By John Kidd, Rogers & Wells

Recent judicial developments point to a narrowing of the role of juries in patent infringement cases. In April of this year, the Supreme Court unanimously held in Markman v. Westview Instruments, Inc. that patent claim interpretation is strictly for the judge and not for the jury. This fall, the Supreme Court will hear oral argument in Hilton Davis Chemical Co. v. Warner-Jenkinson Co. on the question of infringement under the doctrine of equivalents. In light of statements in Markman, and based on predictions by members of the intellectual property bar, the jury's role in determining infringement under the doctrine of equivalence may also be restricted in some way.

In the wake of these developments, numerous articles have been written about the diminished role of the jury in patent infringement cases. This may be the time, however, to recall Mark Twain's often quoted remark that "the report of my death was an exaggeration." In the same vein, it can be said that the diminution of the jury's role in patent infringement cases similarly has been exaggerated. This is not the time to conclude that juries are no longer a factor in patent cases. Just as before, the various jury trial techniques developed, and more recently honed, in jury patent trials continue to be extremely important to the patent litigant. Simplification of themes, liberal use of audio visual aids, sensitivity to arguments that resonate with the jury and the use of mock trial and other jury simulation sessions continue to be essential in large scale patent jury cases.

Juries and Patent Infringement

Markman has the effect of reining in the jury on the issue of infringement by precluding counsel from advancing dubious interpretations of what the patent claim language means. Markman itself involved such a situation where the patentee's counsel managed to persuade the jury that certain claim language should be read in a way that was contrary to the patent itself and the patent's prosecution history. It was only through a successful post-verdict motion for a judgment as a matter of law that the alleged infringer managed to undo the jury's handiwork.

It is important to remember, however, that juries will still be responsible for deciding infringement - i.e. whether the claim language (as determined by the judge) reads on the allegedly infringing device. In those instances where the patentee's case survives dispositive motions and makes it to trial (and there will be many of these), juries will have leeway in deciding the issue of infringement. In those instances, effective use of jury trial techniques will play an important role in determining the outcome of the case.

Many of these same jury trial techniques also will be effective at the "Markman hearings" that courts can be expected to hold early on in patent cases. These hearings, which are minitrials at which the judge decides what the patent claims mean, lend themselves to such techniques. These include such things as devising ways to simplify technology and make it more easily understood through the use of animation and other demonstrative evidence. Federal judges today, and most likely in the future, largely lack technical backgrounds. As a result, the litigant that can make the technology understandable to a judge, using techniques developed for juries, should fare better than the litigant who assumes that the "bells and whistles" of jury trials have become of secondary significance after Markman.

Because of Markman hearings, patent litigants can expect speedier determination of what the patent claims mean. Thus, in turn, can increase the likelihood of disposing of the litigation before trial through dispositive motions or realistic settlement negotiations. However, in the past, large corporate defendants sometimes derived benefit from the uncertainty surrounding claim interpretation, an uncertainty that often would not be cleared up until after long and expensive pretrial litigation and a several week trial. This could lead a plaintiff of modest means to settle with an economically stronger adversary. Today, that same plaintiff can learn what the claims mean after a short Markman hearing early in the case and at modest expense. Thus, the large corporate defendant has, in some respect, lost some leverage as a result of Markman.

Juries and Patent Validity

This conclusion is supported by the fact that other important case issues continue to be the province of the jury in patent infringement actions. While the question of patent validity is ultimately a legal one, it is the jury that decides the subsidiary fact questions about the nature and relevance of the prior art upon which an invalidity claim is based. In the past, most alleged infringers have been able to manufacture some sort of noninfringement defense through creative claim interpretation. After Markman, that will be more difficult to do. As a result, alleged infringers may find themselves without an infringement defense and only an invalidity defense. In that kind of case, the jury's role is especially important. Furthermore, juries generally are reluctant to second guess the U.S. Patent Office and find a patent invalid. Thus, the alleged infringer who lacks a noninfringement defense is well advised to work hard at developing an invalidity case that a jury would understand and find persuasive.

Juries and Damages

A second area where the jury continues to hold sway is the area of patent damages. One "given" in patent litigation is that the parties' respective damages experts will be poles apart in positing the correct measure of damages. The jury's decision to believe one expert, rather than the other, can mean many millions of dollars to the litigants. For example, last year a jury awarded $1.2 billion to the patentee in Litton Systems, Inc. v. Honeywell, Inc. Fortunately for Honeywell, a new trial on the issue of damages has been ordered.

Large damage claims, based on creative lost profit economics-based theories, will be increasingly evident following recent decisions by the Federal Circuit which posit a more flexible "but for" "reasonably foreseeability" standard of damages (e.g. Rite-Hite Corp. v. Kelley Company, Inc.). Even at the level of reasonable royalty calculations (which typically produce the most modest damages), damage amounts can be substantial. For example, in Rite-Hite, the royalty was more than 75% of the net sales price of the infringing device and 33 times greater than the infringer's profit on the device.

This suggests that the amount of damages likely to be awarded will become a more common subject of jury perception studies conducted before trial. For example, a number of years ago one jury consulting group predicted that the defendant in a non-patent case would be found liable, but for minimal damages. The jury did, in fact, find liability, and then awarded one dollar in damages. Similar jury research may become increasingly useful in patent infringement cases.

Juries and Willful Infringement

A third major issue in a patent case involving the jury is whether the infringement was willful. It is a jury's job to decide that question. If willfulness is found, it is the judge's job to decide whether and by how much (up to trebling) damages should be enhanced. While the judge can moderate the effects of a jury's finding of willful infringement by choosing to enhance damages very little or not at all, Federal Circuit case law makes clear that he or she cannot do so by, in effect, disregarding the jury's finding of willfulness.

Juries and Certain Defenses

Several commonly asserted defenses - which ultimately are to be decided by the judge -also raise interesting jury questions in patent cases. One such defense is inequitable conduct, by which the alleged infringer charges the patentee with failing to disclose material prior art to the Patent Office. If proven, this defense makes the patent void and unenforceable. Importantly, it provides the alleged infringer with an opportunity to portray the patentee as a "bad guy". Juries faced with complicated technology and thorny infringement and validity questions might find this easily understood argument to be a good surrogate for deciding the case. As a result, litigants have been battling over whether such evidence, and lawyers' arguments on the issue, should be heard by the jury. One school lets the jury provide an advisory verdict which the judge may or may not adopt. A second school has evidence and arguments on the defense provided separately and only to the judge. Quite obviously, it is to the alleged infringer's advantage to have this "bad guy" defense heard by the jury.

Two other defenses that a judge ultimately decides - laches and estoppel - raise similar jury/judge issues. Laches is proven where there was unreasonable delay by the patentee in asserting his patent rights plus prejudice to the alleged infringer as a result of the delay. Where the laches defense is successful, the patentee is precluded from obtaining damages for any infringement prior to the date the patent action was instituted. The related defense of estoppel requires misleading conduct by the patentee that causes the alleged infringer to assume that no patent claim is being asserted, which reliance leads to evidentiary or economic prejudice. If this defense is proven, all damage claims, as well as the right to an injunction, are lost by the patentee.

Both laches and estoppel raise jury/judge questions similar to those raised by the inequitable conduct defense. The alleged infringer would like the jury to hear these defenses because they raise sympathetic themes - i.e. the patentee's delay or conduct has hurt the alleged infringer. The patentee, in turn, ordinarily would prefer to have these issues heard only by the judge. As with inequitable conduct, courts have handled the matter differently. Some courts let the jury hear all the evidence and give an advisory verdict; other courts, in contrast, let the evidence go only to the judge.

Juries and Verdicts

One further ingredient in the jury trial "stew" is what additional steps, if any, the courts are likely to take to identify and avoid jury error and mistake. Some courts have suggested the use of detailed verdict forms or special interrogatories. Here, again, courts have split with some favoring greater precision and others avoiding measures that would tend to increase the chances of mistrial and consequent retrial of long and complicated cases. If a trend develops towards using such tools regularly or invariably, there will be an obvious effect on patent jury trials.

Conclusion

All of this brings to mind the old Peace Corps advertisement which asked "is this glass half full or half empty". Certainly Markman, and perhaps the anticipated Hilton Davis decision, can be expected to narrow to some extent the role of juries in patent infringement litigation. However, juries will continue to play a major role in a patent infringement trial. The "glass", in short, is far from empty. If patent litigants forget that important fact, they may find themselves "all wet" and on the losing side of a patent case.

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