{"id":1919,"date":"2018-01-12T11:30:30","date_gmt":"2018-01-12T16:30:30","guid":{"rendered":"https:\/\/patents.harnessip.com\/?p=1919"},"modified":"2018-01-13T12:01:11","modified_gmt":"2018-01-13T17:01:11","slug":"the-ultimate-reasonable-royalty-award-must-be-based-on-the-incremental-value-that-the-patented-invention-adds","status":"publish","type":"post","link":"https:\/\/patents.harnessip.com\/?p=1919","title":{"rendered":"The Ultimate Reasonable Royalty\u00a0Award Must be Based on the Incremental Value that the\u00a0Patented Invention Adds"},"content":{"rendered":"

In Exmark Manufacturing Company Inc. v. Briggs & Stratton Power Products Group, LLC.<\/a>, [2016-2197](January 12, 2018) the Federal Circuit vacated summary judgment that\u00a0claim 1 of U.S. Patent\u00a0No. 5,987,863 is not anticipated or obvious, affirmed summary judgment that claim 1 was not indefinite, reversed the denial of a new trial on damages and several\u00a0evidentiary rulings related to\u00a0damages, vacated the finding of willfulness; and affirmed the denial of Briggs\u2019 laches defense.<\/p>\n

Regarding the denial of summary judgment of invalidity, the Federal Circuit found that the district court denied the motion because “examined four times by the PTO, and\u00a0each time the PTO held the claims of the \u2019863 patent\u00a0to be patentable.”\u00a0 While facially logical, this is not legally correct, the Federal Circuit held that<\/p>\n

a reexamination confirming patentability\u00a0of a patent claim alone is not determinative of whether\u00a0a genuine issue of fact precludes summary judgment of no\u00a0invalidity.\u00a0 Surviving a reexamination does not warrant\u00a0ipso facto summary judgment that a patent is not invalid.\u00a0Holding otherwise would improperly give complete deference\u00a0 and preclusive effect to the PTO\u2019s patentability\u00a0determination, foreclosing challenges to patent validity in\u00a0district court based on the same prior art.<\/p><\/blockquote>\n

This holding is supported by Federal Circuit precedent that that a district court is never bound by an examiner\u2019s\u00a0finding in an ex parte patent application proceeding.\u00a0 To the extent that an ex parte reexamination is entitled to deference, it comes from the presumption of validity of an issued patent.<\/p>\n

The Federal Circuit found that the district court’s denial of summary judgment went beyond giving substantial weight to the reexamination proceedings.\u00a0 The Federal Circuit found that\u00a0the district court\u2019s summary judgment was\u00a0based solely on the fact that the patentability of claim 1
\nwas confirmed following multiple reexaminations — the district court made no other findings regarding the elements\u00a0of anticipation or obviousness to determine whether\u00a0a genuine issue of material fact precluded summary\u00a0judgment.<\/p>\n

The Federal Circuit said that is must be\u00a0furnished with sufficient findings and reasoning to permit\u00a0meaningful appellate scrutiny.\u00a0 These were lacking so the Federal Circuit vacated the district court\u2019s summary
\njudgment of no invalidity and remanded with instruction for\u00a0the district court to consider the entire record and reach\u00a0its own independent conclusion on validity.<\/p>\n

On the issue of definiteness, Briggs complained that\u00a0Briggs contends that the patent\u00a0does not explain how to objectively determine whether a
\nbaffle portion is straight enough or long enough to be\u00a0\u201celongated and substantially straight\u201d as required by the claim.\u00a0 The Federal Circuit disagreed, holding\u00a0no numerical\u00a0precision is required when using such terms of degree.\u00a0\u00a0All that is required is some standard for measuring\u00a0the term of degree.<\/p>\n

The Federal Circuit also found that the function of the elongated and substantially straight baffle portions provided further guidance regarding
\nthe scope of the claim language. The Federal Circuit noted that functional language can promote definiteness because it helps bound the\u00a0scope of the claims by specifying the operations that the\u00a0claimed invention must undertake.<\/p>\n

With respect to damages, Briggs complained first that Exmark improperly determined a royalty rate without properly\u00a0identifying a royalty base to apportion the value of the\u00a0patentee\u2019s invention in comparison to the value of the\u00a0whole, and second that at Exmark’s expert did not\u00a0adequately explain how she arrived\u00a0at her proposed 5% royalty rate.\u00a0 The Federal disagreed that the Exmark needed to\u00a0apportion the value of the baffle from\u00a0the other features of the mower through the royalty base\u00a0rather than the royalty rate, noting that apportionment can be achieved, by careful selection of the royalty base to\u00a0reflect the value added by the patented feature; by\u00a0adjustment of the royalty rate so as to discount the value\u00a0of a product\u2019s non-patented features; or by a combination\u00a0thereof.\u00a0\u00a0The essential\u00a0requirement is that the ultimate reasonable royalty\u00a0award must be based on the incremental value that the\u00a0patented invention adds to the end product.<\/p>\n

While the Federal Circuit\u00a0agreed with Exmark on the apportionment question, and agreed with Briggs that Exmark\u2019s\u00a0damages expert\u2019s opinion was inadmissible as it failed to\u00a0adequately tie the expert\u2019s proposed reasonable royalty\u00a0rate to the facts of this case.\u00a0Exmark\u2019s expert concluded with little explanation the parties would have\u00a0agreed to a\u00a05% reasonable royalty rate; nowhere\u00a0in her report, however, did she tie the relevant\u00a0Georgia-Pacific factors to the 5% royalty rate or explain
\nhow she calculated a 5% royalty rate using these factors.\u00a0 The Federal Circuit\u00a0vacated the damages award and remand for a new trial on
\ndamages.<\/p>\n

The Federal Circuit held that\u00a0the district court abused its discretion\u00a0by holding that prior art is relevant to damages only\u00a0to the extent that the prior art was commercialized, stating that\u00a0the fact that some prior art mowers were not\u00a0commercialized does not make them immaterial to determining\u00a0the extent to which the claimed subject matter\u00a0provides utility and advantages over the prior art.\u00a0 but affirmed the district court’s exclusion of other types of mower, and of Exmark’s delay in bringing suit.<\/p>\n

On the award of damages for willful infringement,\u00a0 the Federal Circuit found that the District Court’s\u00a0precluding Briggs from presenting any\u00a0evidence regarding the validity of the claim or how closely the prior art tracked the claim was error.\u00a0 The Federal Circuit said that to the extent that decision excluded evidence relevant\u00a0to Briggs\u2019 state of mind at the time of the accused infringement,\u00a0 however, it does not comport with the standard\u00a0articulated in Halo, which mandates that willfulness\u00a0is an issue for the jury, not the district court.\u00a0 The Federal Circuit vacated the jury\u2019s finding\u00a0of willful infringement, vacated the district court\u2019s enhanced\u00a0damages award, and remanded for the district court\u00a0to determine whether a new trial on willfulness is necessary.<\/p>\n

Finally, on this issue of laches, the Federal Circuit agreed with the district court that in light of SCA Hygiene Products Briggs cannot assert laches as a defense.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

In Exmark Manufacturing Company Inc. v. Briggs & Stratton Power Products Group, LLC., [2016-2197](January 12, 2018) the Federal Circuit vacated summary judgment that\u00a0claim 1 of U.S. Patent\u00a0No. 5,987,863 is not anticipated or obvious, affirmed summary judgment that claim 1 was … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1919","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts\/1919","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1919"}],"version-history":[{"count":3,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts\/1919\/revisions"}],"predecessor-version":[{"id":1922,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts\/1919\/revisions\/1922"}],"wp:attachment":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1919"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1919"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1919"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}