When The Game Is Not Worth The Candle

We’ve spoken as to the merits of creative case management before—particularly when the cost of the defense appears to be driving the litigation train. In a recent scheduling order set in the case of Brandeis University & GFA Brands, Inc. v. East Side Ovens Inc. et al. (the “et al.” standing in for a number of your favorite childhood comfort foods), Judge Posner, sitting by designation in the Northern District of Illinois, gave voice to a similar concern:

“I am concerned whether the plaintiffs if successful in establishing liability will be entitled to nontrivial damages awards. Suppose the defendants infringed the asserted patents but that none of the defendants marketed its products as low in bad cholesterol (LDL) or high in HDL, or as having a high ratio of HDL to LDL; and suppose further that the defendants obtained no cost savings by infringing the patents rather than using some non–infringing recipe and that neither Brandeis nor its licensee GFA Brands lost any business as a result of the infringement. On those assumptions, would the plaintiffs have any claim for damages, whether compensatory or punitive, or restitution? I would like the parties to address this question in briefs filed simultaneously by close of business on April 2.”

In other words, it will be a pyrrhic victory indeed if the parties spend millions of dollars litigating a case to a jury verdict of infringement—only to find that the plaintiff’s damages amount to chump change. On the flip side, even should the patented invention be worth no more than the paper it is written on, a busy executive at Keebler or Nestlé will be hard pressed not to take a nuisance value settlement if it’s priced well below the costs of defense.

Posted by Stacy Stitham