Patent Damages
17Apr/18Off

D. Del. grants a new (third) trial on damages and denies enhanced damages (before a finding of willfulness)

In the District of Delaware, Judge Leonard P. Stark presiding, in Greatbatch LTD. v. AVX Corporation,[1] case no. 13-723-LPS (March 30, 2018), granted defendants’ motion to set aside the damages verdict and ordered a new trial on damages, in part because the lump sum award could not be adjusted in light of the second jury’s verdict of noninfringement of certain claims.  The Court also denied plaintiff’s request for enhanced damages for willfulness because the Read factors weighed against enhancement.  Because the Court had already been through two trials and seen all the evidence, it made the decision on enhancement prior to a jury finding of willfulness.   

Procedural History

A bit of the case’s “convoluted history” is required to understand the holding.  The Court referred to this case as a “particularly contentious action” involving “a tortious gauntlet of discovery disputed.”  Slip Op. at 14.  After the first trial and lump-sum damages award in 2016, the Court vacated a prior sanction ruling of infringement of one of four patents (the ʼ715) and held a second trial in 2017.  The result of the 2017 trial called into question the basis for the lump-sum award because the jury found no infringement by some products of the ʼ715 patent.

After the 2017 verdict, AVX filed a motion to set aside the prior lump-sum damages award from the 2016 trial and for a new trial on damages.  Greatbatch asked for a finding of enhanced damages.

Motion to Set Aside Damages and for New Trial on Damages

AVX based its motion on three grounds: (1) the 2017 verdict “contradicts the assumption upon which the 2016 damages award was premised”; (2) the use of a general verdict form in the 2016 trial (which Greatbatch insisted upon) resulted in a lump-sum award from which the damages attributable to the ʼ715 patent cannot be determined; (3) invalidation of certain claims of the ʼ627 patent in an IPR “provide non-infringing alternatives that AVX was unable to present to the 2016 jury.”  Slip Op. at 5-6.

The court agreed with AVX.  “[B]ecause the $37.5 million damages award is based on the incorrect assumptions that all Ingenio FFTs infringe the ʼ715 patent and that no non-infringing alternatives to the ʼ715 and ʼ627 patents exist, and because there is no way of knowing how the jury came to its lump sum award—basing its decision on a finding of infringement of one or a combination of the asserted patents and products—the award must be vacated and a new trial as to damages is necessary.”  Id. at 11.

The 2016 lump sum award is impacted by intervening changes:  (1) in 2016, infringement of the ʼ715 patent was assumed; and (2) when put before the jury, only some accused products were found to infringe the ʼ715 patent.  “A new trial as to damages may be required ‘where the jury renders a single verdict on damages, without breaking down the damages attributable to each patent.’”  Id. at 6 (citing Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1310 (Fed. Cir. 2007) and DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1262 (Fed. Cir. 2014)).  “During trial, AVX proposed a verdict form that, upon an award of damages, would have required the jury to identify the amount of damages, if any, attributable to the ʼ715 patent.”  Slip Op. at 6.  “Greatbatch opposed this additional question, insisting that ‘the Ingenio is covered by both [the ʼ715 and ʼ095] patents.’”  Id.  The problem was that “the ʼ095 patent expired and did not cover the entire period for which damages was awarded for the ʼ715 patent.”  Id. 

[S]ince the Court instructed the 2016 jury to assume infringement of the ʼ715 patent for Ingenio products, and in light of that jury’s finding that the asserted claims of the ʼ715 patent were not invalid, that jury must have associated some part of its award with the ʼ715 patent. … [But] there is no way of determining how the jury came to its decision or what amount it attributed to the various patents and products.

Id. at 7-8.

The lump sum damages verdict “cannot be cured by Greatbatch's proposed calculations,” which don’t consider the non-infringing alternatives.  Id. at 8.  “During the 2016 trial, Greatbatch premised its damages argument on the fact that there were no non-infringing alternatives,” but tht premise is no longer true based on the intervening outcome of a related IPR.  Id.  Plus, Greatbatch's proposed calculations were based on a demonstrative created at trial that was never moved into evidence.  Id. 

“[B]ecause the assumptions upon which the verdict was reached are no longer supported, the Court finds the damages verdict ‘cries out to be overturned’ and exercises its discretion to grant a new trial to prevent a miscarriage of justice.”  Id. at 11.

Request for Enhanced Damages

Greatbatch's request for enhancement is predicated on two allegations: (1) AVX knew of the ʼ715 patent, knew AVX’s Ingenio FFTs infringed, and proceeded to make and sell the product anyway; and (2) AVX’s “egregious litigation misconduct.”  Citing Read Corp. v. Portee, Inc., 970 F.2d 816, 826-28 (Fed. Cir. 1992), the Court held that “[n]either of these contentions, singly or in combination with other Read factors, persuade the Court to enhance damages, even if willfulness were found.”  Slip. Op. at 11-12.

Greatbatch's allegations of copying were previously rejected by the Court because the evidence related to an AVX product that is not alleged of infringement.  Id. at 12.  And in fact contrary to Greatbatch's allegations that AVX failed to take action after learning of the infringement, “the evidence presented at trial showed that AVX engineer [] took remedial action … within days of becoming aware of the issue” and that AVX implemented the engineer’s suggested changes to avoid infringement.  Id. 

The Court acknowledges that “AVX did act with an attempt to conceal its misconduct, which does favor enhancement.”  Id. at 13.  However, “Greatbatch did not lack litigation and discovery disputes of its own,” plus the other Read factors outweigh the attempted concealment.  Id.  In sum, six factors weigh against enhancement (no deliberate copying, good faith belief of non-infringement, remedial action, short duration of infringement, closeness of case, and no motivation for harm), one factors weights in favor of enhancement (attempt to conceal), and two factors are neutral (both parties were particularly litigious and AVX’s size and financial condition).  Accordingly, the Court concludes that an award of enhanced damages is not warranted.”  Id. at 13-14.

The Court noted that its denial of enhanced damages for the ʼ715 patent before a finding of willfulness was supported by the record:  “As the Court has had two trials on the asserted patents and products and seen all of the evidence, it can make this finding even before a finding on willfulness.”

[1] AVX Filters Corporation is also a named defendant.

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