Patent Law

The following is excerpted from a March 5, 2010 Morgan Lewis Intellectual Property Lawflash:

As is known among many in the intellectual property field, Judge Randall R. Rader, of the U.S. Court of Appeals for the Federal Circuit, periodically takes a break from his appellate duties to preside over trials of patent cases at the district court level. In one such case, he recently issued a decision reminding lawyers, litigants, and expert witnesses that plaintiffs must have a firm evidentiary foundation before submitting a broad damages theory to the jury.

In late 2009, the parties in IP Innovation L.L.C. v. Red Hat, Inc. were preparing to try their case before Judge Leonard Davis in the Marshall Division of the Eastern District of Texas, when they got a surprise?Judge Rader, sitting by designation, would be presiding over the trial. Earlier this week, Judge Rader made his presence in the case felt when he issued an order completely excluding the proposed testimony of the plaintiffs? damages expert.

The asserted patents in this case involved a method for allowing computer users to switch around among multiple different workspaces. The plaintiffs and their expert accused the defendants? Linux-based operating systems of infringement, and sought to recover a royalty for each system in question based on the value of the entire operating system. The plaintiffs? damages model was based on the theory known as the ?entire market value rule,? which can allow a patentee to collect damages based on the entire market value of an accused instrumentality, even if the patented invention is only one component of a larger apparatus. Under the facts of this case, Judge Rader emphatically rejected the plaintiffs? approach.

Access the complete Lawflash here.