EPLAW Patent Blog

DE - Calculation of damages for patent infringement on the basis of a substantially "increased" royalty rate

Calculation of damages for patent infringement on the basis of a substantially "increased" royalty rate District Court Munich I, Germany, 25. March 2010, Case No. 7 O 17716/09

The District Court Munich I had to decide on a damages complaint based on patent infringement.

The starting point of the decision is the so far well-established case law of the German Federal Supreme Court, according to which damages calculated according to the calculation method of a reasonable royalty had to be based on a royalty rate, rational business parties would have agreed upon in normal course of business. However, by advancing and specifying this case law, the District Court found inter alia that rational business parties would take into account that a patent infringement lawsuit triggering the respectively substantial legal costs was necessary for collecting royalty payments. This would justify a significant increase of the royalty rate for calculating damages over a royalty rate on which rational business partners had agreed upon contractually in a pre-trial situation.

The pre-trial royalty rate typically included a discount for the uncertainty of infringement and validity in the pre-trial situation. Since such situation was not comparable with a situation in which a patent litigation has delivered significant legal certainty, a substantially increased royalty rate had to be assumed to be agreed upon by rational business partners. Therefore, the Court held that the reasonable royalty rate to be determined in damages proceedings based on patent infringement is usually substantially exceeding a royalty rate business parties would have agreed upon in normal course of business in a pre-trial situation. Thus, the present decision improves the patentee's chances to collect higher damages based on the calculation method of the reasonable royalty in the future in Germany. A more comprehensive summary on this decision will follow shortly.

Read the decision (in German) here.

Head note: Tilman Mueller-Stoy

UK - Les Laboratoires Servier v. Apotex / damages

Les Laboratoires Servier, Servier Laboratories Limited v. Apotex Inc, Apotex Pharmachem Inc, Apotex Europe Limited and Apotex UK Limited, High Court of Justice, Chancery Division, Patents Court, London, UK, 29 March 2011, Case No. [2011] EWHC 730 (Pat)

The issue decided in this case is whether a patentee who has obtained an interim injunction from a court to restrain infringement of a European patent (UK) which is subsequently held invalid should compensate the defendant for losses sustained as a result of being prevented by the injunction from selling goods manufactured by the defendant in infringement of a valid foreign patent owned by the same group of companies.

Servier contends that, as a matter of public policy, Apotex cannot recover damages for being prevented from selling a material whose manufacture would have been unlawful because it infringed a valid foreign patent. This is an application of the rule of law identified by the Latin maxim ex turpi causa non oritur actio (no action can arise from an illegal or immoral act), also known as the illegality defence.

Justice Arnold concludes that Apotex’s claim is barred by the ex turpi causa rule. It follows that Apotex must repay Servier the money which Norris J ordered Servier to pay Apotex.

Read the earlier post here.

Read the judgment (in English) here.
 

BE – Iverness Medical / Ulti Med Products – infringement and five year time bar

Iverness Medical Switzerland v. Ulti Med Products, Commercial court of Ghent, 27 May 2010, Docket number A/08/2023

The Ghent commercial court finds that Ulti Med Products has infringed European patent 291 194 B2 for a specific analytical test device and an analytical method in which this test device is used.  Ulti Med did not deny having commercialized the contested product ('D Dimer Test', but said that Iverness’ rights were exhausted because the products had allegedly been placed on the market by Iverness or with its consent.

This defence was rejected by the court because there was not enough evidence of the alleged exhaustion. The court also rejected Ulti Med’s argument that no damages were due for some of the infringing sales as a result of the five year time bar for infringement claims under Belgian patent law. According to the court, the fact that Iverness carried out a 'saisie'  at Ulti Med, interrupted the statutory prescription term. An expert was appointed for the final calculation of the damages.

Read the judgment (in Dutch) here.

Head note: Philippe de Jong

UK - Virgin Atlantic v. Premium Aircraft

Virgin Atlantic v. Premium Aircraft, Court of Appeal (Civil Division), London, UK, 21 December 2009, Case No. [2009] EWCA Civ 1513

In previous proceedings, Contour, the defendant, had been found to have infringed Virgin Atlantic's patent for a specific design of aircraft seats which could be used as beds for long haul flights.  In this reported decision, questions relating to, inter alia, a stay of the inquiry as to damages and the terms of the final injunction were before the Court of Appeal. 

The Court of Appeal refused Contour's request for a stay of inquiry and held that a successful claimant is entitled to pursue an inquiry for damages even if there was a possibility of an appeal to a higher court. 

Regarding the terms of the injunction, it was held that an injunction with a carve-out permitting Contour to continue manufacturing infringing products provided certain conditions were met was appropriate.  The conditions required Contour to pay £10,000 to Virgin Atlantic for each infringing product manufactured, the parent company of Contour to give a guarantee and the buyer of the infringing products to give an undertaking that the planes concerned would not be used on a particular flight route which was already well-used by Virgin Atlantic. 

Read the judgment (in English) here.

NL - Intervet v. Merial

Intervet v. Merial, accelerated invalidity proceedings, The Hague District Court, The Netherlands, 9 December 2009, Docket No. 341571 / HA ZA 09-2183, with thanks to Willem Hoyng, Howrey

The District Court of The Hague invalidates the Dutch part of three European Patents of Merial concerning the Post-Weaning Multisystemic Wasting Syndrome (PMWS) (a disease common in pigs) and vaccine technology.

Merial is liable for the damages caused by the descriptive seizures conducted at the Intervet premises (Art. 7 Enforcement Directive). The calculation of these damages will take place in separate follow-up proceedings  for the determination of damages.

An appeal has been filed.

Read the judgment (in Dutch) here. 

Read the judgment (in English) here.

DE - Druckmaschinen-Temperierungssystem III / invalidity

Druckmaschinen-Temperierungssystem III (Cooling system for printing machines III), invalidity proceedings (value in litigation), Federal Supreme Court, Germany, 28 July 2009, Docket No. X. ZR 153/04

When assessing the value in litigation of invalidity proceedings, the court has to take into consideration the full amount of the damages claimed by the infringement plaintiff in (parallel) infringement proceedings as the minimum value in litigation.

Read the judgment (in German) here.

IT - Rheon Automatic Machinery v. Tecno Stamp

Rheon Automatic Machinery Co. LTD. v. Tecno Stamp S.R.L., damages proceedings, Venice Court, Italy, 22 May 2009, Docket No. 3469/2004, with thanks to Sandro Hassan, Siblegal

The Venice Court discusses the criteria to assess damages for patent infringement.

The previous interim judgment in this case, which acknowledged infringement and ordered continuation of the proceedings for damage assessment, is published in IIC 6/2008, page 730. 

Read the judgment (in Italian) here.

Read the judgment (in English) here.

IT - Gipron Giuseppe Pronzati v. Masters

Gipron Giuseppe Pronzati S.P.A. v. Masters S.R.L., Italian Supreme Court, Italy, 23 April 2009, Docket No. 19688/2009, with thanks to Sandro Hassan, Siblegal

The Supreme Court confirms that damages for infringements can only be claimed as from the date on which a patent application was either laid open to the public or formally served upon the alleged infringer. Informal knowledge from other sources is in principle irrelevant (pages 34-37).

Read the judgment (in Italian) here.

FR - Agilent & Hewlett- Packard v. Waters

Agilent Technologies Deutschland GmbH and Hewlett-Packard GmbH v. Waters Corporation and Waters SAS, calculation of damages, Tribunal de Grande Instance, Paris, France, 14 January 2009, Docket No. 97/20725, with thanks to Pierre Véron, Véron & Associés

The compensation granted to the patentee for the loss of profit caused by the infringement may be calculated on the basis of a license only when the patentee does not exploit its patent itself. If, on the contrary, it exploits its patent itself, the loss corresponds to the profit it could not make because of the infringement.

Springboard effect - by using the same references as the infringing apparatuses for the modified apparatuses, Waters intended to place them in the former’s wake and thus continue to enjoy the commercial advantage these apparatuses had unduly brought them.

Read the judgment (in French) here.

Read the judgment (in English) here.