Raymond Clevenger

How to Shoot for the Stars: Federal Circuit Clarifies EMVR Requirements

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.

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Mid-Summer Recap

This blog had some more variety in July 2014 compared to our normal ND Cal patent fare.  In a change of venue (literally), we reported on an Eastern District of California opinion holding that delay led to waiver of an improper venue defense.  Back home, we took a look at how a complaint can be self-defeating in an unfair competition and false advertising case and learned from a trade secret case that “willful and malicious” conduct, and attendant punitive damages, are available only against individuals, not corporations.  An end-of-the-month order on the level of specificity required in patent infringement contentions was more familiar ground.  If this all leaves you craving more discussion of patents, try this updated study on Federal Circuit review of claim construction.