Archive for April, 2009

Compulsory Licensing of Non-Practicing Patentees after eBay v. MercExchange

April 21, 2009

I have an article in the Virginia Journal and Law and Technology examining the regime of compulsory licensing for patentees who do not commercialize their patents in the aftermath of the U.S. Supreme Court’ 2006 decision eBay Inc. v. MercExchange, L.L.C.

See Compulsory Licensing of Non-Practicing Patentees after eBay v. MercExchange.

As is well known, eBay ended the Federal Circuit’s practice of automatically granting permanent injunctions for patent infringement, after which non-practicing patentees are less likely to obtain injunctive relief.  The article examines the Second Circuit’s approach of denying injunctions to non-practicing patentees, which was a counterpoint to many Federal Circuit cases’ approach prior to eBay, denying injunctions and awarding a compulsory license equal to a “reasonably royalty” for a license to the patent.  That approach has been re-invigorated by Justice Kennedy’s concurrence in eBay and subsequent U.S. District Court cases.

Patent Reform Bill Passes Judiciary Committee

April 6, 2009

The contentious patent reform bill finally passed the Senate Judiciary Committee, though without the vote of one of its key sponsors.

The Committee passed the bill 15-4 ,  a vote which should send the bill to the Senate Floor for a vote. Sen. Orrin Hatch of Utah voted against the bill, stating that he does not believe it achieves the goals of improving patent quality and decreasing litigation costs.

Promote the Progress links to the bill as it passed the Committee.the controversial reform to damages, described in my post here, has been replaced with a provision that codified the current damages regime but makes the District Court judge a sort of a gatekeeper on damage issues. The amended provision was brokered by Senators Feinstein of California and Spector of Pennsylvania, according to links to the bill as it passed the Committee, according to PatentlyO . Different reports abound on why Senator Hatch voted against the bill. CNET and Reuters suggested it was because of the compromise on damages that was reached, as noted in a comment by Senator Leahy directed to Senator Hatch. Senator Leahy supposedly said that he would have preferred to have the originally proposed revision to damages calculations. Others, including Promote the Progress and the Salt Lake City Tribune, suggest it was because the bill failed to revise the standard for inequitable conduct.

The full text of the damages provision is below:

§ 284. Damages
(a) IN GENERAL.—
(1) COMPENSATORY DAMAGES AUTHORIZED.— Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court. In determining damages, the court will direct the jury to consider any relevant factors or methodologies, under applicable law, based on the evidence presented.

(2) USE OF EXPERTS PERMITTED.—The court may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances.

(b) PROCEDURE FOR DETERMINING DAMAGES.—
(1) IN GENERAL.—The court shall identify the methodologies and factors that are relevant to the determination of damages, and the court or jury, shall consider only those methodologies and factors relevant to making such determination.

(2) DISCLOSURE OF CLAIMS.—By no later than the entry of the final pretrial order, unless otherwise ordered by the court, the parties shall state, in writing and with particularity, the methodologies and factors the parties propose for instruction to the jury in determining damages under this section, specifying the relevant underlying legal and factual bases for their assertions.

‘‘(3) SUFFICIENCY OF EVIDENCE.—Prior to the introduction of any evidence concerning the determination of damages, upon motion of either party or sua sponte, the court shall consider whether one or more of a party’s damages contentions lacks a legally sufficient evidentiary basis. After providing a nonmovant the opportunity to be heard, and after any further proffer of evidence, briefing, or argument that the court may deem appropriate, the court shall identify on the record those methodologies and factors as to which there is a legally sufficient evidentiary basis, and the court or jury shall consider only those methodologies and factors in making the determination of damages under this section. The court shall only permit the introduction of evidence relating to the determination of damages that is relevant to the methodologies and factors that the court determines may be considered in making the damages determination.’