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Message: Re: BaN; Pautaotzu..
If Awarded Damages/Royalties are calculated in such a way to lower the monetary amount... perhaps to nothing more than what a Co would pay to license the MMP.. and calculated on the basis of the infringing part (minus any contributory prior art and/or other nonpatented contributory elements) as opposed to on the finished product as many Manufactures/End users are licensing, IMO the strength of the MMP will be weakened dramatically. Why would any company license for $X when waiting and going thru litigation will only result in them having to pay $X.. there will be no deterrent to infringment.. and if the way 'royalty' calculation is changed to payment on infringing part the amount that the MMP licenses for will be dramatically reduced... that directly cuts the value of the MMP and the value of PTSC shares. Not attempting to FUD.. but rather show the IMO extreme importance of defeating S.1145..
jmo.. corrections from those more astute welcomed
“Reform” of Patent Damages: S. 1145 and H.R. 1908
by
William C. Rooklidge1
http://www.patentlyo.com/patent/file...
Excerpts:
The provisions of the current Senate and House patent reform bills, S.11452 and H.R. 1908,3 purporting to reform patent damages law are more akin to “repeal” than “reform.” Upon close inspection the proposed legislation would not codify existing law, and in fact would make substantial changes destructive to the patent system. This paper
examines the components of the damages reform legislative provisions and explains how the “prior art subtraction” approach used in the bills would completely eliminate reasonable royalty damages in many cases.
In addition to the procedural problems with paragraph 2, the final sentence of that section introduces a substantive problem. Requiring courts to “exclude from the analysis the economic value properly attributable to the prior art, and other features or improvements, whether or not themselves patented, that contribute economic value to theinfringing product or process” would dramatically change the law of patent damages apportionment. Instead of requiring the infringer to prove the value its own contributions, this proposal would have courts first deduct the value of all the prior art components, then deduct the value of “other features or improvements, whether or not themselves patented, that contribute economic value to the infringing product orprocess,” regardless of who provided those features or improvements. The first step, commonly called “prior art subtraction,”19 proceeds on the theory that subtracting the value of the prior art components from the value of the infringing product leaves the value of the inventive contribution.20 The principal problem with “prior art subtraction”is that it does not work at all with combination inventions, that is, inventions made up of combinations of old elements. “Prior art subtraction ignores the reality that at some level all inventions are combinations of old elements.”21 Inventions from the telephone to the
Post-It® Note would have been ineligible for patent damages under this prior art subtraction approach.
“Unless the claimant shows that the patent’s specific contribution over the prior art is the predominant basis for market demand for the infringing product or process,” paragraph 3 states, “damages may not be based upon the entire market value of that infringing product or process.” Unlike paragraph 2, this provision is not limited to reasonable royalty damages, but would instead apply to lost profits damages as well. And while this provision appears similar to Rite-Hite’s “customer demand” test for application of the entire market value rule, it substitutes “patent’s specific contribution over the prior art” for “claimed invention.” This substitution is not mere semantics, as “patent’s specific contribution over the prior art” is nowhere defined, is not commonly used in patent law, and suggests something far narrower than “claimed invention,” likely
another form of prior art subtraction that would preclude application of the entire market value rule in all but a few cases.
In sum, Section 5 of the Senate and House bills suffers both substantive and procedural problems. In no way can this proposal be said to merely codify current law; the changes are substantial and, if implemented, would dramatically reduce, if not eliminate, patent damages in many cases. Now is not the time to be dramatically reducing patent infringement damages. The Supreme Court’s recent eBay ruling, whichcurtailed the remedy of injunctive relief as a deterrent to infringement, coupled with the pending bills’ limitation on the willful infringement source of enhanced damages, leave liability for monetary damages as the principal deterrent to blatant disregard for the inventor’s rights. The limitations on damages proposed in Section 5 would further
encourage infringement, which would in turn discourage innovation.
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BTW.. No disrespect taken.. No worries.. Regards
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