Wednesday, June 15, 2016

Supreme Court Brings back Treble Damages - WSJ

Supreme Court Makes It Easier for Patent Holders to Win More in Damages - WSJ:

The unanimous ruling by the Supreme Court brings back the serious damages -- up to 3 times -- for willful patent infringement. Recent lower court rulings were making it virtually impossible to go after big, treble-the-losses, damages. That is the BIG STICK in patent infringement cases. Some companies strategy is to just keep infringing and simply let the lawyers do the heavy lifting. Smaller companies often do not have the resources to fight, especially if it becomes long and protracted.

The threat of treble damages, kind of keeps every honest, usually. Take that away and infringement becomes much less risky.

One of the first options for a patent holder is to enjoin the infringer from producing and selling. This can take some time; the patent claims are always contested, etc., etc. Fortunately, the USPTO has improved this process of patent review so that the strength and quality of the patent can be established early on.

Of course, one end result of infringement is a licencing agreement. However, someone who will infringe your patent, might also go to great lengths to avoid giving an accurate count of the units sold and the royalties payable.

During all this time, the infringing company is trying to develop a work-around so that they can continue selling the products but avoid the infringement. Market build, product established.

If the patent has not yet been issued, the game is even more convoluted.

On the flip side of treble damages is the patent troll (NPE). One would hope that judges would evaluate the case of a troll company that simply sits on a pile of patents with no intentions of producing any actual products and takes a toll off of any and all commerce in the industries/products where their patented technologies apply.

*** Update below on June 17, 2016. ***

An excellent Legal-centric focus of this ruling comes form Dennis Crouch at Patently-O. He also discusses "willful" and suggests that "egregious infringement" might be the new standard going forward.

From a more business perspective, Joff Wild at IAM-media offered some interesting insights about the Halo ruling. He noted that Justice Roberts gave us the first official definition of "Patent Trolls", there s also a discussion of "efficient infringer", and this ruling obviously is a great step forward for patent owners, but a small, first-step.

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