Wednesday, October 10, 2012

Design Patent Remedies - It's Never Too Late to Change Your Mind

One of the trickiest questions for any plaintiff in a design patent case is which remedy to pursue. Unlike a utility patent, where only the plaintiff's damages are available under 35 U.S.C. § 284, a design patentee may instead elect to pursue the defendant's ill-gotten profits under 35 U.S.C. § 289. This special remedy for design patent infringement is what makes the oft-overlooked design patent such a powerful form of intellectual property. 

However, deciding which remedy to pursue is never simple. On the one hand, pursuing the plaintiff's damages allows the plaintiff to potentially treble its award in exceptional cases. On the other hand, by seeking to disgorge the defendant's profits, a plaintiff can streamline damages discovery, simplify the issues that are presented to the jury, and avoid additional litigation costs. Depending on the nature of the infringement and the profit margin for the accused product, either theory of recovery could yield a larger sum for the plaintiff. Thus, the decision to pursue damages or profits is rarely simple choice. 

Luckily, a plaintiff's decision to seek damages or profits is not set in stone. Recently, Judge Rudolph Randa held that Nordock was entitled to take discovery of Systems' profits despite never having requested the defendant's profits from infringement in its prayer for relief. See Nordock, Inc. v. Systems, Inc., No. 11–C–118, 2012 WL 4760784 (E.D. Wis. October 5, 2012). In Nordock, Systems, Inc. is accused of infringing U.S. Des. Pat. No. 579,754, for a lip and lug hinge plate for dock levelers. In its complaint, Nordock only requested damages for infringement under § 284. Nordock also failed to identify Systems' profits as a measure of damages in its initial disclosures. Systems Inc. therefore refused to produce any evidence of its profits. Systems Inc. argued that the requested information was irrelevant to Nordock's claims and the only articulated theory of damages. 

Ruling on Nordock's motion to compel, Judge Randa held that evidence of Systems, Inc.'s profits were discoverable, even without first amending the complaint. Judge Randa reasoned that, under Rule 54(c), courts "should grant the relief to which each party is entitled, even if the party has not demanded that relief in its pleadings," unless such relief would prejudice the opposing party. Finding no prejudice to Systems, Inc., the court ordered that the records be produced and allowed Nordock's new theory of disgorged profits. 

The lesson from Nordock is simple. As a general rule, plaintiffs in design patent cases should request all available forms of relief, including disgorgement of profits under 35 U.S.C. § 289. However, a plaintiff may still be able discover evidence of the defendant's ill-gotten profits and assert a disgorgement theory if it acts quickly to gather the necessary evidence before trial.

No comments :

Post a Comment