Power Integrations, Inc. v. Fairchild Semiconductor International, Fed. Cir. (July 3, 2018)
Patent damages law can be fairly complex—so much so that Daubert motions against damages experts are filed in nearly every case. These motions often accuse damages experts of overreaching by failing to properly apportion damages or misapplying the entire market value rule (“EMVR”). On Tuesday, the Federal Circuit’s opinion in Power Integrations, Inc. v. Fairchild Semiconductor International attempted to clarify these aspects of the patent damages analysis, vacating the jury’s $139.8 million damages award in the form of a reasonable royalty.
A patentee seeking damages for the sale of a multicomponent (or multifunction) product must typically take several steps to ensure that any alleged damages have been properly apportioned to exclude the value provided by the product’s noninfringing aspects. First, the royalty base has to be determined on the smallest saleable patent practicing unit. Second, that reduced royalty base needs to be apportioned to reflect only the value attributable to the patented technology. A royalty based on the value of the entire multicomponent product will likely yield much higher damages, but such a royalty can be recovered only if the plaintiff satisfies the very strict requirements of the EMVR.
Order Granting In Part And Denying In Part Plaintiffs’ Motion For Default Judgment, Timothy Ferriss, et al. v. Alliance Publishing, Inc., et al., Case No. 15-cv-05675 (Judge Edward M. Chen)
Tim Ferriss is known for authoring The 4-Hour Workweek and other self-help books on the “4-Hour” theme. He may now become known as the “4-Hour Plaintiff” after he and a company he owns, Krisa Performance, obtained a default judgment against defendants alleged to have improperly used his name and likeness in connection with a fraudulent scheme.
Order Granting Summary Judgment On Dropbox Laches Claims, Dropbox, Inc. v. Thru Inc., Case No. 15-cv-01741-EMC (Judge Edward M. Chen)
The proverb “[e]quity aids the vigilant, not the sleeping ones” aptly describes the rationale behind the defense of laches-i.e., the legal doctrine which states that a plaintiff who unjustifiably delays pursuing a claim may forfeit it. Intended to encourage the timely resolution of disputes and to avoid prejudice to defendants, laches can have dire consequences for plaintiffs who unreasonably delay bringing their claims. READ MORE
Summary Judgment Order, Fortinet, Inc. v. Sophos, Inc., et al., Case No. 13-cv-05831-EMC (Judge Edward Chen)
Means-plus-function claim elements are less common than in the past, due to stricter rules about their scope and requirements for validity. But when they do arise, it is still necessary to know how to deal with them. Judge Chen recently entertained cross-motions for summary judgment on whether a means-plus-function element is indefinite if the specification discloses using a computer but no algorithm. And while Judge Chen ultimately found he could not render summary judgment for either side, his order offers a primer on approaching software-related “means” elements. READ MORE
Order Denying Defendants’ Motion to Dismiss and Anti-SLAPP Motion to Strike, Sonus Networks, Inc. v. Inventegry, Inc., C-15-0322 EMC (Judge Edward Chen)
Patent licensing company Inventegry, Inc. recently suffered some setbacks when Judge Edward M. Chen denied its motion to dismiss and Anti-SLAPP motion to strike several claims that plaintiff Sonus brought as part of its declaratory judgment action. READ MORE
Order Granting Defendant’s Motion to Dismiss for Lack of Personal Jurisdiction, Petzilla, Inc. v. Anser Innovation LLC, Case No. C-14-1354 EMC
Every dog owner knows that the single word “treat” can unleash canine ecstasy in their favorite pet. As a result, if you haven’t had “sufficient contacts” with your dog lately, then the “greet-and-treat” pet products offered by the parties involved in Petzilla, Inc. v. Anser Innovation LLC may be of great help. On the other hand, if you are accused of infringing a patent directed to such canine delights and want to bring a declaratory judgment action arguing that the underlying patent claims are not infringed and are invalid, then you better be prepared to show that the patentee has “sufficient contacts” with your forum state. Otherwise, your declaratory judgment action may end up being a dog.
In August 2014, we saw perhaps the first ND Cal decision awarding attorney’s fees under the Supreme Court’s Octane Fitness decision. Judge Illston based her exceptional case finding on the plaintiff’s lack of adequate pre-filing investigation and unreasonable litigation tactics. (Also interesting was her finding that plaintiff had waived attorney-client privilege by failing to adequately screen its document production.) Litigants were also reminded, however, that the recent Supreme Court decisions only help so much: finding that Akamai had been limited to the issue of indirect infringement, Judge Cousins barred a plaintiff from amending contentions to add a divided direct infringement theory.
Looking at threshold issues, Judge Chhabria transferred a case for insufficient ties to California while finding he had declaratory judgment jurisdiction when the patentee’s C&D letter identified accused features, even if it failed to name specific products. Meanwhile Judge Davila, consistent with prior practice, granted another stay pending a third-party IPR on the condition that defendants agreed to be bound by the same estoppel. Getting into merits issues, we saw a pair of decisions on expert reports, one by Judge Wilken applying Daubert and one by Judge Illston considering whether theories and evidence had been adequately disclosed during discovery. In addition, the Federal Circuit affirmed claim construction decisions by Judges Ware and Chen in Mformation Technologies v. RIM (also noted on Patently-O). And we’ll be getting more attention from the East Coast soon, as the Patent Office announced that its America Invents Act roadshow will be coming to Cupertino in October.
Order Denying Xycarb’s Motion To Bifurcate And Lam’s Motion For Summary Judgment, Lam Research Corp. v. Schunk Semiconductor, Case No. C-03-1335-EMC.
On August 22, 2014, Judge Edward Chen denied defendant Xycarb Ceramics, Inc.’s (“Xycarb”) motion for a bifurcated trial and Lam Research Corp.’s (“Lam”) motion for partial summary judgment, deeming Lam’s motion to be an improper motion for reconsideration.
Minden Pictures, Inc. v. John Wiley & Sons, Inc., Case No. C-12-4601 EMC (Judge Chen)
Just because you have the shared right to reproduce copyrighted works, the shared right to distribute copies of the works to the public, the shared right to display the works publically, and the exclusive agency right to license the works to third parties, does not mean that you have standing to sue others for infringement of those copyrighted works under 17 U.S.C. § 501, according to a recent opinion from Judge Chen. READ MORE