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Issued: September 1987 and January 1989 Prosecuted by: Steven Miller, John Pollaro, and Richard Witte (in-house) Litigated by: John Sweeney, James Gould, Richard Komson, and Seth Atlas of New York’s Morgan & Finnegan, and Charles Buffon, Timothy Hester, and Salvatore Rotella, Jr. of Washington, D.C.’s Covington & Burling Not every killer patent describes a computer breakthrough or saves lives. Take Procter & Gamble Company, Inc.’s patents for the “barrier leg cuff” of its disposable diapers. These two patents aren’t exactly life-changing — unless you’re the parent of an infant. U.S. Patent No. 4,695,278 (titled “Absorbent Article Having Dual Cuffs”) covers a product that prevents leaks. U.S. Patent No. 4,795,454 improves on that design, making it even more leak proof. The design is so leak-proof, in fact, that Paragon Trade Brands, Inc., started producing diapers that seemed to have the same features as P&G’s “Pampers” and “Luvs” brands. In 1994, P&G, the largest disposable-diaper manufacturer in the U.S., filed a patent-infringement suit against Paragon, then the country’s largest manufacturer of “private label” disposable diapers.Paragon counterclaimed under antitrust law and state consumer privacy law. P&G not only prevailed on the patent front but also won dismissal of the counterclaims. By 1996 P&G’s annual sales for Pampers were $28 million — about 26 percent of the disposable diaper market. Sales for Luvs were about 14 percent of the market. The fight with Paragon continued, however. In January 1998, the court’s partial $178 million damages award pushed Paragon into bankruptcy. The court approved a settlement agreement under which Paragon had to pay P&G $185.5 million, and P&G had to grant Paragon a royalty-bearing license. And that’s the straight poop.

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