Recent patent-infringement cases involving medical devices and instrumentation show how litigants have been able to expand or contract the base of a damages award.

In order to receive lost profits in the event of patent infringement, the patent holder must show market demand for the patented product; manufacturing and marketing capability to exploit the demand; absence of non-infringing substitutes; and amount of profit that would have been made. These facts are usually demonstrated via expert opinion at trial.

Church & Dwight, for example, succeeded in its case to obtain lost profits attributable to sales of a pregnancy test sold by an infringing competitor. The company successfully provided clear evidence of market demand for its product and its manufacturing and marketing capability to meet market demand.  Furthermore, the evidence demonstrated that pregnancy tests, which did not include the patented feature, were not viewed as acceptable substitutes by purchasers. The accused infringer attempted to avoid a lost-profits analysis by alleging that there was a second product that buyers would deem an acceptable substitute for the patented device. 

However, this tact failed because the second product actually infringed yet another C&D patent, which was not a part of the lawsuit. C&D’s patent holdings not only allowed it to recover on a particular patented feature,  which was the subject of the suit, but also precluded its competitor from being able to offer a design alternative at market. It is also noted that the infringing competitor was shown to have knowledge of its infringement and yet continued its infringing activity, which caused the trial court to double the amount of patent damages awarded to C&D. 

Other patent-infringement cases, along with timely information on how healthcare reform may impact IP portfolios and when design innovations really require patents, are discussed in the October issue of Medical Design. See “Managing Intellectual Property.”