Johnson on Assessments of Patent Damages in the U.K.

Phillip Johnson has published an interesting article titled The assessment of damages in patent infringement:  General Tire and a history of uncertainty, 15 Queen Mary J. Intell. Prop. 440 (2025).  Here is the abstract:

A court undertaking an assessment of damages has been a rare thing across most of the history of patent law. The House of Lords decision in General Tire & Rubber Company and Firestone Tyre and Rubber Company [1976] RPC 197 looked like it would provide some certainty. But as an exploration of the archive materials surrounding the Patents Bill shows, contemporaries took an entirely different view of the decision. A historical analysis shows not only the importance of the case but also the confusion it caused and how the proposed remedy of a statutory damages rule might have been worse than the cure.

The article traces the development of U.K. case law concerning patent damages beginning in the nineteenth century.  After enactment of the Patents, Designs and Trade Marks Act 1883, there was a flurry of case law on damages from 1885-1925, after which there were no reported decisions until General Tire in the mid-1970s.  Lord Wilberforce’s speech in that case embraced the framework proposed in Lord Justice Fletcher Moulton’s 1911 decision in Meters Ltd. v. Metropolitan Gas Meters Ltd., to the effect that judges should consider licenses already “granted and the rates of royalty fixed by them, to estimate their relevance and comparability, to apply them so far as he can to the bargain hypothetically to be made between the patentee and the infringer, and to the extent to which they do not provide a figure on which the damage can be measured, to consider any other evidence, according to its relevance and weight, upon which he can fix a rate of royalty which would have been agreed.”  Professor Johnson’s research shows that in the wake of this decision, there was serious discussion of enacting a bill that might have expressly codified a “willing licensor/willing licensee” approach to royalty awards, though ultimately no such bill was passed.  Although the Intellectual Property (Enforcement, etc.) Regulation 2006 reflects IPRED article 13 and does reference “the royalties or fees which would have been due had the defendant obtained a licence,” Professor Johnson states that it “did not change practice significantly.” He concludes that the proposed statutory provision in the 1970s might not have improved matters and that “General Tire remains a precious precedent.”

For what it’s worth, I provide some discussion of General Tire, Meters, and some of the other relevant British cases in chapter 3 of Comparative Patent Remedies and in chapter 4 of my new book, Remedies in Intellectual Property Law.  I will be sure to note the above article in any subsequent editions!

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I've been very busy lately, and will be taking a blogging break next week.  I plan to return the week of February 9. 

German Federal Supreme Court Rejects HMD’s Appeal

In 2024, the European Commission filed an amicus brief in a SEP case, VoiceAge v. HMD, urging the Munich Higher Regional Court to require strict compliance with the sequence of steps laid out in Huawei v. ZTE.  That court rejected the EC’s interpretation, as did the Higher Regional Court a few months later.  (For previous discussion on this blog, see here, here, and here.)  Today, the competition law senate of the Bundesgerichtshof (German Federal Supreme Court) rejected HMD’s appeal.  The press release (in German) is here; I would guess there will be a written decision to follow, at some point.  According to the press release, the Court concludes that, in accordance with the CJEU’s decision in Huawei v. ZTE and the BGH’s two previous decisions in FRAND-Einwand  I  and II, SEP owners are not hindered from enforcing their patents against unwilling licensees; and that the evidence in this case, which includes negotiations dating back to 2019, shows the implementer (HMD) to be an unwilling licensee.  Moreover—and consistent with the FRAND-Einwand  I  and II decisions (which, inter alia, require that implementers demonstrate their willingness to license throughout the entire course of negotiations in order to avoid injunctive relief)—the Court has no doubt that TFEU article 102 does not require strict compliance with the sequence of steps set forth in Huawei v. ZTE, and therefore concludes that it is not obligated to refer matter to the CJEU.  The court further sees no reason to address the appellate court’s requirement that, as part of the Huawei v. ZTE framework, the implementer must post security in the amount of the SEP owner’s offer, because in this case, it states, the security the defendant posted wasn’t even as high as its own counteroffer. 

Gervais on Territoriality and Global FRAND Rate-Setting

Daniel Gervais, one of the world’s leading experts on the TRIPS Agreement, has published a very interesting article titled The Principle of Territoriality in International Intellectual Property Law and Its Implications for Global FRAND Rate-Setting, GRUR Int. (advance access pdf available here).  Here is the abstract:

The principle of territoriality under which intellectual property (IP) rights exist and are enforced only within national borders sits uneasily alongside the global nature of standard-essential patent (SEP) licensing disputes. In recent years, courts in Brazil, China, Colombia, Germany, India, the United Kingdom, and now the Unified Patent Court have asserted authority, directly or indirectly, to determine worldwide fair, reasonable, and non-discriminatory (FRAND) licensing terms, often without both parties’ consent. These practices, ranging from injunction-driven leverage to comprehensive judicial rate-setting, raise difficult questions about jurisdiction, comity, competition norms, and the coherence of international IP law.

 

This article provides a systematic and comparative analysis of the principle of territoriality in international IP law and its tension with non-consensual global FRAND determinations. It traces the origins and enduring role of territoriality in treaties such as the Paris Convention and TRIPS Agreement, examines its implications for jurisdiction and choice of law, and explains why territoriality remains a cornerstone of global IP governance. It then turns to the distinctive case of SEPs, highlighting the role of standard-setting organizations and the unique licensing challenges they generate. Against this backdrop, the article maps national approaches across key jurisdictions, identifying functional categories (adjudicators, regulators, and leverage providers) and analyzing how their practices interact in transnational disputes.

 

Drawing on recent case law, WTO findings, and comparative treatment of other IP rights, the article argues that non-consensual global FRAND rate-setting undermines the territorial foundation of international IP law and risks destabilizing global markets. At the same time, it acknowledges arguments for efficiency and uniformity, and considers how these objectives might be pursued within a framework that respects sovereignty and due process. The article concludes by proposing both short-term and longer-term solutions, ranging from national court strategies and WTO enforcement to a possible role for WIPO, the US Congress, and the EU, designed to reconcile innovation incentives, market access, and the legitimacy of international dispute resolution.

I may have more comments to follow, but two things leap out to me upon first reading.  One is Professor Gervais’ argument that even the granting of purely domestic injunctions in FRAND cases, as in Germany, effectively albeit indirectly erodes the territoriality principle by “plac[ing] enormous pressure on the implementer to capitulate to the SEP holder’s terms” (p.13).  It might seem to follow from his analysis, then, that to uphold the territoriality principle nations would have to temper their enthusiasm for granting injunctions in at least some cases.  This may be right, though it also may seem a bit paradoxical that upholding the territorial principle under international law, as Professor Gervais understands it, would require nations to temper the use of a remedy (injunctions with domestic effect only, as a legal if not practical matter) that domestic law otherwise would permit in a given case.  (Again, that may be right—the principle seems logically appealing—but I wonder what the limiting principle would be?)  The other thing that caught my attention was Professor Gervais’ embrace of the view that, absent consent by both parties, only domestic courts can adjudicate questions of infringement and validity under domestic patent law.  This is, as previously noted here, the issue at the heart of the pending BMW v. Onesta dispute, in view of the CJEU’s 2025 decision in BSH v. Electrolux (which seems to me to point, whether rightly or not, in the opposite direction).   (Note that the Federal Circuit has temporarily stayed Judge Albright's antisuit injunction from last week, and we are still awaiting Judge Albright's written decision in that case.)

"Remedies in Intellectual Property Law" Is Now Out

Here is a link to Elgar's webpage for the book.  The ebook is available now (and the table of contents and first chapter available without purchase), and it looks like the hardcover will be out on Tuesday.  I am grateful to the people at Elgar for their hard work in getting the book out this month, and I will be interested to hear what readers think.

 

In other news, this morning the Federal Circuit released a 59-page nonprecedential (!) opinion in Sunoco v. Powder Springs Logistics dealing with, among other things, damages; I'll probably have something to say about it next week.  And the BMW v. Onesta saga continues, with an emergency motion now pending before the Federal Circuit to stay Judge Albright's oral ruling from earlier this week (see discussion here).  Stay tuned.

Judge Albright Enjoins Onesta from Proceeding in Munich with Claims for the Infringement of U.S. Patents

In December, I noted that, at BMW’s request, Judge Albright (W.D. Tex.) had entered a TRO prohibiting Onesta from litigating claims for the infringement of two U.S. patents in the Munich I Regional Court.  ip fray is now reporting that the judge yesterday converted the TRO into a preliminary injunction, that is, an antisuit injunction forbidding Onesta from proceeding with litigation over the U.S. patents in Munich.  I’ve checked both Pacer and Lex Machina, which show that Onesta has already filed a notice of appeal to the Federal Circuit; but there is no written opinion (yet) from the judge, though I would expect some sort of written opinion might follow.

As I noted in December, the order comes after Onesta asserted claims against BMW for the infringement of both German and U.S. patents in Munich—something that the CJEU’s February 2025 decision in BSH v. Electrolux appears, on my reading, to permit it to do in a case like this, in which the defendant is domiciled in an EU member state, subject to the caveat that any decision concerning patent validity would apply only inter partes (in other words, the validity ruling would not be binding in other litigation between Onesta and another party).  BMW contested this reading in its initial motion papers, which were available from Law 360 (and on Pacer and Lex Machina).  Dennis Crouch has an excellent writeup on the issue of whether courts may adjudicate claims for the infringement of foreign patents, which notes among other things the Federal Circuit’s 2007 opinion in Voda v. Cordis (denying supplemental jurisdiction to adjudicate such claims, over a dissent from Judge Newman).  The ip fray post mentions expert declarations in the BMW case have been filed by three people I know, admire, and have worked with, namely Professors Peter Picht (in support of Onesta), Margo Bagley (in support of BMW), and Matthias Leistner (also in support of BMW).  Their declarations, attached to the motion papers, are available here, here, and here.  (I have not yet read through all of them carefully myself.)

For my February 2025 writeup on BSH, see here.  Also note that, in my December post, I flagged as a possible issue (to which I do not claim to know the answer) whether the German court, if it were to adjudicate claims for the infringement of U.S. patents, would apply German or U.S. law to the question of remedies, especially permanent injunctive relief.  That would be a huge issue here, where under U.S. law an injunction in a  case like this would be difficult to obtain.

OxFirst Webinars Tuesday and Wednesday

In connection with its 12^th IP and Competition Forum in Oxford, U.K., OxFirst will be presenting live webinars tomorrow (Jan. 13) and Wednesday (Jan. 14) featuring eight patent judges—Richard Arnold, Kemal Bengi-Akyürek, Fabian Hoffmann, Richard Meade, Oliver Schoen, Katalin Tözsér, Stefan Wilhelm, and Jiyoung Yi—including FRAND, antisuit injunctions, and interim licenses.  (Readers who follow global FRAND disputes will surely recognize some of these names!) Registration is free, and more information is available here.  

UPC Court of Appeal Reverses Moral Prejudice Damages Award

The case is Bhagat Textile Engineers v. Oerlikon Textile GmbH & Co. KG, decided by Panel 1b of the UPC Court of Appeal on December 9, 2025.  In one respect at least it resembles the Federal Circuit decision I blogged about earlier this week, in requiring non-speculative evidence of alleged reputational harm.

Plaintiff Oerlikon owns EP 2145848 for a “false twist texturing machine.”  In July 2023, Oerlikon initiated an action for infringement in the Milan Local Division of the UPC.  That court found Bhagat liable based upon its “promotion and offer to the public of a structuring/textiling machine exhibited at the ITMA trade fair in June 2023 in Milan” (para. 6).  It also entered an injunction and awarded “provisional damages in the amount of €15,000 as a result of reputational  damage to Oerlikon’s image” and “ordered Bhagat to bear 80% of the proceedings costs” (id.) 

On appeal, the court notes that, consistent with IPRED article 13, UPCA article 68 “distinguishes between situations in which the infringer knew or had reasonable grounds to know that he or she was engaging in a patent infringing activity (Art. 68(1) to (3) UPCA) and situations where the infringer did not knowingly, or with reasonable grounds to know, engage in the infringing activity (Art. 68(4) UPCA)” (para. 18).  For the first situation, the court shall award “damages appropriate to the harm actually suffered,” taking into account “all appropriate aspects,such as the negative economic consequences, including lost profits, which the injured party has suffered, any unfair profits made by the infringer and, in appropriate cases, elements other than economic factors, such as the moral prejudice caused to the injured party by the infringement (Art. 68(3)(a) UPCA) or, alternatively, may decide to set the damages as a lump sum under certain conditions (Art. 68(3)(b) UPCA)” (paras. 19-20).  On the other hand, “[w]here the infringer did not knowingly, or with reasonable grounds to know, engage in the infringing activity, the Court may order the recovery of profits or the payment of compensation (Art. 68(4) UPCA)” (para. 21).  Here, there was no “evidence of negative economic consequences such as lost profits . . . or unfair profits made by Bhagat,” but the parties disagree regarding damages for moral prejudice (para. 22).  First, Bhagat argues that it did not know or have reasonable grounds to know that the product it exhibited at the trade fair was infringing, but the court disagrees:

Bhagat . . . presents itself as an international leading manufacturer of texturing and winding machines (see a press release in the magazine Textile Insights dated 13 July 2023, cited in Oerlikon Exhibit # 20) and is a direct competitor of Oerlikon in the field of textile and winding machines. It actively participated in the ITMA trade fair, which Bhagat does not deny is the most important textile machines trade fair globally, and exhibited a sizable textile machine (the attacked embodiment).

 

It follows that, being an active stakeholder in the industry, Bhagat was at least reasonably expected to monitor the patent landscape before exhibiting its product on the market and should have had reasonable grounds to know about the existence of the Patent and the infringing nature of the attacked embodiment. Failure to do so was at least negligent . . . (paras. 24-25).

Nevertheless, there was no evidence of reputational harm resulting in moral prejudice.  Oerlikon’s evidence consisted merely of “general statements” made by Bhagat about its success at promoting its products at the trade fair; and that further evidence submitted by Oerlikon for the first time on appeal concerning the accused product exhibited at the fair, even if admissible, did not change this result.

On costs, the court affirmed that Bhagat was liable for 80% of Oerlikon's recoverable costs, and Oerlikon 20% of Bhagat's, in accordance with UPCA article 69.  Oerlikon did not cause Bhagat to suffer any unnecessary costs by not first sending a warning letter, given the urgency and the short time frame of the fair.  The specific amount of costs to be recovered, however, will be determined in view of the value of the proceedings, which the court lowered from €750,000 to €250,000 (meaning that recoverable costs cannot exceed €38,000).