Patent Damages

Nevada court imposes 3X post-judgment royalty in lieu of injunction

The District of Nevada, in Server Technology, Inc. v. American Power Conversion Corp., 3:06-CV-00698-LRH-VPC (Judge Larry R. Hicks) (March 31, 2015), denied plaintiff’s request for injunction but granted a post-judgment royalty of 15%, which was 3X the jury’s 5% royalty.  The section of the opinion is brief and is quoted nearly in full here:


EDTX considers post-trial motions re the intersection of patent misuse and damages, EMVR, and ongoing royalties

The Eastern District of Texas in Soverain Software LLC v. J.C. Penney Corp., Case No. 6:09-CV-274 (E.D. Tex., Aug. 9, 2012), issued an opinion that addresses the cross-section of patent misuse and damages, the entire market value rule for a patented on-line ordering system, and ongoing royalties.  All three issues are interesting and worth consideration.  In particular, the conclusion on EMVR seems flawed and will be a good issue for appeal.  Similarly, there are substantive issues for appeal for the ongoing royalties analysis.


Beware NPEs – ITC says no to exclusion order for an NPE who obtained ongoing royalties in district court

On August 1, 2012, in Certain Video Displays and Products Using and Containing Same, Inv. No. 337-TA-828, Order No. 9, ITC ALJ Essex held that an ongoing royalty awarded in the EDTX precluded an NPE, Mondis Technology Ltd., from obtaining an exclusion order from the ITC.  The EDTX had awarded post-verdict (or ongoing royalties) to Mondis against respondents Chimei Innolux Corp. and Innolux Corp. (“CMI”).  CMI argued in the ITC that the ongoing royalties constituted a license.  Mondis argued to the contrary, but Judge Essex rejected Mondis’ arguments.


CAFC vacates unsupported reasonable royalty award in Whitserve v. CPi

On August 7, 2012, the Federal Circuit in WhitServe, LLC v. Computer Packages, Inc., Case No. 2011-1206, 1261 (Fed. Cir.), the court vacated the jury’s damages award and remanded for a new trial on damages.  The case addresses many damages issues—reasonable royalty base, reasonable royalty rate, lump sum versus running royalty, the 25% rule, ongoing royalties, prejudment interest, and supplemental damages—but none of the rulings is surprising or ground breaking.  The case is instructive, however, on how much care must be taken in presenting a coherent damages case.  Plaintiff, WhitServe, and its damages expert, Shapiro, made mistakes at trial, and WhitServe’s desperate attempt on appeal to preserve the verdict (approximately $8M) simply could not overcome these mistakes.


EDTX Post-Trial Order on Multiple Issues: Ongoing Royalty Base and Payment of Ongoing Royalties; Supplemental Damages & Prejudgment Interest; Foreign Tax Laws; Extending Ongoing Royalties to Successors and Assigns; Stay of Supplemental Damages and Ongoing Royalties Pending Appeal

On April 30, 2012, in Mondis Tech. Ltd. v. Chimei InnoLux Corp., Civil Action No. 2:11-cv-378-JRG (EDTX), Judge Gilstrap issued a post-trial order on a number of damages issues:  (a) the definition of the royalty base for ongoing royalties; (b) the timing and frequency of reports and payments; (c) whether prejudgment interest should be assessed on the supplemental damages; (d) whether a portion of the judgment must be withheld due to Taiwanese tax laws; (e) whether the ongoing royalties extend to Innolux’s successors and assigns; (f) whether Mondis is entitled to additional discovery related to a  possible transfer of assets from Innolux to Hon Hai Precision Ltd. (which is not addressed in this summary); and (g) whether the supplemental damages award and the ongoing royalty award should be stayed pending appeal.


Federal Circuit Affirms Ongoing Royalty in Bard v. W.L. Gore

In an earlier post dated December 1, 2010 (, we addressed a case between Bard and W.L. Gore from the District of Arizona involving ongoing royalties (i.e., royalties awarded after post-judgment motions).  The case presented an interesting and detailed study in the analysis of ongoing royalties, even including a license agreement at the end of the opinion.


EDVA denies motion to stay payment of “sunset” royalties

Judge Jackson in EDVA denied a stay of so-called “sunset” royalties, holding that to do so would “circumvent the entire purpose of granting sunset royalty payments as part of an injunction.”  Plaintiff prevailed at trial, and in addition to $115M in damages, was also granted injunctive relief.  At Defendant’s urging, the Court provided the Defendant a six-month “sunset” period to continue selling the infringing devices while (presumably) working on a design-around.  For those units sold during the sunset period, however, the Court required that the Defendant pay the Plaintiff a per-unit royalty.  Thereafter, the Defendant moved to stay that per-unit royalty payment under Rule 62(d).  The Court held that Rule 62(d) was inapplicable in the current factual scenario, though, since the royalty payments were not a “money judgment” but instead a condition of staying the injunctive relief.  The Court opined that staying the royalty portion of the injunction would serve no legitimate purpose, as it would give the Defendant no disincentive to continuing to supply the infringing technology.


Cisco sued in separate lawsuit for damages post-verdict

Commil USA LLC has filed a second lawsuit in EDTX against Cisco concerning a wireless networking patent owned by Commil.  In a first EDTX suit between the parties, Commil obtained a $63M verdict against Cicso.  The $63M in damages covered the period up through the beginning of the trial—apparently through January 29, 2011.


Detailed opinion on ongoing royalties from Arizona court

Cases concerning ongoing royalties have been issuing with increasing frequency.  We have discussed other cases in prior posts, including our discussion of Presidio Components in a post dated October 29, 2010.  The District of Arizona, in Bard Peripheral Vascular, Inc. v. W.L. Gore & Assoc., Inc., No. CV-03-597-PHX-MHM (D. Ariz. Sept. 8, 2010), issued a lengthy, detailed ongoing royalty opinion.  The case is worth reading for its interesting analysis and because it includes at the end a license agreement that the court fashioned, presumably with the assistance of the attorneys from both sides.

Judge Mary Murgula issued the opinion in what proved to be “the most complicated case this Court has presided over.”  The jury had fixed a 10% reasonable royalty rate, and the court was faced with the two sides’ competing proposals for a post-judgment royalty.  Of course, the plaintiff was seeking a higher rate (35% on some products and 25% on others), while the defendant proposed something lower (5%).


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.