December 2016

Reasonable Royalty Depends on Incremental Price of a Product Attributable to Its Patented Features Rather than the Value of the Patented Features in a Vacuum
by John C. Paul, D. Brian Kacedon, and R. Benjamin Cassady
A court excluded testimony of experts who conducted a consumer survey that established values for each of four patented features relative to each other and then used those results to estimate an $80 million reasonable royalty the infringer would have paid for those features, finding the testimony unreliable for considering the value of the specific features in a vacuum without considering the value of the accused products as a whole.

License Defense Fails Due to Interpretation of License Agreement’s Provisions on Commercialization and Importation
by John C. Paul, D. Brian Kacedon, and Stephen E. Kabakoff
A licensee did not prove it was entitled to summary judgment on its license defense because it had not proven it had met the license agreement’s "commercialization requirement" for Licensed Products or that the license agreement included a right to import the accused products.

Willful Patent Infringement May Be Alleged in Suit Filed on the Same Day the Patent Issues Based on Prior Notice of Allowance
by John C. Paul, D. Brian Kacedon, and Kevin D. Rodkey
Entitlement to enhanced damages for willful patent infringement requires the patent owner to show the infringer knew about the patent before the lawsuit was filed. In Malibu Boats, a district court concluded that the patent owner could allege willful infringement in a suit filed on the same day that the asserted patent issued where the complaint alleged that the defendant had knowledge of the Notice of Allowance and Issue Notification of the patent, had been contacted by patent owner’s attorneys about the impending issuance of the patent, and was engaged in a separate litigation with the patent owner involving a related patent.

Infringement Complaint Based Solely on Continued Production of a Previously Licensed Product Fails to Meet Minimum Pleading Standards
by John C. Paul, D. Brian Kacedon, and Robert D. Wells
Complaints for patent infringement must allege enough facts about the infringement of patent claims by an accused product to plausibly show the patent owner may be entitled to the relief it seeks for patent infringement. In Deetz Family, a district court dismissed a complaint that based its allegations of infringement on continued production of a previously licensed product, finding the complaint did not provide sufficient facts to show the patent owner may be entitled to relief for patent infringement. In addition, to establish a breach of the duty of good faith and fair dealing, the complaining party must show that a license agreement vested the opposing party with discretion in performing an obligation under the contract and that the opposing party exercised that discretion in bad faith, unreasonably, or in a manner inconsistent with the reasonable expectations of the parties.

Court Dismisses Divided Infringement Claim Because Customer's Data Entry Steps Were Not Attributable to the Defendant Software Vendor
by John C. Paul, D. Brian Kacedon, and Andrew E. Renison
Liability for direct infringement requires all steps of a patented method to be actually performed by a single entity or to be attributable to a single entity that directs or controls other entities that perform the remaining steps. However, such direction or control by a vendor over its customers is not established merely because the customers receive a benefit from using software supplied by the vendor.