Wednesday, November 13, 2013

Rite-Hite Corp. v. Kelley Co. case brief

Rite-Hite Corp. v. Kelley Co. case brief summary
56 F.3d 1538 (1995)


CASE SYNOPSIS
Defendant sought review of a judgment of the United States District Court for the Eastern District of Wisconsin which found in plaintiffs' favor, holding that defendant infringed plaintiffs' product and was liable for patentee plaintiff's lost profits damages. Plaintiffs appealed the award of simple judgment interest and denial of lost retail profits damages.

CASE FACTS
Defendant was a company that produced vehicle restraints similar to those produced by plaintiff. Plaintiff brought a suit for patent infringement. Plaintiff distributed its product through wholly-owned sales organizations and through independent distributors. The independent distributors intervened as exclusive licensees entitled to lost retail profits. The trial court found in favor of plaintiff and the independent distributors. Defendant appealed, claiming that the trial court incorrectly determined damages. Plaintiffs appealed the trial court's award of simple interest and refusal to award lost retail profits.


DISCUSSION

  • The court affirmed in part, vacated in part, and remanded, holding that lost sales were compensable where foreseeable. 
  • Defendant was not liable for damages associated with a non-patented device sold with the patented product where the two did not function together to create one result and could be used independently. 
  • Judgment interest was properly calculated and lost profits denied where distributors' license lacked the right to exclude others under the patent.

CONCLUSION
The court affirmed in part, vacated in part, and remanded the trial court's judgment in favor of plaintiffs, holding that where lost profits of patentee were reasonably foreseeable, lost profits were compensable. Damages associated with non-patented product were not awardable where a device was subject to independent use.


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