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Reuters reported that Majority Leader Harry Reid announced that the Senate aims to begin consideration next month, possibly by March 14, of a bipartisan bill to revamp the U.S. patent system and reduce the likelihood of what critics see as “excessive damage awards.”

The two areas of damages that we are watching closely are the reforms to the False Patent Marking provisions (35 USC §292) and to Patent Infringement Remedies (35 USC §284).

False Marking

Current law allows “Any person” to sue for the “$500 for every such offense” penalty (35 USC 292(b)) and this has created a veritable cottage industry of “patent marking chasers,” particularly ever since the $500 penalty has been applied to each item so marked, creating windfall profits to the filers (and the US Treasury).

The proposed reform bill seeks to strike this subsection with the following language: ”(b) Any person who has suffered a competitive injury as a result of a violation of this section may file a civil action in a district court of the United States for recovery of damages adequate to compensate for the injury.” Consequently, the reform on this issue aims at limiting recovery to compensatory damages to persons with actual damages.

Damages Determination

The proposed reform includes, for Section 284 – Damages, adding a subsection specifying the procedure for determining damages whereby: (a) The court shall identify the methodologies and factors that are relevant to the determination of damages to be considered by the court or jury; (b) The parties shall specify in a timely fashion the methodologies and factors proposed for instruction to the jury in determining damages, including the underlying legal and factual bases for their assertions; and (c) The court shall also consider whether one or more of a party’s damages contentions lacks a legally sufficient evidentiary basis.

Further reading

A full summary of the bill can be obtained on the Library of Congress’ THOMAS website.

This entry was posted on Thursday, February 24th, 2011 at 3:55 pm and is filed under Economic Damages, Legislation, Patents. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.