John, I hope this is the part you were talking about.
The 1995 Fonar case, tried to a jury, involved a patent on a magnetic resonance imaging (MRI) apparatus component permitting generation of multiple images at different
orientations ("multi angle oblique", MAO). General Electric was held to infringe and a verdict of nearly $62,000,000 damages was awarded. In addition, an unreported
amount of pre-judgment interest was assessed, calculated on the average 52-week U.S. Treasury bill rate for the period of two years preceding entry of the judgment,
computed daily and compounded annually. The damages award had two components: (1) recovery of $27,825,000 lost profits from 75 MRI sales and (2) royalties of
$34,125,000 for another 525 infringing units, at a rate of about 4.5% of GE's anticipated operating profits. Both awards were based on the "entire market value" of the MRI
machines, even though only the MAO component was patented. In part, this award was calculated on the GE's original expected profit level rather than on its later, much
less, actual realized profits (due to a later declining demand), all following the reasoning in Rite-Hite.
The importance of the "entire market value" rule is illustrated by the finding that the Fonar patent owner had actually sold the patented MAO component as a separate and
distinct feature for only about $1,000 to $1,500, or as part of an upgrade package worth $15,000. By basing the damages calculation on the total value of the MRI machine,
Fonar's "reasonable royalty" recovery was from 18 to 65 times the established sales price of the patented item when it was sold separately.
However, the jury's award of an additional $13,625,000 to Fonar for inducement of infringement based on GE's repair of apparatus units it had sold prior to receiving a notice
of infringement was set aside (again, there had been no patent marking). While repair of an infringing device can also be inducement of infringement, inducement of
infringement requires intent and some underlying act of direct infringement. Here, the court held that to the extent apparatus units were sold by GE prior to its receipt of the
patent owner's notice of infringement, those units were not infringing units for purposes of damages recovery. i.e., there could not earlier have been an intent to infringe and
consequently no inducement of infringement arising from the repair of those units.
Fonar illustrates once again the importance of early and consistent marking of the patented product and an early issuance of a notice of infringement, strictly complying with
the specific requirements of Rite-Hite.
Thanks for the info. -Niedz |
