Page 111 - Intellectual Property Disputes

ultimately awarded 50% of the profits based on the infringed materials, reasoning that the additional
products would be purchased to complete the collection.

Similarly, in Nintendo of America, Inc. v. Dragon Pacific International, the infringer packaged multiple
video games on a single Nintendo cartridge. The expert argued that because 33% of the games packaged
on a cartridge were Nintendo games, 33% of profits was an appropriate apportionment. fn 21 The court
rejected that argument, reasoning that because the entire cartridge was marketed as a Nintendo product,
the infringer had received the benefit of the Nintendo trademark on all games included on the cartridge.

Stacked Royalties

The question of the value of intellectual property is complicated if the defendant has expenses (either
real or imputed based on its own intellectual property contribution) for other intellectual property used
with the product in question. For example, if the product uses other patented technology or earns
premium pricing due to a trademark, it may be appropriate to consider the other contributory intellectual
property assets in the apportionment analysis.

The court addressed this issue in Integra Lifesciences. fn 22 In that patent infringement case, the
plaintiff’s patents related to segments of certain proteins that, by interacting with certain receptors on the
surfaces of cells, induced better cell adhesion and growth aimed at promoting wound healing. Integra
Lifesciences was awarded $15 million in reasonable royalty damages at trial. On appeal, the Federal
Circuit found that the number of patent licenses needed to develop a drug may also affect the value
placed on any single technology used in the development process and remanded the case to the district
court for further proceedings. On remand, the court reduced the damages to $6.375 million.

Stacked royalties can also apply to the determination of a reasonable royalty if multiple licenses exist
with a single product.

fn 21 Nintendo, 40 F.3d at 1007, 1010.

fn 22 Integra Lifesciences I, Ltd. v. Merck KGaA, 331 F.3d 860 (Fed. Cir. 2003) and Integra Lifesciences I, Ltd. v. Merck KGaA, 2004
WL 2284001 (S.D. Cal. 2004).

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