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Any patent plaintiff would be thrilled to get a ruling of
infringement on summary judgment — but if that win ultimately
resulted in zero damages, it would ring hollow. In a recent case
that emphasizes the importance of introducing granular evidence on
damages, the U.S. Court of Appeals for the Federal Circuit affirmed (on remand from the
U.S. Supreme Court) a district court's ruling that overturned a
jury's $52 million damages award.
In Promega v. Life Technologies, Promega (a life
sciences company) sued Life Technologies (a biotech company) for
infringement of a patent related to genetic testing kits used in
both clinical research and forensic identification. Life
Technologies assembles the kits in the United Kingdom and sells
them worldwide. All of the kits sold by Life Technologies include
one component — Taq polymerase — made in the United
States. Promega won its infringement case against Life Technologies
on summary judgment under two sections of U.S. patent law: 35 U.S.C. § 271(a) and §
271(f)(1).
Prior to the trial on damages, the parties stipulated that Life
Technologies had worldwide sales of $708 million for the
infringement period. Promega argued that all sales infringed under
§ 271(f)(1) because all kits contained the Taq polymerase
component, which qualified as a "substantial portion" of
the accused products. However, the jury verdict form did not break
out a damages award under § 271(a) and § 271(f)(1) and
did not provide an option for a lesser damages award based only on
sales in the United States. The stipulation — and the jury
verdict form — proved to be grave miscalculations by
Promega.
The jury awarded Promega $52 million in lost damages based on
the stipulated-to worldwide sales figure. Life Technologies then
filed a motion for judgment as a matter of law. The company argued
that the award was based on a misinterpretation of §
271(f)(1); it also argued that Promega had not provided adequate
evidence of infringing sales under either § 271(a) or §
271(f)(1). The district court granted Life Technologies'
motion, holding that no reasonable jury could have found, based on
the trial record, that all of the accused products infringed under
§ 271(a) and § 271(f)(1) in light of the district
court's interpretation of "substantial portion." It
also held that Promega had waived any argument that the evidence at
trial could support a damages calculation based on a subset of
total sales. Subsequently, the district court also denied
Promega's motion for a new trial, filed by the company's
new counsel.
The Federal Circuit initially reversed the district court, holding
that a single component supplied from the United States could
qualify as a "substantial portion" of a multicomponent
product, and thus could be found to infringe under § 271(f)(1)
no matter where it was sold. The court also vacated the denial of
Promega's motion for a new trial and remanded with instructions
to conduct a new damages trial.
On appeal of that decision, the U.S. Supreme Court reversed the
Federal Circuit's judgment and remanded for further
proceedings, consistent with the justices' opinion that "a
single component does not constitute a substantial portion of the
components that can give rise to liability under §
271(f)(1)."
Because Promega relied on a single damages theory at trial, a
significant issue the Federal Circuit considered on remand was
waiver. Specifically, did Promega waive all other damages theories,
or could it have a second shot at proving a lesser damages award
despite its all-or-nothing gamble at trial? The court ruled that
Promega had, in fact, waived all other damages theories, and that
it could not have another bite at the apple. The ruling was based
partly on Promega's decision to not present any expert
testimony on damages at trial, as well as the company's
decision to submit a jury verdict form that asked the jury to
determine a single "United States sales" figure for sales
falling under both § 271(a) and § 271(f)(1).
Proving damages is usually not the flashy part of any case. It
is a rare trial where the lead partner has the starring role on
damages. But as this case shows, it cannot be discounted. Although
a jury might be convinced to reward an all-or-nothing strategy,
they do not always have the last word. An alternate theory that
results in a lower damages award might appear to be risky at trial,
but it can be the difference between $52 million and nothing at
all.
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27 Jan 2020, Conference, California, United States
One of the most visible and highly-regarded securities and corporate law conferences in the country, the Securities Regulation Institute reaches prominent attorneys from both firm and in-house practices.
One of the most visible and highly-regarded securities and corporate law conferences in the country, the Securities Regulation Institute reaches prominent attorneys from both firm and in-house practices. From boardroom updates to issues impacting pre-public companies, the Institute focuses on practical advice for all attorneys advising corporate clients on the ever-changing world of securities and business law. During this three-day event, attendees learn from regulators who write the new regulations, judges who interpret the law to resolve complex disputes, and prominent practitioners who guide their clients through the maze of new legislation, regulations, and jurisprudence.
Fenwick partner Dawn Belt will be speaking on a panel titled “Capital Markets: Private Company Financing” on January 27 at 3:15pm.
Legaltech is the largest and most important legal technology event of the year. Legaltech® provides an in-depth look at what the technological world has in store for you and your practice AND offers an expansive exhibit floor with the most extensive gathering of innovative products designed to meet your current and future technology needs.
Robert Brownstone, chair of Fenwick's Electronic Information Management practice will be speaking during multiple sessions on February 6.
Legaltech is the largest and most important legal technology event of the year. Legaltech® provides an in-depth look at what the technological world has in store for you and your practice AND offers an expansive exhibit floor with the most extensive gathering of innovative products designed to meet your current and future technology needs.
Robert Brownstone, chair of Fenwick's Electronic Information Management practice will be speaking during multiple sessions on February 6.
Understanding CCPA & U.S. State Privacy Regimes (10:00am - 11:00am):
What You Don’t Know Will Hurt You: Artificial Intelligence (AI) vs. Individual Privacy Rights (11:00am - 12:30pm):
Privacy Engineering (“Privacy by Design”): What is it & What Do I Need to Know? (1:30pm - 2:00pm):
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The Delaware Court of Chancery recently held in Solak v. Welch, No. 2018-0810-KSJM (Del. Ch. Oct. 30, 2019), that a plaintiff's letter to a board of directors suggesting the board look...
On November 22, 2019, the United States Court of Appeals for the Eleventh Circuit, the court with jurisdiction over Alabama, Florida, and Georgia, handed down a decision that invalidates...
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