

Infringement Damages Increased After CEO Complains About Patent System - martingordon
http://www.techdirt.com/articles/20111005/11133116225/judge-makes-company-pay-more-infringement-because-ceo-complained-publicly-about-patent-system.shtml?utm_source=dlvr.it&utm_medium=twitter

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tzs
Techdirt's near perfect record of misreporting on legal issues remains
unblemished by this article.

The article makes it sound like the court decided damages should be 0.75%,
then found out about the CEO's statements, and doubled the damages to 1.5%.
That is not so.

What they overlook is that there are TWO damage awards--one for the
infringement before the verdict, and one for future infringement.

The jury found that the infringement was willful, which allows the judge to
enhance the damages. However, the judge ruled that there was not enough
evidence to support a finding of willfulness and so overturned that part of
the jury verdict. The damages for past infringement were then set based on
non-willful infringement. That is the 0.75%.

InnoLux can stop infringing, and then all they owe will be that 0.75% royalty
on their past sales.

The second damage award is for future infringement if InnoLux does not cease
infringing. The court has decided that this infringement is likely to be
willful, partly based on the company's attitude as evidenced partly by the
CEO's statements. Hence, enhanced damages are appropriate, and the court
doubled the rate to 1.5% (I believe the law authorizes up to triple damages
for willful infringement).

So overall the judge has been quite fair to InnoLux. The jury said the past
infringement was willful. The company's attitude, as evidenced by the CEO's
statements, indicates that the jury was likely right about that. Nevertheless,
the judge tossed out the finding of willfulness because the jury didn't have
the information on the company's attitude, and so gave InnoLux the lower rate
for past infringement.

The court DOES have the information that the jury did not, so is not giving
them a break on continuing infringement.

~~~
ovi256
So basically you just described a convoluted legal black box that works like
this:

CEO statement -> Black box -> bigger damage award

Finally, Techdirt got the gist of it.

~~~
mentat
If that's all you got out of it, I suggest you reread. The CEO provided new
evidence, which is indeed a valid input, that showed that future infringement
would be willful. This is simple reasoning.

~~~
alttag

      > The CEO provided new evidence, ...
    

Okay ... but part of what isn't clear is whether the "new evidence" was
presented in court by counsel or found and entered by the judge.

~~~
mentat
Yes, it would be good to have clarity on that. Though I remember reading in a
different article that it was possible for a judge to call their own witness
so perhaps the rules aren't the same as what courtroom drama shows.

------
Natsu
Note that this happened in the Eastern District of Texas, which should come as
no surprise to those following the activities of certain NPEs (AKA "patent
trolls"). From the article's conclusion:

"Judge Ward, of course, is the judge who put Eastern Texas on the map as the
place to go for patent lawsuits, so it's no surprise that he seems to think
saying something bad about the US patent system opens you up to greater
damages. But it seems like a pretty serious First Amendment issue when the
judge is, quite clearly, punishing someone for their speech."

~~~
guelo
What is the point of this comment just duplicating information in the article?

~~~
Natsu
I think it's telling.

Often, people excuse the EDT saying that it's merely one of a few "rocket
dockets" where cases speed through the system. Yes, it is also that, but
there's a reason why so many lawyers have set up shop there and I think this
story illustrates that nicely.

------
SoftwareMaven
Would this provide reason to appeal and potentially have the ruling thrown
out? I have no idea what the legalities behind something like this are, but it
seems like a pretty clear attempt to quash first amendment rights.

~~~
Natsu
Be that as it may, appeals are quite expensive and I suspect that whatever
decision they'll make on that will have more to do with finances than free
speech.

That said, in an appeal, you generally list any and every complaint about the
lower court's errors that has any chance of success. I don't know enough about
the relevant laws to say whether or not this was an abuse of the court's
discretion (even though I _feel_ that it was an abuse), though.

As an aside, I really wonder how he happened to find out about a comment in a
Chinese newspaper, which would presumably be in Chinese? I have to assume that
the plaintiff dug that up, because learning enough hanzi to read one is pretty
difficult.

------
sk5t
As I read it, the judge found the defendant's remark to be a sign of
wilfulness and systematic disregard for patent rules. The article suggests
that the judge isn't authorized to tack on damages for this, but I question
whether this is entirely correct. Kind of like flipping off the judge at
sentencing is a good way to test the limits of judicial discretion.

~~~
sk5t
Also, I am baffled by the strong anti-patent bias in the comments--as if folks
assume every suit is a troll at work.

~~~
ak217
Every suit filed by companies from outside Eastern Texas in that court (or by
companies who set up shop there for the sole purpose of being in that
district) is definitely a troll at work.

~~~
tzs
That's massively wrong. Did you do _any_ research at all before making that
claim?

edit: could the down voters explain why, please? All you have to do is look at
a list of cases from EDT to see that ak217's claim that there is no non-troll
patent suits filed by companies outside the district is idiotic.

~~~
Natsu
You're right. There are plenty who aren't NPEs who are just forum shopping.

It will be interesting to see how the AIA changes things, given that you won't
just be able to sue dozens of people for infringing the same patent and
consolidate the cases. But they probably still will be able to set up shop in
Marshall, TX.

