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JOHN W. SCHLICHER |
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PATENTS, PATENT LITIGATION, PATENT DISPUTE RESOLUTION AND SETTLEMENT, LICENSING, ANTITRUST, LAW AND ECONOMICS |
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John W. Schlicher, Patent Damages, the Patent Reform Act and Better Alternatives for the Courts and Congress, 91 Journal of the Patent and Trademark Office Society 19 (2009) Table of Contents I. Summary
... II. The Amendments Try to Solve Two Perceived Problems with Reasonable Royalty Damages6 III. How the Amendments Attempt to Solve These Two Perceived Problems8 IV. The Amendments Are Unlikely to Improve Damage Awards and Are Likely to Prevent Sensible Awards10 A. The Amendments Change the Law by Requiring Use of One of Three Supposed Methods of Determining Reasonable Royalty Damages B. The Entire Market Value Rule Is Not a Separate Theory of Reasonable Royalty Damages and the Bills Version of that Rule Fails to Identify Inventions Responsible for the Entire Profits from Sales of a Product C. The Bills Valuation Calculation Rule Does Not Require Damages Equal to the Economic Value of Inventions and Would Be an Obstacle to Sensible Awards D. The Amendments May Lead to Damages Awards that are Too Large by Requiring that the Damage Awards be Based on the Claimed Inventions Specific Contribution Over The Prior Art E. The Establish Royalty Option Will Frequently Lead to Damage Awards that Are Too and Lead to Less Licensing and More Litigation F. These Amendments Will Likely Prevent the Courts from Adopting a Simpler Better Solution G. The Amendments Impose New Requirements on Judges in Patent Actions
A. V. The Amendments Do Not Provide for Increased Damages in Appropriate Situations27 B. A. The General Willful Infringement Standard and the Specific Limitations
C. B. The Effects of the Amendments28 D. C. The Proper Role of Increased Damages29 E. The Three Judicial Approaches
A. VI. The Amendments Do Nothing about Many Other Defects in the Law of Patent Damages
. B. A. The Hypothetical Negotiation Approach to Reasonable Royalty Damages
... C. B. Reliance on Historical Prices, Quantities, and Profits36 D. C. Reliance on Patent Owner and Infringer Expectations38 E. D. Reliance only on the Patent Owners and Infringers Efficiency
F. E. A Hypothetical Negotiation between the Patent Owner and One Infringer G. F. A Hypothetical Negotiation at the Time Sales Began and after the Infringer Has Sunk Costs in Assets Specific to Use with the Invention H. G. The Effect and Cost of Patents Owned By Others
.. I. H. The Effect and Cost of Patents Owned By the Infringer and Used in Infringing Activities J. I. The Standard and Burden of Proof for Determining Reasonable Royalty Damages K. Split Awards ... VII. An Alternative Amendment to Section 284 and the Purposes of the Changes in that Amendment
.. A. An Alternative Amendment43 B. Damages based on the Economic Value of the Invention
... C. Profits Lost as the Result of the Economic Value of the Invention in the Infringing Use D. The Reasonable Economic Value of the Invention in the Infringing Use E. The Amount of Reasonable Royalty Payments
.. F. The Reasonable Economic Value of the Invention in More Valuable Use By Another G. Standard and Burden of Proof54 H. Increased Damages
..54 I. Infringers Profits or Gains |