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The district court entered summary judgment in favor of Dewberry Engineers on both claims. After a three-day bench trial to calculate damages, the district court found that profit disgorgement was appropriate. Because Dewberry Group provided its infringing services to affiliate companies under common ownership, the court found that the revenues associated with Dewberry Group’s conduct appeared on the affiliates’ balance sheets. Consequently, the court treated Dewberry Group and its affiliates as a single corporate entity for the purpose of calculating revenues and profits generated by Dewberry Group’s use of infringing marks. The district court reduced Dewberry Engineers’ requested award of $53.7 million by 20%—awarding Dewberry Engineers close to $43 million in disgorgement profits, plus attorneys’ fees.

On appeal, the United States Court of Appeals for the Fourth Circuit affirmed the district court’s judgment in all respects.[2] On the issue of including revenues of Dewberry Group’s affiliates in the disgorgement calculation, the Court ruled that, while Dewberry Group did not receive the revenues from its infringing behavior directly, it still benefited from its infringing relationship with its affiliates. It therefore ruled that the district court acted within its equitable discretion to hold Dewberry Group to account for the revenues generated in part from infringing materials used by its affiliates under common ownership. Admonishing the district court for exercising its discretion in that manner, it ruled, risked “handing potential trademark infringers the blueprint for using corporate formalities to insulate their infringement from financial consequences.”

“The Court said that it chose not to decide whether a copyright claim accrues when a plaintiff discovers or should have discovered an infringement, rather than when the infringement happened’ because the issue was not properly presented in the case.”

copyright damages The U.S. Supreme Court today issued its decision in Warner Chappell Music v. Nealy, a case that asks whether a copyright plaintiff can recover damages for acts that allegedly occurred more than three years before the filing of a lawsuit.

“Given the high bar set by eBay, patentees should assess the strength of their case with attention to the factors to determine if investing resources in pursuing an injunction is worth the endeavor.”

Prior to the Supreme Court’s ruling in eBay v. MercExchange, when there was a finding of infringement, granting an injunction was almost automatic. See Richardson v. Suzuki Motor Co., Ltd., 868 F.2d 1226 (Fed. Cir. 1989). But eBay rejected this categorical grant of injunctions, raising the bar for obtaining such relief. The Court’s decision in eBay sets forth the test used in United States district courts for establishing the necessity of a permanent injunction.

Adam Mossoff 20, Visiting Intellectual Property Fellow in the Edwin Meese III Center for Legal and Judicial Studies at The Heritage Foundation, a Professor of Law at the Antonin Scalia Law School of George Mason University, and a Senior Fellow at the Hudson Institute, 6/25/20, The Heritage Foundation, “The Supreme Court or Congress Must Restore Injunctions for Patent Owners”, https://www.heritage.org/economic-and-property-rights/report/the-supreme-court-or-congress-must-restore-injunctions-patent, kcab

SUMMARY Property rights are essential to a free society and a free market. Courts secure these freedoms, especially the freedom to contract, with injunctions to stop trespasses. Courts recently have eliminated injunctions as remedies for violations of patents—property rights in inventions. This has undermined the function of patents as a platform for spurring inventions and for fostering commercial innovations in the free market. Without the ability to stop violations of patent rights, billion-dollar investments in cutting-edge technologies like 5G or cancer cures will not be made. Commercial exchanges are further undermined as deliberate infringement is incentivized. Reliable and effective property rights—patents secured against infringement by injunctions—are the engine that has driven the U.S. innovation economy for over two hundred years.

Over the past 20 years, the overall number of intellectual property cases filed in the U.S. courts has increased dramatically. However, after sharp increases in the early 2010s, patent infringement case filings now have started to fall, copyright case filings have fluctuated, and trademark case filings have held steady. Most intellectual property cases are concentrated in a handful of states.

The framers of the U.S. Constitution believed that codifying intellectual property (IP) rights at the federal level was important to economic independence, innovation, and domestic growth. IP rights were established in the U.S. Constitution in Article I, Section 8, which declares that Congress has the power “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” This ”IP Clause”1 text has been attributed to James Madison and James Pinckney, who both submitted proposals related to IP rights at the Constitutional Convention of 1787 in Philadelphia. The IP Clause was approved unanimously by the delegates without debate.2 George Washington also was a proponent of establishing IP rights at the federal level, which he considered necessary for the country to achieve economic independence.3

Studies deploying different methods, measuring innovation through different means and over different time periods, collectively provide consistent and persuasive evidence that the current innovation system is becoming increasingly inefficient and unproductive. While intellectual property and other exclusive rights are critical to continued firm investment in research and development, too much intellectual property actually decreases efficiency through siloing and high transaction costs. Firms retrench to lower-risk projects. The consequence is a declining level of growth due to innovation, rending the argument that governments ought to invest more in innovation precarious. As a result, governments curtail funding, leading university researchers to become increasingly risk-adverse, particularly when facing a peer review system that rewards short term citations over long-term contribution. At some point, as West (2017) speculates, inefficiency leads to more loss of productivity that, in turn, leads to greater declines in efficiency.

Whether the innovation system reaches such a decline in efficiency depends, in part, on whether the actors in the innovation system can curtail cost escalation and increase productivity. Following David (2003), we can fix some of these difficulties by re-establishing an equilibrium between proprietary and open science models of innovation. The last several decades witnessed a slide away from open science toward proprietary models, upsetting a balance that has sustained science for three centuries. The belief that science was only done in the academy and commercialization in industry (Chesbrough, 2019) is not only factually incorrect – the vaccine to fight Ebola was created, developed and trialed solely by the public sector (Herder et al., 2020) and the largest pre-clinical drug deal in Canadian history arose out of an OSP (“The Ontario Institute for Cancer Research and the Structural Genomics Consortium Develop and Give Away New Drug-like Molecule to Help Crowd-Source Cancer Research” n.d.) – but blinds us to advantages of open science partnerships in accelerating commercial development.

They also found no effect on R&D spending. R&D spending reflects only the inputs to innovation, i.e., money spent to support innovative efforts, but a slowdown or decline in R&D spending growth after eBay could indicate a reduction in those efforts. Simcoe and Mezzanotti found no decrease in spending immediately after eBay, and, indeed, after the expected drop during the Great Recession, R&D spending took off, which suggests that the overall economic climate has a much stronger influence on R&D spending than patent policy. They also examined venture-capital spending as a proxy for innovation in startups, to see if they experienced any effects from eBay, and found that, if anything, startup funding, and in the computing industry in particular, increased dramatically after eBay. While there is no way to know if the increase would have been even more dramatic absent eBay, their findings are “consistent with the idea that intellectual property is less important for driving investments in innovation” than other factors, like demand.

Simcoe and Mezzanotti also examined productivity, “which measures the total economic value created for a given level of resources used in production.” Productivity growth in the U.S. has slowed compared to the late 1990s, and there is “robust ongoing debate” about its causes. Although eBay is not likely to be a cause of the slowdown because it often takes decades for significant inventions to have an impact on productivity, Simcoe and Mezzanotti nevertheless analyzed productivity for seventeen manufacturing industries in the period 2000-2011. They found that the computing industry had the fastest productivity growth both before and after eBay, which is expected, given the rapid improvements associated with Moore’s law. Further analysis showed that productivity actually increased for patent-intensive industries (such as computing) after eBay, and there was no change in productivity growth rate across all industries for that same period.

In 2006, the U.S. Supreme Court issued a decision that went against nearly 100 years of precedent when it ruled that a court should not automatically issue an injunction against a patent infringer. Before this decision, patent owners had had considerable leverage when negotiating settlements in patent infringement lawsuits, because they could halt sales of an entire product, even if the patent only covered a minor component. While some commentators hailed the Supreme Court’s decision as a way to stop so-called “patent trolls,” others feared that without the power of an automatic injunction, inventors would lose some incentive for innovation. Timothy Simcoe and Filippo Mezzanotti looked at the numbers over the past decade to see what actually happened and found no negative effects on innovation after the Supreme Court’s decision in eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006).

Prior to eBay, courts would almost always issue injunctions prohibiting infringers from continuing to use a patent when the patent was found to be both valid and infringed. As the scope of patentable subject matter expanded to include software and business methods, and with the advent of “patent trolls,” companies that owned patents but made money from licensing and litigating them rather than selling products or services, commentators feared a “crisis” within the patent system. Even an accidental infringer would be at the mercy of the patent holder’s demands, which could be worth much more than the patent by itself, using the threat of an injunction to “hold up” the infringer.

“Despite the STRONGER Act seeking to overturn eBay, Congress at large has no desire to disturb this Supreme Court decision, and any bill that contains a provision overruling eBay cannot be enacted.”

"The USITC in Washington DC." Licensed under CC BY-SA 3.0.

Companies whose patented technology is considered essential in standards for shared applications that are used widely by other companies will face a harder time getting injunctive relief if they feel their technology is being used without appropriate compensation.

The U.S. Patent and Trademark Office joined with the antitrust division of the Department of Justice and the National Institute of Standards and Technology this week to roll back a 2019 Trump administration policy that made it easier for companies to against what they feel are unfair uses of their technology. use injunctions

The Federal Circuit’s recent decision in Brumfield v. IBG LLC[1] made clear what the Supreme Court hinted at in WesternGeco LLC v. ION Geophysical[2]: For any domestic act of infringement, a patent holder may request compensation for internationalharms. The Supreme Court had established this rule in WesternGeco for the recovery of lost profits in connection with infringement under Section 271(f), and the Federal Circuit recognized in Brumfield that there is no reason for reasonable royalties and other types of direct infringement to be treated differently.[3]

The purpose of this article is to examine the immediate strategic implications of Brumfield, and the potential long-term significance of the case within the evolving landscape of patent damages. The potential expansion of patent damages under Brumfield has added significance in the context of current patent litigation trends. Reasonable royalty damages have become the default approach in most cases, especially in cases involving non-practicing entities.[4] The Supreme Court’s decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC—which tightened venue rules for patent infringement actions against domestic defendants—incentivizes patent holders to bring infringement actions against foreign companies.[5] In combination, this means that more patent cases are likely to involve requests for reasonable royalties against multi-national corporations, which will almost always implicate Brumfield.

The U.S. Senate is moving forward with two bills that would enrich patent trolls, patent system insiders, and a few large companies that rely on flimsy patents, at the expense of everyone else.

One bill, the Patent Eligibility Restoration Act (PERA) would bring back some of the worst software patents we’ve seen, and even re-introduce types of patents on human genes that were banned years ago. Meanwhile, a similar group of senators is trying to push forward the PREVAIL Act (S. 2220), which would shut out most of the public from even petitioning the government to reconsider wrongly granted patents.

Nevertheless, a significant body of academic and policy work has argued—with very real policy success—that patent rights in the U.S. have been too strong.[6] The past two decades have witnessed a significant weakening of patent protection in the U.S. as courts, legislators, and several private organizations have progressively chipped away at some of the key features of patent protection. This includes the availability of injunctions, the amount of damages awarded to victims of patent infringement, and other, more subtle changes, such as curbs on fee-shifting between parties to patent litigation.

Behind many of these changes lies a powerful intellectual movement, alleging that excessive patent protection is holding back western economies. These critics chiefly fear that the owners of the standard essential patents (“SEPs”) crucial to much of modern technology are charging their commercial partners too much for the rights to use their patents—referred to as patent holdup and royalty stacking[7]—and that so-called patent trolls (“patent-assertion entities” or “PAEs”) are deterring innovation by small startups by employing “extortionate” litigation tactics.[8] Oversimplifying, the argument is that, by selecting certain winning technologies, standardization artificially weakens implementers’ bargaining position vis à vis patent holders. Accordingly, critics argue that the royalties charged by SEP holders should not exceed those that they could have obtained before their technology was included in a standard. However, there is little evidence beyond occasional anecdotes to support the first of these concerns, and a growing body of empirical research points in the opposite direction.[9] And the latter concern, while real, is complex, and the optimal policy response should address these complexities more than typical proposals do. Yet despite the limited evidence and complexities, policymakers have been quick to act on them.

Facing the threat of a patent lawsuit can quickly throw a company into uncomfortable and uncharted waters. Even if your legal team is confident that it can vindicate your legal rights, there is plenty of reasonable concern about how such allegations can significantly alter your prospects and the ability to conduct your business.

The word "injunction" can create a special kind of fear as a court order can completely disrupt everyday business activities. Many defendants in patent suits are not prepared to run the risk that a major source of revenue could be shut down as the result of an adverse legal ruling. If your company has decided to stand firm against a potential infringement suit, here are some strategies that can be pursued to help avoid the damaging impact of an injunction.

Patents, as one part of intellectual property protection, provide a valuable property right and play an important role in economic development, a reward for innovations, add to the technological knowledgebase, and increase the general welfare. Patentees obtain patents for defensive purposes (file applications for publication and issuance to create prior art against others); commercial purposes (for licensing, monetization, or advertising/marketing); or offensive purposes (for enforcement). When a patentee chooses to enforce the patent, the end goal of patent litigation needs to be well-understood. This article will discuss some of the basics of the remedies available to patentees. Now obviously there are myriad considerations in patent infringement damages and injunctive relief so this article cannot do justice to all those situations.

Patent Infringement Damages – How Much Can I Win?

Fair warning: this is a post about patents and IP. I say that because in the past, I've practically been able to see the readers fleeing in real time when such things come up. Two or three of them in a row, and there would probably be nobody left around at all. But it's a big part of drug discovery, like it or not, and some people don't.

Perhaps the editors of The Economist fall into that category? I say that because of a big article (the cover story, with lead editorial) in this week's issue. The subhead is "Patents are protected by governments because they are held to promote innovation. But there is plenty of evidence that they do not". And it's worth seeing the passage from an 1851 issue of the magazine, which held that the patent system "excites fraud, stimulates men to run after schemes that may enable them to levy a tax on the public, begets disputes and quarrels betwixt inventors, provokes endless lawsuits [and] bestows rewards on the wrong persons". It's certainly still capable of doing all of those, for sure.

We are said to live in a time of remarkable innovation, with the computer/information revolution often compared to the Industrial Revolution in allowing people to produce more while working less. Economists, consultants, and other business gurus are striving mightily to quantify this revolution and to understand its sources and implications.

One popular metric is the number of new patents issued each year. For example, the pace of innovation might be gauged by the fact that there were 669,434 US patent applications and 390,499 new patents awarded in 2019, each triple the number in 1997. Lists of the most innovative companies, industries, and nations are often based on the number of patents, and patent analysis has now become a dominant method for studying innovation. The number of research papers in Google Scholar that contain the phrase “patent citation” rose from fewer than 10 in 1998 to more than 900 in 2014. Of the 20 papers published in the American Economic Review during the past decade on product, process, and service innovations, 9 used patent analyses. For Management Science, the leading management journal on innovation, it’s 11 of 15.

Patent law in the United States is historically premised on advancing the interests of society. From the store of productive activity available to all, the government restricts some activities for a limited time in hopes this will redound to the benefit of all by incentivizing innovation1. The law thereby restricts competition, forgoing the concomitant advantages of the free market, but only during the patent period. After that time, the law expects that competition will enter, driving down prices and spurring new innovation. From this perspective, US patent law centers on the benefit to the public, with the inventor’s reward providing the vehicle for accomplishing this jurisprudential goal.

In the health care space, these incentives have resulted in extraordinary success stories, but the same incentives can also result in a range of undesirable consequences, including excessive development of similar (but not better) products (‘me-too drugs’), the focus on drugs for diseases that affect wealthy people and wealthy countries rather than diseases that disproportionately affect the poor and developing nations, and a lack of innovation for types of medicines that may return fewer profits, such as antibiotics2,3,4. Similarly, drug companies will not research the utility of a known (and hence unpatentable) chemical, since the ability to obtain patent protection is central to their business model5.

The U.S. Senate Subcommittee on Intellectual Property will debate a bill this week that would dramatically limit the public’s right to challenge bad granted patents. The PREVAIL Act, S. 2220 would bar most people from petitioning the U.S. Patent and Trademark Office (USPTO) to revoke patents that never should have been granted in the first place.

If the bill passes, it would be a giant gift to patent trolls, who will be able to greatly increase the extortionate toll they demand from small businesses, software developers, and everyday internet users. EFF opposes the bill, and we’re reaching out to Congress to let them know they should stand with technology makers and users—not patent trolls.

Miriam Marcowitz-Bitton et al 23, ISEF Scholar, she received her BLL and MLL degrees at Bar-Ilan prior to earning her PhD at the University of Michigan School of Law as an ISEF International Fellow, Orit Fischman-Afori & Hillel Billauer , Volume 30 Issue 2, George Mason Law Review, “The Future of Criminal Enforcement of Copyright: The Promise of Civil Enforcement”, https://lawreview.gmu.edu/print__issues/the-future-of-criminal-enforcement-of-copyright-the-promise-of-civil-enforcement/, kcab

B. Practical Use and Effect of Criminal Copyright Enforcement in the U.S.