Kaufman v. Microsoft Corporation
- Alvin Hellerstein
- 1:16-cv-02880
- U.S. District Court · Southern District of New York
- 3
In Kaufman v. Microsoft, Judge Hellerstein reconsidered patent-damages limits and allowed royalties from patent issuance.
The ruling affected Michael Philip Kaufman’s potential royalty recovery in his patent-infringement case against Microsoft Corporation by allowing the jury to consider royalties beginning on February 8, 2011, rather than only after April 18, 2016.
What happened
In Kaufman v. Microsoft Corporation, Michael Philip Kaufman challenged a ruling limiting the period for which he could recover royalties for alleged patent infringement. The issue involved a website describing Kaufman’s “Schemalive” process and telling readers how to obtain more information or order it.
The court had initially ruled that Kaufman failed to display his patent number on the website as required by federal patent law. On reconsideration, the court held that the website was not a commercial offer for sale because it lacked necessary terms, including pricing information. The court also held that the website was not itself a patented article because it was not part of the patented device and did not allow customers to download patented software.
Judge Hellerstein granted Kaufman’s motion for reconsideration and ordered that the jury be instructed that royalties could accrue beginning February 8, 2011, the date the patent issued. The court said there would be no need to reopen the evidence for a narrower damages period.
The detailed version
- Kaufman v. Microsoft Corporation · No. 1:16-cv-02880
- Alvin Hellerstein
- Feb. 5, 2020
Background
After both sides had rested at trial, Microsoft moved to limit damages under 35 U.S.C. § 287(a), a patent-law provision concerning marking patented articles with the patent number. Microsoft relied on a website discussing Michael Philip Kaufman’s “Schemalive” process for interacting with relational databases. Trial evidence indicated that Kaufman stopped selling Schemalive in 2004, but the website remained available, described the process, and told readers how to contact Kaufman for more information or to order it.
The court initially granted Microsoft’s motion. It ruled that Kaufman had failed to mark the website with his patent number and therefore could recover royalties only for infringement after Microsoft received notice through the filing of the complaint on April 18, 2016. That ruling barred recovery of royalties from the patent’s issuance on February 8, 2011.
Reconsideration
At the charging conference, Kaufman moved for reconsideration and cited additional cases. He argued that the website was not a sale or an offer to sell his patented process and therefore did not have to be marked as a “patented article” under § 287(a).
The court granted the motion. It reasoned that the marking requirement would apply only if the website were a commercial offer for sale under contract-law principles. The court compared § 287(a)’s phrase “offer for sale” with the similar phrase “on sale” in 35 U.S.C. § 102(b), and relied on decisions stating that an offer for sale requires a commercial offer under contract-law principles. The court found that the website lacked necessary elements of such an offer, including pricing information.
The court separately held that the website was not itself a “patented article” subject to the marking requirement. It noted that other district courts had addressed whether websites must be marked and had identified circumstances such as a website being intrinsic to a patented device or allowing customers to download patented software. The court found that the Schemalive Website met neither circumstance.
Ruling and effect
Judge Alvin K. Hellerstein granted Kaufman’s motion for reconsideration. The court ordered that the jury be instructed that royalties accrue from February 8, 2011, the patent’s issuance date, rather than only from April 18, 2016, when the complaint was filed. The court stated that it would not reopen the record for additional evidence about royalties within a narrower period. It further stated that, if the jury returned a verdict of infringement and invalidity, the parties would proceed to damages summations immediately or as otherwise ordered by the court.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.