Intellectual Property

Valuation, Exploitation, and Infringement Damages, 2022 Cumulative Supplement

Yuridia Caire,Russell L. Parr

• Publisher: Wiley
• Year: 2022
• ISBN:
  9781119873617
• Edition: 5
• Topic: Derecho
• Subtopic: Derecho de la propiedad intelectual

Stay informed about every major and recent development in the law of intellectual property in the US In the 2022 Cumulative Supplement to the 5th edition of Intellectual Property: Valuation, Exploitation, and Infringement Damages, a renowned team of authors delivers a comprehensive and authoritative review of the most relevant and impactful changes to the legal regime governing intellectual property in the United States. Current to the year 2022, the Supplement explores the legislative and regulatory changes, as well as major developments in case law, affecting intellectual property in the US. An indispensable update for lawyers advising founders, entrepreneurs, and executives in any industry, and business leaders themselves, this volume is a one-stop resource covering every applicable recent change in a rapidly evolving area of the law.

CHAPTER 29A
EVOLVING PATENT DAMAGES

In 2020, the trend for increasing damages awards continued with one of the largest judgments in history in the case styled at Centripetal Networks, Inc., v. Cisco Systems, Inc., Civil Action No. 2:18cv94 (E.D. Va). The case is currently on appeal to the Federal Circuit.

Another large patent damages award occurred in VLSI Tech. LLC, v. Intel Corp., No. 6:21‐cv‐00057‐ADA, Dkt. 564 (E.D.TX.), a case dealing with two patents, U.S. Patent Nos. 7,523,373 (‘373 Patent) and 7,725,759 (‘759 Patent)¹ related generally to integrated circuits with minimum memory operating voltages and managing clock speed in electronic devices. VLSI asserted infringement based on the patented technology being incorporated into millions of various models of Intel microprocessors. The jury awarded $1.5 billion for past infringement of the ‘373 patent and $675 million for past infringement of the ‘759 patent. The jury also responded that this was a lump sum for all damages, rather than a “running royalty in the form of a lump sum for past damages only.”

In VLSI, the plaintiff's expert used a hedonic regression model to provide an estimate of the royalties owed for the infringement of the asserted patents.² The regression model consisted of a multitude of factors, each associated with a coefficient. Plaintiff's expert inputted various coefficients regarding the benefits of the product and provided the price benefit specific to the patented technology. The expert relied on technical experts for these coefficient inputs, which included power savings for one of the asserted patents, the ‘373 patent, and performance improvement for the ‘759 patent. The model related to the relationship between clock speed and price and yielded a 0.764 coefficient for the ‘759 patent. Plaintiff's expert claimed that a 1 percent improvement in speed resulted in an increase in price by 0.764 percent (a 2 percent speed improvement would have resulted in an approximately 1.5 percent increase). On the flip side, Intel's expert looked at prior transactions and other agreements in the record and provided a range of royalties. Ultimately the jury agreed with VLSI and awarded $1.5 billion for the ‘373 patent and $675 million for the ‘759 patent.

In another case, Bayer Healthcare LLC v. Baxalta, Inc., a jury found infringement of one patent, the ‘520 patent, which generally covered recombinant forms of human factor VIII, a protein that the liver produces and is released into the bloodstream. Human factor VIII is comprised of 2,332 amino acids. The infringement related to the defendants, Baxalta and Nektar, Adynovate product, a recombinant PEGylated FVIII product used to treat hemophilia A. The jury was asked to determine the royalty rate, royalty base and total damages. Plaintiff's expert opined that the royalty rate was in the range of 5.1 percent to 42.4 percent. Notably, prior to trial, the plaintiff's expert was excluded from presenting the proposed royalty rate of 23.75 percent because it was the midpoint of the range and based on the Nash bargaining solution. The district court did allow the plaintiff's expert to testify regarding the range. The jury found that Bayer was entitled to roughly $155 million for the time period of June 2016 through November 2018 based on a 17.78 percent royalty rate applied to a royalty base of almost $873 million. The defendant appealed on the grounds that the royalty range presented to the jury was too wide and effectively required the jury to speculate and just randomly pick a number. The Federal Circuit upheld the award, finding that a single royalty rate was not required and tha...