Order Vacating ITC Invalidity and Infringement Determinations and Remanding for Further Proceedings, Converse, Inc. v. Int’l Trade Commission, (Fed. Cir.) (Oct. 30, 2018) (Judges Dyk, O’Malley, and Hughes)
We’ve previously discussed some of the challenges of obtaining quality consumer survey evidence in trademark litigation in past posts, such as here and here. The persuasiveness and wisdom of a consumer survey was once again called into question, this time by the Federal Circuit in its October 30 opinion in Converse’s long-running trademark litigation against Skechers, New Balance, and others. The appeals court identified a “series of errors” requiring remand, including that the International Trade Commission applied incorrect standards to both invalidity and infringement and erred in its secondary meaning analysis. READ MORE
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.