A successful plaintiff in a patent infringement lawsuit is awarded damages as compensation for the defendant’s past acts of infringement. If the plaintiff is practicing the patented invention, it will – most likely – also be awarded a permanent injunction barring the defendant from committing any further acts of infringement. Whereas the grant of a permanent injunction was formerly automatic, the courts must now – thanks to eBay – apply a “four-factor test” to determine whether an injunction is appropriate.
This, of course, engenders delay between the jury’s verdict and the court’s entry of an injunction, creating a question as to the penalty to be applied – if any – in respect of infringing sales made during this period.
Well, a court has now taken the time to address this issue and write a twelve-page opinion thereon. (Cummins-Allison Corp. v. SBM Co., Ltd. and Amro-Asian Trade, Inc.)
Showing uncommon foresight, the court advised the parties – before the trial – that it would ask the jury to determine “future damages,” i.e. the appropriate damages in respect of sales made during this period. As the court noted, “[c]alculating a future royalty rate should be little different than opining on the rate the parties would have agreed upon at the hypothetical negotiation.” Noting that any infringement occurring after the verdict would likely be willful, thus raising the question of enhancement of damages, the Court went on, “[w]hile a judge might simply determine an amount of enhanced damages, it appears that there may be advantages to first calculating the proper measure of damages without consideration of willfulness, and then determining whether, and by how much, the award should be enhanced.”
In this instance, the jury found that the appropriate damages for the sale of infringing goods during the subject period were $400.00 per unit. The court found the sales constituted a willful infringement and increased the damages to $500.00 per unit.
THE LESSON TO BE LEARNED: If you’re found guilty of infringement, the damages are likely to go up for sales occurring after the entry of the verdict.