Source: http://quickreadbuzz.com/2019/01/23/litigation-meredith-angjeli-evolving-landscape-patent/
Timestamp: 2019-04-22 04:44:57+00:00

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In the last 18 months, we have seen numerous decisions which will likely have a dramatic impact on the landscape of patent litigation damages. Two of the most impactful decisions, Apple v. Samsung and WesternGeco v. Ion Geophysical, made their way to the United States Supreme Court. However, we will not see the true practical outcome of either of these hallmark decisions for many years. This article provides an overview of these two cases and discusses their potential impact on the landscape of patent litigation damages.
Consistent with historical interpretation, Apple sought as a damages remedy 100% of Samsung’s profits generated through the sale of infringing mobile phone units, with no consideration for an apportionment of value between allegedly infringing and non-infringing features. Samsung, by comparison, argued that it should only be required to pay damages for the copied portion of the phone’s design.
As Apple’s interpretation of damages prevailed at both the district court and the federal circuit, Samsung appealed to the United States Supreme Court, asking: Under the design patent statute, is an “article of manufacture” for which “total profits” are awarded always the entire end-product? Or could such article of manufacture be individual components of the end-product?
The decision did not address whether the design patent statute remedy is (1) an award of all total profits or (2) an award limited to only total profits made because of the infringement.
The physical relationship between the patented design and the rest of the product, including whether the design pertains to a component that a user or seller can physically separate from the product, and whether the design is embodied in a component that is manufactured separately from the rest of the product, or if the component can be sold separately.
Despite the Supreme Court’s new guidance and the four-part test suggested by Judge Koh, the jury again sided with Apple; this time ordering Samsung to pay $539 million (an amount in excess of the original $399 million post-appeal verdict and significantly more than the $28 million Samsung had argued was appropriate). The parties ultimately settled their seven-year dispute in June of 2018; the terms of the settlement were not disclosed.
Though this matter paved the way for the guidance that an “article of manufacture” may be an end-product or component thereof, this case has not provided practical guidance for application. The one thing that is clear is that we will continue to see parties battle over appropriate methods of apportionment for design patent breaches for years to come.
Related to its dispute with Ion Geophysical over reservoir monitoring and imaging services to help perform seismic surveys, WesternGeco filed a petition for certiorari on February 17, 2017, which presented the following question: Did the Court of Appeals err in holding that lost profits arising from prohibited combinations occurring outside of the United States are categorically unavailable in cases where patent infringement is proven under 35 U.S.C. § 271(f)?
In June 2018, the Supreme Court ruled that the presumption against extraterritoriality does not apply to bar foreign lost profits, a major shift from prior federal circuit and Supreme Court decisions. Specifically, the Supreme Court held that Ion’s export of components caused WesternGeco a domestic injury under 35 U.S.C. § 271(f) and lost profits WesternGeco suffered overseas were the damages flowing from that injury.
Though this is broadly considered a “win” for patent holders, the courts are still wary of extraterritoriality. We may likely see plaintiffs argue that this guidance suggests more generally that a patent owner can recover damages of any form under § 284 based on foreign activities arising from infringement of any form under § 271. Whether under § 271 or § 271(f), courts will likely require the patentee to carefully tie its damages theory to domestic acts of infringement in order to recover foreign lost profits. Additionally, to the extent those domestic acts caused foreign harm, plaintiffs will likely need to present compelling evidence to demonstrate that foreign harm was foreseeable and proximately caused by the domestic act of infringement.
This article was published in the Marcum Business Valuation Newsletter and is being re-published here with permission.
 Samsung Electronics Co. v. Apple Inc., No. 15-777 (S. Ct. December 6, 2016).
 WesternGeco LLC v. ION Geophysical Corp., No. 16-1011 (S. Ct. June 22, 2018).
Meredith Angjeli, CPA, CFE, is a director in the Advisory Practice in Marcum’s Boston, Massachusetts office. She has over seven years of management consulting experience, focusing on litigation support, and expert witness services. Ms. Angjeli also has experience in a variety of forensic accounting matters, including investigations and anti-bribery/corruption matters. She has led external investigations in partnership with client’s external counsel and has also teamed with client’s internal auditors and general counsel to navigate allegations of fraud, illegal acts or non-compliance.
Ms. Angjeli can be contacted at (617) 807-5213 or by e-mail to Meredith.Angjeli@marcumllp.com.

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