Sunday, March 31, 2019

Federal Circuit at the University of Minnesota This Coming Week

For those of you in the Twin Cities area, this is a reminder that the United States Court of Appeals for the Federal Circuit will hear oral arguments at the University of Minnesota Law School on Wednesday, April 3, from 10-11 a.m.  The two cases to be heard are:
  • 2018-1700  DCT  Board of Regents v. Boston Scientific Corporation  [argued]
  • 2018-1724  DCT  Dodocase Vr, Inc. v. Merchsource, LLC  [argued]
This session is open to the public. Oral arguments will be followed by a Q & A session for students from 11:30 a.m. - 12:00 p.m.  I won't be there myself, since I am in Europe  this week, but I would encourage my students in particular to attend. 

Friday, March 29, 2019

French Cour de Cassation Ruling on Defendant's Profits

I've blogged about this case, Carrera SARL et Texas de France SAS v. Muller et Cie, PIBD No. 1112, III, 120 (Jan. 23, 2019), once before (here), after the December 2016 Court of Appeals decision, which held that the plaintiff was not entitled to an award of the defendant's profits.  In January of this year, however, the Cour de Cassation reversed, holding that even though the plaintiff did not practice the patent itself it was entitled, under French law, to have the court consider the defendant's profits as an element of damages.

Here is what I wrote about the Court of Appeals decision in 2017:
Carrera SARL et Texas de France SAS v. Muller et Cie, PIBD No. 1067, III, 170 (Dec. 9, 2016), appears to take the latter view, namely that IP owners are entitled to recover damages for their own losses but not an award of the infringer's profits as such.  If I'm reading the facts correctly, Muller (owner of European Patent 1,067,822 for a "Heating element manufacturing process for heating or cooking apparatus, such heating element and apparatus incorporating it") is a patent holding company that had licensed the patent, royalty-free, to six affiliated companies.  Muller prevailed on liability, but sought to recover an award of the defendants' profits rather than a reasonable royalty.  The district court awarded damages in the amounts of  €327,733 and €280,130, respectively, as well as damages for moral prejudice in the amount of €100,000.  Both parties appealed.  The Court of Appeals, however, rejected Muller's argument that  it could opt for an award of profits, stating (my translation):
Moreover, while it is true that the Law of October 29, 2007, implementing Directive 2004/48, invites the judge to take into account "the benefits realized by the infringer," it does not  authorize the confiscation of those benefits; and this taking into account is limited only to the portion relating to the losses suffered as a result of the exploitation, in order to attain a complete reparation for the loss." 
Furthermore, if I'm reading this correctly, since Muller disavowed any reliance on a reasonable royalties theory, the court also threw out that award; and it also disallowed the award for moral prejudice, concluding that there was no evidence that the infringement caused any harm to Muller's reputation.
Anyway, the Cour de Cassation annuls the Court of Appeals decision on defendant's profits, stating that L. 615-7 of the I.P. Code confers upon the injured party a choice among damages remedies, and that "the existence, for the patent holder, of an economic prejudice resulting from patent infringement is not contingent upon the patent holder itself engaging in the exploitation of the patent" (my translation).  It's not entirely clear to me, however, from the text of the decision and the accompanying commentary by S. Lepoutre and C. Martin, whether this means that the patent holder is entitled to recover all of the profits realized by the infringer as a result of the infringement, or only  if the court should take those profits into consideration in crafting an appropriate compensatory damages award (which, perhaps, could be for less than the entire profits realized as a result of the infringement).

The Cour de Cassation affirmed the finding that there was no evidence that the patentee had suffered any moral prejudice as a result of the infringement.

Many thanks to Pierre Véron for helpful discussion of this case.

Tuesday, March 26, 2019

Mezzanotti and Simcoe on eBay and Innovation

Filippo Mezzanotti and Timothy Simcoe have published a paper titled Patent policy and American innovation after eBay: An empirical examination, 48 Research Policy 1271-81 (2019).  Here is a link to the paper and here is the abstract:
The 2006 Supreme Court ruling in eBay vs. MercExchange removed the presumption of injunctive relief from infringement and marked a sea change in U.S. patent policy. Subsequent legal and policy changes reduced the costs of challenging patent validity and narrowed the scope of patentable subject matter. Proponents of these changes argue that they have made the U.S. patent system more equitable, particularly for sectors such as information technology, where patent ownership is fragmented and innovation highly cumulative. Opponents suggest the same reforms have weakened intellectual property rights and curtailed innovation. After reviewing the legal background and relevant economic theory, we examine patenting, R&D spending, venture capital investment and productivity growth in the wake of the eBay decision. Overall, we find no evidence that changes in patent policy have harmed the American innovation system.
The paper also links to a draft paper by Mezzanotti titled Roadblock to Innovation: The Role of Patent Litigation in Corporate R&DHere is a link to that paper, and here is the abstract:
Using a difference-in-difference design around the Supreme Court decision “eBay v. MercExchange,” I examine how patent enforcement affects corporate R&D. To identify the effects of the decision, I compare innovative activity across firms differentially exposed to patent litigation before the ruling. Across several measures, I find that the decision led to a general increase in innovation. This result confirms that the changes in enforcement induced by the ruling reduced some of the distortions caused by patent litigation. Exploring the channels, I show that patent litigation negatively affects investment because it lowers the returns from R&D and exacerbates its financing constraints.
These appear to be some important findings, which should inform the debate on the wisdom of mandatory versus discretionary injunctive relief.

Sunday, March 24, 2019

Speaking Engagements This Week in Barcelona

Today and tomorrow I will be speaking at a couple of events in Barcelona, Spain.  As always, I will be happy to meet any readers of this blog who happen to be at either of these. 

The event today (March 25) is hosted by the ESADE Alumni Law Club, the ESADE Entrepreneurship Institute, and the ESADE Law School, and is titled 'Patent Wars? A debate about the role of patents for entrepreneurs.  Here is a link to the announcement, and here is the event's description and agenda:
Patents are ubiquitous in contemporary life. Practically everything we use incorporates one or more patented inventions, and recent years have witnessed epic disputes about such matters as the patenting of human genes, the control of smartphone design and technology, the marketing of patented drugs, and the conduct of "patent trolls" accused of generating revenue from nuisance litigation. But what exactly is a patent? And what role do they play for entrepreneurs? 
In this event, Professor Thomas Cotter, one of America's leading patent law scholars, will offer an accessible, lively, and up-to-date examination of the current state of patent law, showing how patents affect everything from the food we eat to the cars we drive to the devices that entertain and inform us. He will focus on patenting in various parts of the economy including genes, medical procedures, software, and business methods.
Following that, a panel of experts will discuss how patent law affects entrepreneurship and how entrepreneurs can use patents to their advantage.
The ESADE Alumni Law Club, the ESADE Entrepreneurship Institute and the ESADE Law School are pleased to announce their forthcoming talk 'Patent Wars? A debate about the role of patents for entrepreneurs'.
Thomas Cotter, University of Minnesota Law School
Miquel Montaña, Partner at Clifford Chance Spain and lecturer at ESADE Law School
Cheryl Fragiadakis, Technology consultant and formerly head of technology transfer at Lawrence Berkeley National Laboratory in Berkeley, California.
George Chondrakis, Assistant professor of strategic management at ESADE Business School.
Carles Puente, Co-founder and VP of Innovation at Fractus Antennas and professor at UPC
See you there!
Members are welcome to bring a guest
For further details 
The event tomorrow (March 26) is hosted by the Bar Association of Barcelona and is titled "Current Affairs of Patents Conference:  American and European Perspective."  I will be on three panels, discussing the doctrine of equivalents, patentable subject matter, invalidation proceedings, and injunctions.  Here are links to the event announcement in Spanish, Catalan, and English.  Here is the program:

BARCELONA, March 26, 2019


María Eugenia Gay Rosell. Dean of the Bar Association of Barcelona

                   Carles Prat Masip. Lawyer. Member of the Industrial Property Commission of the Bar Association of Barcelona

                   Presentation by Florencio Molina López, Judge. Commercial Court of Barcelona (Patent Section) of Professor Thomas F. Cotter of the University of Minnesota Law School (USA) and of his book: PATENT WARS: HOW PATENTS IMPACT OUR DAILY LIVES (Oxford University Press 2018)

17:00h:      PANEL 1: patent infringement. doctrine of equivalents.

Chair: Cristina Vallejo Ros. Laywer. Deputy of the the Bar Association of Barcelona.

                   Oriol Ramón Sauri. Patent Lawyer.              
                   Yolanda Ríos López. Judge. Commercial Court of Barcelona (Patent Section)
                   Thomas F. Cotter, Professor of the University of Minnesota Law School

18:00h:      COFFEE BREAK

                   Chair: Antoni Romaní Lluch. Lawyer. Vice President of the Industrial Property Commission of the Bar Association of Barcelona

                   Javier Huarte Larrañaga. Patent Lawyer.
                   Alfonso Merino Rebollo. Judge. Commercial Court of Barcelona (Patent Section)
                   Thomas F. Cotter, Professor of the University of Minnesota Law School


                   Chair: David Pellisé Urquiza. Patent Lawyer.

                   Miquel Montañá Mora. Patent Lawyer.
                   José Mª Fernández Seijo. Judge. Court of Appeals of Barcelona, 15th Section.
                   Thomas F. Cotter, Professor of the University of Minnesota Law School

Yvonne Pavia Lalauze. Laywer. Deputy of the the Bar Association of Barcelona.

Conference organizers:

Antoni Romaní Lluch. Lawyer. Vice President of the Industrial Property Commission of the Bar Association of Barcelona
Yvonne Pavia Lalauze. Laywer. Member of the the Bar Association of Barcelona.
Cristina Vallejo Ros. Laywer. Member of the the Bar Association of Barcelona.
Patent Section of the Commercial Court of Barcelona.
 ·        Language: English. Without translation service 
          Registration Price: 10€ for all