In a recent decision, the Fifth Circuit affirmed a district court's finding of infringement and disgorgement of profits, but increased the amount of profits awarded because the defendant failed to provide evidence of its costs to reduce the award.  Interestingly, the infringement took place entirely outside the United States, namely in Saudi Arabia.  Even though the products were not sold in the United States, under the Fifth Circuit's decision in American Rice, Inc. v. Arkansas Rice Growers Cooperative Association, enforcement of trademark rights extraterritorially was permitted if it was not an affront to Saudi sovereignty.  Here, there was no such evidence of record (such as a finding by a Saudi court that there was no infringement), so the court determined that jurisdiction was properly exercised.

The court also vacated the district court's award of attorney's fees on the basis that it represented an inconsistent award.  The district court awarded profits, but no attorney fees under the Lanham Act, and attorney's fees, but no other damages under a breach of contract theory.  Because an award of both attorney fees and profits would mean portions of the award would come from different legal theories under Texas law, the court did not permit recovery of both.

More detail of Am. Rice, Inc. v. Producers Rice Mill, Inc. after the jump.

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In a decision this week, the Eleventh Circuit reversed the decision of a district court, holding the "one-satisfaction rule" does apply to infringement claims under the Copyright Act.

This appeal arose out of a jury award to copyright plaintiff of almost $1.6 million against two defendants who infringed the plaintiff's rights in its used boat price guide.  Pursuant to the one-satisfaction rule, the two defendants moved the district court to reduce the final judgment against them by the amounts the plaintiff obtained from co-defendants that settled before trial.  The district court declined.

The Eleventh Circuit held that the one-satisfaction rule, drawn from Rule 60(b)(5), is an appropriate rule to seek credit for settlement amounts obtained against joint tortfeasors.  As a result, the court vacated and remanded the matter to the district court to reduce the award by the amount the plaintiff had already received from the settling codefendants.

More detail of BUC Int'l Corp. v. Int'l Yacht Council Ltd. after the jump.

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In a decision Tuesday, the Federal Circuit addressed the issuance, stay, and subsequent dissolution of a permanent injunction.  Further, the court addressed how damages should be allocated from infringement during a stay.  The district court took the jury's reasonable royalty for pre-verdict infringement and trebled it to determine the applicable post-verdict royalty. 

The Federal Circuit vacated this decision, noting that this calculation did not take "into account the fact that the sales, although authorized under the terms of the district court's stay, were nevertheless infringing and subject to an injunction."  The district court's use of willfulness was not the correct inquiry "when the infringement is permitted by a court-ordered stay," but instead should have taken "into account the change in the parties' bargaining positions, and the resulting change in economic circumstances, resulting from the determination of liability."

The court also remanded the case for a determination of whether the post-verdict damages should be altered in light of the Supreme Court's decision in Microsoft v. AT&T.

More detail of Amado v. Microsoft Corp. after the jump.

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In a decision Friday, the Seventh Circuit affirmed a jury verdict of trademark infringement, but reversed the district court's ruling holding the plaintiff had forfeited damages because of improper conduct towards a prospective witness. The court dealt with whether the burden of proof for the sanction was by clear and convincing evidence or as the district court concluded, by a mere preponderance of the evidence.

The court ultimately decided that when the appropriate burden of proof is not clear, the issue is resolved within the limits of proportionality.  Specifically, a larger sanction requires a higher degree of harm caused by the misconduct.  Since, there was no harm caused by the misconduct, the district court's imposition of the sanction was revered.  The harm was mitigated in this case because the defendant decided not to call the witness in question, which turned out to be a tactical mistake, as the witness was going to offer testimony on a potentially meritorious defense, namely that the mark at issue was generic.

More detail of Ty Inc. v. Softbelly's, Inc. after the jump.

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In a decision yesterday, the Federal Circuit once again affirmed a finding of infringement against a farmer who saved seeds covered by a patent to replant the following year.  The plaintiff in this case, Monsanto, has brought similar cases in the past, and they have resulted in similar outcomes.

Here, the asserted claims covered the genetic sequence for Monsanto's Roundup Ready gene, which, when incorporated into plants, causes the plants to exhibit tolerance to the herbicide glyphosate.  The defendant farmer argued that because the claims were directed to the sequence rather than the seeds or plants incorporating the sequence, the seeds were not covered by the patent.  

This argument was flatly rejected by the Federal Circuit.  The court noted that the authority on which the defendant relied, J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc., actually leads to the opposite result, as in that case the Supreme Court held that despite the availability of plant patents and PVPA certificates, utility patents were also available for plants, assuming the requirements for patentability were met.  In fact, the Court refused "to narrow the reach of § 101 where Congress has given us no indication that it intends this result."  Here, the infringing act was the use of the gene by planting the seed incorporating the gene, so the Federal Circuit affirmed the finding of infringement.  While the court vacated a portion of the damages award for recalculation, it affirmed the award of costs and attorney fees to Monsanto.

More detail of Monsanto Co. v. David after the jump.

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In a decision last week, the Federal Circuit affirmed-in-part and reversed-in-part a jury verdict of infringement of a patent owned by Tivo relating to its DVR technology.  The ruling was based on claim construction, with the court finding that, based on the correct construction of claims directed to the DVR hardware, there was no infringement of those claims.  However, the claims directed to the software were correctly construed and infringed, and as a result, the jury's award of nearly $74 million in damages was affirmed.

In addition, the district court's permanent injunction had been stayed pending appeal.  Based on the court's disposition, that stay was dissolved, and the case was remanded for a determination of the amount of damages to be assessed for infringement while the case was on appeal.

In an interesting footnote, the Federal Circuit acknowledged that perhaps, in some cases, claim construction is more appropriately considered a question of fact.  In this case, the district court's construction was "largely based on the court's assessment of extrinsic evidence."  As a result, the court noted that "there is substantial force to the proposition that such a conclusion is indistinguishable in any significant respect from a conventional finding of fact, to which [the court] typically accord[s] deference."  Perhaps this signals that the court may be willing to revisit its en banc decision in Cybor that determined claim construction was a pure issue of law reviewed without deference in all cases.

More detail of Tivo, Inc. v. Echostar Commc'ns Corp. after the jump.

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In a decision today, the Federal Circuit affirmed a district court's decision setting aside the portion of a jury verdict awarding convoyed sales to a patentee, and sustaining the portion of the verdict finding the alleged infringer had not shown invalidity via public use.  There was no evidence of a functional relationship between the patented and unpatented goods, instead the two were sold together as a matter of "convenience or business advantage."  As such, damages for convoyed sales were unavailable.

Regarding the alleged public use, the court held that the absence of a written confidentiality agreement did not mandate the conclusion that the pre-critical date uses were public.  Instead, based on the circumstances, it was proper for the jury to imply an "understanding of confidentiality."  The pre-critical date uses were for a select group of individuals and involved a series of evolving prototypes, permitting the jury to conclude that there was no invalidating public use.

More detail of Am. Seating Co. v. USSC Group, Inc. after the jump.

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In a recent decision, the Federal Circuit affirmed a finding of infringement of a patent relating to the detection and classification of Hepatitis C Virus, but remanded the case for a determination of anticipation. 

In arguably the most interesting aspect of the decision, the court vacated the permanent injunction entered against the defendant.  The plaintiff asked for and was awarded damages to compensate for the amount the defendant would have had to pay the plaintiff for a "market entry fee."  As a result, the court reasoned the plaintiff could not assert that it would be irreparably harmed by future sales by the defendant, having already been compensated for the harm caused by the defendant's entry to the market.  The court therefore instructed the district court on remand to determine the amount of royalty due on the defendant's compulsory license under the patent going forward.

The court briefly mentioned the issue of willful infringement after In re Seagate Technology, LLC, but only noted that there was no evidence of objective recklessness by the defendant and therefore the finding of no willful infringement was appropriate.  The court also gave a reminder to parties and lawyers of the potential consequences when being too cavalier toward obligations under the Federal Rules of Civil Procedure.  As explained in the court's footnote 4:

This case aptly demonstrates the pitfalls of playing fast and loose with rules of discovery. Conclusory expert reports, eleventh hour disclosures, and attempts to proffer expert testimony without compliance with Rule 26 violate both the rules and principles of discovery, and the obligations lawyers have to the court. Exclusion and forfeiture are appropriate consequences to avoid repeated occurrences of such manipulation of the litigation process.

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In a decision Tuesday, the Ninth Circuit reversed a district court's decision awarding $100,000 in attorney's fees for trademark counterfeiting under 15 U.S.C. § 1117(c).  The court reached this decision based on the language of § 1117:  While § 1117(b), the provision allowing attorney's fees, states that they shall be awarded when damages are assessed under § 1117(a), the subsection regarding actual damages, it makes no reference to § 1117(c), the statutory damages provision.  Based on this statutory text, the Ninth Circuit held that when a plaintiff opts for statutory damages, the language of § 1117, when read as a whole, does not permit an award of attorney fees based on § 1117(b).

More detail of K & N Eng'g, Inc. v. Bulat after the jump,

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In a decision Friday, the Federal Circuit affirmed a district court's finding of infringement and no invalidity of patents relating to the reduction of software piracy.  At issue was a finding of non-infringement based on the claim construction of claim limitations found in patents held by z4 Technologies.   

In affirming the district court decision, the court found that a reasonable juror could find that Microsoft infringed the contested claims notwithstanding the court's modification of the district court's construction of one of the claim limitations.  The court refused a remand to recalculate damages based on the Supreme Court's recent decision in Microsoft v. AT&T, finding that Microsoft had not presented any evidence that some of the infringment was under § 271(f).  As a result, the court affirmed the jury's finding of willful infringement of the asserted claims, and the concomitant damages award of $115 million against Microsoft, plus attorney's fees and $25 million in enhanced damages for willful infringement and litigation misconduct.  

More details of z4 Techs., Inc. v. Microsoft Corp. after the jump,

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