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Damages Decision Issues in Novozymes v. Genencor Litigation

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In one of his last acts as a district judge, now-Third Circuit Judge Kent A. Jordan last week issued a post-trial damages opinion in the Novozymes v. Genencor litigation. In its decision, the Court touched on a range of subjects, including questions of standing, willfulness, and permanent injunctive relief.

Subsidiary Standing. The Court recognized that, in the absence of direct evidence of an exclusive relationship, an otherwise nonexclusive licensee might have standing to pursue an infringement action. But where, as here, the license agreement contained a covenant not to sue and a grant of a “non-exclusive” license, the written agreement trumped any collateral evidence of an exclusive relationship.

Willful Infringement. The Court also found that Defendant Genencor willfully infringed Novozymes’s patent by continuing to sell its competing product after receiving notice of allowance of Novozymes’s claims.

“[N]ot only did Genencor continue to manufacture and sell Spezyme Ethyl, it also applied for its own patent claiming what appears to be, in essence, the same technology. Taken together, Genencor’s behavior suggests that it deliberately continued to infringe Novozymes’s claims on technology that Genencor itself believed was patentable.” (slip op. at 31)

Genencor’s decision to wait to pull its product from the market until after a decision in the first phase of trial also weighed on the Court’s willfulness finding: “Genencor failed to exercise due care when it chose to continue making and selling the accused product until the end of the liability phase of this trial.” (slip op. at 32)

Permanent Injunctive Relief. The Court also found that, because the parties are direct competitors, permanent injunctive relief is warranted.

“[T]he statutory right to exclude represents a benefit that, under these circumstances, cannot be equated by an award of cash. These are head-to-head competitors, and Novozymes has a right, granted by Congress, not to assist its rival with the use of proprietary technology.” (slip op. at 37)

Interestingly, the Court noted that this legal-remedy analysis would apply regardless of whether Novozymes was awarded a reasonable royalty or lost profits.

, C.A. No. 05-160-KAJ (D. Del. Feb. 16, 2007) (Jordan, J.).

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