Friday, June 3, 2011

Non-Practicing Plaintiff May Not Obtain Discovery Concerning Future Products Under "Accelerated Market Entry" Damages Theory

The court denied plaintiff's motion to compel the production of highly confidential information concerning defendant's future products that were still under development and would not be sold until after the patent-in-suit expired and rejected plaintiff's argument that such information was relevant to its "accelerated market entry" damages theory. "'Accelerated market entry' ('AME') is a recognized theory of damages . . . [that] compensat[es] for lost sales after the patent’s expiration based on defendant’s entry into 'the market at a level accelerated by its earlier infringement.' . . . Defendant argues that AME does not apply in this case because Plaintiff does not manufacture or sell products and cannot recover lost profits. . . . Plaintiff argues that there are very few AME cases at all, and while it is true that they involve patentees who manufacture their own product, there is no reason why the theory should not apply equally to patentees who license their products and collect royalties from third party manufacturers. While it is true that infringing sales could decrease the post-expiration sales and profits of those third party manufacturers, the patentee’s damages could only be the corresponding decrease in royalty from those decreased third party sales. The law is clear, however, that royalties are not paid after expiration of a patent. Accordingly, the Court sees no basis for a post-expiration claim of lost royalties, whether based on AME or otherwise."

STC.UNM v. Intel Corporation, 1-10-cv-01077 (NMD May 31, 2011, Order) (Schneider, M.J.)

No comments: