One way of dealing with the inherent uncertainty of calculating compensatory or restitutionary damages is to authorize courts to award so-called "statutory" damages within some pre-established range. To my knowledge, however, few countries authorize statutory damages for patent infringement; China and Russia are the only two I am aware of (see posts here, here, here, and here). Regarding China in particular, as I have previously written:
As discussed in my book, statutory damages appear to the most popular damages remedy for patent infringement in China, even though the amounts that can be awarded are relatively low; 1,000,000 yuan equals only about $160,000 (U.S.). Among the relevant factors that Chinese courts take into account are “the infringer’s state of mind; the effect, manner, and duration of the use; the value, function, and materiality of the patent, including the availability of competing products; and the cost incurred in responding to the infringement.” Id. at 359 (citing Jingjing Cao, Die Durchsetzung von Patenten in China 178–80 (2010); Cheng Miao et al., Theory and Practice Related to Patent Infringement Damages, China Pats. & Trademarks, 2009, no. 4, at 17–18).
More common is the practice of several countries (including the United States) of awarding statutory damages for copyright infringement. In the U.S., subject to certain conditions the court--actually the jury, if there is one, since the Supreme Court in Feltner v. Columbia Pictures held that this is a jury issue--may award damages ranging from $750 to $30,000 for each work infringed. (The figure can be lowered to $200 in certain (rare) cases involving innocent infringement, or increased to $150,000 for willful infringement.) Recently, the U.S. Copyright Office published a White Paper making various recommendations relating to (among other matters) statutory damages. With regard to statutory damages, the Office recommends (1) "incorporating into the statute a list of factors for courts and juries to consider when determining the amount of a statutory damages award"; (2) "changes to the copyright notice provisions that would expand eligibility for the lower 'innocent infringement' statutory damages awards"; and (3) "that, in cases involving non-willful secondary liability for online services offering a large number of works, courts be given discretion to assess statutory damages other than on a strict per-work basis" (p.85). The proposed statutory factors would be:
(1) The plaintiff’s revenues lost and the difficulty of proving damages.I suppose that this might be an improvement over the current practice of having no statutory factors, but I'm still not sure that statutory damages are, at the end of the day, desirable. Is it really that difficult to calculate actual harm? Will copyright cases become mired in a multifactor test that calls to mind certain portions of patent law's Georgia-Pacific (for reasonable royalties) and Read v. Portec (for enhanced damages) factors?
(2) The defendant’s expenses saved, profits reaped, and other benefits from the infringement.
(3) The need to deter future infringements.
(4) The defendant’s financial situation.
(5) The value or nature of the work infringed.
(6) The circumstances, duration, and scope of the infringement, including whether it was commercial in nature.
(7) In cases involving infringement of multiple works, whether the total sum of damages, taking into account the number of works infringed and number of awards made, is commensurate with the overall harm caused by the infringement.
(8) The defendant’s state of mind, including whether the defendant was a willful or innocent infringer.
(9) In the case of willful infringement, whether it is appropriate to punish the defendant and if so, the amount of damages that would result in an appropriate punishment (pp. 87-88).
Still and all, the question of what to do when the evidence of actual damages or defendant's gain is deficient is not an easy one. U.S. patent law arguably requires a court to award some reasonable royalty unless the patent has no economic value, and when the parties' evidence is lacking the court may just have to muddle through (see my post on Apple v. Motorola here). This is a topic I hope to address in some forthcoming work. I'm not inclined to think that statutory damages are the answer in patent law (even if, maybe, they are acceptable in copyright), though it may be worthwhile that some countries are experimenting with them. Perhaps others can learn from their experience.
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