Supreme Court opens door to worldwide patent damages
Together with the R Street Institute, EFF filed an amicus brief [PDF] in the case explaining that worldwide damages are not consistent with the domestic focus of the patent act. Our brief, co-written with Professors Bernard Chao and Brian Love, provided an example of how such a ruling could harm U.S. innovation:
[C]onsider how such a regime might impact two hypothetical companies. Two companies, a domestic one A and a foreign one B, design and test semiconductor chips and contract with a foreign manufacturer to produce their designs. A patent owner claims that both companies’ testing processes infringe a patent, and demands damages for the manufactured chips on the theory that those chips’ manufacture and sale are proximately and factually caused by the infringing testing. [If the Court allows worldwide damages then] Company A could be liable for a reasonable royalty on its worldwide sales. In contrast, Company B would likely only be liable for royalties on its U.S. sales. This would effectively punish Company A for conducting research and development in the United States.