Posts Tagged: "damages"

A district court does not have authority to issue an injunction against a party not adjudicated to be liable for infringement in the underlying case unless that party aided or abetted the liable party in the infringement, or the non-liable party is legally identified with the liable party through privity or some other means. This determination requires specific findings of fact about the parties.

On Tuesday, December 6, 2016, the U.S. Supreme Court issued a decision in Samsung Electronics Co. v. Apple which found by a unanimous 8-0 vote that a damages award for design patent infringement may be limited to revenues attributable to a component of an article of manufacture and not the entire article itself. Tuesday’s SCOTUS decision overturns a judgment reached in May 2015 at the U.S. Court of Appeals for the Federal Circuit, which would have awarded nearly $400 million in damages to Apple Inc. (NASDAQ:AAPL) for the infringement of three design patents by mobile devices marketed by Samsung Electronics (KRX:005930).

Earlier this year, President Obama signed into law the new federal “Defend Trade Secrets Act of 2016.” It arms with substantial new weaponry those whose trade secrets have been taken. What has been less heralded, but might just affect you more directly, are new requirements that might lead you to revise your standard confidentiality and non-disclosure agreements.

The court decided to award enhanced damages in this case because of egregious behavior on behalf of Samsung, including attempts to copy the technology and demonstrably false testimony given by Samsung. For example, Samsung’s representatives testified under oath that they only became aware of Imperium IP’s patents in June 2014, when the infringement action was first brought to court. Depositions and other discovery proved this to be incorrect. One witness who worked at ESS Technologies, the company to which the ‘884 patent was first assigned, testified that Samsung sought specific information on anti-flicker and flash technology. It was also proven that Samsung had previously attempted to purchase the patents-in-suit from Imperium, concealing its identity through a patent broker. Instead of June 2014, the court found that Samsung knew about Imperium’s patents since at least April 2011.

The DTSA amends the Economic Espionage Act of 1996 (“EEA”) to provide for civil remedies in federal courts for the misappropriation of trade secrets. The new Section 1836(b) provides for both equitable and monetary relief. Subsection 1836(b)(3) authorizes a federal court to grant an injunction to prevent actual or threatened misappropriation of trade secrets. The language is identical to § 2 of the Uniform Trade Secrets Act (“UTSA”). However, there are a number of limitations as to when a court may issue an injunction under the DTSA. First, the injunction may not “(I) prevent a person from entering into an employment relationship, and that conditions placed on such employment shall be based on evidence of threatened misappropriation and not merely on the information the person knows ….” Section 1836(b)(3)(A)(i)(I).