3. Interpretación de la experiencia pedagógica
3.3. Sobre las motivaciones de los catequistas
The traditions of Commonwealth jurisdictions, the US and Canada on patent damages converge when substitutability to user(s) is zero. This is because in such a market state, the patentee functionally has a monopoly. As such, it will be a straightforward matter to whatever sales the infringer made would have necessarily gone to the patentee, so long as the patentee had the productive capacity to produce as much as the infringer did.67 Hence, the loss suffered by the
patentee is generally attributable to the volume of infringing activities.
A ‘two-supplier’ market often characterises such a market state, as it only consists of the patentee and infringer.68 In such situation, both causation and loss are easily
established or implicit. The recent English case of AP Racing Ltd v Alcon Components Ltd69 presents a good example. In this case the English High Court
found that although there were other alternative sources of calipers (Brembo and PFC), sold even at cheaper prices, the buyers of the infringing calipers (Joe Gibbs) were singularly interested in buying calipers incorporating the infringed technology due to its superior performance enabled by a structural optimisation design process. For this reason, they were willing to pay a price higher than other alternative sources would have demanded. Thus, the court held that sales that had the infringers not sold the calipers the patentees would certainly have done so.
66 [1914] RPC 104, 119.
67 Ronald Coolley, ‘Overview and Statistical Study of the Law on Patent Damages’ (1993) 75 Journal
of the Patent and Trademark Office Society 515, 526; see also James F. Nieberding, ‘Lost Profits and Price Erosion in Patent Infringement Cases: Implications of Crystal Semiconductor’ (2003) 16
Journal of Forensic Economics 37.
68 Micro Chemical, Inc. v Lextron 318 F.3d 1119 (2003); see also Roy Epstein, ‘State Industries and
Economics: Rethinking Patent Infringement Damages’ (2000) 9 The Federal Circuit Bar Journal
367.
A ‘two-supplier’ market will not, however, be considered to exist where relevant customers would have sought other market alternatives if they considered the patentee’s to be too expensive—i.e. imperfect substitutability. Thus, in Fabio Perini SPA v LPC Group plc,70 the English High Court ruled that the patentee
(Perini) would only entitled to damages for the full contractual gains lost if they could prove that they would have secured the contracts but for the infringement. The court found that although the patented technology was most suitable to the contractual specification, but there was an alternative technology (Gambini) which the customer (LPC, also an infringer) could apply.71 Hence Norris J made
the observation that ‘[i]n the world of (what would have been) Perini was not the sole company offering converting lines to LPC, and LPC would not have been compelled to accept what Perini offered’.72 An expression of similar reasoning is
seen in Coflexip v Stolt Offshore MS Ltd,73also a contract-based case. In rejecting
the patentee’s claim that they would have earned the contracts lost, Justice Jacob (as he then was) remarked that:
the claimants are not in a position to show that the use of the apparatus or process of the invention was considered crucial or indeed even material for either the defendants or their customers. So this is not a case…..where there were really only two machines in the market — plaintiffs' and the defendants' — and it was the machines themselves which the customer wanted.74
Thus, where the market situation is one of imperfect substitutability, because a two-supplier market situation does not exist, causation and loss become onerous to prove.
A ‘two-supplier’ market may, however, take a difference shape. Although there may be several alternatives available to relevant customers, the circumstances may place the patentee’s goods or services in a ‘niche market’ (a ‘mini-market’ or ‘submarket’ as the American jurisprudence calls it).75 Consider, for example, a
70 [2012] RPC 885. 71 Ibid, 198. 72 Ibid. 73 [2002] EWHC 1686 (Ch). 74 Ibid.
75 See Yarway Corp. v Eur-Control USA, Inc., 775 F.2d 268, 276 (Fed. Cir. 1985); see also John
market for fruit juice-based sweeteners where sweeteners sold in liquid form. If, however, patented sweeteners sold in tablet form render them a species of fruit juice-based sweeteners, this may create a sub-market. In such a niche market situation, using the words of the US Federal Circuit in Kaufman Co. v Lantech,76‘it
is reasonable to infer that the infringement probably caused the loss of profits’.77
Some other Federal Circuit cases, such as Electro Scientific Industries, Inc. v General Scanning,78and Standard Havens Products, Inc. v Gencor Industries, Inc,79 have
adopted this reasoning. In sum, once again, it is apt to say that the Commonwealth and US approaches would converge in situations of zero substitutability.
As already hinted, there is the consideration that where there is zero substitutability causation and quantification of loss is easy as lost profits are ascribable to the infringement. The problem with such outcome is likely one of false attribution the implication of which is that the patentee is overcompensated. This is so for two reasons. The first is that as protection centres on the patentee’s goods, and ignoring the incremental nature of patents, there would be an undue imputation of patents. This is due to disregarding the roles of pre-existing stock of knowledge that the patent’s inventive concept builds upon and other non- infringing elements incorporated in the patented goods.
The second reason is essentially economic. It is that the patentee due to zero substitutability, the patentee can sell above market price to a considerable number of customers, and a small share of the market served by the infringer, even at lower prices, would not diminish the patentee’s economic rents.80 In other
words, regardless of the infringement the patentee would have been able to recoup its marginal costs and capture a reasonable measure of social surplus contributed through its invention.
Society 762, 780-781; Harold Brown, ‘Proof of Lost Profits Damages Following Rite-Hite v Kelley’ (1995) 23 AIPLA Quarterly Journal 579, 598-599.
76 926 F. 2d 1136 - Court of Appeals, Federal Circuit 1991. 77 Ibid.
78 247 F.3d 1341 - Court of Appeals, Federal Circuit 2001. 79 953 F.2d 1360 - Court of Appeals, Federal Circuit 1991.
The implication of compensatory damages, where there is zero substitutability, on the patent licensing market and in litigation settlements is an endowment of the patentee with undue bargaining powers such that he can demand royalties up to the licensee’s ability to recover their marginal costs. The follow-on consequence of this is a serious likelihood of abrasion to consumer welfare and this is particularly so for two possible reasons. One is that licensees would have no choice but to pass on licensing costs to consumers through high prices if they choose to license from the patentee. The other is that if they choose not to license, then they avoid the market to which the patented goods relate, which leaves the patentee in a monopolistic position such that the patentee is able to charge supracompetitive prices.