Carlos Armando Amado v. Microsoft Corporation

This case involved post-trial litigation of a patent infringement suit that Amado won against Microsoft. The patent at issue related to the integration by Microsoft of spreadsheet and database functionality in its Office line of products. A jury found Microsoft liable for patent infringement and awarded damages to Amado. The trial judge also awarded Amado a permanent injunction against Microsoft continuing to infringe the patents but stayed that injunction pending Microsoft’s appeal. Following resolution of the appeal, the trial judge awarded damages to Amado for the period of the injunction based on the jury’s award in the trial. Microsoft appealed the damage award. The Court of Appeals then ruled that the trial judge must consider damages for the period of the injunction based on the economic circumstances faced by the parties following trial, including bargaining positions that reflected the finding of liability and the difficulty of Microsoft to “immediately comply” with the injunction.

Econ One was retained by counsel for Amado to analyze the economic circumstances and bargaining situation that would have been faced by the two parties, given the outcome of the trial and had the trial judge not stayed the permanent injunction. Dr. Jeffrey Leitzinger submitted a declaration that concluded that, given the circumstances, Microsoft would have been willing to pay a substantial license fee rather than face the severe disruptions to its business that would have been caused by halting the licensing of much of its Office sales. The Court ruled that Microsoft would have paid a royalty rate under those circumstances.