Patent Damages

San Diego court awards post-judgment (ongoing) royalties and supplemental damages

Chief Judge Irma E. Gonzalez of the Southern District of California (San Diego) released an opinion on August 5, 2010 that set an ongoing (i.e., post-judgment ) royalty of 12% of the wholesale price of the infringing capacitors.  Presidio Components Inc. v. American Technical Ceramics Corp., 08-CV-335-IEG (NLS).  Judge Gonzalez also awarded "supplemental damages" to the plaintiff in the amount of $235,172.68.  Ongoing royalties raises some interesting issues and has been the subject of numerous opinions over the past couple years.  We'll discuss both issues below.


Fish & Richardson patent damages seminar in NYC on 11/10

Chris and Justin (your blog authors) are giving a seminar on patent damages in New York City on November 10, 2010.  The event will be held at Fish & Richardson's office in New York City, 601 Lexington Ave., New York, NY 10152, (212) 765-5070.  The seminar is open to anyone who is interested.  For more information and sign-up, see

We previously put on this seminar in Minneapolis, Boston, and San Diego.  We do the seminar with two of our F&R partners, Jack Skenyon from the Boston office, and Michael Florey from the Twin Cities office.  The seminar is called:  Taming the Wild West of Patent Damages: Is There a New Sheriff in Town?  The following is a quick summary:

Patent damages law has come to the forefront in recent years, as juries have increasingly awarded large sums to plaintiffs, and Congress has stepped into the fray in an effort to rein-in patent damages. Reacting to the escalating damages awards and Congress' efforts, the judiciary has recently issued a flurry of opinions that may be changing the patent damages landscape permanently, and policing the previously untamed law of patent damages.

Please join us for a timely discussion led by attorneys who have literally written the book on patent damages and who are strategically guiding clients through this challenging area of patent law and litigation.

Key topics:

  • When will Congress pass legislation reforming damages law, what will it address, and what impact will it have?
  • Have recent cases - such as Lucent v. Gateway, Cornell v. Hewlett-Packard, i4i, Wordtech, and ResQNet - changed the law?
  • Are trial judges now acting as gatekeepers to prevent juries from hearing unsound damages theories?
  • What can be done in preparing a damages case to avoid running afoul, or take advantage, of the recent case law?

We hope to see you there!



Utah court: refuses to apply entire market value rule to lump-sum damages; finds no marking violation where unmarked products were not within scope of license

Earlier today, we issued a post on a Utah case, Phillip M. Adams & Assoc. LLC v. Winbond Electronics Corp., Case No. 1:05-CV-64 TS (D. Utah, Sept. 8, 2010).  The previous post summarized the court's decision on a motion in limine, in which the court refused to exclude testimony from the inventor concerning factual issues relevant to reasonable royalty damages.  Only a week earlier, the Utah court also issued an opinion (click here)that addressed summary judgment on two issues:  entire market value rule and patent marking.  Both issues are interesting.

Click the "continue" link to read more about this case...


Pennsylvania court holds pre-licensing correspondence is relevant to damages and must be produced

Judge William Caldwell of the Middle District of Pennsylvania was faced with an issue that has arisen with increasing frequency in the past year:  whether the pre-licensing correspondence between a patent owner and its licensees is discoverable.  Kimberly-Clark Worldwide, Inc. v. First Quality Baby Prods., LLC, Civil No. 1:CV-09-1685 (M.D. Pa. Sept. 15, 2010) (Caldwell, J.).  Judge Caldwell’s decision follows what appears to be the prevailing view on this topic—i.e., such correspondence is discoverable because it is relevant to the damages calculus.

Defendant First Quality sought production of “document concerning the communications between [plaintiff Kimberly-Clark] and any licensee, or potential licensee, of the patents-in-suit, the related patents, or related applications.”  Kimberly-Clark resisted production of these documents, arguing that pre-licensing correspondence is neither admissible nor reasonably calculated to lead to discovery of admissible evidence.  First Quality argued that such documents are relevant to damages and obviousness.  The court agreed with First Quality.


Inventor can testify as to factual basis for damages — District of Utah

We're catching on some recent cases, and found quite a few interesting damages decisions that have issued in the past few months.  The following is a summary of one of those cases, handed down by Judge Ted Stewart from the District of Utah.  The case suggests that one need not have a formal damages expert to support its case of reasonable royalties or lost profits.  Rather, a credible and knowledgable fact witness can introduce that facts that support your damages case.  Hope you find this informative.

The case (click here) is Phillip M. Adams & Assoc., LLC v. Winbond Electronics Corp., Case No. 1:05-CV-64 TS (D. Utah Sept. 14, 2010) (Stewart, J).  The plaintiff sought to use testimony from the inventor (Dr. Adams) of the patents-in-suit, who also happened to be a principal of the plaintiff.  The defendants moved to exclude Dr. Adams from testifying as a damages expert because, as he admitted, he is not a damages expert.  The plaintiffs argued that they were not offering Dr. Adams as a damages expert, but that his testimony should be admitted for the factual underpinnings of its reasonable royalty case. 

The court agreed with the plaintiff and held that Dr. Adams could testify as a fact witness as to the amount of previous licenses for the patents and the price at which plaintiff would have offered a license.  The court stated that it is proper for a fact witness like Dr. Adams to testify on various Georgia-Pacific factors that are relevant to the damages analysis, including demand for the patented product, provided a foundation is shown.  The court did remark, however, that Dr. Adams could not testify as to the application of those factors under Georgia-Pacific because he is not a damages expert.  The court noted that other courts have allowed patent owners to offer valuations based on straightforward common sense calculations (citing Lifewise Master Funding v. Telebank, 374 F.3d 917, 929 (10th Cir. 2004)).


Wordtech Systems, Inc v. Integrated Networks Solutions, Inc. Wordtech Systems, Inc v. Integrated Networks Solutions, Inc., — F.3d —-, 2010 WL 2384958, C.A.Fed. (Cal.) 2010.

The Federal Circuit reversed the damages award, finding it to be against the clear weight of the evidence.  The Court found that defendants had waived their JMOL argument on damages, but had properly preserved a New Trial argument.  The plaintiff had requested “at least 12 percent” for a royalty, which came out to $114,000, but the jury awarded $250,000.  Wordtech did not present expert testimony, but instead used its President to discuss previous licenses it had entered into.

The Court held that, similar to Lucent and ResQNet, the licenses were not sufficiently comparable to the hypothetical negotiation license.  Although there were two previous lump-sum agreements in evidence, one for $175,000 and one for $350,000, the Federal Circuit noted that these licenses were not discussed in the trial, and thus “provide no basis for comparison with INSC's infringing sales. Neither license describes how the parties calculated each lump sum, the licensees' intended products, or how many products each licensee expected to produce.”