## Facts

- Windsurfing International owned U.S. Reissue Patent No. 31,167 covering sailboards and primarily sold higher-priced “One-Design Class” boards used in uniform-class racing.
- Market demand shifted away from one-design boards toward lighter, faster “funboards” and “wave boards,” and Windsurfing’s market share declined significantly from 1983 to 1985.
- Windsurfing did not adopt a blow-molding process used by others and continued using rotomolding, contributing to cost and market-position differences.
- BIC Leisure sold infringing sailboards at substantially lower prices, targeting the entry-level segment; Windsurfing’s boards were materially more expensive over the damages period.
- Windsurfing sought damages for infringement from the patent’s reissue date (March 8, 1983) through the injunction against BIC (September 30, 1985).
- After a bench trial on damages, the district court awarded Windsurfing lost profits using a market-share variant of the Panduit framework, denied price-erosion lost profits, denied enhanced damages and attorney’s fees, and granted BIC absolute intervening rights for certain post-reissue sales.

## Issues

1. Whether lost profits could be awarded using a market-share/Panduit-based approach when the patentee’s and infringer’s boards were not close substitutes competing for the same customers.
2. Whether Windsurfing proved additional lost profits based on price erosion allegedly caused by BIC’s infringement.
3. Whether the district court abused its discretion in denying enhanced damages under 35 U.S.C. § 284 and attorney’s fees under 35 U.S.C. § 285.
4. Whether the district court properly granted BIC absolute intervening rights following the reissue.

## Decision

- Reversed the district court’s lost-profits award based on market-share extrapolation.
- Affirmed the denial of price-erosion damages.
- Affirmed the denial of enhanced damages and attorney’s fees.
- Affirmed the district court’s intervening-rights rulings.

## Legal Principles

- Lost profits require proof of “but for” causation: the patentee must show it would have made the infringer’s sales absent infringement.
- Panduit’s demand and noninfringing-alternatives considerations generally presuppose product substitutability; they do not justify lost profits where the patentee and infringer sell materially different products to different market segments.
- Market-share allocations cannot substitute for proof that the infringer’s customers would have purchased the patentee’s product in the absence of infringement.
- Price-erosion damages require proof that infringement, rather than other market forces, caused the price reduction and resulting loss.
- Enhanced damages and fee shifting are discretionary and depend on the evidentiary showing required by §§ 284 and 285; absent adequate support, denial will be affirmed.
- Absolute intervening rights may limit liability for certain post-reissue activities where equitable and statutory requirements are met.

## Conclusion

The Federal Circuit held that Windsurfing could not recover market-share-based lost profits because BIC’s low-priced boards were not shown to be substitutes for Windsurfing’s higher-priced boards, defeating “but for” causation, and it otherwise upheld the district court’s denial of price-erosion damages, enhanced damages, attorney’s fees, and its grant of intervening rights.


BIC Leisure Prods., Inc. v. Windsurfing Int’l, Inc., 1 F.3d 1214 (Fed. Cir. 1993)