From Around the Blogs

1.  On IPKat, Henry Yang published the remaining three installments of his series on Mr. Justice Mellor’s March 2023 decision in InterDigital v. Lenovo, [2023] EWHC 539 (Pat.):    Unpacking IDC v Lenovo (PartII): General principles of FRAND explored;  Unpacking IDC v Lenovo (Part III): $0.175 per cellular unit; and Unpacking IDC v Lenovo (Part IV): top-down cross check; allegations regarding conduct; permission to appeal.  I previously noted Part 1, The approach on unpacking and comparing prior licence agreements, here, and published some of my observations on the decision here.

2. On Law360, Manuel Velez, Lisa Ferri, and Jessica Lehrman published an article titled Enhancing Patent Damages:  Trends IP Attorneys Should Know.  The authors report that they found 73 post-Halo v. Pulse district court decisions in which there was both a finding of willfulness and a decision by the judge whether or not enhance damages.  They found that courts enhanced damages in 40 (54.8%) of these cases, and that the average enhancement was 2.2.  (For comparison, see Karen Sandrik, An Empirical Study: Willful Infringement & Enhanced Damages in Patent Law After Halo, 28 Mich. Tech. L. Rev. 61 (2021), reporting that courts enhanced damages in 69.0% of cases in which there was a finding of willfulness post-Halo through 2020, but also cautioning that the increase compared to pre-Halo was not statistically significant).  The authors also report considerable variation among districts, with the District of Delaware enhancing damages upon a finding of willfulness in 9.1% of cases (although I wonder if that is a misprint; an accompanying graph seems to indicate a higher rate, albeit still below 20%), to the Central District of California doing so in 85.7% of cases; and discuss courts’ continued reliance on the Read v. Portec factors to determine whether to enhance.    

Also of interest on Law360 was an article by Adam Lidgett titled Atty Tells 9th Circ. Valeant Ruling Saves Allergan Patent Suit.  The article discusses another False Claims Act case brought by Zachary Silbersher, who argues that a recent Ninth Circuit decision (noted here) should permit his cases against Allergan (alleging fraudulent procurement of two patents) to proceed.

3.  On FOSS Patents, Florian Mueller published, among other things, a post discussing the first UPC preliminary injunction hearing conducted in Munich this past week.  

4.  On Sufficient Description, Norman Siebrasse published Nova v Dow: Summary of the Summary.  The post summarizes Professor Siebrasse's forthcoming article on this Canadian Supreme Court decision, which I blogged about here; it resumes an ongoing series of posts on this case, which Professor Siebrasse plans to continue (the previous posts can be accessed (here, here, here, here, and here).  Siebrasse is, in my view, rightly critical of the majority's reasoning as it relates to the remedy of an accounting of the infringer's profits and the meaning of "non-infringing alternative."  He writes that "There is no way to interpret Nova v Dow that would restore the remedy to a sound basis," and that "[t]he best response to Nova v Dow is therefore to abolish the accounting remedy entirely"--something the U.S. did, for utility patents, in 1946, though so far no other country has done so--or at least restrict the remedy "to cases in which the infringer was trying to game the system by avoiding ex ante licensing, ie was engaging in holdout."  

 

China’s Supreme People’s Court Issues Decision on Damages for Infringement of Plant Variety Rights

The case is Shenzhen Jingu Meixiang Industrial Co. v.  Hefei Wanfeng Seed Co., Ltd. and Huoqiu Baofeng Seed Industry Co., Ltd., Case No. Zui Gao Fa Zhi Min Zhong No. 466, 2 Nov. 2021.  An English-language translation by Connie Kongkui Hubbard is now available in 54 IIC 1121-31 (2023)--the August 2023 issue of the Max Planck Institute’s International Review of Intellectual Property and Competition Law—under the heading “China:  ‘Huang Hua Zhan’ Rice Variety’.”  To summarize, the plaintiff Jingu is the exclusive licensee of plant variety rights owned by the Rice Research Institute of the Guangdong Academy of Agricultural Sciences.  Jingu filed suit against Wanfeng, a producer and seller of rice seeds, and Baofeng, a seller, alleging infringement of these rights.  The court of first instance concluded that the defendants infringed and awarded damages of only CNY 300,000 against Wanfeng and CNY 40,000 against Baofeng.  Both parties appeal from certain aspects of the lower court’s ruling.  The SPC affirms the judgment of liability, but awards greater damages against Wanfeng, in the amount of CNY 1,000,000, plus CNY 50,000 costs.

Focusing exclusively on the damages issues, the Seed Law of the People’s Republic of China contains a provision similar to what is found in China’s Patent, Copyright, and Trademark Acts, in that it lists the various types of monetary compensation awardable in order of preference.  Thus, under article 73 of the law in force at the time of the above decision, the court could award damages based on actual losses to the rightsholder; if this was difficult to calculate, then it could award damages based on the infringer’s financial gain from the infringement; if this was difficult to calculate, the court could award a license fee, which could be multiplied up to three times in the presence of aggravating factors; and if all else failed, it could award statutory damages of up to 3,000,000 CNY (equal to about $409,000 as of today).  (An amended version of the Seed Law became effective in 2022.  The damages provision is now found in article 72, under which courts can increase the amount of the license fee up to five times, and statutory damages of up to CNY 5,000,000.)

Anyway, in the present case the SPC rejects the defendants’ argument that Jingu is not entitled to damages because it has not suffered a financial loss, reasoning that the rightsholder suffers a loss even if it does not produce seeds itself, and that the defendants profited from their infringement.  In addition, the court notes that Wanfeng and Jingu entered into a mediation settlement agreement in 2019, under which Wanfeng agreed to pay “damages of no less than CNY 1 million if it violated the agreement,” which according to the court it did.  More generally, the court appears to endorse the use of such stipulated damages agreements, stating that although such a provision may be “simplistic,” the “law does not proscribe a rights owner and an infringer from reaching an agreement in advance regarding liability and the amount of damages.”  In addition, the court noted that the infringement was a re-offense, occurring after the signing of the agreement; that the scale was "rather large"; and that Wanfeng sold and produced seeds that were found to infringing in two other cases in which it was not named as a party.  The court therefore ordered Wanfeng to pay CNY 1 million, plus costs (“reasonable expenses" Jingu incurred "defending its rights”) in the amount of CNY 50,000.  The court also concludes that, although a seller is not liable in damages if it proves that it did not know the seeds it sold infringed, and that it obtained the seeds from a legal source, Baofeng did not prove these facts here (“it is difficult to determine if Baofeng Company either did not know or need not know that the seeds it sold infringed”).  Therefore, Baofeng is liable for Jingu’s losses from the sale of the infringing seeds, plus costs.  The court awards "CNY 40,000.00 damages.”

UPC Grants Ex Parte Preliminary Injunction; Protective Letter Insufficient

From time to time on this blog, I have mentioned the use of “protective letters”--Schutzschriften in German, escritos preventivos in Spanish--in certain countries including Germany, Switzerland, and Spain.  The basic idea is that an entity that believes it may be the subject of an ex parte application for a preliminary injunction can deposit, ex ante, a protective letter with the relevant court or courts.  (See the discussion in my book at p.244 n.104, and also previous posts here, here, here, and here.)  My understanding is that protective letters may be particularly useful in connection with trade shows.  A patent owner may feel the need to take quick action against the display and possible sale of what it believes to be infringing products, while the seller displaying the products wants some opportunity to get its views on the record in advance, if need be.  The seller therefore deposits the protective letter, which however will be kept secret unless and until the patentee files the application for the preliminary injunction.

That said, protective letters are not a magic bullet, as indicated by what must be one of the first cases in which the UPC has issued a preliminary injunction.  See Order of the Court of First Instance of the UPC Local Chamber Düsseldorf, June 22, 2023,IPC_CFI_177/203.  I read about this decision the other day in a very interesting post on the Kluwer Patent Blog, First developments at the Unified Patent Court, which also discusses hearings scheduled for this week and later this month on an applications for preliminary injunctions brought by 10x Genomics against Nanostring Technologies. (See also this article on JUVE Patent.)  Later in the post the author mentions this case and links to a write-up by Inteo on LinkedIn, titled MyStromer v Revolt Zycling:  protective letters, ex parte injunctions and (accidental?) carve-outs before the United Patent Court.  To summarize, the patent owner owns EP 2546134B1 ("Combination structure of bicycle frame and motor hub"), which it believed was infringed by a product another firm was displaying a trade fair in Frankfurt.  The latter firm filed a protective letter with the court on the same day the patent owner filed its motion for a preliminary injunction.  The court rejects the arguments made in the protective letter for denying the preliminary injunction (lack of infringement and exhaustion), concluding that the letter does not show a lack of literal infringement, and noting that a Swiss court has already rejected the argument that an existing license agreement covers the combination at issue here.  Moreover, the court further cautions that the validity of the patent is adequately assured, insofar as the patent issued in 2015 and has not been the subject of an opposition, and the protective letter makes no mention of any relevant prior art (see decision, part V).

The mention in the LinkedIn post above about a carve-out relates to the fact that the patent has been validated in Austria, but the patentee omitted to ask for injunction to have effect in Austria; and its subsequent request for the court to rectify this error was rejected.