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Intellectual Property and Commercial Court

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2008 Min Zhuan Su No. 66

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Decision No. 2008 Min Zhuan Su No. 66
Date October 5, 2009
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Regarding calculation of the damages generated by patent infringement, Article 108 of the Patent Act, which applies mutatis mutandis Article 85, Paragraph 1 of the same act, allows patentees to choose among concrete methods of calculation. However, the damages calculation is quite complicated and difficult. While a patentee chooses to license her patent to others, she usually will ask for royalties in turn. Given the fact that there was no licensing relationship between the patentee and infringer in an infringement litigation, royalties collected from existing licensees of the same patent could be used as a reference for damages calculation. Similarly, the German law sometimes adopts a doctrine of analogical license to practice, which analogizes the damages calculation with license to practice. In the U.S., reasonable royalty is a method of damages calculations, which is expressly acknowledged by 35 U.S.C. § 284. If there is no standard royalty in the same industry, nor did the patentee have set up established royalty through a substantial amount of prior licensing, the patentee may then rely on a hypothetical negotiation to calculate the damages. This approach is usually called the “hypothetical willing-licensor willing-licensee approach,” the most frequently cited case of which is Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970). Article 102, Paragraph 3 of the Japanese Patent Law also allows the patentee to recover damages calculated on the basis of royalties she otherwise collected through licensing. In addition, Article 87, Paragraph 2 of the Guidelines for Managing Civil Litigation provides that, “when dealing with damage issues in intellectual property infringement cases, the court could by the plaintiff’s request refer the damage issue to the authorities concerned or other appropriate institutions to assess its amount. The court could also consider any reasonable royalty the owner may acquired through licensing. Still, the court could also order the defendant to produce documents or data that are necessary for damages calculation.” That provision is of the same view on this issue as the aforementioned countries. Thus, the plaintiff’s argument in the present case, which asserts the damages calculation to be based on reasonable royalties of the four patents at issue, shall be upheld.

Related Provision Art. 108; Art. 85, Para. 1 Judge Guidelines on Civil Litigation: Art. 87, Para. 2
  • Release Date:2020-11-13
  • Update:2020-12-07
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