Patent Litigation Lawyer

Power-One sued Artesyn for infringement on a number of Power-One’s patents, generally relating to a power control system using a control and monitoring bus called the “PMBus.”  The case was filed before certain of the patents had issued from the USPTO, and apparently before Artesyn sold any infringing products.  From a quick reading of Power-One’s motion for sanctions (amongst other relief requested), it appears Power-One’s theory was Artesyn was in fact selling infringing product, but shielding those sales from discovery.  That particular motion was denied on October 11, 2007.  Somewhat interesting the defendant didn’t request Rule 11 sanctions in this case (or at least I didn’t see such a motion in my quick review of the docket for 2:05-CV-00463), as analyzing an alleged infringing device is typically required to satisfy rule 11.

Michael Smith reports the parties agreed to infringement damages of $100.00 (yes, you read that right).  The jury did find infringement on the ‘125 patent, but not the  ‘999 patent.  It also failed to find by clear and convincing evidence the patents were invalid, or that the infringement on the ‘125 patent was willful.

I must confess some confusion on this case, as it is hard to infringe a patent when you don’t manufacture, sell, or offer to sell an infringing product.  Simple use of the patented IP can technically give rise to an infringement claim, but it would hard to see any damages.  One possibility in this case was Power-One simply wanted to shut down a competitor from developing future infringing products, although that is purely speculative on my part.

One would assume the plaintiff in this case spent several hundred thousand dollars prosecuting the case, and its hard to see the result as a huge “win” (although it may well be for reasons not readily apparent from the pleadings).   This particular case presents a fairly good example of the simple economics of patent litigation, which to some extent make litigating against small-scale infringers economically impracticable.  Contingent fee lawyers, for example, routinely reject cases where the royalty base is lower than $20 million, which can be frustrating for potential clients who see a competitor enjoying the fruits of misappropriated IP.  When one assumes a royalty of <5% and a litigation budge of $1 million+, it is easy to see why it takes fairly large scale infringement to justify a contingent interest in the case.  At Williams Kherkher we try to stay flexible to accommodate inventors and smaller private companies by not imposing arbitrary amounts on the royalty base, but instead focusing on whether a global litigation strategy can add value both the the company and the firm.

Armi Easterby