Patent litigation concerning single patents is becoming increasingly rare, as litigants opt to utilize a litigation strategy incorporating multiple patents. Frequently, the parties ask the jury to render a single damages verdict for all asserted patents. If the jury finds more than one patent infringed and not invalid, the jury will enter a single number on the verdict form for all patents (assuming the verdict form is set up this way). This strategy runs the risk, however, that on appeal the Federal Circuit will rule that a subset of the patents is not infringed or is invalid. Under these circumstances, the Federal Circuit will remand to the district court for a determination of damages.
A recent case from the Federal Circuit demonstrates this point. InVerizon Serv. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1298 (Fed. Cir. 2007), the patentee asserted three different patents against the defendant’s system. The jury found that the accused products infringed each of the individual patents-in-suit and awarded a single damages award.Id.On appeal, the Federal Circuit remanded to determine whether the accused products infringed only one of the patents-in-suit, while affirming the jury’s findings of infringement on each of the remaining patents.Id.at 1308-1309. The majority cited the general rule that when a jury renders a single damages verdict, a new trial is required on remand for an assessment of damages where an appellate court rules that one of the patents-in-suit is not infringed.Id.at 1310.
While the majority inVerizonultimately remanded the case for an assessment of damages, it cautiously approached this issue and did not close the door on certain alternatives.Id.(“The parties have not briefed whether there is any reason to depart from this general rule in this case [and we] think it is bestunder these circumstancesto remand this issue.”) (emphasis added). Indeed, the dissent opposed the remand on damages as an unnecessary cost to the litigants and a waste of judicial resources.Id.at 1315 (“When, as here, the evidence shows that each of the accused products infringes all of the patents-in-suit, and the infringer fails to make any showing on appeal that the damages award would not be supported by only those patents for which we affirm liability, we must affirm the damages despite our reversal of part of the infringer’s liability.”).
Thus, in a case involving multiple patents asserted against the same accused products, both the patentee and defendant should consider whether they want a single damages verdict for all the patents being tried or a separate verdict for each patent. Depending on the route chosen, the parties should craft a trial strategy that accounts for the possibility of appeal. Strategies exist that can assist in avoiding a potential remand on the issue of damages in a multi-patent suit. These strategies can be employed to help the patentee establish that regardless of whether the accused products infringe one or all of the patents-in-suit, the Federal Circuit should affirm a damages award because the infringement of the remaining patents will support any existing award. On the other hand, the defendant may wish to present evidence at trial that would allow it to invoke the “normal rule” that where liability is affirmed on fewer than all patents, the defendant is entitled to retry the damages issue.
A damages expert can be a helpful resource in the patentee’s efforts to demonstrate that damages are not dependent on the number of patents infringed. An expert can explain to a jury that whether or not the accused products infringe one or several of the patents-in-suit, the resulting damages award should be the same because the same products infringe each of the individual patents-in-suit. A record of this testimony may assist a successful patentee in avoiding a remand on the issue of damages. On the flip side, the defendant may use its expert to provide evidence that the damages award should be reduced when fewer than all the patents are found infringed. For example, in a three-patent case, the defendant may assert that damages should be reduced by a third for each patent on which there is no liability. Alternatively, the defendant could attempt to demonstrate that certain patents have more “value” than others and that the jury should reduce the verdict on noninfringed patents commensurate with their value.
Special Verdict Forms
In certain instances, itmaybe advantageous for a patentee to request that the jury individually allocate damages for the infringement of each patent in a special verdict form. Ideally, if an appellate court reverses a jury’s finding of infringement for one of the patents-in-suit, a patentee can then point to the verdict form as support for affirming or remanding with explicit instructions on how to allocate damages.
Use of a special verdict form is a calculated risk, and parties should approach a special verdict form with caution. From the defendant’s perspective, it may be helpful to seek a special verdict form that provides the appellate court with sufficient information about how the jury allocated damages for each of the patents-in-suit to assist the defendant in overcoming a damages award by providing potential arguments supporting flaws in a jury’s decision-making process. From the patentee’s perspective, any special verdict form should be carefully crafted to provide just enough information for an appellate court to assess an appropriate allocation of damages while avoiding potential inconsistencies that may result from providing too much information in the verdict form, allowing the defendant to convince the Federal Circuit that the jury’s damages award is flawed and must be vacated.