Patent Damages – Where We Are, Where We Are Going. Federal Circuit Bar Ass’n 10.18.2010 Prof. Robert Merges. Basic Principles.
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Federal Circuit Bar Ass’n
Prof. Robert Merges
When a patent is for an improvement, and not for an entirely new machine or contrivance, the patentee must show in what particulars his improvement has added to the usefulness of the machine or contrivance. He must separate its results distinctly from those of the other parts, so that the benefits derived from it may be distinctly seen and appreciated....
-- Garretson v. Clark, 111 U.S. 120, 121 (1884
“Translating the Court's early stylistic description into a precise, contemporary, economic paradigm presents a challenge.”
-- 580 F.3d 1301 (Fed. Cir. 2009)
Courts are beginning to exercise the “gatekeeper” function of Lucent:
- ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 869 (Fed. Cir. 2010) (“The majority of the licenses on which ResQNet relied in this case are problematic for the same reasons that doomed the damage award in Lucent.”).
- See also Wordtech Sys., Inc. v. Integrated Network Solutions, Inc., 609 F.3d 1308 (Fed. Cir. 2010).
IP Innovation, L.L.C. v. Red Hat, Inc., 2010 WL 986620 (E.D. Tex., Mar. 2, 2010) (Rader, Circuit Judge, sitting by designation) (rejecting plaintiff’s reasonable royalty evidence, where its “methodology . . . does not show a sound economic connection between the claimed invention and [a] broad proffered royalty base”).
Neil Gandal, Hedonic Price Indexes for Spreadsheets and an Empirical Test for Network Externalities, 25 Rand J. Econ. 160 (1994)