Patent Damages
7Jan/20Off

California Law on Reverse Payment Settlements Goes into Effect

January 1, 2020, was the effective date of California’s new “Preserving Access to Affordable Drugs” Act, A.B. 824, now Sections 13,400-13402 California Health and Safety Code. The California Legislative Counsel’s digest summarizes the law’s main provision as follows:

This bill would provide that an agreement resolving or settling, on a final or interim basis, a patent infringement claim, in connection with the sale of a pharmaceutical product, is to be presumed to have anticompetitive effects if a nonreference drug filer receives anything of value, as defined, from another company asserting patent infringement and if the nonreference drug filer agrees to limit or forego research, development, manufacturing, marketing, or sales of the nonreference drug filer’s product for any period of time, as specified.

The bill only applies to California’s antitrust law, the Cartwright Act, and its Unfair Competition statute, California Business and Professions Code Section 17,200 et seq. The law has no effect on federal law or other states’ laws. Further, the bill only impacts the initial burden of going forward on whether a contract is a reasonable restraint on trade. The bill does not change the law on standing, antitrust injury or antitrust damages or equitable relief, nor does it likewise extend to all elements needed to prove liability under Section 17,200. So while the law shifts the burden of going forward in a “reverse payment” settlement from the plaintiff to the contracting parties (presumably the defendants) on the issue of whether the contract is a reasonable restraint on trade, it does not shift the plaintiff’s burden of going forward on the other elements of its claim. Moreover, since the bill only impacts only part of the proof of liability, it does not appear to shift the ultimate burden of proof away from the plaintiff (albeit how court’s deal with the statute in litigation is as yet unknown).

 A non-profit industry group, the Association for Accessible Medicines, filed suit against the state to declare the law unconstitutional and to enjoin it from going into effect. The Plaintiff argued, among other things, that the law violated the federal government’s right to regulate interstate commerce and the scope of U.S. patents. On December 31, 2019, the United States District Court for the Eastern District of California refused to enter a preliminary injunction against the law going into effect, holding the Plaintiff had not met its burden of proof for a preliminary injunction. Association for Accessible Medicines v. Becerra, 2019 WL 7370421 (E.D.Cal. 12/31/2019). Moreover, since the injunction was sought prior to when the law went into effect, there was uncertainty as to whether it would violate federal law “as applied”, which further complicated the injunction litigation.

How the Ninth Circuit will handle the issue, and whether courts will limit the law’s application to try to avoid conflict with federal law, remains to be seen. In the interim, given the size and reach of the California economy, settlements and licenses should be vetted by antitrust counsel in light of the AB 824.

Author: DJ Healey

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30Dec/16Off

EDTX denies exclusion of settlement license and “real estate” apportionment

The Eastern District of Texas, in ZiiLabs, Inc. v. Samsung Electronics Co., (Judge Roy S. Payne) (December 4, 2015), granted in part and denied in part defendant’s motion to exclude various opinions from plaintiff’s damages expert, Robert Mills.

Grounds:

  • Defendant sought to exclude expert’s reliance on litigation settlement license covering 100 patents as not economically comparable and not the most reliable license in the record.
  • Defendants sought to exclude expert’s reliance on licensing negotiations that never resulted in executed licenses, and were not technically comparable.
  • Defendant sought to exclude apportionment based on surface area of accused element on the chip.
  • Defendants sought to exclude expert’s testimony on several economic theories
7Dec/16Off

Federal Circuit Opinion Asetek Danmark a/s v. CMI USA Inc. Cites Patent Damages Treatise

In a December 2nd opinion by the Federal Circuit, the court cited Patent Damages Law and Practice as a “leading commentary.” The comprehensive treatise was co-authored by Chris Marchese, one of the bloggers on this site, and has been cited in numerous district courts as well.

21Jan/14Off

Upcoming webinar: Drafting Patent Claims from a Litigator’s Perspective

Please join me on January 22 for a webinar, “Drafting Patent Claims from a Litigator’s Perspective.” In this first-of-the-season patent-focused webinar hosted by Fish & Richardson, I will cover the importance of:

6Jul/11Off

EDVA approves permanent injunction; provides detailed analysis of eBay factors and injunction scope

On May 23, 2011, Judge Robert E. Payne of the Eastern District of Virginia issued an opinion granting ePlus’ (“plaintiff”) motion for a permanent injunction against Lawson (“defendant”). ePlus, Inc. v. Lawson Software, Inc., Case No. 3:09-CV-620 (E.D. Va., May 23, 2011). Defendant infringed plaintiff’s e-procurement software patent. Defendant, a large company, manufactured a “Core S3 Procurement System” able to run either defendant’s or plaintiff’s e-procurement software.

29Jun/11Off

Kathrein v. Microondas

On May 19, 2011, Judge Geraldine Soat Brown of the Northern District of Illinois sitting in place of Judge Ronald Guzman issued an opinion granting the defendant’s motion to strike plaintiff’s supplemental response. Kathrein-Werke KG v. Radiacion Y Microondas SA, Case No. 07-C-2921 (N. D. Ill., May 19, 2011). The court held, without prejudice, that any decision to change a damages methodology, in light of Uniloc, must be decided by the District Judge. The court found that changes to a damage’s methodology is more than a mere “supplementation” under FRCP 26(e). “It is not appropriate to insert such a significant change in the case under the label ‘supplementation.’” Id. Thus, the court decided to strike the supplemental response , but not on its merit; rather, struck it on its characterization as a supplement to plaintiff’s calculation of damages. Id.

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