Lex Machina Damage Award Litigation Report 2025

I was alerted to the publication of Lex Machina’s Damage Award Litigation Report 2025 by an articlein Law360 earlier this week, and have now had a chance to review the report myself.  (Readers who want a copy should contact Lex Machina.)  “The report primarily compares data spanning the ten-year period from the beginning of 2015 through the end of 2024,” and “focuses on the more than 73,000 federal cases with damage awards in that ten-year span,” including patent, copyright, trademark, trade secret, and antitrust cases, along with several other subject matter areas including products liability.  For present purposes, I thought I would simply highlight a few things relevant to patent damages awards over the past few years.  Most notably, the number of cases awarding patent damages from 2020-24 was 738 (compared with 305 during 2015-19), and the total amount awarded has risen from $3,822,980,219 to $12,667,647,608.  (These amounts are not adjusted for inflation, but clearly outstrip the rate of inflation over that period of time.  I understand that $1 in 2015 would be worth about $1.36 today, and $1 in 2019 would be worth about $1.26.)  The average patent damages award for 2020-24 has increased 200% (to $35,784,315), and the median by 84% (to $1,861,033), compared with 2015-19.  Not surprisingly, average and median jury awards are higher than average and median judge awards, though presumably much of this is attributable to selection effects.  For 2024, the average and median amounts for jury awards in patent cases are $83,693,841 and $24,200,000, compared to $1,254,568, and $603,965 for judge awards.  Average trade secret awards from 2020-24 also have increased compared to 2015-19 (by 105%), while average copyright and trademark awards have decreased (by 48% and 39%, respectively)--though the median trade secret award has increased by only 19%, and the median for copyright and trademark has decreased by 6% and 9%, respectively.  And, as noted above, these numbers are not adjusted for inflation.

Federal Circuit Vacates Preliminary Injunction

I am a little late reporting on this one.  The case is UATP IP, LLC v. Kangaroo, LLC, decided on February 16, nonprecedential opinion authored by Judge Chen, joined by Judges Reyna and Taranto.  According to the opinion, the parties “are operators of ‘adventure parks’—indoor play facilities that includes trampolines, ziplines, ropes courses, and other attractions” (p.2).  UATP filed suit against Kangaroo for infringing U.S. Patent No. 10,702,729 (“Multi-level Play Equipment”) and also for infringing its trade dress; it moved for a preliminary injunction some ten months later.  The district court granted the preliminary injunction, “on the grounds that UATP was likely to succeed on the merits of both its patent and trade dress infringement claims, and that UATP was entitled to a rebuttable presumption of irreparable harm that Kangaroo failed to rebut” (p.3).      

The Federal Circuit reverses the order preliminarily enjoining patent infringement:

We find that UATP’s showing was legally insufficient to demonstrate likelihood of success on the merits of its patent infringement claim. “[W]hether performed at the preliminary injunction stage or at some later stage in the course of a particular case, infringement and validity analyses must be performed on a claim-by-claim basis.” Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1351 (Fed. Cir. 2001). But neither UATP’s motion for preliminary injunction nor the Order ever identified any claim of the ’729 patent that Kangaroo allegedly infringes. Instead of comparing Kangaroo’s allegedly infringing equipment to any of the claims of the ’729 patent, UATP and the district court appear to have assumed that Kangaroo’s equipment infringes the patent because it was previously used in an Urban Air Adventure Park. But the district court never determined that Urban Air Adventure Parks practice a specific claim of the ’729 patent. By assuming that similarities between Kangaroo’s equipment and the equipment in an Urban Air Adventure Park constitute infringement without any discussion of the claims, the district court erred in finding a likelihood of success on the merits.

 

The district court likewise erred in failing to make any findings on irreparable harm, balance of the equities, or the public interest in its analysis relating to UATP’s patent infringement claim. See Fed. R. Civ. P. 52(a)(2) (“In granting or refusing an interlocutory injunction, the court must [] state the findings and conclusions that support its action.”) (pp. 4-5).

On the trade dress claim, “the district court failed to make any findings on whether UATP’s alleged trade dress was nonfunctional, inherently distinctive, or had acquired secondary meaning. Instead, the district court found that UATP’s “trade dress claim against Kangaroo is likely to succeed on the merits, because it has shown that Kangaroo substantially imitated Urban Air’s total image by using the same colors, attraction structures, and park layout.” . . .  The district court’s failure to explain how it arrived at this finding in view of the relevant trade dress likelihood of confusion factors . . . and failure to address the non-functionality or distinctiveness of UATP’s alleged trade dress, render its analysis too conclusory to permit meaningful appellate review” (p.6).  Further:

The district court’s findings relating to irreparable harm are also deficient. First, the district court erred in failing to address UATP’s ten-month delay in moving for a preliminary injunction. . . . Second, the district court erred in finding that UATP was entitled to a rebuttable presumption of irreparable harm under 15 U.S.C. § 1116(a). Section 1116(a) entitles a plaintiff seeking a preliminary injunction under 15 U.S.C. § 1125 to a rebuttable presumption of irreparable harm “upon a finding of likelihood of success on the merits for a violation.” Because the district court’s analysis was premised on a flawed likelihood of success finding, the court’s application of the presumption cannot stand. . . .

 

Finally, as with its analysis relating to the patent infringement claim, the district court’s analysis relating to the trade dress infringement claim failed to make sufficient findings on the balance of the equities or the public interest (p.7)

The court vacates and remands as to the trade dress claim.

As readers may recall from some of my previous posts, a ten-month delay in moving for a preliminary injunction would strongly weigh against granting the injunction under German law, which emphasizes Dringlichkeit (“urgency”).

U.S. Supreme Court Limits Extraterritorial Reach of U.S. Trademark Law

AbitronAustria GmbH v. Hetronic Int’l, Inc. is hardly the most consequential U.S. Supreme Court decision this week—and this blog is mostly about patent remedies, not IP generally—but I have mentioned the case here previously, because of its potential impact on the extraterritorial reach of U.S. IP law, including possibly remedies for the infringement of U.S. patents.  I’m sure that the case and its implications will command considerable attention going forward, so for present purposes I’ll be as brief as possible in just setting out the contours of the decision. 

The defendants in this case (collectively, Abitron) are foreign companies that allegedly engaged in the unauthorized commercial use of Hetronic’s U.S. trademarks in Germany.  Some of the allegedly infringing products were intended for export to the U.S., but most were not.  The Tenth Circuit, adopting an expansive reading of the Supreme Court’s 1952 decision in Steele v. Bulova Watch, concluded that the Lanham Act reached the defendant’s conduct and awarded $96 million in damages--covering damages not only for products that the defendants directly sold in the U.S., or sold to companies that designated them for export to the U.S., but also for "foreign sales of products that did not end up in the United States" (p.2)--on the theory that the plaintiff, a U.S. corporation, suffered financial injury in the United States.  The Supreme Court unanimously reverses (no surprise there, in my view), but fractures 5-4 on the question of precisely what conduct the Lanham Act proscribes.  Justice Alito writes for the majority, joined by Justices Thomas, Gorsuch, Kavanaugh, and Jackson.  Justice Jackson also files a separate concurring opinion.  Justice Sotomayor, joined by the Chief Justice and Justices Kagan and Barrett, files an opinion concurring the judgment.

All of the justices agree that the governing principle is to be found in the two-step test articulated in cases such as WesternGeco v. ION, the 2018 decision in which the Court held that a U.S. patent owner can recover damages, where the defendant violates Patent Act § 271(f) by exporting components from the United States to be combined abroad, and the resulting extraterritorial combination deprives the patent owner of the profit it would have earned on extraterritorial sales it would have made but for the infringement.  Starting from an underlying presumption against the extraterritorial application of U.S. law, the two-step framework directs a court to consider, first, whether Congress has affirmatively stated that the statutory provision at issue should apply to foreign conduct.  (Here, the Court concludes, Congress has not affirmatively displaced the presumption against extraterritoriality, rejecting Hetronic's argument that the statutory definition of "commerce" in the Lanham Act includes foreign commerce.)  If not (or if, as in WesternGeco, the Court chooses not to address the first issue but rather to skip directly to the second), the question then is to identify the “focus” of the statute, and to determine if the conduct relevant to that focus is domestic foreign or domestic.  It is on this second step that the majority opinion and the concurring opinion by Justice Sotomayor part company.  The majority concludes that, whatever the “focus” of Lanham Act §§ 32 and 43 may be, the conduct relevant to that focus is the use of the mark in commerce in the United States, that is, the “bona fide use of a mark in the ordinary course of trade, where the mark serves to identify and distinguish the mark user’s goods and to indicate the source of the goods” (p.14, internal quotation marks and ellipsis omitted).  On this reading, consumer confusion in the United States standing alone (much less financial injury to a U.S. corporation) is not sufficient.  Justice Sotomayor’s concurring opinion, by contrast, would conclude that conduct occurring abroad that causes a likelihood of confusion in the United States is within reach of the Lanham Act, because the "focus" of the statute is consumer confusion, even if the conduct relevant to that confusion occurs outside the U.S.  The majority rejects this position, reasoning that it would result in there being a domestic application of the statute whenever “particular effects are likely to occur in the United States” (majority op. at 12, internal quotation marks omitted), while the concurrence refers to the majority's view as a "myopic conduct-only test" (concurrence at 7).

Justice Jackson’s separate concurrence tries to elaborate a bit on what “use in commerce” means, but I'm not sure I agree with her analysis.  She posits a hypothetical where some U.S. students buy handbags in Germany marked “COACHE” and bring them back to the U.S.  She concludes that the German company isn't using the mark in commerce in the U.S. as long as the students keep the bags, but that if they resell them in the U.S. the German seller then would be using the mark in commerce in the United States.  This seems to raise unaddressed questions, however, about the scope of the first-sale doctrine, as well as why the German seller's "use" of the mark in commerce in the United States should depend on what the students do.  In any event, it will now be up to the lower court to sort out whether the defendants are responsible for the products that indirectly made their way to the U.S.