Page 40 - Intellectual Property Disputes

with electrically, it does not perform as well as competitive devices (specifically ours and
Presidio’s). So for all practical purposes, DLI is not a major concern."

The record contains substantial evidence to support the market’s migration away from a two-
piece design, thus supporting the jury’s finding of no acceptable non-infringing substitutes.

The relevant market does include other devices or substitutes similar in physical and functional
characteristics to the patented invention. fn 31 It excludes, however, alternatives "with disparately
different prices or significantly different characteristics." fn 32 Once the market is defined, it generally
becomes an easier task to determine how many suppliers operate in the defined relevant market. Market
supplier inquiry focuses on the number of companies involved in the supply market, not the number of
alternatives in the relevant market.

Market share was further addressed in BIC Leisure Products, Inc. v. Windsurfing International, Inc. On
appeal, the Federal Circuit rejected the trial court’s award of lost profits because it found that
"[a]ssuming BIC [Leisure] had not been in the market, Windsurfing did not show that BIC [Leisure]’s
customers would have purchased sailboards from Windsurfing and other manufacturers in proportion to
their market shares." fn 33 The Federal Circuit found that the types and prices of boards sold by the
plaintiff and defendant were different and would be purchased by distinct customers. In other words,
absent infringement, purchasers of the infringing product would not purchase products from the patent
holder, even in proportion to the patent holder’s market share.

In American Seating Co. v. USSC Group, Inc., fn 34 an award of lost profits on the defendant’s sales of
products that were non-infringing but substituted for infringing product sales was upheld. In this case,
the plaintiff sought lost profits on sales made by the defendant based upon offers to sell in contract bids
describing an infringing product. Upon award of the contracts, the defendant delivered non-infringing
replacement products in lieu of the infringing products described in the offer to sell contract bids. The
Federal Circuit found that but for the defendant’s initial offer to sell the infringing products, the patentee
would have otherwise made sales of its product covered by the patented technology. The court found
that the jury’s conclusion that the replacement product was not an acceptable substitute was reasonable.

In Golden Blount, Inc. v. Robert H. Peterson Co., fn 35 the Federal Circuit found there was a two-supplier
market controlled by the patentee and defendant, and that but for the infringement, the patentee would
have made the infringing sales. At the bench trial, the plaintiff’s damages expert provided testimony that
there was sufficient demand, that there were no non-infringing alternatives, and that the plaintiff had
sufficient marketing and manufacturing capacity. The plaintiff’s damages expert testified that the

fn 31 Crystal Semiconductor Corp. v. TriTech Microelectronics Int’l, Inc., 246 F.3d 1336 (Fed. Cir. 2001).

fn 32 Id. at 1336, 1356.

fn 33 BIC Leisure Prods., Inc. v. Windsurfing Int’l, Inc., 850 F. Supp. 224 (S.D.N.Y. 1994).

fn 34 Am. Seating Co. v. USSC Group, Inc., 514 F.3d 1262 (Fed. Cir. 2008). The patent at issue relates to wheelchair tie-down restraint
systems for use in mass transit vehicles. At trial, the jury awarded $1,366,612 in lost profits on sales of infringing product and
$959,517 in lost profits on sales of replacement products. These awards included lost profits on collateral sales of passenger seats.
fn 35 Golden Blount, Inc. v. Robert H. Peterson Co., 438 F.3d 1354 (Fed. Cir. 2006). The patent at issue relates to gas-fired fireplace
burners and associated equipment. At trial, the district court awarded damages that were vacated by the appellate court and remanded
to resolve the limited issue of the returned goods. The district court found damages of $429,256 in lost profits, which were trebled.
Attorney’s fees were awarded in the amount of $622,015. The defendant appealed.

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