Willful Infringement Center Stage at Federal Circuit

The United States Court of Appeals for the Federal Circuit recently issued a unanimous panel decision in Halo Electronics, Inc. v. Pulse Electronics, Inc. This decision may have more far-reaching implications for patent reform than any other decision reached by any court in recent memory. The issue of particular interest in this case was willful infringement, and in a concurring opinion, Judges O’Malley and Hughes wrote that the majority was constrained by the Federal Circuit’s precedent in In re Seagate and Bard Peripheral Vascular v. W.L. Gore, but that recent Supreme Court decisions call into question the continued viability of that precedent. As such, Judges O’Malley and Hughes urged the Federal Circuit to reconsider en banc the standard for awarding enhanced damages under 35 U.S.C. 284.

The case came to the Federal Circuit on an appeal by Halo Electronics, Inc. (“Halo”), who appealed from multiple decisions of the United States District Court for the District of Nevada. First, Halo appealed the granting of summary judgment that Pulse Electronics, Inc. and Pulse Electronics Corp. (collectively “Pulse”) did not sell or offer to sell within the United States the accused products they manufactured for delivery to buyers outside the United States. Second, Halo also appealed the granting of summary judgment that Pulse did not directly infringe Halo’s U.S. Patents 5,656,985 (the “’985 patent”), 6,297,720(the “’720 patent”), and 6,344,785 (the “’785 patent”) (collectively “the Halo patents”). Finally, Halo appealed the holding that Pulse’s infringement of the Halo patents with respect to certain accused products that Pulse sold and delivered in the United States was not willful.

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Patent Law Institute Live Blog: Patent Damages – Keeping Up With the Changing Rules

We are back from the lunch break with our first panel of the afternoon from the Patent Law Institute. This afternoon’s panel is entitled, “Patent Damages – Keeping Up With the Changing Rules”. Our featured panelists are John Moehringer and Dawn Hall. The panel provides perspectives on the sea change in damages analysis, with focus on constructing/deconstructing a reasonable royalty case, proving lost profits and price erosion, and getting the most from your damages/economic expert. Here are the highlights: (more…)

PLI Talks: Gerard Haddad on Patent Litigation

The Practising Law Institute’s Laurie Gilbertson interviewed Gerard Haddad, a partner in the Intellectual Property Practice at Dickstein Shapiro LLP, regarding the latest in patent litigation. Gerard shares how the Federal Circuit’s new rule of thumb for patent damages requires a connection between the damages and the actual patent. He also discusses with Laurie how the pharmaceutical industry has a likelihood of bringing claims that may challenge the application of the new rule for patent damages. For more, check out Gerard’s power point presentation entitled, “Rule of Thumb is Extinguished”.

Judge: Nash Bargaining Is No Solution for Patent Damages

Brandon Baum of Baum Legal and Practice Center Contributor, sent in this article discussing the “Nash 50 Percent Rule” and patentees recent attempt to use the rule to support it’s damages claim in it’s patent infringement case.  Is the Nash Bargaining Solution stronger and more defensible than the “25 Percent Rule”?

In Uniloc v. Microsoft, the Federal Circuit rejected the so-called “25 Percent Rule of Thumb” that suggested that in a hypothetical negotiation over reasonable royalties, a good starting point is to assume a profit split of 25% to the patentee and 75% to the infringer.  Although the Federal Circuit did not say it, it has been assumed by many that the problem with the 25 Percent Rule was that it gave too much to the patentee — resulting in excessive damage awards.  Indeed, it was Microsoft complaining about the use of the “Rule” on appeal, not Uniloc.

Patentees, however, are a clever and resilient bunch who always view the glass as half full.  Since the Federal Circuit found that the 25 Percent Rule was not sufficiently grounded in science, patentees sought a replacement that was stronger and more defensible — and many have turned to the Nash Bargaining Solution. The Nash Bargaining Solution is a mathematical proof of what any parent of two children knows; in a two person bargaining scenario, the optimal split that the parties will eventually agree upon is 50-50.  For this, Nash won a Nobel Prize.  ”Eureka!,” said patentees.  ”We will replace the unproven and now-rejected 25 Percent Rule with Nash’s Nobel Prize-winning 50 Percent Rule!” (more…)

New FTC Report Suggests Improved Alignment of Patent System With Competition Policy

Earlier this week, the FTC published an extensive report recommending ways to improve patent law policies.  The report emphasizes that the patent system and competition policy share the goal of promoting innovation that benefits consumers and explores ways to achieve greater alignment between the two.  Our friends at Foley & Lardner sent in this alert highlighting the key points of the report.

On March 7, 2011, the FTC released a 300-page report, The Evolving IP Marketplace: Aligning Patent Notice And Remedies With Competition. The Report assesses the patent system’s benefits and challenges as more companies shift to “open innovation” and increasingly rely on technology transfers to adopt inventions created outside their own R&D efforts. The FTC continues its engagement regarding the patent system that began with its 2003 Report, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy, and continued with its 2007 Report, Antitrust Enforcement and Intellectual Property Rights: Promoting Innovation and Competition. The 2011 Report aims to better align the patent laws with competition policy by recommending improvements to two areas of patent law policies, namely how well a patent gives notice to the public of what technology is protected, and the remedies available for patent infringement.

Improving The (more…)