2 impact on the fundamental principle that patent law should promote innovation.
Whether the Patented Feature Is a Small Part of the Product to Be Excluded
It is age-old law that the value of a patent is proportional to the amount that patent con-tributes to a product.
Seymour v. McCormick
, 57 U.S. 480 (1854) (“But one who invents some improvement in the machinery of a mill could not claim that the profits of the whole mill should be the measure of damages for the use of his improvement.”). This proportionality informs dis-trict courts when they calibrate awards of reasonable royalties. The Commission does not have the flexibility to award a calibrated reasonable royalty. Consequently, it must apply exclusion orders judiciously, based on the relative value of the pa-tented elements. In cases where that value is relatively small, the Commission should avoid the heavy hammer of exclusion and instead defer to the district courts to use the scalpel of damages.
By failing to consider proportionality and issuing exclusion orders on products based on even the smallest infringing part, the Commission risks denying consumers numerous valuable and useful technologies for the sake of protecting a minimal patent on a single aspect of a com- plex device. Aside from obviously reducing competition, disincentivizing innovation, and dis-serving consumers, it is entirely possible, as was the case in
, that some of those non-patented features implicate public health and welfare.
Certain Baseband Proces- sor Chips
, Inv. No. 337-TA-543, Comm’n Op. at 148-49 (June 19, 2007).
Thus, to properly consider the public interest factors fully, the Commission must balance the specific component implicated by the patents at issue against other technologies provided by the products at issue.
Whether an Exclusion Order Will Hamper Future Innovation
Generally, in evaluating the market effect of an exclusion order on a product, the Com-mission looks to other products contemporaneously on the market, to evaluate the extent to
This conclusion is strengthened when the complainant is a non-practicing entity who ultimately benefits only from settlements driven by exclusion, and not the exclusion order itself. Patent owners generally are free to pursue parallel district court litigation, and many of them do.
, the public safety applications used the patented networking technology, the public safety applications themselves did not infringe the patents at issue.