Intellectual Property Attorneys - IP Lawyers

2010 Proposed Patent Reform Legislation Series - Damages

DAMAGES

The changes proposed to 35 U.S.C. § 284 seem to be done with the intention of increasing the predictability of damages in patent litigation.  35 U.S.C. § 284 currently gives courts significant leeway to determine damages without a codified standard:

"When the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed."

The treble damages within the court's discretion are often assessed in cases of Willful Infringement. 

The proposed reform would codify a more defined procedure for the determination of damages:

 

(b) PROCEDURE FOR DETERMINING DAMAGES.--                                                                                                                         

(1) IN GENERAL.--The court shall identify the methodologies and factors that are relevant to the determination of damages, and the court or jury, shall consider only those methodologies and factors relevant to making such determination.

(2) DISCLOSURE OF CLAIMS.--By no later than the entry of the final pretrial order, unless otherwise ordered by the court, the parties shall state, in writing and with particularity, the methodologies and factors the parties propose for instruction to the jury in determining damages under this section, specifying the relevant underlying legal and factual bases for their assertions.

 

Presumably, forcing the parties to set out these methodologies is intended to make determinations of damages less arbitrary and more predictable.  Other additions are made as well, including allowing for summary judgment on a particular damages contention and allowing any party to request sequencing of the trial such that the question of infringement is decided by the jury before the jury makes any determination on willful infringement or related to damages.

Willful Infringement would also be codified under the reform legislation and the court has discretion to triple damages in these cases.  The reform legislation seems to have narrowed the court's discretion to triple damages, allowing it only for findings of Willful Infringement.   The tripling of damages is only mentioned in this section of the reform to 35 U.S.C. § 284--the existing statute did not expressly limit the tripling of damages, even though the tripling of damages was most commonly done for cases of Willful Infringement.  In an effort to put a cap on findings of Willful Infringement, the reform legislation would require that courts find no Willfulness in "close case[s]."

 

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