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Sufficiently Pleaded Willful Infringement Claim and Inappropriate Royalty Base Calculation Result In Partial Reversal

Client Alert | 1 min read | 09.07.07

In Mitutoyo, Corp. et al. v. Central Purchasing, LLC (No. 06-1312, 1343, September 5, 2007) a Federal Circuit panel reverses-in-part a district court’s judgment dismissing the plaintiff’s claim of willful infringement and for including a second company’s sales figures in calculating the royalty base.

On appeal, the plaintiff is deemed to have sufficiently pleaded the willful infringement claim under its patent infringement count and because it had additionally provided details about the declaratory judgment suit filed by the defendant in 1995, thereby establishing that defendant had knowledge of the patent prior to 2002. Nothing in the plaintiff’s litigation conduct, notes the panel, evidenced an intent by plaintiff not to pursue its willful infringement claim; plaintiff had apprised the Court throughout the entire course of the litigation of its willful infringement claim and requested a trial on the issue.

With respect to the reasonable royalty calculation, the district court utilized both defendant’s and a second company’s sales of the accused products in calculating the royalty base. The Federal Circuit reverses as to the district court’s use of a royalty base that includes the second company’s sales figures, rather then defendant’s sales to that company. The panel notes that the two companies have a strong business relationship; however, they are independent corporate entities with different owners. No corporate relationship is found to exist between the second company and defendant, and there was no course of dealings or other evidence to suggest that defendant would have agreed to pay royalties on both company’s sales.

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Client Alert | 6 min read | 03.26.24

California Office of Health Care Affordability Notice Requirement for Material Change Transactions Closing on or After April 1, 2024

Starting next week, on April 1st, health care entities in California closing “material change transactions” will be required to notify California’s new Office of Health Care Affordability (“OHCA”) and potentially undergo an extensive review process prior to closing. The new review process will impact a broad range of providers, payers, delivery systems, and pharmacy benefit managers with either a current California footprint or a plan to expand into the California market. While health care service plans in California are already subject to an extensive transaction approval process by the Department of Managed Health Care, other health care entities in California have not been required to file notices of transactions historically, and so the notice requirement will have a significant impact on how health care entities need to structure and close deals in California, and the timing on which closing is permitted to occur....