Damages I
Patent Law
4.19.04
Relief
Prospective Effect
Issuance
Complaint filed
in District Court
Damages assessed for
this period if marking
(or actual notice)
Preliminary
injunction
hearing
Final
injunction
issues
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
– 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
Reasonable royalty
Patent owner must prove:
1. Demand
2. Absence of substitute
3. Capability
4. Amount of profit
Actual damages & the problem of proof
– Panduit Corp. v. Stahlin Bros. Fibre Works, Inc.
(CB:328-29)
Damages
Two approaches to substitution:
1. Patentable = unique, therefore, no
substitutes.
2. 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. 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
noninfringers
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
postexpiration.