Willful Patent Infringement and Enhanced Damages After In re Seagate: An Empirical Study

Willful patent infringement is a critical issue in patent litigation, as it can result in an award of up to treble (enhanced) damages. In a 2007 decision, In re Seagate, 497 F.3d 1360 (en banc), the Federal Circuit significantly altered the standard governing willful infringement by requiring the patentee to prove at least objective recklessness by the accused infringer. Many observers predicted that this heightened standard would result in far fewer willfulness findings and enhanced damage awards. To date, however, there has been no comprehensive empirical study of Seagate\u27s actual impact in patent litigation. This paper fills that gap by analyzing six years of decisions in the district courts - three years before and after Seagate - on willful patent infringement and enhanced damages. Surprisingly, it determines that willful infringement was found only about 10% fewer cases after Seagate. In addition, after Seagate, juries find willful infringement substantially more often than judges at trial. However, enhanced damages are awarded less frequently and in lower amounts when juries find willfulness compared to judges. Finally, this Article evaluates the impact of several common factors on willful infringement decisions after Seagate. Based on the empirical data collected in this study, the existence of a substantial or legitimate defense to infringement is the strongest predictor of a finding of no willfulness after Seagate, while evidence of copying by the accused infringer was the strongest predictor of willfulness. In contrast, the remaining factors studied - opinions of counsel, attempts to design around the patent, reexamination at the PTO, and bifurcation of willfulness from liability at trial - had no statistically significant effect on willfulness decisions

Noncompetes and Other Post-Employment Restraints on Competition: Empirical Evidence from Trade Secret Litigation

Noncompete clauses in employment agreements are both common and controversial. An estimated twenty-eight million Americans—nearly twenty percent of the U.S. workforce—are currently bound by a noncompete. The traditional view that noncompete agreements can facilitate increased productivity by encouraging employers to invest in employee training has been challenged by numerous legal and economics scholars in recent years, who contend noncompetes hinder employment options for skilled workers and limit information spillovers, which are both vital drivers of innovation. Based on these claims, several states have recently limited the enforcement of noncompetes, and legislation is pending at the federal level to effectively ban noncompete agreements for certain types of workers. Despite their widespread use, empirical research regarding noncompetes is fragmented and incomplete. In particular, there have been few empirical studies based on actual employment agreements. This Article helps fill an important gap in the existing literature. Using a novel dataset of noncompete agreements that have been publicly disclosed in trade secret litigation in federal court, it finds that noncompetes are more frequently enforced against technical and sales personnel, instead of high-ranking corporate executives. In addition, it finds that noncompetes are common for employees with a base salary below $100,000 per year and that California-based employees are significantly less likely to be bound by a noncompete. The implications of these and other findings from the dataset are discussed in the final Part of the Article

Patent Eligibility and Cancer Therapy

As an empirical legal scholar, I am pleased to report that Sasha Hoyt has done what very few law students—and even many law professors—could achieve. She successfully conducted a novel empirical study to assess the real-world impact of a U.S. Supreme Court decision, Mayo Collaborative Services v. Prometheus Laboratories, Inc., on venture capital (VC) investment in startups and other companies that develop medical diagnostic technology. As Ms. Hoyt notes, patent protection is particularly important for startup companies, as it can help protect their innovations from unauthorized use, attract funding and other investments, and foster collaboration with third parties. In the Mayo case, the Supreme Court made it extremely difficult for medical diagnostic companies to obtain patent protection for their technology, no matter how novel or useful it is. Using a sophisticated difference-in-difference methodology to evaluate the impact of the Supreme Court’s decision in Mayo on VC funding for medical diagnostic startups, Ms. Hoyt finds that medical diagnostics firms received almost $10 billion less in VC funding that they would have compared to other industries that were unaffected by the decision. And importantly, this result is statistically significant using an ordinary least squares (OLS) regression analysis. In short, Ms. Hoyt’s Note is a valuable contribution to the literature on patent eligibility and its impact on innovation, and policymakers should take note of her study

American Innovation and the Limits of Patent Law: A Response to William Hubbard, Competitive Patent Law

In his recent article Competitive Patent Law, Professor William Hubbard makes a valuable contribution regarding an underexplored aspect of patent law’s ability to encourage innovation — namely, “whether U.S. patent law can be tailored to provide U.S. innovators with enhanced incentives to invent” compared to foreign rivals, and thus by extension make American firms more competitive in the global marketplace. This brief response addresses three aspects of Professor Hubbard’s thoughtful and well-written article. First, it critiques the article’s contention that the United States is currently facing an “innovation gap.” Second, it critically evaluates the claim that patent law can play a meaningful role in enhancing innovation and thus competitiveness. Finally, it discusses several non-patent-law approaches, including prizes, tax credits, and math and science education, that can help foster the “innovation culture” advocated by Professor Hubbard

The Case Against Federalizing Trade Secrecy

Trade secrecy is unique among the major intellectual property (IP) doctrines because it is governed primarily by state law. Recently, however, a number of influential actors — including legislators, academics, and organizations representing IP attorneys and owners — have proposed creating a private civil cause of action for trade secret misappropriation under federal law. Proponents assert that federalizing trade secrecy would provide numerous benefits, including substantive uniformity, the availability of a federal forum for misappropriation litigation, and the creation of a unified national regime governing IP rights. This Article engages in the first systematic critique of the claim that federalizing trade secrecy is normatively desirable. Ultimately, it concludes that there are multiple reasons for trade secrecy to remain primarily the province of state law, including preservation of states’ ability to engage in limited experimentation regarding the scope of trade secret protection and federalization’s potential negative impact on the disclosure of patent-eligible inventions. Finally, it proposes an alternative approach — a modest expansion of federal courts’ jurisdiction over state law trade secret claims — that can help address the issue of trade secret theft without requiring outright federalization

Ongoing Royalties in Patent Cases after eBay: An Empirical Assessment and Proposed Framework

While the Federal Circuit has authorized the award of ongoing royalties as an equitable alternative to a permanent injunction, numerous questions regarding such relief remain unresolved, including when ongoing royalties should be awarded, the structure and methodology for computing an award, and possible enhancement of the royalty rate for post-judgment willful infringement. Despite lower courts\u27 attempts to grapple with these issues, a comprehensive methodology for determining ongoing royalties has yet to emerge. This Article seeks to fill this void in two ways. First, it empirically assesses how courts have resolved claims for ongoing royalties by prevailing patentees. It does so by reporting the results from an original dataset of district court decisions on ongoing royalties following eBay. Second, based in part on insights from this empirical study, it proposes a new framework for determining ongoing royalty awards. In particular, this framework is designed to avoid over- or under-compensation of patentees by requiring consideration of actual or anticipated changes to the relevant product market as well as potential future alternatives to the patented technology in determining the amount of an ongoing royalty award. The balance of this Article is organized as follows. Part II discusses prospective remedies in patent law prior to the eBay decision. It also analyzes the eBay decision and its impact on the availability of injunctive relief for PAEs. Part III assesses ongoing royalties as an alternative to permanent injunctive relief and evaluates several unresolved issues regarding ongoing royalty awards. Part IV describes the methodology and findings from the author\u27s empirical study of ongoing royalty awards following eBay. Finally, Part V proposes a new framework for computing ongoing royalty awards in future cases

Introduction: The Defend Trade Secrets Act of 2015

This is an introduction to a Roundtable on the Defend Trade Secrets Act published by the Washington and Lee Law Review Online in 2015