As technology advances rapidly and modern industrial techniques continuously evolve, the structures and functions of products are getting increasingly complex. A single product may simultaneously incorporate multiple patents. When a specific patent within a product is determined by the court to constitute infringement, the court may assess damages for such infringement. Accordingly, considering that the core concept of patent damages is to compensate the injured party for its losses, ensuring that the patentees receive damages commensurate with the contribution of their patent to the value of the product has become an important matter for the court to consider.

 

Specifically, if the Intellectual Property and Commercial Court (hereinafter the "IP Court") determines that an accused product constitutes patent infringement, and if such product is composed of both infringing and non-infringing components, how should damages be assessed and calculated? Current judicial practice applies the concept of apportionment, which refers to the relative contribution that a particular patent makes to the value of a product. The determination of such contribution should include factors such as the enhancement of the overall utility of the product due to the patented technology, whether the enhancement of that functionality affects consumers' primary purchasing intentions, and general market transaction conditions, among other factors, and are decided on a case-by-case basis.

 

For example, if non-infringing components are generally sold together with infringing components, the combination of both components can achieve the intended function and effect, and the patented component is the primary reason for consumers to purchase the product, the court recognizes that the benefits derived from the sale of the entire product by the infringer can be considered as the benefits obtained by the patentee due to the infringement (please refer to the Civil Judgment of the IP Court (103) Ming-Juan-Shang No. 9, the Civil Judgment of the IP Court (104) Ming-Juan-Su No. 62, and the Civil Judgment of the IP Court (103) Ming-Juan-Shang No. 27).

 

In addition, if the efficacy of the patented component of the product is not the main reason for consumers purchasing the product, the court may use the price difference between products that implement the patented component and those that do not as the basis for calculating the apportionment (please refer to the Civil Judgment of the IP Court (107) Ming-Juan-Shang No. 27). Alternatively, the court may comprehensively consider the extent to which the patented component enhances the product's functionality and its effect on attracting or increasing consumer purchasing willingness to determine the apportionment (please refer to the Civil Judgment of the IP Court (109) Ming-Juan-Shang No. 9, the Civil Judgment of the IP Court (109) Ming-Juan-Su No. 61, and the Civil Judgment of the IP Court (110) Ming-Juan-Shang No. 36). There are also cases where the apportionment is determined based on the findings of appraisal institutions (please refer to the Civil Judgment of the IP Court (109) Ming-Juan-Shang No. 45). These examples demonstrate that the courts employ a variety of analytical methods in determining the apportionment.

 

However, in the recent civil judgment of the IP Court (112) Ming-Juan-Shang No. 27 dated October 17, 2024, the court's analysis of the apportionment seems to differ from the aforementioned court's views (i.e., considering "the overall enhancement of the product's effectiveness due to the disputed patented technology, whether the enhancement of that function affects consumers' primary purchasing intentions, and the general market transaction conditions).

 

The product at issue is a small portable rapid camping stove, and the disputed patent is a structure for a portable small rapid stove. The design of the fuel connector, which includes a base, an L-shaped flow channel within the base, a connecting tube, and a guiding tube, facilitates two stages of oxygen mixing during gas combustion, enhancing the complete combustion of oxygen. After review, the IP Court determined that the product at issue constitutes the patent infringement. In the calculation of damages, the court acknowledged the concept and purpose of apportionment and applied apportionment to the calculation of damages. The court also considers that without the disputed patent, the original heating function of the stove would not be affected; therefore, the amount of damages should accordingly be determined based on the apportionment. The structure of the stove with a two-stage mixed oxygen fuel connector can be roughly divided into five main components: the stove base, the burner head, the outer frame, the support column, and the fuel connector (which further includes the base, the L-shaped flow channel within the base, the connecting tube, and the guiding tube). The average contribution of each of these components to the technology of the stove is assessed to be 20%. The contribution of the fuel connector is 20%, and there are four main components beneath the fuel connector (namely the base, the L-shaped flow channel within the base, the connecting tube, and the guiding tube). Therefore, the technical contribution of each component can be further calculated to be 5%. The product at issue has the functionality of mixing oxygen in two stages due to the inclusion of the "L-shaped flow channel within the base," "connecting pipe," and "guiding pipe" in the fuel connector, each contributing 5% to the technical contribution. Since there are three components that each account for 5%, multiplying the two gives a final calculation of the apportionment of the disputed patent to the product, which is approximately 15%. This serves as the basis for calculating the final amount of damages.

 

In the court's determination of the apportionment in this case, the court explored how many main components there are and then averaged the apportionment of each main component. However, the court did not further investigate the factors such as the extent to which the patented technology enhances the overall utility of the product, whether the enhancement of that function affects consumers' primary purchasing intentions, or the general market transaction conditions. Instead, the court mechanically determined that the apportionment of each component was equal. While this simplistic approach can indeed expedite the proceedings and avoid prolonged unresolved cases, this raises questions about whether the reasoning is complete and whether it accurately reflects the effects of each component on the overall product, its impact on consumers, and the market conditions. It is worth watching to see whether the IP Court will adopt this type of determination more frequently in the future.