No Compensation Without Proof of Damages for Patent Infringement
In Tabig-Israel Gruber v Toytoplast the Supreme Court discussed granting a damage award for patent infringement without actual proof of damage.
In this case the District Court ruled that 2 of the appellant’s products infringed patents owned by the respondent. The District Court further found that it could not calculate the damage suffered by the respondent or the profits of the appellant attributed to the infringements. Therefore the court granted an award without proof of damages in an amount of NIS 100,000 for each of the infringing products. The award amount was based inference from the Commercial Torts Law and the Copyright Law which grant compensation without proof of damages up to a ceiling of NIS 100,000.
While the Supreme Court upheld the infringement findings, it reversed the damages ruling and remanded the case to the District Court.
The Supreme Court held that due to the inherent difficulty involved in determining the damage caused by the infringement of intellectual property, it is possible to determine compensation for the infringement of a patent through estimation, rather than actual computation. However, in order to reflect the extent of damage caused by the patent infringement, the court should base this estimate on the concrete facts of the specific case, such as scope of the infringement, number of infringing products sold, the length of the period in which the infringement took place, the impact on marker pricing, and so on. In a case of a difficulty in determining the damage caused by the patent infringement, the court must use indicators that will provide an alternative criteria, even a partial one, for assessing the actual damage.
The Supreme Court further ruled that the inference to patent law from the laws above is fundamentally flawed, and the lack of an explicit provision in the law of patents indicates that the legislator had not wanted to impose compensation without proof of damages for patent infringement. The purpose underlying the patent law significantly differs from the purpose of the laws above. While the purpose of patent law is compensation for actual damages, the specific and exceptional compensation-without-proof clauses in the Copyright and Commercial Torts laws above give great weight to the deterrent aspect. Therefore, due to the different purposes underlying the laws referenced, the analogy between the laws is irrelevant.
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