Patent Damages
23Oct/19Off

DNJ finds award of lost profits does not preclude injunction

In Eagle View Tech., Inc. v. Xactware Solutions, Inc., Civil No. 1:15-cv-07025 (D.N.J. Oct. 18, 2019), Judge Renee Marie Bumb granted Eagle View’s motion for a permanent injunction.  Addressing an issue related to damages, the court reasoned that an award of lost profits at the trial stage—which is for past damages—does not establish that the plaintiff has an adequate remedy at law, and thereby does not preclude injunctive relief. We quote the court’s analysis (slip op. at 22-26):

Concerning lost market share and lost profits, as discussed above, Eagle View has presented ample evidence proving that it lost market share and suffered price erosion as a result of Defendants’ infringement, and the jury’s award of lost profits necessarily means that the jury found those facts as true. While Defendants argue that the jury’s award of lost profits demonstrates that loss of market share and price erosion can be adequately compensated with money damages, the Court disagrees. The jury’s award of lost profits for past injury is not irreconcilably inconsistent with a finding that money damages will be inadequate to remedy future injuries for two related reasons. First, that the jury was able to award damages within a reasonable amount of certainty [footnote omitted] does not, as Defendants argue, necessarily lead to the conclusion that Eagle View has been made whole for its past injuries resulting from Defendants’ infringement. [Footnote omitted.] Defendants’ calculated and targeted price erosion strategy has rendered it impossible to predict exactly what price the market would have sustained absent Defendants’ infringement.

Second, an award of lost profits for past injury, of course, cannot prevent future harm to Eagle View. Having seen all of the evidence of Defendants’ deliberate strategy of aggressive head-to-head competition with Eagle View, and in light of the jury’s finding of willful infringement--which continued until this Court temporarily restrained Defendants--this Court has no confidence that absent a permanent injunction, Defendants will not continue to infringe Eagle View’s patent rights in a manner that will cause additional long-term, irreparable harm to Eagle View. The longer Defendants are permitted to exploit their unlawful infringement, the longer Eagle View will be unfairly forced to compete against its own patented technology, and the longer Defendants will artificially and unfairly depress the market price for roof reports, thereby rendering impossible any reasonably accurate post-hoc valuation of lost profits in the future, just as that same conduct has precluded a more accurate valuation of past lost profits.

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As to money damages, “[p]atent property rights are especially difficult to protect with solely monetary relief because ‘a calculating infringer may thus decide to risk a delayed payment to obtain use of valuable property’ without the owner’s permission.” Broadcom, 732 F.3d at 1338 (quoting Presidio, 702 F.3d at 1362–63). Indeed, the evidence of Defendants’ Five Year Strategy and the jury’s finding of willful infringement supports a finding that Defendants decided-- ultimately unwisely-- to take precisely the risk that Presido and Broadcom identify. This Court, sitting in equity, will not allow such conduct to continue.

Moreover, Eagle View has put forth unrebutted evidence that its reputation / brand recognition and goodwill in the marketplace have been damaged as a result of Defendants’ infringement [Dkt. No. 792-1, Daga Sept. 22, 2019 Decl. ¶¶ 4-7, see also Trial Transcript, p. 1484:1-4 (West Testimony)], and this Court finds that Eagle View’s goodwill and reputation will more likely than not suffer continuing damage in the future unless Defendants are enjoined from further infringement.

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