Court Nixes $500K Award in ResQNet Patent Case

(CN) - The Federal Circuit upheld a patent ruling against Lansa over its NewLook computer program, but said the $506,305 damage award to ResQNet.com "relied on speculative and unreliable evidence divorced from proof of economic harm."

ResQNet claimed that Lansa's NewLook program violated its patented screen-recognition technology for personal computers.

The district court ruled that Lansa violated one of ResQNet's patents and awarded the company $506,305, based on 12.5 percent of Lansa's revenue from the sale of NewLook. It also imposed a license, at the same royalty rate of 12.5 percent, for future NewLook sales.

Lansa challenged the award on cross-appeal, claiming the amount had been calculated from seven ResQNet licenses, five of which had no relation to the claimed invention.

The federal appeals court in Washington, D.C., agreed that one of the two disputed patents had been infringed, but agreed with Lansa that the royalty rate was inflated.

ResQNet's economic expert had "used unrelated licenses on marketing and other services -- licenses that had a rate nearly eight times greater than the straight license on the claimed technology in some cases -- to push the royalty up into double figures," the court wrote.

The three-judge panel also reversed sanctions against ResQNet.com and its attorneys, who were sanctioned for continuing to litigate two patent claims despite conceding that the patents appeared not to be infringed.

The Federal Circuit ruled that Lansa waited too long to move for sanctions for one of the patents, and that "no act of bad faith has been shown, or proposed," in ResQNet's not having withdrawn the second patent.

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