In an infringement suit in the Eastern District of Texas, Johnson & Johnson subsidiary Centocor, Inc., was awarded $1.67 billion in infringement damages. The jury found that Abbott Laboratories’ arthritis drug, Humira® (adalimumab), infringed U.S. Patent No. 7,070,775, owned jointly by Centocor and NYU, and that the infringement was willful. Humira® competes with Centocor’s own arthritis drug, Remicade® (infliximab).
After a trial that lasted a single week, the jury took less than a day to award Centocor lost profit damages of $1,168,466,000 and reasonable royalty damages of $504,128,000. Double recovery of both lost profits and reasonable royalties is generally not allowed in infringement cases, but sometimes a hybrid of the two may be awarded as damages if, for example, lost profits are difficult to prove. In this case, it appears that the jury verdict form would allow for both if only a portion of the lost profits could be proven. Doubtless, this potential ambiguity will be part of the post-trial motions filed in this case.
This infringement verdict may be the largest ever awarded for a patent infringement case. It should be noted, however, that Abbott launched Humira® in 2002 and its 2008 sales of the drug topped $4.5 billion or about 15% of the company’s total revenue, while sales of Remicade® topped $3.75 billion.
Both J&J and Abbott have been lobbying against limitations on damage awards for infringement verdicts in the current patent reform debate. Many earlier high infringement verdicts have been overturned in post-trial motions or on appeal, including the $1.52 billion verdict awarded to Alcatel-Lucent against Microsoft in 2007 over digital music patents. Judge Ward will shortly entertain such post-trial motions in this case. These mechanisms seem to be effective for curbing unwarranted damage verdicts.
