USA Law and Practice Contributed by: Jim Hurst, Jeanna Wacker, Sam Kwon and Ashley Ross, Kirkland & Ellis
to fix a royalty rate. A determination of the roy - alty stemming from a hypothetical negotiation is often made by assessing certain factors set forth in Georgia-Pacific Corp v US Plywood Corp, 318 F Supp 1116, 1120 (SD NY 1970). A district court may also use an analytical approach – obtaining the reasonable royalty by subtracting the indus - try standard profit margin from infringer’s actual profit margin. 35 USC Section 284 gives district courts dis - cretion to award enhanced damages against infringers in egregious cases. This can include an award of treble damages for wilful infringement. Courts may also award pre-judgment interest on the compensatory portion of the damages award under this section, and post-judgment interest of the entire award under FRCP 37. 35 USCA Section 286 limits the recovery of damages for past infringement to six years from the filing of the claim of infringement. Gener - ally, there is no infringement liability for activi - ties before a patent issues. However, provisional damages may begin after the publication date of the patent application if (35 USCA Section 154(d)): • the infringer had notice of the publication; and • the asserted claims are substantially identical to the claims in the publication. In jury trials, a district court has discretion to try damage-related issues together with – or sepa - rate from – other issues. As to the execution of judgment on damages, proceedings to enforce it are stayed for 30 days after its entry, unless the court orders otherwise (FRCP 62(a)). If an accused infringer is wrongfully enjoined, the relief to the injured party is typically limited to the terms of the bond.
A party does not need to be the patent owner to claim damages in a patent litigation – for exam - ple, a party with all substantial rights to a patent may also claim damages against an infringer. In the pharmaceutical industry, no monetary damage would result from filing an ANDA para - graph IV certification before commercial market - ing. And the BPCIA limits a patent owner’s dam - ages to a reasonable royalty if an infringement suit is untimely filed. Patent owners can only seek PIs after receiving notice of commercial marketing. In both ANDA and BPCIA litigations, a company may decide to launch at risk, thereby making monetary damages possible if it is later found to have infringed a patent. 5.5 Legal Costs Under the American Rule, each party in a litiga - tion pays its own attorney’s fees, unless the case is considered “exceptional” (35 USC Section 285). District courts have discretion to award reasonable attorney fees to the prevailing party in exceptional cases. An exceptional case is one that stands out from others with regard to: • the substantive strength of a party’s litigation position; or • the unreasonable manner in which the case was litigated (Octane Fitness, LLC v ICON Health & Fitness, Inc, 572 US 545, 554 (2014)). Not all legal costs can be shifted in a patent case. Even where attorney fees are shifted, for example, experts’ fees generally still may not be shifted (Finjan, Inc v Juniper Networks, Inc, 2021 WL 3140716, at *5 (ND Cal 26 July 2021)).
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