The Federal Circuit’s recent decision affirming the patent jury verdict in Funai v. Daewoo effectively increases the money damages that can be recovered by millions if not tens of millions of dollars. (Full disclosure: I tried the case and among other things was responsible for the damages evidence introduced at trial.)
Background: The Accounting Period for Patent Damages Does Not Compensate All Economic Harm
In situations where the patent owner sells a product that practices the patented invention and a competitor sells an infringing product, an economist pegs the beginning of the economic harm resulting from infringement (lost sales, reduced prices, etc.) to the date the infringing sales began.
However, the accounting period for patent infringement damages usually begins much later – not until notice is given in compliance with the patent marking statute, see 35 U.S.C. sec. 287(a). Any and all economic harm that predates notice is excluded from recovery under the statute.
More Background: The Earlier the Notice, the Earlier the Accounting Period Begins, the Much Larger the Damages
The earlier the statutory notice, the further back in time you can go to collect damages on infringing sales. We’ve previously demonstrated in The Shifting Sands of Price Erosion that even slight adjustments in how early the accounting period begins can increase by tens of millions of dollars price erosion damages alone.
Funai Relaxes the Notice Requirements and Effectively Expands The Accounting Period to Capture Infringing Sales That Are Earlier In Time
More after the jump.