Patent Damages
3Nov/10Off

Bard Peripheral Vasc et al v WL Gore Associates et al

The Court, based primary on public interest factors, denied a permanent injunction, and thereafter went about determining an appropriate ongoing royalty for direct competitors.  The jury had awarded a 10% royalty for the damages period, but Bard argued that the ongoing royalty should be much higher because of the “markedly different” circumstances and legal status (citing Amado v. Microsoft).  For the hypothetical negotiation date, the parties agreed that the appropriate date was the day after the Court denied a permanent injunction, and also agreed that a “modified Georgia-Pacific framework” was most appropriate.

Gore had been adjudicated a willful infringer, and was also ordered to pay attorneys’ fees, and Bard argued that the parties would have taken that into account when negotiating an ongoing royalty, since a reasonable assumption would be that Gore would have to pay treble damages and attorneys’ fees for any repeat litigation.  Bard argued that any ongoing royalty for less than that amount would lead to perverse incentives, namely that it would be better to forego an ongoing royalty and simply re-litigate the patent every six years.

The Court agreed that the rate should be higher than 10% for the reasons stated by Gore, but not as high as Bard was requesting.  The Court found 20% for surgical graft products (where the parties directly competed) and 15% for stent-graft products (where the parties did not directly compete).  Two other products also received lower royalty rates, because in each instance Gore added significant value beyond the patented features.  The Court found that these royalty rates “should likely allow Gore to continue to make a reasonable, albeit reduced, profit on the products it sells utilizing Dr. Goldfarb’s invention, and that such a license would be a fair result of a renewed hypothetical negotiation.”

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