Prathiba M. Singh President, APAA (Indian Group)

Prathiba M. Singh President, APAA (Indian Group)

Section 108 relates to relief in a suit for infringement Section 108(1) provides for Damages or Account of Profits At the option of the Plaintiff Section 111 provides that damages or accounts of profits not to be granted against innocent infringer Innocent infringer was not aware and had no reasonable ground to believe that the patent existed Onus on defendant to establish lack of knowledge at the date of infringement Most patent infringement actions Courts order maintenance of accounts

It is the profit from use of the invention Not necessarily from all the infringing sales Apportionment of the defendant s profit is performed Accounts of profits only to the extent it is regarded as equitable Object is to compensate and not to punish

Direct Indirect Punitive or Exemplary Damages are recoverable from the date of publication of patent application under section 11A No infringement action can be initiated till the grant of a patent Actual profit (or loss) made is of no consequence while calculating damages thus damages can exceed the actual profits made by an infringer unlike in case of account of profits

Object is to put the patentee in a position where there was no infringement Is a pecuniary equivalent of injury caused Damage calculation generally based on * normal rate of profit *royalty rates (established and reasonable) Court may also order payment of interest on damages

Indirect damages are generally not recoverable In certain cases, the "entire market value" rule is applied Thus a patent owner may collect damages based on the value of an entire infringing device, even if that device contains multiple features and only one of the features infringes

Punitive damages, also known as exemplary damages intent is to punish May be awarded in addition to actual damages Way of punishing the defendant and based on the theory that the interests of society and the individual harmed can be met by imposing additional damages on the defendant. To act as a deterrent

Three factors guide a decision to award punitive or exemplary damages; (1) whether the infringement was willful or deliberate; (2) whether the infringer had a good faith belief that the patent was invalid; and (3) the party's conduct during the litigation

The U.S. Supreme Court, in BMW of North America v. Gore, 517 U.S. 519, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996) developed guidelines for assessing punitive damages The Court held that the "degree of reprehensibility of defendant's conduct" is the most important indication of reasonableness in measuring punitive damages The Court also measured the possible excessiveness of a punitive damage award by applying a ratio between the plaintiff's Compensatory Damages and the amount of the punitive damages

Types Ordinary patents Standard Essential patents

In normal infringement actions, damages can be direct/indirect and in some cases even exemplary, if the conduct of the defendant is condemnable. In Standard Essential Patents damages is normally a measure of Royalty

At the interim stage if injunction is not granted *Court directs filing of an undertaking & quarterly accounts *The accounts can be used to quantify damages at the final stage If the injunction is granted even for sale of already manufactured product, court may direct deposit of certain percentage (Span Diagnostics Vs. J Mitra FAO (OS) no. 153 of 2008; LC appointed to ascertain the number of kits manufactured & 30% was asked to be deposited in the court)

Courts are granting injunctions and a direction is passed to the defendant to file an affidavit of past sales If the defendant agrees, the interim injunctions are being replaced with an order to deposit royalties either with the plaintiff or the court

F Hoffman La Roche Vs. Cipla Limited Bristol Myers Squibb Vs. Ramesh Adige & Anr Bayer Corporation Vs. Cipla Limited J Mitra Co. Pvt Limited Vs. Qualpro Diagnostics Merck Sharp & Dohme Corporation & Anr Vs. Glenmark Pharmaceuticals

Some Principles: Strength of patent portfolio Ratio of the patent ownership What would be the total royalty rate payable on a particular product? What would be share of the said patent owner?

15 factors laid down modified to apply in FRAND cases by J. Robart Royalties received by the patentee for the licensing of the patent in suit Rates paid by the licensee for the use of other patents comparable to the patent in suit. Nature and scope of the license Licensor's established policy and marketing program to maintain his patent monopoly Commercial relationship between the licensor and licensee

The effect of selling the patented specialty in promoting sales of other products of the licensee; Duration of the patent and the term of the license. Established profitability of the product made under the patent Utility and advantages of the patent property over the old modes or devices, if any Nature of the patented invention; Extent to which the infringer has made use of the invention

Portion of the realizable profit that should be credited to the invention as distinguished from non-patented elements Portion of the profit or of the selling price that may be customary in the particular business or in comparable businesses to allow for the use of the invention or analogous inventions Opinion testimony of qualified experts Amount that a licensor (such as the patentee) and a licensee (such as the infringer) would have agreed upon (at the time the infringement began) if both had been reasonably and voluntarily trying to reach an agreement

Microsoft Vs. Motorola In September, 2013, Moto has been ordered to pay Microsoft approximately USD 14 million in damages after a US court ruled that the company had failed to license standard-essential patents it owns on FRAND terms Apple Vs. Samsung Samsung ordered to pay USD 290 million to Apple following a damages retrial by a Jury on November 21, 2013.

Ericsson Vs. D-link 6 defendants were involved. The jury awarded damages ranging from USD 425000 to USD 3.6 million per Defendant & held that the royalty payable would be USD 0.15 per product for 3 infringed patent

The next five years will see increase in patent litigation involving monetary amounts; Could be either damages or royalties; Courts are yet to determine; Trend seems to be that the defendant should pay royalties on a fair & reasonable basis; Deposits have been directed in several cases.

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