Page 35 - Intellectual Property Disputes

For example, in Gyromat Corp. v. Champion Spark Plug Co., fn 11 the court observed that "the patented
control features were advertised by Champion and although Champion has shown that painting systems
could be made and sold without the patented features, the patented control system was obviously
important enough to keep for 15 years on all of its short stroke reciprocating painting systems. If there
was no demand for the patented system, Champion would not have run the risk of infringement." fn 12
The court also found that "[t]he substantial number of sales of infringing products containing patented
features was compelling evidence of the demand for the product" fn 13 for the purpose of determining lost
profits.

Analyses that may assist in establishing the commercial success of the patented feature include the
following factors:

• Showing the levels and growth of sales of the patented product for both the patent holder and the
infringer

• Mapping the variations between the sales of the patented product and its predecessor product

• Reviewing the infringer’s business plans and product literature that may speak to the importance
of the patented feature

• Demonstrating the infringer’s sales prior and subsequent to infringement

• Showing the length of time the infringer has been infringing the patent

In DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc. and subsequent cases, fn 14 the Federal Circuit
has held that there needs to be a showing of demand for the infringing product only, as opposed to the
more stringent hurdle of showing demand for the patented feature. In this case, the defendant argued that
the plaintiff was not entitled to lost profits because it had not shown that demand for the patented
product "was driven by ‘the screws’ top-loading’ feature." fn 15 The Federal Circuit disagreed with the
defendant and found that the first Panduit factor

does not require any allocation of consumer demand among the various limitations recited in a
patent claim. Instead, the first Panduit factor simply asks whether demand existed for the
"patented product," i.e., a product that is "covered by the patent in suit" or that "directly
competes with the infringing device." fn 16

fn 11 Id.

fn 12 Id.

fn 13 Id.

fn 14 DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314 (Fed. Cir. 2009). The patent at issue relates to pedicle screws
used in spinal surgery. A jury awarded $226.3 million in lost profit damages, of which $149.1 million related to the patented pedicle
screws and $77.2 million related to unpatented "pull-through" products. On appeal, the court affirmed lost profit damages on the
pedicle screws but reversed lost profit damages on the unpatented pull through products.

fn 15 Id.

fn 16 Id.

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