Damages

Inadequate Disclosures Preclude Monetary Damages Recovery in Trademark Infringement Suit

Order Granting in Part and Denying in Part Defendant’s Motion for Summary Judgment, Sazerac Co., Inc., et al. v. Fetzer Vineyards, Inc., Case No. 3:15-cv-04618-WHO (Judge William H. Orrick)

As any practitioner who has sought to establish trademark infringement already knows, likelihood of confusion is difficult to prove at trial. Nonetheless, a recent Order in Sazerac Co., Inc., et al. v. Fetzer Vineyards, Inc. demonstrates that plaintiffs still retain certain inherent advantages at the summary judgment stage in proving that there exists a likelihood of confusion, given the high hurdle for defendants to convince a court that no genuine issues of fact exist and that summary judgment is warranted.  But as this case also demonstrates, that does not mean that plaintiffs can “sleep at the wheel,” so to speak, when disclosing infringement or damages theories during discovery. READ MORE

Reveal Your Hurt

Corning Optical Communications Wireless Ltd. v. Solid, Inc. et al., 5:14-cv-03750 (Magistrate Paul Grewal) (April 14, 2015)

The days of “wait until we serve our expert report” to reveal damages figures might be over, at least if your case is in front of Judge Grewal.  Patent damages present an especially difficult situation for the parties to calculate damages without discovery, since damages theories will turn, in part, on information known only to the opposing party, such as revenues, sales and licensing practices.  Moreover, though the Patent Local Rules contain extensive disclosure requirements on patent liability issues, they do not contain any similar requirements for the disclosure of damages contentions prior to expert discovery. READ MORE

January/February Recap

It’s interesting to look at the first two months of 2015 against the backdrop of the previous year.  Judge Illston’s orders, for example, suggest that one should not expect much to change in ND Cal judges’ willingness to invalidate patents under Alice (specifically, in her case, a patent for storing “link relationships” between “document objects” in a network) and to stay cases pending IPR (especially when a large number of patents and products are involved).  Magistrate Judge Grewal also followed an approach that we’ve seen before, ruling that both sides in a discovery dispute should make foreign-based party witnesses available for deposition in the Northern District.  Typo Products found itself haunted by the past when Judge Orrick awarded $1 million in sanctions to Blackberry for Typo’s violation of a preliminary injunction.  Meanwhile, Rep. Goodlatte, R-VA, hoped to shake off past failures by reintroducing a version of the Innovation Act bill that died in the Senate last May.

February 2015 was also trial month for the patent litigation between Open Text and Box.  In the preceding weeks, Judge Donato issued several noteworthy decisions, including a Rule 12(c) judgment of invalidity of claims from 5 patents under Alice and a Daubert order excluding the damages opinions of plaintiff Open Text’s expert.  Notwithstanding Open Text’s lack of expert testimony on a reasonable royalty, the jury awarded Open Text $4.9 million in a lump sum (Law360, subscription required).

Over at Patently-O, guest author Andres Sawicki discusses the role of intellectual property in the uniquely Silicon Valley practice of “acqui-hires.” And if all that isn’t enough recap for you, why not revisit our most popular blog posts from 2014?

“Black Box” Damages Theory Won’t Put Plaintiff In The Black

Order Granting Motion to Exclude Expert Opinions and Testimony, Open Text S.A. v. Box, Inc. et al., Case No. 13-cv-04910 (Judge James Donato)

There are many permissible ways for an expert to come up with a damages number, but they need to be expressed according to a clear methodology. That was the overall takeaway from Judge Donato’s order excluding the opinions of Krista Holt regarding the reasonable royalty defendant Box should pay if found to infringe plaintiff Open Text’s patents on file synchronization. After holding a thorough Daubert hearing, Judge Donato concluded that Holt’s damages method was a “black box,” which prevented Court, jury, and opposing counsel from understanding or testing how the data drove her conclusions. Judge Donato also faulted Holt’s proposed opinions for using third-party licenses after she had rejected them as non-comparable and for her handling of apportionment.

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Don’t Touch! A Cautionary Tale in Which Court Awards Damages, Fees, and Injunction for Trade Secret Misappropriation by Ex-Employees

Findings of Fact and Conclusions of Law, PQ Labs, Inc. et al. v. Yang Qi et al., Case No. 12-0450 (Judge Claudia Wilken)

It is not uncommon for Silicon Valley employees to switch companies, and the temptation of bringing along materials such as customer lists, pricing information and technical documents to jumpstart their new employment can be strong. It is also not uncommon for such employees to get their new companies in hot water when they act on such temptation and use the materials. Judge Wilken reminded us all that when an employee’s switch in jobs includes misappropriation of his or her former employer’s confidential intellectual property, the consequences can be severe.

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Sticks and Stones May Break My Bones, but your Disagreement Will Not Exclude Me

MediaTek Inc. v. Freescale Semiconductor, Inc., Case No. 11-cv-5341 (Judge Yvonne Rogers) (June 20, 2014)

Attacking an expert’s methodology may be appropriate in motions to exclude, but any disagreement with an expert’s opinion or reliance on documents is better left for cross-examination at trial. Judge Rogers denied Defendant Freescale Semiconductor’s motion to exclude certain testimony from Plaintiff MediaTek’s damages expert because Freescale’s attacks of the expert related to credibility and the weight of her opinion, which could all be cross-examined, rather than excluded. READ MORE

Internal Testing Activities Alone Can Be The Basis Of A Patent Jury Trial

Interwoven, Inc. v. Vertical Computer Systems, Case No. 10-4645 (Judge Seeborg)

Asserting patented method claims against a product feature is not always straightforward.  To prove infringement, patentees often rely on a combination of indirect infringement theories supported by product documentation as well as direct internal testing by the defendant.  Usually, the focus is on the indirect infringement, because customer usage undoubtedly makes up the lion’s share of the alleged infringing use of the method.  However, though internal testing may seem like a small proportion of the overall usage, Judge Seeborg’s summary judgment order is a reminder that internal testing can still be the focus of an infringement trial. READ MORE