NDTX affirms damages verdict; cites most favored licensee clause; limited infringement did not warrant a lower award
The Northern District of Texas, in Jean Melchior v. Hilite International, Inc., Case No. 3:11-CV-3094-M (Judge Barbara M. Lynn) (July 15, 2015), ruled on post-trial motions, including denying defendants motion for a new trial on damages. The court held that the damages award was not excessive or against the great weight of the evidence.
Hilite’s arguments were effectively two-fold: (1) that Melchior’s expert, Dr. Poindexter, had relied too heavily on Georgia-Pacific factor 1 and in particular on a license agreement between Melchior and Borg Warner; and (2) that Dr. Poindexter’s testimony failed to account for limited use of the patented invention in the infringing devices, in which the devices are only in the patented position for a fraction of a second.
On July 2, 2015, in WesternGeco L.L.C. v ION Geophysical Corp., Case 13-1527, the Federal Circuit reversed almost $100 million in lost profits due to the “infringing” activity being outside of the United States and therefore not an infringement at all. Specifically, the defendant ION exported components that were combined by ION’s customers into a larger system, overseas, for performing marine geophysical surveys for the Oil & Gas industry. The plaintiff, WesternGeco, argued that it lost profits from 10 lost surveys that utilized these systems. The “lost surveys” all occurred outside of the United States.
The District of Delaware, in Comcast IP Holding I LLC v. Sprint Comms. Co. LP, Civil Action No. 12-205-RGA (Judge Richard G. Andrews) (Sept. 29, 2014), granted Sprint’s motion in limine to exclude Comcast from introducing at trial profits and/or revenues related to the accused products. Sprint argued that this evidence was not allowed due to the entire market value rule (EMVR). Comcast contended that its expert did use EMVR but instead had apportioned. After obtaining a proffer of the Comcast expert’s testimony, Judge Andrews ruled for Sprint. He did note, however, that this exclusion still left Comcast with a basis to seek damages, which he believed would be in the same amount requested without the exclusion.
The District of Nevada, in Server Technology, Inc. v. American Power Conversion Corp., 3:06-CV-00698-LRH-VPC (Judge Larry R. Hicks) (March 31, 2015), denied plaintiff’s request for injunction but granted a post-judgment royalty of 15%, which was 3X the jury’s 5% royalty. The section of the opinion is brief and is quoted nearly in full here:
The District of Utah, in Waterton Polymer Products USA, LLC v. Edizone, LLC, Case No. 2:12-CV-17 TX (Judge Ted Stewart) (Nov. 6, 2014), denied the accused infringer’s motion in limine to preclude patentee’s introduction of evidence regarding minimum royalty payments by third party licensees of the patentee.
Each of the disputed license agreements were directed to the patent-in-suit and included a percentage-based running royalty and a minimum royalty amount. The accused infringer argued that the minimum royalties were not relevant because the license agreements specifically envisioned active sales and marketing by the licensees, whereas the accused infringer alleged it endeavored not to make sales in the U.S. and made only one such sale.
The Central District of Illinois, in Philippi-Hagenbuch, Inc. v. Western Tech. Services Int’l, Inc., Case No. 12-1099 (Chief Judge James E. Shadid) (April 8, 2015), denied defendants’ motion to exclude opinions of plaintiffs’ damages expert, Michael E. Tate. Tate had offered opinions on lost profits and reasonable royalty. The reasonable royalty issue—whether Tate’s opinion that the royalty base should be the entire products at issue, which were truck bodies and water tanks, or should be apportioned—is addressed here.
The case involved two sets of patents: water tank patents and truck body patents. The plaintiffs contended that their patented design process created a water tank or a truck body and that no smaller, salable unit was separable or could be apportioned from the larger products for purposes of damages computation. To this end, the court noted that the truck body patents claim a process for designing a custom truck body for specific environments by use of three-dimensional modeling of the loads to be hauled. Some of the evidence indicated that the defendants’ customers purchased the custom truck bodies over generic bodies because the custom bodies were designed to meet the customers’ specifications, to carry a particular load, and to “max out” the truck’s performance, making the premium cost for the patented truck bodies worthwhile to the customers.
The District of Minnesota, in Ecolab USA, Inc. v. Diversey, Inc., Case No. 0-12-cv-01984 (SRN/FLN) (Judge Susan R. Nelson) (May 15, 2015), denied defendant’s motion in limine to preclude plaintiffs from comparing the defendant’s reasonable royalty calculation to the fees defendant incurred in the litigation. Defendant argued that its defense costs, i.e., its expert costs, costs for outside counsel to prepare noninfringement opinions, and attorneys’ fees incurred in litigation, were irrelevant to the amount of damages. The defendant argued that none of these costs are covered by the Georgia-Pacific factors and should not be presented to the jury.
The District of Delaware, in Helios Software, LLC v. Awareness Tech., Inc., Civil Action No. 11:1259LPS (Judge Stark) (April 13, 2015), addressed a variety of motions to exclude damages testimony. Plaintiff and defendant each moved to dismiss its counterpart’s damages expert on various grounds. The most interesting issues are addressed below.
On February 5, 2015, in Rembrandt Wireless v. Samsung, Case No. 2:13CV213-JRG-RSP, Judge Payne entered a Magistrate’s Recommendation recommending that Samsung’s motion for summary judgment be denied. Samsung argued that Rembrandt should be barred from receiving any pre-notice damages, because Rembrandt had allegedly not complied with the marking statute. Specifically, Samsung alleged that while Rembrandt itself had no products to mark, one of its licensees – Zhone – had sold products embodying claim 40 of the asserted ‘580 patent but had not marked them.