By: Steve Amundson (partner) and Mark Basanta (summer associate)
Generally in patent cases, liability, damages, and willfulness issues are addressed before either party appeals from a district court to the Federal Circuit. Many times, all issues are handled in a single trial. That may change as of last Friday. The Federal Circuit sitting en banc held in a split decision that a party may appeal a district court’s liability decision even though there has been no determination regarding damages or willfulness.
In Robert Bosch, LLC v. Pylon Manufacturing Corp., Judge Sue Robinson of the District of Delaware bifurcated liability and damages into separate proceedings. Judge Robinson is among a handful of judges who routinely separate patent trials this way. After this Federal Circuit decision, however, more district judges may decide that they too can conserve party and judicial resources by bifurcating patent trials. If so, the procedure will certainly become more common.
The specific statute at issue in Robert Bosch allows for appeals in patent cases when the decision is “final except for an accounting.” An “accounting” was one way in which the patentee’s compensation was calculated when this statute became law in 1927. Federal courts functioned very differently back then. In 1927, patentees had to choose between suing in a court of law to recover damages (including the patentee’s lost profits or the loss of an established royalty), or suing in a court of equity to receive an injunction and an accounting. By 1927, an accounting in a court of equity had come to include determinations of the infringer’s profits, and the patentee’s damages (including lost profits or a reasonable royalty). Both courts determined liability, but in a court of law, a jury settled disputed facts and determined damages, whereas in a court of equity, the judge did. Today, the two different courts are merged and a single court handles all issues. In modern patent cases, an infringer’s profits are no longer an available remedy for infringement of a utility patent.
Robert Bosch is significant because five of the nine Federal Circuit judges held that the definition of an “accounting” under this statute includes both willfulness and damages, a jury trial is available for an accounting, and that appeals may be taken after a determination is made on liability alone.