Patent Law

I received the following Morgan Lewis intellectual property lawflash yesterday, September 17, 2009:

On September 11, the U.S. Court of Appeals for the Federal Circuit vacated Lucent?s $357 million patent infringement award against Microsoft. Lucent Technologies, Inc. v. Gateway, Inc., Nos. 2008-1485, 1487, 1495 (Fed. Cir. Sept. 11, 2009).

In an opinion by Chief Judge Michel (joined by Judges Newman and Lourie), the court reaffirmed that application of the ?entire market value rule,? which allows patent infringement damages to be assessed based on the value of the product into which a patented item is placed, requires a showing that the patented feature is the basis for customer demand. The court, however, reiterated that determination of the ?precise methodologies? to be used in determining infringement damages is committed to the district court?s sound discretion and the ?base used in a running royalty calculation can always be the value of the entire commercial embodiment, as long as the magnitude of the rate is within an acceptable range (as determined by the evidence).? In its detailed substantial evidence analysis, which emphasizes that ?speculation, without more,? and ?superficial testimony? are not sufficient, the court provides extensive guidance to litigants regarding necessary damages proofs.

Read the full lawflash here.