Patent Owner Cannot Recover Both Reasonable Royalty on Utility Patent and Infringer Profits on Design Patent for the Same Sale

The U.S. Court of Appeals for the Federal Circuit recently held that the holder of a design patent and a utility patent cannot recover both infringer profits under 35 U.S.C. § 289 and a reasonable royalty under 35 U.S.C. § 284 for the same infringing sales. Catalina Lighting, Inc. v. Lamps Plus, Inc., Case No. 01-1563 (Fed. Cir. June 28, 2002).

Lamps Plus is the owner of U.S. Patent No. 5,221,141 (the ‘141 patent), a utility patent for a "tree torchiere," a stand-alone electric lamp having a general area light source at the top of a stem as well as a plurality of adjustable light sources affixed to the stem for providing task lighting directed to specific areas. Lamp Plus also owns U.S. Design Patent No. 353,904 (the ‘904 patent), for the ornamental design of a "Combined Torchiere Lamp and Adjustable Accent Lamps." Lamps Plus sells tree torchieres through its retail stores and through a third-party wholesaler, Pacific Coast Lighting. Catalina Lighting also manufactures lamps that are sold to Home Depot for resale.

Lamps Plus and Pacific Coast sued Home Depot and Catalina, claiming infringement of both the design patent and the utility patent. After trial, the jury returned a special verdict form finding that Catalina infringed the ‘141 patent and owed a reasonable royalty of $660,000; Catalina infringed the ‘904 patent and owed damages of $275,194, equaling Catalina’s profits; Home Depot infringed the ‘141 patent and owed reasonable royalty of $630,190; Home Depot infringed the ‘904 patent and owed damages of $492,748, equaling Home Depot’s profits; and that Home Depot and Catalina’s infringement was willful. The Court entered judgment in accordance with the jury’s verdict but modified the damages award of the ‘141 patent, replacing the jury’s award with a single award of $660,000 for which Catalina and Home Depot were jointly and severally liable.

On appeal, Catalina argued that Lamps Plus was not entitled to recover a reasonable royalty for infringement of the utility patent as well as infringer profits for infringement of the design patent. The Federal Circuit noted that a design patentee may recover damages under §284 or §289, but may not recover both. The Court recognized that while §289 prohibits a double recovery of infringer profits, it does not directly address whether an additional remedy may be recovered when both a design patent and a utility patent have been infringed. The Court resolved the issue by focusing on the infringing sales. Since each sale was the basis for the infringement of both the ‘904 and ‘401 patents, the Court held that once the patent owner receives infringer profits under §289, it was not entitled a further recovery from the same sale. According to the Court, the award of infringer profits under §289 also constitutes "damages adequate to compensate for the infringement" under §284. It went on to state "… the recovery of infringer profits resulting from the single act of selling lamps satisfies Lamp Plus’s entitlement under §289 and more than satisfies its entitlement under §284."