Patent infringement damages skyrocket

Saturday, 06 January 2007

Rising damages awarded by US courts for patent infringement

• Juries in the US awarded US$1 billion in patent damages in 2006, almost triple the 2005 amount. (The US$1 billion amount excludes the US$612.5 million Research In Motion Ltd agreed to pay patent licenser NTP Inc in an out-of-court settlement of a dispute over Research in Motion's Blackberry phones. The payment by Waterloo, Ontario-based Research in Motion to NTP of Richmond, Virginia, was the fourth-largest legal settlement of the year.)
• Three of the top 10 patent verdicts came in suits filed in federal court in the Eastern District of Texas, where inventors and other patent owners have won jury verdicts 90% of the time since 1994. (See side bar story.)
  

Why are damages skyrocketing?

The reasons given in the Bloomberg article, quoting US attorneys, are that companies are more willing to go to court to protect patents because:

• the computer and communications technologies have rising value;
• patent holders and accused infringers wish to avoid being shut out or hindered in their exploitation of computer and communications technologies and markets; and
• jurors perception of the value of technology has increased.

These points were noted by attorneys such as - Ken Nissly of San Jose, California, whose client Hynix lost the Rambus verdict and Ernie Brooks, a Southfield, Michigan attorney, who represented Z4 Technologies Inc in a dispute with Microsoft Corp and Autodesk Inc over a method to prevent software piracy. I woud also add another reason - companies are placing higher value on the monopoloy rights a patent provides, hence the Monopoly Man graphic used for this post.

Bloomberg's Top 10 Patent Awards in 2006