Class 24: Finish Remedies, then Subject Matter Patent Law Spring 2007 Professor Petherbridge

Overview Remedies –Damages Subject Matter

Patentability A Description that Complies with § 112 Is Novel § 102 Avoids the so-called Statutory Bars § 102 Is Nonobvious § 103 Is made by the listed Inventor(s) § 116 Is useful § 101 Is statutory subject matter § 101

Summary of the Most Common Remedies Injunctions –Preliminary Injunctions –Permanent Injunctions Damages –Reasonable Royalty –Lost Profits Additional Damages –Willfulness (x3) and Fees in Exceptional Cases

35 U.S.C. § 284 Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer,.... the court may increase the damages up to three times the amount found or assessed....

Panduit Corp. v. Stahlin Bros. If lost profits are not available, you are going to have to try to get a reasonably royalty. What is a reasonable royalty?

Panduit Corp. v. Stahlin Bros. When does the hypothetical negotiation occur? Any assumptions? What considerations go into determining a reasonably royalty? Is an industry average royalty rate a fair “reasonable royalty?” Is basing a “reasonably royalty” on an infringer’s actual profits a fair way to calculate?

Panduit Corp. v. Stahlin Bros. Demand for the Patented Product Absence of acceptable noninfringing substitutes The manufacturing and marketing capability to exploit the demand The amount of profit the patentee would have made

Lost Profits Demand for the Patented Product –What is this doing?

Lost Profits Absence of acceptable noninfringing substitutes –Is a less effective, but really cheap noninfringing substitute an “acceptable” substitute? –Is an even better, but very expensive substitute an “acceptable substitute?” Generally—a product that confers the benefit of the invention, and that is not significantly more expensive will serve as an acceptable substitute

Lost Profits Why does the law concern itself with whether there are “acceptable noninfringing substitutes?” Does an acceptable noninfringing substitute have to be marketed?

Lost Profits The manufacturing and marketing capability to exploit the demand What is this element doing? If a small business makes and sells a small volume of a patented product, and an infringing corporation makes and sells 100x the volume of an infringing product, can you argue that you could have met the demand?

Lost Profits The amount of profit the patentee would have made Suppose that patentee sells 1000 units at a profit margin of $25/unit, and infringer sells 1000 units at a profit margin of $25/unit. Is the patentee limited to arguing that his lost profits are $25,000?

Rite Hite v. Kelly What did Rite Hite sell? Which of their products was the patent in suit directed to? What did Kelly do? Can Rite Hite establish an absence of acceptable noninfringing substitutes? How did the trial court calculate the damages? Why did the Federal Circuit decide as it did?

Patentability A Description that Complies with § 112 Is Novel § 102 Avoids the so-called Statutory Bars § 102 Is Nonobvious § 103 Is made by the listed Inventor(s) § 116 Is useful § 101 Is statutory subject matter § 101

35 USC § 101 Inventions Patentable Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

35 USC § 100 Definitions When used in this title unless the context otherwise indicates— (a) The term “invention” means invention or discovery. (b) The term “process” means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material....

35 USC § 101 Inventions Patentable Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

35 USC § 101 Inventions Patentable Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

Diamond v. Chakrabarty What were the claims in the original application directed to? Is the Supreme Court’s holding a good one? What are the argument here against patenting living things? What are the instrumental consequences of the Supreme Court’s decision?

Parke Davis v. Mulford When are naturally occurring substances patentable? How might this decision affect innovation?

Funk Bros. v. Kalo Inoculants What are the claims directed to? What is the problem with patentability? How can a law of nature be captured by a patent claim? Does the analysis look familiar? Why does Frankfurter think this claim is unpatentable?

Gottschalk v. Benson What are the claims directed to? Does the claim fall within one of the categories of section 101? Why is this claim not patentable? How can one obtain a patent on a mathematical process?

Diamond v. Diehr Why is this subject matter patentable? What does this suggest if you want to obtain whose scope covers a mathematical process?

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