Despite the headline-grabbing awards in patent infringement cases, recoveries actually have been fairly few and far between and, for the most part, not that big, according to a first-of-its-kind study released on Wednesday.
Lex Machina, a legal analytics firm in Menlo Park, Calif., found that compensatory damages were awarded in fewer than 2 percent of patent infringement cases during the past 14 years. Of those, 90 percent came to $25.4 million or less, with the median award totaling $372,000.
“Damages are extremely difficult to obtain in patent cases,” Lex Machina general counsel Owen Byrd said. Yet, in general, the size of the awards is increasing, with compensatory awards—combined with enhanced damages for willful conduct, fees, costs and interest—totaling more than $15 billion, according to the study. “So while they’re rare, when they happen they can be significant,” he said.
Lex Machina examined compensatory damages awards in patent infringement cases filed and ended between Jan. 1, 2000, and Dec. 31, 2013. The study, based on data from the nation’s federal district courts, looked at both bench and judge awards.
The No. 1 award was $1.67 billion against Abbott Laboratories in a case brought by Centocor, a unit of Johnson & Johnson, and New York University.
But in 2009, the year that award was rendered, the median compensatory damages granted in patent cases was $1.4 million, according to the study.
“While the total damages across all these categories and all these charts is often the easiest thing to understand and draws your eye quickest, it’s often the calculation of median damages that sheds the most light on the behavior of specific districts or judges or parties or law firms,” Byrd said. “Parties and their attorneys shouldn’t be distracted by the big ones. If they’re going to get damages, what size of the award is the question—and the answer is, it hews closely to the median.”
In most cases, reasonable royalties made up the largest share of compensatory damages awards, compared to lost profits. The study included its own category of “compensatory lump” awards, when it was unclear whether the dollars represented reasonable royalties or lost profits.
According to the study, more than $5 billion in compensatory damages awards emerged from the U.S. District Court for the Eastern District of Texas, where 84 cases were filed. Four of the seven judges who presided over patent cases that awarded the highest total of compensatory damages resided in that district, with U.S. District Judge Michael Schneider topping the list at nearly $2.4 billion.
But the median award in that district, according to the study, was only $8.25 million. The median for the U.S. District Court for Kansas, on the other hand, which had only two awards, was nearly $34.9 million, and cases before U.S. District Judge Marilyn Huff of the Southern District of California had the highest median award at $188.4 million.
The law firm that recovered the most in total compensatory damages for clients was Dallas-based McKool Smith, with more than $2 billion, and the firm with the highest number of awards was Husch Blackwell, with 45.
The study considered which firms consistently won high compensatory awards. Caldwell Cassady & Curry in Dallas topped that list with an average of $80.8 million per case.
The study found that attorney fee awards in patent cases totaled more than $200 million, although 90 percent of them fell below $2 million.
The study excluded awards in cases filed before Jan. 1, 2000, or those that dealt with injunctive relief. It did not look at appellate decisions, including those that might have reversed awards, and excluded mixed awards that involved claims other than patent infringement, such as Apple Inc.’s $290 million award last year against Samsung Electronics Co., which also included trade dress infringement.
Contact Amanda Bronstad at email@example.com.
|Trends in compensatory damages won in patent litigation|
|Year||No. of Cases||Total (in millions)||Median (in thousands)|
|Source: Lex Machina|