Tuesday, March 27, 2012

Judge Posner Questions Whether Owner of Patent on Heart-Healthy Cookies Would Be Entitled To Nontrivial Damages

Last year I reported that Brandeis University had joined its exclusive licensee GFA Brands in suing a number of cookie companies for infringing its patents directed towards methods of "Increasing the HDL Level in the HDL/LDL Ratio in Human Serum by Balancing Saturated and Polyunsaturated Dietary Fatty Acids." The case is being heard by Judge Richard Posner in the Northern District of Illinois. On March 16, Judge Posner issued an interesting order in the case, ordering the parties to brief the issue of whether plaintiffs, if successful, would be entitled to nontrivial damage awards. Here is the order:

“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, if the cookie manufacturers are not profiting from the healthy cookie recipe by using it to market their cookies, and the recipe does not cut their costs, then how has the patent owner been harmed, and what does Brandeis want the court to do? Perhaps the answer is that customers do pay a premium for healthier cookies, even if the cookie manufacturer does not use that information in marketing its products. And in any event, Brandeis/BFA would presumably like to get an injunction against the cookie manufacturers, as leverage to demand royalty payments, or to keep them off the market, thus reducing competition in the market for healthy cookies. But if the defendant cookie manufacturers do not profit from the technology, perhaps they will simply change their recipe, perhaps rendering their cookies less healthy but no less profitable.

Thanks to Docket Navigator for making me aware of this order.

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