Patent Act Damages:

As usual, the language of the Patent Act is somewhat ambiguous on the meaning of damages. The first paragraph of Section 284 calls for an award of "damages adequate to compensate for the infringement but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court." One view of this provision would require damages to be, at a minimum, a combination of a reasonable royalty plus interests and costs. In my view, however, the better plain meaning interpretation of Section 284 is that a court is required to award damages (minimum of reasonable royalty) and in addition must award interest and costs.

The appellate panel rejected the parties' analysis of the language of the patent act as irrelevant – holding instead that "actual damages" was a contract term and that the interpretation therefore does not depend upon any statutory language.

While interesting, these arguments neither illuminate nor resolve the issue before us – the meaning of "actual damages" in the May 2006 agreement. The agreed upon "actual damages" are a creature of contract and not of the Patent Act. By entering into the May 2006 agreement, the parties decided that the agreement itself – not § 271(e)(4)(C) or § 284 – would govern the appropriate measure of damages from Apotex's infringement.

Writing in Dissent, Judge Newman would have applied the usual background rule that interest is different from damages as a primary driving factor in interpreting the contract. In that framework, the contractual limitation on damages would not apply to limit interest as well.

My colleagues err in reading the contract's silence on interest for infringement as meaning that the parties intended and agreed to forgo the interest to which the patentee is entitled by statute and precedent. I must, respectfully, dissent

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