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Damages Calculation Still Biggest Rift In Patent Overhaul, Committee Told

Publication Date: 
March 11, 2009
Source: 
Consumer Electronics Daily
Author: 
Greg Piper

Professor Mark A. Lemley is quoted in Consumer Electronics Daily in a story about the Patent Reform Act (S-515), which is currently being considered by Congress. Lemely recently testified about a provision in the legislation before the Senate Judciary Committee:

The Patent Reform Act (S-515) recently offered by Chairman Patrick Leahy, D-Vt., and Sen. Orrin Hatch, R-Utah, would award damages based on a patent's "specific contribution over the prior art" (CED March 4 p5). That provision has drawn the most criticism in the bill's previous versions. Opponents proposed substituting a "gatekeeper" provision. Discussed as a compromise, it would allow only patent claims supported by "substantial evidence."

...

Even if courts resolve the other disputed matters over patent litigation, such as "forum-shopping" and inequitable conduct, damages will remain a stumbling block, said Mark Lemley, a Stanford University law professor. Entire market value makes sense as a damages measure only when a plaintiff can point to lost profits on its own products, he said: Letting non-practicing entities sue on that standard "leads to a windfall." Courts are reluctant to wade into the murky water of a patent's specific contribution to a product, Lemley said. "It's hard, and neither judges nor patent owners particularly want this information [to get] into the court." A patent owner asking for 1 percent of the profit on a product sounds reasonable "unless there are 7,000 different patents" in the product, as with 3G mobile phone technologies, Lemley said.

...Lemley pushed for the "value contributed" language.