Monday, 13 July 2009

Patent damages: a book review

Winning the Patent Damages Case: a Litigator's Guide to Economic Models and Other Damage Strategies is the sort of title that is bound to set the patent litgator's pulse racing -- and this little book, by California lawyer Richard Cauley, does not disappoint.

The author, a partner in the Newport Beach law firm of Wang, Hartmann & Gibbs, was formerly a partner in the Palo Alto office of McDermott Will & Emery, LLP. An experienced trial attorney, he specialises in complex intellectual property and antitrust matters and lays claim to particular expertise in matters requiring economic and financial analysis. Those last four words often presage an intention to break into algebra at the drop of a hat, informing the legal reader that the proper calculation of damages (x) is along the lines of x = ∞⅓<√∏.

Fortunately the author does not seek to blind his readers with this sort of thing; it's a short book and it's all in English because it explains the principle upon which patent damages may be asserted, leaving the sums to those who can do that sort of work more cheaply than if it were left to litigation lawyers with their calculators. Symbolic notation is simplified into concepts like "Equal Bargaining Power B = 0.5" as the Lemley/Shapiro principle is broken down into lawyer-sized bites. The book is actually very readable and doesn't require to carry either a dictionary or a law library around with him in order to appreciate it.

So what do the publishers, Oxford University Press's US desk based in New York, say about the book?
"Patent litigation is a lengthy and expensive exercise typically dominated by scientific and technical inquiry, but the economic side of a case -- namely, the damages phase -- is too often neglected. In such instances, substantial economic damage to the plaintiff and potentially devastating financial consequences to the defendant are given too little priority before and during litigation, which can result in an ineffective damages case and create unnecessary expenses.
Conducting sophisticated economic analysis and creative discovery for the damages case from the outset can help prevent this detrimental result. By focusing on how to build an analytical framework for likely damages awards, Winning the Patent Damages Case provides valuable information on how to structure a patent case from an economic standpoint, from start to finish".
There's nothing on the website or cover of the book to suggest that it explains the theory and practice of only US law. That's not to say that it's not useful and/or interesting for the non-US reader, and we all know that US patent damages, whether on a reasonable royalty basis or any other, are likely to be way in excess of anything that a court will order elsewhere. However, in an increasingly small world with increasingly global markets it makes sense for readers who need to know about patent damages to get a sense of what happens elsewhere, if only to help focus the mind on negotiating a settlement that spills across other major jurisdictions. If this is right, then OUP should be encouraged to bring out companion volumes -- particularly for Europe.

Bibligraphical details: ISBN13: 9780195366938, ISBN10: 019536693X. Paperback, xiv + 165 pages. Price: $185. Website here.

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