Patent Infringement Settlement: Everything You Need to Know
Legal cases involving patent infringement are complex and can have a substantial impact on both parties. 3 min read
2. Outcomes of Patent Infringement Lawsuits
3. Largest Patent Infringement Award: Microsoft
4. Largest Patent Infringement Award: Merck
5. Largest Patent Infringement Award: Cordis Corporation
6. Largest Patent Infringement Award: TiVo
Updated November 27, 2020:
Patent Infringement Cases
A patent infringement settlement is an agreement that has been reached between a patent owner and an individual or corporation that used and profited from the intellectual property in the patent without the patent owner's permission. Legal cases involving patent infringement are complex and can have a substantial impact on both parties.
Suing someone for patent infringement is a big risk for most companies. These cases are costly, can drag on for years, and are often difficult to win at trial. This is especially true if you are a small business attempting to sue a large company for patent infringement.
Outcomes of Patent Infringement Lawsuits
- A negotiated settlement in which the defendant agrees to pay an ongoing royalty for the intellectual property in question. Through this licensing agreement, the plaintiff will enjoy a stream of income. Also, he or she may be able to negotiate for retroactive payments as well.
- If a settlement cannot be reached, a mediator specializing in patent infringement may be used to assist with the negotiation and terms of agreement. These firms can often secure favorable settlements for the plaintiffs in such cases. In addition, they can sometimes resolve the issue more quickly than if both parties proceeded with the case to trial.
- If these measures are not successful, the plaintiffs in patent infringement cases can attempt to win a victory at trial.
Largest Patent Infringement Award: Microsoft
Microsoft was sued for patent infringement for its use of technology that places ads within search engine results. The suit was filed in New York federal court. However, a settlement was eventually reached under which Microsoft had to pay the patent owner $1 million, assign certain patents to that company, enter into a licensing agreement with the plaintiff, and pay the plaintiff 5 percent of what Google pays to use the same patents.
This case illustrates the possibility of settling a patent infringement case even with a large corporation, as well as the breadth and depth of terms that can be involved in these settlements.
Largest Patent Infringement Award: Merck
Merck was awarded more than $2.5 billion by a jury when Gilead Sciences, Inc. was found guilty of willful infringement for using a Merck patent to make and to sell two prescription drugs for hepatitis C. This was the largest patent infringement verdict ever granted in the United States. Moreover, damages could even be multiplied by three based on a June Supreme Court case in which additional penalties for willful misconduct were approved.
Largest Patent Infringement Award: Cordis Corporation
In a 2010 patent infringement settlement that was the largest in U.S. history at the time, a Fortune 50 medical device company called Cordis Corporate received $1.725 billion. The defendant, a Fortune 500 manufacturer, infringed on a revolutionary cardiac stent device. They previously paid more than $700 million in damages by issues that another stent they produced had caused in patients.
Largest Patent Infringement Award: TiVo
TiVo received a minimum of $215 million in a settlement from AT&T. This was for an infringement complaint filed in Texas and California courts. The suit revolved around TiVo's digital video recorder, the first of its kind in the marketplace. AT&T countersued, claiming TiVo violated three of its own patents. The issue was resolved by this patent licensing agreement less than a week before the case was set to go to trial. TiVo's attorney noted that they were pleased about this recognition of the value of TiVo's intellectual property.
The settlement outlined a $51 million payment as well as quarterly payments that equaled to $164 million. AT&T was also to be held responsible for monthly license fees for each of their DVR subscribers over a certain level, through June 2018. Also, both companies agreed to dismiss other pending litigation involving the other party and to cross-license their existing patent portfolios.
TiVo previously received two settlements for patent infringement from the Dish Network, through which they were awarded a total of more than $600 million.
If you need help with a patent infringement settlement, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.