages Two approaches to substitution: Patentable = unique, therefore, no substitutes. Antitrust, substitution is a function of cross-elasticity of demand. Therefore, there will usually be substitutes.

The Fallback – Reasonable Royalties “Hypothetical Bargain” principle When? – Date infringement began Factors Do not reward infringement !! Available noninfringing substitutes? Does infringer get a profit?

United States Patent 4,373,847 Hipp , et al United States Patent 4,373,847 Hipp ,   et al. February 15, 1983 Releasable locking device A releasable locking device is provided for securing a parked vehicle to an adjacent upright structure. The device includes a first means mounted on the upright structure and a second means mounted on the first means for vertical movement relative thereto between operative and inoperative mode positions. When in an operative mode, the second means is in a raised position and interlockingly engages a portion of the parked vehicle. A third means is provided which releasably retains the second means in an operative mode and prevents accidental movement of the second means from an operative mode position to a lower inoperative mode position. The first means includes guides for restricting movement of the second means to a substantially vertical path. Inventors: Hipp; Steven J. (Milwaukee, WI); Hahn; Norbert (Cudahy, WI) Assignee: Rite-Hite Corporation (Cudahy, WI) Appl. No.: 260340Filed: May 4, 1981

Other damage theories Price erosion Market share rule Lost sales of related but unpatented products Post-expiration sales Not just lost sales, but lower price—because infringer provides price competition Larry Solum, USD Law School

Other damage theories Price erosion Market share rule Lost sales of related but unpatented products Post-expiration sales Relative market share of patentee relative to non-infringers would remain the same without the infringer.

Other damage theories Price erosion Market share rule Lost sales of related but unpatented products Post-expiration sales Components and other related products which are normally sold with the patented product.

Other damage theories Price erosion Market share rule Lost sales of related but unpatented products Post-expiration sales Head-start theory. Competitor cannot enter market immediately post-expiration.