Thursday, August 31, 2017

Federal Circuit Orders Rehearing En Banc on Question of Fee Award to USPTO Director

The case is Nantkwest Inc. v. Matal (available here).  As I explained in my blog post on the panel opinion from this past June:
The examiner and the PTAB rejected the inventor's patent application on nonobviousness grounds, and rather than immediately appealing to the Federal Circuit (which is one option under these circumstances) the applicant initiated a lawsuit against the director in the U.S. District Court for the Eastern District of Virginia (which is another, less commonly invoked, option).  The district court ruled in favor of the director, and in May the Federal Circuit affirmed (here).  The district court also awarded the director expert witness fees but denied a request for attorney's fees. On appeal of this matter, the Federal Circuit (in an opinion by Chief Judge Prost) concludes that the relevant statute--which in the present context is not 35 U.S.C. § 285, but rather 35 U.S.C. § 145--requires the court to award both expert and attorneys' fees--and, although it isn't at issue in this case, since the director won--the rule applies regardless of outcome
The per curiam order issued this morning states:
This case was argued before a panel of three judges on February 9, 2017. A sua sponte request for a poll on whether to reconsider this case was made. A poll was conducted and a majority of the judges who are in regular active service voted for sua sponte en banc consideration.
(1) The panel opinion of June 23, 2017 is vacated, and the appeal is reinstated.
(2) This case will be heard en banc sua sponte under 28 U.S.C. § 46 and Federal Rule of Appellate Procedure 35(a). The court en banc shall consist of all circuit judges in regular active service who are not recused or disqualified.
(3) The parties are requested to file new briefs. The briefs should address the following issue:
Did the panel in NantKwest, Inc. v. Matal, 860 F.3d 1352 (Fed. Cir. 2017) correctly determine that 35 U.S.C. § 145’s “[a]ll the expenses of the proceedings” provision authorizes an award of the United States Patent and Trademark Office’s attorneys’ fees? . . .
I don't know off the top of my head how many actions are filed annually under 35 U.S.C. § 145, but I suspect it isn't many, so whatever the outcome is here won't affect a whole lot of cases--though a result consistent with the panel opinion in June presumably would reduce that number to an even smaller amount.

Wednesday, August 30, 2017

Recent Articles on the CJEU's Judgment in Genentech v. Hoechst

In July 2016 the Court of Justice for the European Union (CJEU) issued its judgment in Genentech Inc. v. Hoechst GmbH, Case C-567/14 (available here), stating that "Article 101(1) TFEU must be interpreted as not precluding the imposition on the licensee, under a licence agreement such as that at issue in the main proceedings, of a requirement to pay a royalty for the use of a patented technology for the entire period in which that agreement was in effect, in the event of the revocation or non-infringement of a licenced patent, provided that the licensee was able freely to terminate that agreement by giving reasonable notice" (para. 43).  (The matter was referred to the CJEU by the Paris Court of Appeal, to determine whether an arbitration decision in favor of Hoechst was enforceable.  The holding may be contrasted with the U.S. Supreme Court's decision in Kimble v. Marvel, which I blogged about here.)  I blogged about the Genentech case here and noted a couple of early commentaries on it here.  Here are some more commentaries that have come out in the last few months:

1. Marco Botta published an article titled Comment on "Genentech":  The Arbitrability Paradox in EU Competition Law, 48 IIC 235 (2017).  Here is the abstract:
Article 101(1) TFEU must be interpreted as not precluding the imposition on the licensee, under a licence agreement such as that at issue in the main proceedings, of a requirement to pay a royalty for the use of a patented technology for the entire period in which that agreement was in effect, in the event of the revocation or non-infringement of a licenced patent, provided that the licensee was able freely to terminate that agreement by giving reasonable notice.
2.  Helen Hopson has published a short article titled Genentech:  No EU Competition Law Barrier to Patent Royalties Despite Invalidity or Noninfringement of the Licensed Patents, 7 J. Euro. Comp. L. & Prac. 679 (2016).  Here is a link to the paper, and here is the abstract:
The Court of Justice has confirmed that EU competition law prohibition of anticompetitive arrangements does not preclude the entitlement to patent royalties in the event of the revocation or finding of non-infringement of the licensed patent(s), provided that the licensee was able freely to terminate the licence by giving reasonable notice.
3.  The December 2016 and March 2017 issues of les Nouvelles published several articles on Genentech.  Appearing in the December 2016 issue is an article by Patricia Cappuyns and Jozefine Vanherpe titled Patent Royalties and Competition Law:  The Genentech Judgment of the Court of Justice of the European Union (pp.283-85).  Here is a link, and here is the abstract:   
On 7 July 2016, the Court of Justice of the European Union (“CJEU”), the highest court in Europe, held that a requirement to pay royalties for the licensed use of a patented technology for the entire duration of the license is not contrary to competition rules in the event of the revocation or non-infringement of the patent at issue (Case C-567/14, Genentech v. Hoechst and Sanofi-Aventis). This ruling shifts the balance back in favour of the licensors, while recent case law as well as the Commission had emphasised that licensees must always remain free to challenge licensed IP rights. But what is the point of successfully challenging the licensed IP right if the royalties simply keep running? 
In the March 2017 issue, Mizuki Hashiguchi published Unraveling the Conundrums of Running Royalties in Cross-Border License Agreements (pp. 13-20).  Here is a link, and here is the abstract:
Adjacent to the glorious and delicate stained glass of Sainte-Chapelle, stands the magnificent “Palace of Justice,” currently housing the Court of Appeal of Paris. In Genentech v. Hoechst, the court encountered an enigma involving patent royalties and European competition law. A license agreement licensed three patents. One patent was subsequently revoked. The other two patents were later found not to be infringed by the licensee. Yet, the license agreement imposed an obligation on the licensee to pay running royalties throughout the contractual term. Is the imposition of this obligation permitted under Article 101 of the Treaty on the Functioning of the European Union?
The Court of Appeal of Paris referred this question to the Court of Justice of the European Union. On July 7, 2016, the Court of Justice of the European Union issued a judgment answering the question in the affirmative.
Analyzing the judgment in comparison with legal precedent in the United States such as Kimble v. Marvel Entertainment evinces differing judicial approaches to interpreting license agreements and discerning the parties’ commercial intent when royalty payments and patent monopoly are at issue. Similar cases in the United States, France, and Japan provide practical guidance concerning the licensees’ obligation to pay royalties and whether licensees are entitled to a refund when the licensed patents are ultimately invalidated.  
This article discusses, among other things, the law in the U.S., France, and Japan.  In addition, Richard Binnes and Nicola Walles published Royalties for Unpatented Technology (pp. 27-30).  Here is  a link, and here is the abstract: 
The Court of Justice of the EU has ruled that a licensee could be obliged to pay past royalties under a patent licence agreement even after a patent has expired or been deemed invalid, provided that the licensee has the ability to terminate the licence agreement for convenience.  The Court of Justice’s response to the question posed by the Paris Court of Appeal in Genentech Inc v Hoechst and Sanofi-Aventis (Case C-567/14) suggests that, if a licensee does not have the option to terminate for convenience, requiring it to pay past royalties due under the licence could be anti-competitive, amounting to a violation of Article 101 of the Treaty on the Functioning of the European Union (TFEU).This ruling reflects the status quo in some jurisdictions, but highlights the importance of careful drafting in respect of royalty obligations. 
This article briefly discusses the law in several EU countries prior to Genentech.  Also, Patrick Gattari, Steven M. Ferguson, David Crichton, and Bryan Helwig published Beyond Hybrid Licenses – Strategies for Post Patent Expiration Payments in the United States(pp. 31-36)  Here is a link, and here is the abstract:
The recent US Supreme Court decision in Kimble v Marvel confirmed that royalty payments based on post-patent expiration sales violate US patent laws and the Court’s often criticized 1964 Brulotte decision.  Fortunately, several alternatives exist for structuring deals that can extend payments beyond the expiration of a patent for a license that existed during the patent term.   This article explores those alternatives and proposes strategies that address the needs of business while complying with the patent laws.
4.   Jacques Raynard published an article titled L'obligation contractuelle de payer des redevances au titre d'un exploitation qui n'est pas couverte par le brevet ("The contractual obligation to pay royalties for a noninfringing use of a patent") in the December 2016 issue of Propriété Industrielle.  Here is the abstract (my somewhat free translation): 
On July 7, 2016, the Court of Justice issued a judgment in the context of a referral presented by the Paris Court of Appeals arising from an appeal against an arbitration decision.  The Court of Justice decides that article 101 of the TFEU should be interpreted as not prohibiting a licensee from being required to pay a royalty for the use of a patented technology during the effective period of the contract, in the event of an invalidation or even the noninfringement of the licensed patent, as long as the licensee can terminate the license with reasonable notice.  Beyond what the judgment has to say about competition law, its context serves to delimit the extent to which E.U. law can render arbitral decisions accountable.

Monday, August 28, 2017

Recent Federal Circuit Cases on Lost Profits, Enhanced Damages, and Fees

While I was taking a blogging break these past two weeks the Federal Circuit decided two cases relevant to patent damages.  The first is Georgetown Rail Equipment Co. v. Holland L.P., decided August 1 (but not published until August 16, after the court issued a ruling unsealing the opinion) in a panel opinion authored by Judge Wallach.  Georgetown sued Holland for the infringement of a U.S. patent relating to a system for inspecting a railroad track bed.  A substantive issue on appeal was whether language found in claim 16's preamble functioned as a claim limitation (thus narrowing the scope of the claim); affirming the district court, the Federal Circuit held that it did not.  Another substantive issue involved the question of whether Holland directly infringed by using the patented invention, and the Federal Circuit again affirmed a conclusion adverse to Holland.  On the question of remedies, the jury awarded Georgetown $1,541,333 in lost profits.  Holland argued on appeal that the court misapplied the Panduit factors, but the Federal Circuit disagreed, holding that Georgetown had presented adequate evidence of demand for the patented invention (pp. 17-18) and the amount of profit Georgetown would have earned but for the infringement (pp. 18-22).  Not a lot of new legal ground here, in my view.  On the issue of enhanced damages, the court affirmed a finding of willful infringement, stating that "The jury heard evidence that Holland was aware of the ’329 patent prior to the current litigation, see, e.g., J.A. 1180−87, 1340, 1384−85; see also J.A. 1161−62, 1277, and believed that it was infringing the patent" (p.25).  The court cited the Read v. Portec factors (p.24 n.6) and held that the district court did not abuse its discretion in awarding $1,000,000 as an enhancement (pp. 25-26).  Finally, Holland did not challenge the district court's finding that the case was "exceptional" and thus meriting an award of fees (p.5 n.1).

Second, in a nonprecedential opinion handed down on August 25, the court affirmed an award of $1.6 million in attorneys' fees in Icon Health & Fitness, Inc. v. Octane Fitness, LLC, the same case in which the Supreme Court in 2014 altered the standard for finding exceptionality (see here).  On remand the district court held that a fee award was appropriate (see here) and the Federal Circuit affirms based on, among other things, the district court's findings on the weakness of the case and Icon's litigation conduct.

Friday, August 11, 2017

Blogging Break

I'll be taking a break from blogging for the next two weeks, resuming the week of August 28.

Thursday, August 10, 2017

Federal Circuit: No Right to a Jury Trial on Awards of Attorneys' Fees Under § 285

This morning the Federal Circuit handed down an opinion, AIA America, Inc. v. Avid Radiopharmaceuticals, holding that there is no right to a jury trial on awards of attorneys' fees under § 285 of the Patent Act.  The underlying case was an action for infringement relating to two patents "directed to research technologies stemming from the discovery of the 'Swedish mutation,' a genetic mutation that is associated with early-onset familial Alzheimer’s disease" (p.2).  The district court held a jury trial on the issue of whether AIA had standing to assert its claims, which resulted in a judgment that it did not.  The Federal Circuit summarily affirmed this judgment in 2014, and the litigation then moved to the issue of whether the defendants were entitled to an award of fees under § 285 ("The court in exceptional cases may award reasonable attorney fees to the prevailing party").  The district court awarded fees in the amount of almost $4 million, and AIA appealed, arguing that it was entitled to a jury determination.  Not surprisingly, in my view, the Federal Circuit thinks not:
We first address AIA’s argument that the Seventh Amendment requires a jury trial to decide the facts forming the basis to award attorney’s fees under § 285 of the Patent Act. Specifically, AIA argues that when an award of attorney’s fees is based in part or in whole on a party’s state of mind, intent, or culpability, only a jury may decide those issues. . . .  
A litigant has a right to a jury trial if provided by statute, or if required by the Seventh Amendment. . . . 
The Seventh Amendment preserves the right to a jury trial for “[s]uits at common law.” U.S. Const. amend. VII. The phrase “suits at common law” refers to suits in which only legal rights and remedies were at issue, as opposed to equitable rights and remedies. . . . A legal remedy requires a jury trial on demand, while an equitable remedy does not implicate the right to a jury trial. . . .  A two-step inquiry determines whether a modern statutory cause of action involves only legal rights and remedies. Tull v. United States, 481 U.S. 412, 417–18 (1987). First, we must “compare the statutory action to 18th-century actions brought in the courts of England prior to the merger of the courts of law and equity.” Id. at 417. “Second, we examine the remedy sought and determine whether it is legal or equitable in nature.” Id. at 417–18. The Supreme Court has stressed the second step of this test is the more important of the two. . . .
Turning to the first step, the nature of the claim, English courts for centuries have allowed claims for attorney’s fees in both the courts of law and equity. . . . 
As to the second step, the nature of the remedy, the fact that the relief sought is monetary does not necessarily make the remedy “legal.” . . . In the context of attorney’s fees, when attorney’s fees are themselves part of the merits of an action, they are regarded as a “legal” remedy. For example, a lawyer’s fee claim against a client is a question for the jury, Simler v. Conner, 372 U.S. 221, 223 (1963) (per curiam), and a claim for attorney’s fees under a contractual indemnification provision is a contractual “legal right” that is also a question for the jury, McGuire v. Russell Miller, Inc., 1 F.3d 1306, 1315–16 (2d Cir. 1993). By contrast, when attorney’s fees are awarded pursuant to a statutory prevailing party provision, they are regarded as an “equitable” remedy because they raise “issues collateral to and separate from the decision on the merits.” . . . 
Despite the foregoing, AIA argues that if a decision on attorney’s fees involves considerations of a party’s state of mind, intent, and culpability, then those questions must be presented to a jury under the Seventh Amendment. AIA, however, has pointed to no cases finding that once an issue is deemed equitable, a Seventh Amendment right to a jury trial may still attach to certain underlying determinations. . . .
The court also rejects AIA's arguments that the district judge was precluded from "making factual findings on issues that were not considered by the jury," and that AIA was denied its right to due process of law.  Opinion by Judge Hughes, joined by Judges Newman and Lourie.

Wednesday, August 9, 2017

Federal Circuit: Standard for Awarding Attorney's Fees Is the Same in Patent and Trademark Cases

This morning the court issued an opinion in Romag Fasteners, Inc. v. Fossil, Inc., vacating a district court judgment granting attorneys' fees under § 285 of the Patent Act and denying fees under § 1117(a) of the Lanham Act.  (The district court also awarded fees under the Connecticut Unfair Trade Practice Act (CUTPA), the propriety of which does not appear to be discussed in the Federal Circuit opinions.)  The author of the principal opinion is Judge Dyk, joined by Judge Hughes; Judge Newman concurs in part and dissents in part.

This is the third time this case has come up on appeal.  In 2016, the Federal Circuit approved a reduction in damages due to laches (Romag's delay in filing suit until the eve of the Christmas shopping season in 2010), see discussion here.  Earlier this year the Federal Circuit vacated and remanded this aspect of the opinion in light of the Supreme Court's opinion in SCA Hygiene  that laches is no longer a defense to a claim for damages incurred within the statute of limitations.  This third appeal is all about attorneys' fees.  Following a jury trial, the district court entered judgment for Romag on its claims for patent infringement, trademark infringement, and violation of CUTPA, relating to Fossil's sales of handbags bearing allegedly infringing magnetic snap fasteners.  The court awarded fees in connection with the patent claim, finding the case to be "exceptional" under the Octane Fitness standard, but not for trademark infringement, based on the Second Circuit's understanding that Lanham Act § 1117(a) permits awards of attorneys' fees only for bad faith or fraudulent conduct.  (In a case like this one, the courts are supposed to apply regional circuit law to the non-patent issues, and here the case was litigated in the District of Connecticut, which is within the Second Circuit.)  The Federal Circuit, however, holds that after Octane Fitness the standard for awarding fees under the two statutes is identical:
Before Octane, the Second Circuit allowed recovery of attorney’s fees under 15 U.S.C. § 1117(a) only if there was bad faith or willful infringement on the part of the defendants. . . . The question is whether this standard survives after Octane. There have been no Second Circuit decisions on this issue since Octane. . . .   [H]owever, there is intervening relevant Supreme Court authority which, we think, would lead the Second Circuit to follow other circuits which have held that the Octane standard applies to the Lanham Act. . . . 
Since Octane was decided, the Third, Fourth, Fifth, Sixth, and Ninth Circuits have all held that the Octane “Court was sending a clear message that it was defining ‘exceptional’ not just for the fee provision in the Patent Act, but for the fee provision in the Lanham Act as well.” Fair Wind Sailing, Inc. v. Dempster, 764 F.3d 303, 315 (3d Cir. 2014) . . . .Indeed, no circuit has specifically considered Octane and then declined to apply it to the Lanham Act.
This is unsurprising, as the language of the Patent Act and the Lanham Act for attorney’s fees is identical. Both statutes provide that “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U.S.C. § 285; 15 U.S.C. § 1117(a). “[W]hen Congress uses the same language in two statutes having similar purposes, . . . it is appropriate to presume that Congress intended that text to have the same meaning in both statutes.” Smith v. City of Jackson, 544 U.S. 228, 233 (2005).
The court therefore remands for the district court to reconsider the award of fees for trademark infringement.  Judge Newman joins in this aspect of the majority opinion. 

On the question of fees for patent infringement, however, the majority (Judge Newman dissenting) also vacates and remands, holding that the district court erred in concluding (1) that Fossil had not withdrawn its anticipation and obviousness challenges until after judgment was entered; (2) that the district judge who presided over an earlier part of the litigation had found Fossil's indefiniteness argument to be "woefully inadequate," words that the panel majority believes were taken out of context; and (3) that the impact of Romag's own conduct in delaying suit until shortly before the 2010 holiday season had been adequately addressed by the court's refusal to award fees in connection with Romag's motion for a TRO.  However, while the majority agrees with Romag that the district court's denial of a plaintiff's motion for judgment as a matter of law on the issue of infringement doesn't preclude a finding that the defendant's position was frivolous, the court finds that the district judge properly evaluated the strength of Fossil's position and sees "no error in the district court's refusal to consider this issue as an adverse factor in the totality of circumstances" (p.19).  Finally, the court sets aside an award of expert witness fees incurred in connection with Fossil's motion for summary judgment on indefiniteness.

Monday, August 7, 2017

IP Chat Channel Webinar: Asian FRAND and SEP Update

Apologies for the short notice, but the IPO IP Chat Channel will be presenting a webinar titled FRAND and SEP Update:  Asia at 2 pm Eastern time tomorrow, August 8.  Here is a link, for those who might be interested in registering, and here is a description:
Standard essential patents (SEPs) are a key part of global commerce. For instance, an Internet of Things or 5G mobile networks can only be built using standards that are licensed at rates that are fair, reasonable, and non-discriminatory (FRAND). Yet traditional jurisprudence has shown itself ill-suited for disputes involving SEPs.
This webinar will consider the impact of recent developments in involving SEPs in China, Korea, Japan, and India. Our panel, which includes a senior competition lawyer at a SEP owner, an attorney who represents implementers, and a leading academic authority, will discuss topics including: 
  • The April release of the Beijing High People’s Court Guidelines for Patent Infringement Determination;
  • The decision of the Beijing IP Court in March finding Sony infringed a SEP and was an unwilling licensee, resulting in the first injunction in favor of an SEP holder in China;
  • The decision of the Korean Fair Trade Commission, now being appealed, to impose a $853 million fine on Qualcomm for FRAND violations; and
  • The ongoing assertion campaign by Japanese sovereign patent fund IP Bridge;
  • Ericsson’s campaign to win licensing royalties from local and Chinese phone makers in India.
  • Jorge Contreras, University of Utah School of Law
  • James Harlan, InterDigital Holdings, Inc.
  • Paul Zeineddin, Zeineddin PLLC

Friday, August 4, 2017

Learned Hand's Cincinnati Car Opinion: When Everything Old Is New Again

I would venture to guess that the saying "There is nothing new under the sun" itself wasn't very new when some scribe long ago penned the biblical Book of Ecclesiastes.  Some version of or variation on the saying probably has existed in many cultures over the ages, including the 1974 song by Peter Allen and Carole Bayer Sager to which I allude in the title to today's blog post (memorably performed in the classic 1979 film All That Jazz).  Anyway, I was thinking about the saying and the song yesterday as I read Judge Learned Hand's opinion in Cincinnati Car Co. v. New York Rapid Transit Corp., 66 F.2d 592 (2d Cir. 1933) (hat tip to Professor John Golden, for calling this case to my attention).  The technology at issue, which relates to railway cars, seems rather dated, as does Judge Hand's indulgence in the occasional use of Latin adages (U.S. courts generally don't do that anymore.)  But the opinion is surprisingly prescient in its discussion of issues that continue to bedevil the law of patent remedies, to the extent that it almost seems it could have been written yesterday (if only we had judges of the caliber of Learned Hand to write them).  To wit:

1.  Should courts ever stay an injunction to provide the infringer with a period of time to design around?  Yes:
The plaintiff sued the defendant for infringement of patent No. 1,501,325, issued on July 15, 1924, to Thomas Elliott, and included two others in the bill. We held the patent just mentioned, and one of the others infringed; the third, not infringed. Cincinnati Car Co. v. New York Rapid Transit Co., 35 F.(2d) 679. Later we suspended the injunction to allow the defendant to substitute another device. 37 F.(2d) 100. It did so, and when the new structure came before us, we held that it escaped the claims of the patent. 52 F.(2d) 44.
For some previous posts on the subject, see here and here.

2.  Calculating damages for the infringement of one patent or a handful of patents in a complex device (say, a smartphone) is very difficult.  But are the core issues we're facing today anything new and different?  Maybe not:
The situation was . .  . one so common in patent accountings, in which the invention is not of the article as a whole, but of a small detail. The difficulty of allocating profits in such cases has plagued the court from the outset, and will continue to do so, unless some formal and conventional rule is laid down, which is not likely. Properly, the question is in its nature unanswerable. It is of course possible to imagine an invention for a machine, or composition, or process which is a complete innovation, emerging, full grown, like Athene, from its parent's head. It would then be easy to say that profits were to be attributed wholly to the invention. Such inventions are however mythological. All have a background in the past, and are additions to the existing stock of knowledge which infringing articles embody along with the invention. It is generally impossible to allocate quantitatively the shares of the old and the new . . . .
Of course, Judge Hand liked to say that various other issues in IP law were unanswerable too, before proceeding to attempt an answer. 

3.  Patent infringement is a strict liability offense, arguably for good reasons; but in the typical case, is it also a moral offense akin to stealing someone else's property?  I don't think so, and neither did Judge Hand:
Before Westinghouse Co. v. Wagner Co., 225 U.S. 604, it was generally assumed that the burden lay with the patentee, though there were exceptions even then. That case has at times been thought to lay down a different rule, treating the infringer in all cases as a trustee ex maleficio, and therefore subject to the severe standard imposed upon malversators. A rigid insistence upon this would cast him for full profits in all cases except those in which by artificial and unreal distinctions courts should come to satisfy themselves that they could dissect the contribution of the prior art from that of the invention. This would be as unsatisfactory a result as that which imposed upon the patentee the same duty, and, while it might be answered that he is a victim, and the infringer a tort-feasor, the character of the tort ought not really to have such sanguinary results. Patent infringement often involves nice and casuistical questions which it is mere artifice to treat as involving moral delinquency.
4.  The calculation of reasonable royalties is hardly an exact science:
In Dowagiac Manufacturing Co. v. Minnesota Moline Plow Co., 235 U.S. 641, the situation was reversed, the invention being itself for an avowed improvement upon an earlier reaper, and the new parts structurally distinguishable. There the court refused to impose the burden upon the infringer, though he had indubitably created the confusion by his wrong, and might, if he was caput lupinum, be held for the whole consequences. The patentee was required to make the division, and because he could not, was relegated to a reasonable royalty, the only satisfactory solution; perhaps because it abandons the appearance of rationalizing the irrational.
Again, the last phrase is the kicker.  Judge Hand goes on to say:
The whole notion of a reasonable royalty is a device in aid of justice, by which that which is really incalculable shall be approximated, rather than that the patentee, who has suffered an indubitable wrong, shall be dismissed with empty hands. It is no more impossible to estimate than the damages in many other torts, as for example, personal injuries with their accompanying pain and mutilation.
5.   Can expert witnesses at least help us to sort things out?  Well . . .
Though the testimony of experts was recognized as competent in Dowagiac Mfg. Co. v. Minnesota Plow Co.,  it is generally of small help.
But then Hand had been saying that at least ever since the Parke-Davis case in 1911.

6.   Finally, towards the end of the opinion, Judge Hand relies on comparables and doubles the award the special master had recommended.  Along the way, he notes the disagreement between the parties about what the appropriate royalty base should be (entire market value rule, anyone?), and whether licenses entered into in settlement are competent evidence (an issue the Federal Circuit recently addressed, see here).  On this last point, Judge Hand grasped the idea that the risk of incurring further attorneys' fees in the absence of settlement is symmetric and therefore (all else being equal) irrelevant: 
Here it is true that the witnesses agreed within limits as to the percentage upon cost which might be taken, though some spoke in terms of a percentage on profits. But the base used was widely different, the plaintiff's witnesses taking the whole cost of the cars; the defendant's the cost of the articulations alone. We are thrown back therefore upon very little that is tangible, and while any conclusion must inevitably be somewhat speculative, we must find some basis in the evidence; we cannot conjure figures from our own minds. Though the payments were not established royalties, we need not disregard them, any more than the master did. It is true that they were settlements for infringements, but both parties may have been influenced by a wish to be done with litigation; that consideration is a sword with two edges.
By the way, if you're ever looking for a good biography of a famous judge, I'd recommend Gerald Gunther's classic  Learned Hand:  The Man and the Judge, which I remember reading shortly after it came out, right before I started work as a law professor in 1994.  I believe there's a second edition with a foreword by Justice Ruth Bader Ginsburg that came out in 2010.

Learned Hand: The Man and the Judge

Wednesday, August 2, 2017

Some Recent Articles, Posts on Damages Multipliers and Attorneys' Fees in the E.U.

In July 2016, the CJEU handed down its judgment in UnitedVideo Properties, Inc v Telenet NV, C-57/15, on the recovery of attorneys' and advisors' fees in IP cases (see my blog post here), and in January of this year it handed down its judgment in Stowarzyszenie ‘Oławska Telewizja Kablowa’ v. StowarzyszenieFilmowców Polskich, Case C-367/15, on whether E.U. member states can award double damages for copyright infringement (see my blog post here).  Here are some recent articles and blog posts:

1.  Thibault Gisclard has published an article titled La nature des "dommages et intérêts" sanctionnant la contrefaçon:  À propos de l'arrêt de la CJEU, 25 janv. 2017, aff. C-367/15, Stowarzyszenie Olawska Telewizja Kablowa c/ Stowarzyszenie Filmowców Polskich ("The nature of "damages and interest" for infringement:  Regarding the Judgment of the CJEU, Jan. 25, Case No. C-367/15," etc.) in the May 2017 issue of Propriété Industrielle. (pp. 23-27).  Here is the abstract (my translation):
Directive 2004/48/CE of April 29, 2004 permits an award of lump-sum damages unconnected with just the harm effectively suffered and proven by the victim of the infringement.  The Court of Justice of the European Union indicates in its judgment of January 25, 2017 that such an award may correspond to double the royalty based on a hypothetical license, which does not consequently constitute punitive damages and interest.  The court, however, does not specify if the latter are compatible with the Directive.  In French law, if the laws of 2007 and 2014 permit an extension of the notion of damages and interest beyond injury in the tort-law sense, the award of a fictive license has more of a quasicontractual nature, and the disgorgement of the gain realized by the infringer, which is no way punitive, is just a form of restitution of the fruits of the illicit exploitation of the intellectual property.
2.  Magdalena Kogut-Czarkwoska and Dr. Birgit Clark have published an article titled "Copyright and Punishment":  CJEU Rules that the IP Enforcement Directive Does Not Prevent "Lump Sum" Damages in IP Cases, 39 E.I.P.R. 315 (2017).  Here is the abstract:
The Court of Justice of the EU (CJEU) has held that art.13 of the IP Enforcement Directive 2004/48 (the Directive) does not preclude an EU Member State from enacting national legislation which offers a method of establishing damages as a "lump sum" equivalent to double the hypothetical royalty rate. The decision confirms that the Directive merely aims to introduce "minimum" standard of protection, but does not prevent the Member States from introducing a higher level of protection: Stowarzyszenie Oławska Telewizja Kablowa v Stowarzyszenie Filmowców Polskich (C-367/15).
3.  Peter R. Slowinski has published an article titled Case Note on: "United Video Properties" , 48 IIC 373 (2017).   Mr. Slowinski argues that the CJEU has left open "a number of important practical questions," among them how to determine what "reasonable" costs are, given that "[a]s of today, all information on legal fees in Europe is based on more or less structured surveys, which must be categorized as anecdotal."
4.  Jan-Diederick Linemans has published two posts on the Kluwer Patent Blog, one titled First Belgian Ruling on Costs in Patent Proceedings Post United Video Properties/Telnet (May 4, 2017), and Recovering Lawyers' Fees in Belgium:  Antwerp Court Beats Mons Court to First Substantive Ruling (May 24, 2017)According to Mr. Lindemans, in two recent cases Belgian courts have awarded fees for technical advisors, on the ground that "the 'direct and close link' required by the CJEU had . . . been proven."  In the case before the Antwerp court, however, the court concluded that "an individual can only invoke his rights under the directive against a Member state . . .  and not against another individual," although "the prevailing party could have a claim . . . against the Belgian government for not having implemented article 14 of the Enforcement Directive correctly or in a timely fashion."