Contingent Fee Business Litigation Blog : Houston Patent & Contingent Fee Business Litigation Lawyer & Attorney : McClanahan Myers Espey Law Firm : Intellectual Property, Commercial Litigation

       In “Judge Weighs Jury Consideration of Future Damages in Patent Suits,” (Texas Lawyer, August 11, 2008, p. 5), Lynne Marek writes that U.S. District Judge Ron Clark, who sits in the Eastern District of Texas, has stated that juries may take up the question of “future damages” for ongoing violations of a patent. That is a really good idea!

       A plaintiff in a patent case always wants to recover damages for past infringement. As to the future, however, he might want something different. If he wants to prevent future infringement, he might want an injunction. That has historically been his only remedy. The problem is that if the defendant fails to do the right thing, the plaintiff must go back to court, perhaps many times, to continually enforce his rights. That is a waste of everyone’s time and money. Moreover, recent court decisions have made it more difficult to get an injunction than before.  

       Allowing the jury to find future damages should not prove too difficult or speculative. We have done it for years in personal injury and other cases. There is no conceptual reason why we cannot do it in patent cases as well.

       Judge Clark’s order leaves flexibility as to how to best award future damages from case to case. According to EDTexweblog.com, Judge Clark noted: “In formulating their jury instructions, the parties should consider whether the jury should be instructed regarding a future reasonable royalty rate, lost profits, price per unit, or some other appropriate measure of future damages. Of course, the instructions and question(s) will depend on the evidence submitted, and the theories of recovery pending at that time." 

    If injunctions against future infringement are to be difficult to get, without future damages there will be no relief available to the aggrieved inventor for continued infringement in the future. He will have to return to court to sue again, at a later date, for what happened in the past. What a waste of judicial resources! Judge Clark’s idea will give us a practical way to resolve the infringement once and for all in one trial. What can be wrong with that?

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            In  “Patent Payday,” (Forbes.com, 2/12/08) Nathan Vardi discusses institutional investors such as Rembrandt IP Management, Altitude Capital Partners and NW Patent Funding that have raised capital to acquire and enforce patent rights. One of the investors, Michael Cannata, sees such funds as leveling the playing field in David v. Goliath battles. He is right.

            According to the 2007 American Intellectual Property Law Association’s “Report of the Economic Survey,” the mean (average) cost of a small patent infringement case in Texas is approximately $3,000,000 through trial! Most individual inventors and entrepreneurs do not have the money to pay hourly lawyers such fees to enforce their rights. Some law firms, including mine, have the ability to take a patent case on a contingent fee, where we advance the case expenses and receive a fee only if we achieve a settlement. Without the institutional investors and contingent fee lawyers, however, the little guy would be simply out of luck in trying to enforce his patent rights. 

            Mr. Vardi mentions pending legislation in the U.S. Senate, pushed by large technology companies, to limit the rights of plaintiffs and make litigation even more expensive. The intent of such legislation is obvious. If the price of admission to the playing field can be made so high that only the big companies can afford to play, the smaller companies can either be litigated to death or acquired on the cheap.

            If the institutional investors can help insure access to the court system by all, then more power to them! They, together with contingent fee lawyers like my firm, can indeed level the playing field.

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