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The Intellectual Property StrategistKickerSectionsNewsLJN Newsletters

What Is Reasonable?

By Benjamin Hershkowitz and Charles Wizenfeld
April 30, 2008

Several recent rulings from the U.S. Supreme Court have arguably tipped the scales toward alleged infringers involved in a patent battle. Specifically, the U.S. Supreme Court ('Supreme Court') in KSR Inter- national Co. v. Teleflex Inc., __ U.S. __, 127 S.Ct. 1727 (2007) modified the standard for obviousness thereby making it easier for alleged infringers to invalidate patents. In eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 126 S.Ct. 1837 (2006), the Supreme Court modified the standard for determining the propriety of injunctions, making it more difficult for certain plaintiffs to obtain permanent injunctions against infringers. Finally, in MedImmune, Inc. v. Genentech, Inc., __ U.S. __, 127 S.Ct. 764 (2007), the Supreme Court made it easier for alleged infringers to argue there is a case or controversy, and thereby prospectively haul patent holders into court by filing a declaratory judgment action. However, a recent decision from the Court of Appeals for the Federal Circuit ('Federal Circuit') may help tip the scales back toward patent holders and thereby provide some additional leverage to patent holders in discussions with alleged infringers. In Amado v. Microsoft Corp., __ F.3d __, 2008 U.S. App. LEXIS 4065 (Fed. Cir. Feb. 26, 2008), the Federal Circuit indicated that after a verdict of infringement, the infringing party may be subject to a different (higher) royalty for post-verdict sales of the infringing product than was determined for past (i.e., pre-verdict) infringing sales.

What Is Reasonable for Infringement Before Trial '

Carlos Armando Amado ('Amado') brought suit in the U.S. District Court for the Central District of California ('District Court') against Microsoft Corporation ('Microsoft') alleging that several versions of Microsoft's Office Suite product infringed his patent directed to a 'point and shoot interface for linking database records to spreadsheets whereby data of a record is automatically reformatted and loaded upon issuance of a recalculation command' (i.e., a software program combining the functionalities of spreadsheet and database software). At trial, the jury ruled that Amado's patent was valid and infringed by Microsoft, and awarded Amado damages equivalent to a 4 cents reasonable royalty for each infringing product sold. No willful infringement was found. Amado then sought a permanent injunction against Microsoft, which the District Court granted but then stayed pending appeal. The District Court further required that Microsoft deposit $2 into escrow for each infringing product sold during the stay.

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