PATENT LITIGATION is often arduous and arcane and always technical. Patent attorneys are likely to have a background in engineering, which is often necessary simply to understand the issues in a case and to frame the argument. So it is not surprising that little public attention was given to a case decided by the Supreme Court last week that seemed, at first glance, to be a patent matter. In fact, the court was considering a case that began as a patent infringement dispute but became a decision on damages, delays and basic fairness.
In 1946, the Devex Corporation filed suit against General Motors alleging that the automotive giant was infringing its patent on "a lubricating process used in the cold-forming of metal car parts by pressure." This is, of course, an abbreviated description of the patent. But even if you think cold-forming is part of a recipe for ice-cream molds, read on, for you don't have to be an engineer to understand this issue.
Devex won the case--but only after 27 years of litigation on the patent infringement question. Then the matter of damages arose. In 1973, after hearings before a Special Master, the court awarded Devex $8,813,945.50 in royalties. Then--and here's what last week's Supreme Court decision was all about--the court awarded interest on the royalties: $11,022,854.97, considerably more than the judgment itself.
GM appealed, arguing that Congress intended that interest be awarded only in cases where the infringer had acted in bad faith. The Supreme Court didn't buy that. The justices unanimously ruled that it is quite proper for the courts to order that a patent holder be compensated not only for royalties he should have been paid, but also for money he might have earned on those royalties had the patent not been infringed. While there will always be cases where interest is not appropriate--where inordinate delay has been caused by the plaintiff, for example--the presumption is that an award is necessary to provide full compensation to the owner of the patent. Otherwise, it is in the interest of an infringer--particularly a large corporation that can easily absorb the costs of litigation--to draw out the legal proceedings while he continues to earn money by banking the royalties he has not paid.
This decision should provide a strong incentive to streamline some of the disputes that are clogging the federal courts. Protracted litigation is costly to private parties, but the expense of running the courts is borne by the taxpayer. The peaceful settlement of disputes is certainly in the public interest, but even a technical and complicated patent case ought to be completed in less than 37 years.