Thursday, December 15, 2016

From Around the Blogs: Lost Profits in China, Accountings of Profits in Canada, and Reasonable Royalties in the U.S.

1. On the the China IPR Blog, Mark Cohen published a short post earlier this week on Watchdata v. Hengbao, a recent patent infringement case against fifteen banks in which the Beijng IP Court awarded 50,000,000 RMB--which comes to about U.S.$7.2 million  (49,000,000 RMB in damages and another 1 million RMB in attorneys'  fees).  The post links to some other commentary on the judgment, including this one by David Huang in English.  Mr. Huang writes that "The court adopted the 'hybrid' formulation 'defendant's sales × plaintiff's profit for patented products', as allowed by a judicial interpretation issued by the PRC Supreme People's Court."  Both Mr. Cohen and Mr. Huang note that the court's award of attorneys' fees based on time charged may be a new development in China. 

I understand that the judgment itself has just been made publicly available, and I'm hoping to publish a post--possibly a guest post--discussing the matter in more detail sometime soon. 

2.  On Sufficient Description, Norman Siebrasse published a post last month titled The Patentee, Not the Infringer, Elects an Accounting, discussing a case in which Canada's Federal Court held (not surprisingly, it seems to me) that the patentee, rather than the infringer, is the entity that gets to request that the court order an accounting of the infringer's profits.  There's also a write-up by Peter Menyasz on Bloomberg BNA's World Intellectual Proeprty Report (available here, but behind a paywall).  Professor Siebrasse also has a published a recent series on "unjustified threats" (wrongful enforcement) in Canada (see here, here, and here), which I hope to discuss in a separate post on this blog sometime soon.  

3.  On Patently-O, Dennis Crouch published  a short post on a new article by Michael Risch titled (Un)Reasonable Royalties, which is now up on ssrn (here).  I'm hoping to sit down and read the article myself over the next couple of days.  Here is the abstract:
Though reasonable royalty damages are ubiquitous in patent litigation, they are only one-hundred years old. But in that time they have become deeply misunderstood. This Article returns to the development and origins of reasonable royalties, exploring both why and how courts originally assessed them.
It then turns a harsh eye toward all that we think we know about reasonable royalties. No current belief is safe from criticism, from easy targets such as the 25% “rule of thumb” to fundamental dogma such as the hypothetical negotiation. In short, the Article concludes that we are doing it wrong, and have been for some time.
This Article is agnostic as to outcome; departure from traditional methods can and has led to both over- and under-compensation. But it challenges those who support departure from historic norms—all the while citing cases from the same time period—to justify new rules, many of which fail any economic justification.
The biggest patent-related news in the U.S. so far this month, however, besides the Samsung v. Apple decision (see here) is probably the U.S. Supreme Court's grant of certiorari in Impression Products v. Lexmark Int'l (on the exhaustion doctrine) and in T.C. Heartland v. Kraft Food (on venue).  This may be  shaping up to be an unusually patent-heavy term for the Court.  These two cases are not directly related to remedies, though surely the resolution of the issues presented could have an impact on matters such as damages awards and negotiated royalties.

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