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U.S. Supreme Court

General Motors Corp. v. Devex Corp., 461 U.S. 648 (1982)

General Motors Corp. v. Devex Corp.

No. 81-1661

Argued December 7, 1982

Decided May 24, 1983

461 U.S. 648


Prior to 1946, the section of the patent laws governing recovery in patent infringement actions contained no reference to interest. In 1946 the section was amended, and now provides in 35 U.S.C. § 284 that the court shall award a successful claimant

"damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court."

In respondent Devex Corp.'s action against petitioner for infringement of a patent covering a lubricating process used in the cold-forming of metal car parts by pressure, the District Court entered judgment for Devex pursuant to § 284, awarding, in addition to royalties and postjudgment interest, prejudgment interest. After determining what the annual royalty payments would have been, the court calculated prejudgment interest on each payment from the time it would have become due. The Court of Appeals affirmed.

Held: The award of prejudgment interest was proper in this case. Pp. 461 U. S. 651-657.

(a) Section 284 does not incorporate the pre-1946 common law standard enunciated in Duplate Corp. v. Triplex Safety Glass Co., 298 U. S. 448, under which prejudgment interest could not be awarded where damages were unliquidated, absent bad faith or other exceptional circumstances. Rather, § 284 gives a court general authority to fix interest, and this authority, on the face of § 284, is not restricted to exceptional circumstances. Pp. 461 U. S. 651-654.

(b) Both the background and language of § 284 provide evidence that the underlying purpose of the provision is that prejudgment interest should ordinarily be awarded where necessary to afford the plaintiff full compensation for the infringement. Consistent with this purpose, prejudgment interest should ordinarily be awarded absent some justification for withholding such an award. In the typical case, an award of prejudgment interest is necessary to ensure that the patent owner is in as good a position as he would have been if the infringer had entered into a reasonable royalty agreement. An award of interest from the time that the royalty payments would have been received merely serves to make the patent owner whole, since his damages consist not only of the

Page 461 U. S. 649

value of the royalty payments but also of the forgone use of the money between the time of infringement and the date of the judgment. Pp. 461 U. S. 654-657.

667 F.2d 347, affirmed.

MARSHALL, J., delivered the opinion for a unanimous Court. STEVENS, J., filed a concurring opinion, post, p. 461 U. S. 658.

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