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Person A has a patent in India, granted in 2000. A applies for protection in the US in 2005 and gets granted in 2010. Firm B and C were using the patent from 2004 and 2006 respectively to manufacture and sell a product in the US.
B will invalidate A's patent with the indian patent as prior art because a priority claim can be made only for 12 months so the US application can't claim priority to the indian application and therefore has 2005 as the filing date.
B could also invalidate A's patent by proving that they had the product in public use prior to the filing date of the patent.
B could claim a "prior use" exception and not pay royalties (pre AIA that's pretty much theoretical).
Other than that, a valid patent can claim royalties for the time between publishing of the application and grant under some circumstances. See for example here:
This provisional right comes with two caveat [...]
The invention as claimed in the patent must be “substantially identical” to the patent as claimed in the published patent application. 35 U.S.C. § 154(d)(2) [...]
The second caveat concerns notice. The statute requires the infringer to have “actual notice” of the published application. 35 U.S.C. § 154(d)(1)(B). [...]
Commentators agree that based on congressional intent, the courts will likely require notice from the applicant. See, e.g., 82 JPTOS at 748; Patrick J. Birde, Nicholas J. Nowak, Analyzing Provisional Rights for Patent Applicants, 9 No. 12 Intell. Prop. Strategist 1 (2003); Terence P. Ross, Intelectual Property Law: Damages and Remedies § 3.08 (2004); Brian J. Massey, Reasonable Royalties for 18 Month Patent Publication Infringement: An Unreasonable Remedy for Smal Businesses, 8 J. Small & Emerging Bus. L. 87, 103 (2004).
-> If B infringed only while the patent was still an application (but not before filing), A won't be able to enforce royalties or punishment as high/strong as if B infringed afterwards, but will be able to enforce royalties nonetheless.
Therefore, if B stops production before the grant, they will still "be punished" (with royalties) but that should be less than if they infringed a granted patent.
