Petition for Writ of Certiorari — Presidio Components, Inc., Petitioner v. American Technical Ceramics Corp.
Supreme Court briefMay 31, 2018
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R. App. 1
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
Presidio Components,
Inc.,
Plaintiff,
v.
American Technical
Ceramics Corp.,
Defendant.
Case No.:
14-cv-02061-H-BGS
ORDER:
(1) DENYING DEFENDANT’S MOTIONS FOR
JUDGMENT AS A
MATTER OF LAW AND
FOR A NEW TRIAL;
[Doc. Nos. 399, 400, 402.]
(2) GRANTING
PLAINTIFF’S MOTION
FOR A PERMANENT
INJUNCTION;
[Doc. No. 373.]
(3) DENYING PLAINTIFF’S MOTION FOR
ENHANCED DAMAGES
AND ATTORNEY’S FEES;
AND
[Doc. No. 377.]
(4) GRANTING PLAINTIFF’S MOTION FOR
SUPPLEMENTAL DAMAGES AND INTEREST
[Doc. No. 372.]
(Filed Aug. 17, 2016)
R. App. 2
On June 22, 2016, Plaintiff Presidio Components,
Inc. filed (1) a motion for a permanent injunction; (2) a
motion for enhanced damages and attorney’s fees; and
(3) a motion for supplemental damages and interest.
(Doc. Nos. 372, 373, 377.) On July 13, 2016, Defendant
American Technical Ceramics Corp. filed its responses
in opposition to Presidio’s three motions. (Doc. Nos.
391, 393, 394.) On July 20, 2016, Presidio filed its replies in support of its motions. (Doc. Nos. 412, 414, 415.)
On July 15, 2016, ATC filed (1) a motion for judgment as a matter of law and new trial of no infringement; (2) a motion for judgment as a matter of law and
new trial of no willfulness and no induced infringement; and (3) a motion for judgment as a matter of law
and new trial of no lost profits. (Doc. Nos. 399, 400,
402.) On July 29, 2016, Presidio filed its responses in
opposition to ATC’s three motions. (Doc. Nos. 423, 424,
426.) On August 5, 2016, ATC filed its replies in support of its motions. (Doc. Nos. 432, 433, 434.)
The Court held a hearing on the matters on August
17, 2016. Gregory Ahrens and Brett Schatz appeared
for Presidio. Peter Snell and Ronald Cahill appeared
for ATC. For the reasons below, the Court: (1) denies
ATC’s motions for judgment as a matter of law and
new trial; (2) grants Presidio’s motion for a permanent
injunction; (3) denies Presidio’s motion for enhanced
damages and attorney’s fees; and (4) grants Presidio’s
motion for supplemental damages and interest.
R. App. 3
Background
On September 2, 2014, Presidio filed a complaint
for patent infringement against ATC, alleging infringement of U.S. Patent No. 6,816,356 (“the ’356 patent”).
(Doc. No. 1, Compl.) The ’356 patent is entitled “Integrated Broadband Ceramic Capacitor Array.” U.S. Patent No. 6,816,356 B2, at 1:1-2 (filed Apr. 14, 2003). The
patent issued on November 9, 2004 and claimed priority to an application filed on May 17, 2002. See id. (See
Doc. No. 276-3 ¶ 4; Doc. No. 356-1 at 5.)
A capacitor is a passive electrical component that
stores and releases energy and is used in a variety of
electrical devices. Presidio Components, Inc. v. American Technical Ceramics Corp., 702 F.3d 1351, 1355
(Fed. Cir. 2012). Generally, a capacitor comprises two
parallel metal plates separated by a non-conductive
material such as ceramic or air, known as a dielectric.
Id. When a capacitor is connected to a power source,
electricity passes through the metal plates, but not the
dielectric, causing a positive charge to accumulate on
one plate and a negative charge on the other. Id. “The
capacitor may release this stored energy by connecting
the two plates through a conductive path that closes
the circuit.” Id. “The amount of energy a capacitor can
store is its ‘capacitance.’ ” Id.
Multiple capacitors may be combined to create a
“multilayer capacitor.” Id. A multilayer capacitor is
made of several layers of conductive and non-conductive
materials stacked together. Id. Each layer in the
R. App. 4
multilayer capacitor has its own electrical properties
affecting the overall performance of the capacitor. Id.
The ’356 patent claims a multilayer capacitor design and teaches a multilayer integrated network of
capacitors electrically connected in series and in parallel. Id.; Presidio Components, Inc. v. American Technical Ceramics Corp., 723 F. Supp. 2d 1284, 1289 (S.D.
Cal. 2010), vacated on other grounds, 702 F.3d 1351
(Fed. Cir. 2012). This network of capacitors is disposed
within a “substantially monolithic dielectric body,” as
shown below in Figure 10A. Presidio, 702 F.3d at 1355.
The claimed multilayer capacitor creates capacitance
between internal parallel plate combinations 10 and
11 while simultaneously creating fringe-effect capacitance between external contacts 72 and 74. Id.
R. App. 5
On December 8, 2015, the United States Patent
and Trademark Office issued a reexamination certificate for the ’356 patent, amending certain claims of the
patent.1 (Doc. No. 170-2, FAC Ex. 2.) Amended claim 1
of the ’356 patent, the only independent claim asserted
by Presidio in this action, is as follows:
1.
A capacitor comprising:
a substantially monolithic dielectric body;
a conductive first plate disposed within the dielectric body;
a conductive second plate disposed within the dielectric body and forming a capacitor with the first
plate;
a conductive first contact disposed externally on
the dielectric body and electrically connected to
the first plate; and
a conductive second contact disposed externally on
the dielectric body and electrically connected to
the second plate, and the second contact being located sufficiently close to the first contact in an
edge to edge relationship in such proximity as to
form a first fringe-effect capacitance with the first
contact that is capable of being determined by
measurement in terms of a standard unit.
U.S. Patent No. 6,816,356 C2, at 1:23-36 (Reexamination Certificate filed Dec. 8, 2015) (emphasis removed
1
The PTO previously issued a reexamination certificate for
the ’356 patent on September 13, 2011. (Doc. No. 170-1, FAC Ex.
1.) This reexamination certificate did not alter any of the claims
at issue in the present action. (Id.)
R. App. 6
from original). The claims in the reexamination certificate were amended in order to overcome a final rejection by the PTO examiner, rejecting the claims at issue
as anticipated by the AVX MLC Catalog reference, and
in the alternative, as obvious over the AVX MLC Catalog reference in view of the Ceramic Capacitor Technology reference. (See Doc. No. 212-2, Slonim Decl. Exs.
1, 2, 8, 11.)
On December 22, 2015, Presidio filed a first
amended complaint, alleging infringement of the ’356
patent as amended by the reexamination certificate.
(Doc. No. 170, FAC.) Specifically, Presidio alleged that
ATC’s 550 line of capacitors infringes claims 1, 3, 5, 16,
18, and 19 of the ’356 patent. (Id. ¶ 26.) On December
22, 2015, ATC filed a second amended answer and
counterclaims to the first amended complaint, adding
an affirmative defense of absolute and equitable intervening rights and an affirmative defense and counterclaim of unenforceability due to inequitable conduct.
(Doc. No. 171.)
On January 12, 2016, the Court denied Presidio’s
motions for: (1) summary judgment of definiteness; (2)
summary judgment of infringement; (3) summary
judgment of ATC’s equitable affirmative defenses; and
(4) summary judgment of no acceptable non-infringing
alternatives. (Doc. No. 210.) In the order, the Court also
denied ATC’s motions for: (1) partial summary judgment of non-infringement; (2) summary judgment of
indefiniteness; and (3) summary judgment of no willful
infringement. (Id.) On February 10, 2016, the Court
granted ATC’s motion for summary judgment of its
R. App. 7
affirmative defense of absolute intervening rights and
held that Presidio is entitled to infringement damages
only for the time period following the issuance of the
reexamination certificate on December 8, 2015. (Doc.
No. 234 at 28.) In that order, the Court also dismissed
with prejudice ATC’s affirmative defense and counterclaim that the ’356 patent is unenforceable due to inequitable conduct. (Id. at 33.)
The Court held a jury trial beginning on April 5,
2016. (Doc. No. 297.) During the trial, on April 8, 2016,
ATC filed a motion for judgment as a matter of law
pursuant to Federal Rule of Civil Procedure 50(a).
(Doc. No. 307.) On April 18, 2016, the jury returned a
verdict finding direct infringement and induced infringement of claims 1, 3, 5, 16, 18, and 19 of the ’356
patent by ATC as to all of the accused products in the
action: the 550L, the 550S, the 550U, and the 550Z capacitors. (Doc. No. 328 at 2-3.) In addition, the jury
found that Presidio had proven by clear and convincing
evidence that ATC’s infringement of the asserted
claims was willful. (Id. at 4.) The jury awarded Presidio
$2,166,654 in lost profit damages. (Id.) The jury also
issued an advisory verdict as to indefiniteness and
found that ATC had failed to prove by clear and convincing evidence that claim 1 of the ’356 patent is indefinite.2 (Id. at 5.)
2
The verdict form initially had the “Yes” box marked in response to question No. 6 “Has ATC proved by clear and convincing
evidence that claim 1 of the ’356 patent is indefinite?” (Doc. No.
328 at 5.) During the reading of the verdict in open court, the jurors agreed that checking the “Yes” box in response to question
R. App. 8
On June 17, 2016, the Court issued a memorandum
decision finding in favor of Presidio and against ATC
on all issues submitted to the Court, including indefiniteness, equitable intervening rights, equitable estoppel, and laches. (Doc. No. 368.) On June 17, 2016, the
Court entered judgment in favor of Presidio on all
causes of action and awarded Plaintiff $2,166,654 in
damages. (Doc. No. 369.)
By the present motions, ATC moves for judgment
as a matter of law pursuant to Federal Rule of Civil
Procedure 50(b) or, in the alternative, for a new trial
pursuant to Rule 59 on the following issues: (1) infringement; (2) induced infringement; (3) willful infringement; and (4) lost profits. (Doc. Nos. 399, 400,
402.) Presidio moves for: (1) a permanent injunction;
(2) enhanced damages; (3) attorney’s fees; (4) supplemental damages; and (5) prejudgment and postjudgment interest. (Doc. Nos. 372, 373, 377.)
Discussion
I.
ATC’s Motions for Judgment as a Matter of
Law and for a New Trial
A. Legal Standard for a Rule 50 Motion for
Judgment as a Matter of Law
In a patent case, a motion for judgment as a matter
of law is governed by the regional circuit, here the
No. 6 was a clerical error and then amended the verdict form to
reflect that the “No” box should be checked. (See id.; Doc. No. 333
at 8-11.)
R. App. 9
Ninth Circuit. InTouch Techs., Inc. v. VGO Commc’ns,
Inc., 751 F.3d 1327, 1338 (Fed. Cir. 2014). Under Federal Rule of Civil Procedure 50, a court should render
judgment as a matter of law (“JMOL”) only when “a
party has been fully heard on an issue during a jury
trial and the court finds that a reasonable jury would
not have a legally sufficient evidentiary basis to find
for the party on that issue. . . .” Fed. R. Civ. P. 50(a)(1);
see Reeves v. Sanderson Plumbing Prods., 530 U.S. 133,
149 (2000). In other words, judgment as a matter of law
is proper when “the evidence, construed in the light
most favorable to the nonmoving party, permits only
one reasonable conclusion, and that conclusion is contrary to the jury’s verdict.” Pavao v. Pagay, 307 F.3d
915, 918 (9th Cir. 2002); accord InTouch Techs., 751
F.3d at 1338; see also Hangarter v. Provident Life & Accident Ins. Co., 373 F.3d 998, 1005 (9th Cir. 2004)
(“JMOL should be granted only if the verdict is
‘against the great weight of the evidence, or it is quite
clear that the jury has reached a seriously erroneous
result.’ ”). In contrast, “[a] jury’s verdict must be upheld if it is supported by substantial evidence, which is
evidence adequate to support the jury’s conclusion,
even if it is also possible to draw a contrary conclusion.” Pavao, 307 F.3d at 918.
In deciding a motion for judgment as a matter of
law, a court “must view all evidence in the light most
favorable to the nonmoving party, draw all reasonable
inferences in the favor of the non-mover, and disregard
all evidence favorable to the moving party that the
jury is not required to believe.” Harper v. City of Los
R. App. 10
Angeles, 533 F.3d 1010, 1021 (9th Cir. 2008); see Reeves,
530 U.S. at 150-51. A district court “may not make credibility determinations or weigh the evidence.” Reeves,
530 U.S. at 150. “ ‘[T]he court must accept the jury’s
credibility findings consistent with the verdict’ . . .
[and] ‘may not substitute its view of the evidence for
that of the jury.’ ” Winarto v. Toshiba Am. Elecs. Components, Inc., 274 F.3d 1276, 1283 (9th Cir. 2001).
B. Legal Standard for a Rule 59 Motion for
New Trial
In a patent case, a motion for a new trial is also
governed by the law of the regional circuit. InTouch
Techs., 751 F.3d at 1338. Under Federal Rule of Civil
Procedure 59(a), a district court “may, on motion, grant
a new trial on all or some of the issues—and to any
party—. . . after a jury trial, for any reason for which a
new trial has heretofore been granted in an action at
law in federal court.” “Rule 59 does not specify the
grounds on which a motion for a new trial may be
granted. Rather, the court is bound by those grounds
that have been historically recognized.” Molski v. M.J.
Cable, Inc., 481 F.3d 724, 729 (9th Cir. 2007) (internal
citations and quotation marks omitted). In the Ninth
Circuit, “ ‘[t]he trial court may grant a new trial only if
the verdict is contrary to the clear weight of the evidence, is based upon false or perjurious evidence, or to
prevent a miscarriage of justice.’ ” Id.; see also Lucent
Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1309 (Fed.
Cir. 2009) (“[A] district court in the Ninth Circuit ‘may
grant a new trial only if the verdict is against the clear
R. App. 11
weight of the evidence.’ ”). “Unlike with a Rule 50 determination, [a] district court, in considering a Rule 59
motion for new trial, is not required to view the trial
evidence in the light most favorable to the verdict. Instead, the district court can weigh the evidence and assess the credibility of the witnesses.” Experience
Hendrix L.L.C. v. Hendrixlicensing.com Ltd, 762 F.3d
829, 842 (9th Cir. 2014). “ ‘[A] district court may not
grant a new trial simply because it would have arrived
at a different verdict.’ ” Wallace v. City of San Diego,
479 F.3d 616, 630 (9th Cir. 2007).
“The grant of a new trial is ‘confided almost entirely to the exercise of discretion on the part of the
trial court.’ ” Murphy v. City of Long Beach, 914 F.2d
183, 186 (9th Cir. 1990) (quoting Allied Chem. Corp. v.
Daiflon, Inc., 449 U.S. 33, 36 (1980)). On appeal, the
Ninth Circuit “afford[s] considerable deference to the
district court’s new trial decision and will not overturn
the district court’s decision to grant a new trial absent
an abuse of discretion.” Experience Hendrix, 762 F.3d
at 842. A district court’s “denial of a motion for a new
trial is reversible ‘only if the record contains no evidence in support of the verdict’ or if the district court
‘made a mistake of law.’ ” E.E.O.C. v. Go Daddy Software, Inc., 581 F.3d 951, 962 (9th Cir. 2009).
C. Infringement
ATC moves for judgment as a matter of law that
its 550 capacitors do not infringe claims 1, 3, 5, 16, 18,
and 19 of the ’356 patent, or in the alternative, for a
R. App. 12
new trial on the issue of infringement. (Doc. No. 399-1
at 25.) Under 35 U.S.C. § 271(a), “whoever without authority makes, uses, offers to sell, or sells any patented
invention, within the United States . . . infringes the
patent.” A patent infringement analysis proceeds in
two steps. Markman v. Westview Instruments, Inc., 52
F.3d 967, 976 (Fed. Cir. 1995), aff ’d 517 U.S. 370. In the
first step, the court construes the asserted claims as a
matter of law. See id. In the second step, the factfinder
compares the claimed invention to the accused device.
Id.; see also Verizon Servs. Corp. v. Cox Fibernet Va.,
Inc., 602 F.3d 1325, 1340 (Fed. Cir. 2010) (“A determination of infringement is a question of fact. . . .”).
“[A] patentee who files a complaint or counterclaim alleging patent infringement bears the burden of
proving that infringement.” Medtronic Inc. v. Boston
Sci. Corp., 695 F.3d 1266, 1272 (Fed. Cir. 2012). “To
prove literal infringement, the patentee must show
that the accused device contains every limitation in
the asserted claims. If even one limitation is missing
or not met as claimed, there is no literal infringement.”
Riles v. Shell Exploration & Prod. Co., 298 F.3d 1302,
1308 (Fed. Cir. 2002); accord Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1301 (Fed. Cir. 2011).
ATC argues that it is entitled to judgment as a
matter of law of no infringement because Presidio,
through its infringement expert, failed to prove that
the high frequency performance of the accused products is derived from the fringe-effect capacitance
between the capacitors’ external contacts rather
than from the capacitors’ internal electrodes. (Doc. No.
R. App. 13
399-1 at 1-21.) In response, Presidio argues ATC’s contention is based on an improper attempt to redefine the
scope of the asserted claims of the ’356 patent. (Doc.
No. 424 at 5-9.) The Court agrees with Presidio.
In its motion, ATC argues that the asserted claims
of the ’356 patent, as amended by the December 8, 2015
reexamination certificate, require that the capacitor’s
high frequency performance derive solely from the
fringe-effect capacitance between the capacitor’s external contacts; “[h]igh frequency capacitors that derive
their high-frequency performance from internal structures of the capacitor do not infringe Presidio’s ’356 patent.” (Doc. No. 399-1 at 1.) But the asserted claims
have never been construed to contain a limitation requiring that the fringe-effect capacitance between the
external contacts of the capacitor, and not the internal
structures of the capacitor, affect the capacitor’s high
frequency performance. Such a limitation is not contained in the plain language of the asserted claims of
the ’356 patent as amended by the December 8, 2015
reexamination certificate. See ’356 Patent at 13:26-28,
14:1-2, 14:9-16; ’356 Patent Dec. 8, 2015 Reexamination Certificate at 1:23-2:9 (“the second contact being
located sufficiently close to the first contact in an edge
to edge relationship in such proximity as to form a first
fringe-effect capacitance with the first contact that is
capable of being determined by measurement in terms
of a standard unit”). Such a limitation is also not contained in the Court’s claim construction order. (See
Doc. No. 103.) Such a limitation was also not contained
in ATC’s proposed jury instruction regarding the
R. App. 14
Court’s claim constructions, (Doc. No. 296 at 19), or in
the actual instructions that were provided to the jury
regarding the Court’s claim constructions. (See Doc.
No.327 (Court’s Instruction No. 17).)
Further, in determining the scope of the amended
claims when ruling on the parties’ cross-motions for
summary judgment of ATC’s absolute intervening
rights defense, the Court never found that such a
limitation was present in the amended claims. (See
Doc. No. 234.) Cf. R+L Carriers, Inc. v. Qualcomm, Inc.,
801 F.3d 1346, 1350 (Fed. Cir. 2015) (explaining that
the determination of claim scope for an intervening
rights analysis is “a matter of claim construction”).
In determining that that [sic] the amendments in the
December 8, 2015 reexamination certificate narrowed
the scope of the asserted claims, the Court determined
“that the scope of the asserted claims as amended by
the December 8, 2015 reexamination certificate requires a fringe-effect capacitance that is actually
measurable such as in the manner shown in Figs. 21A
and 21B of the ’356 patent.” (Id. at 20.) A fringe-effect
capacitance that is negligible or merely theoretically
present, i.e., a capacitance that is merely derivable by
using theoretical calculations or simulations, is outside
the scope of the amended claims. (Id.) Figures 21A and
21B of the ’356 patent are graphs representing the insertion loss of a capacitor. ’356 Patent at 6:10-16. Accordingly, the Court’s absolute intervening rights
summary judgment order only holds that the amended
claims contain the limitation that the fringe-effect capacitance between the external contacts be capable of
R. App. 15
being determined by measurement such as through insertion loss measurements, and not merely by using
theoretical calculations. The order does not hold that
the amended claims contain a limitation specifically
requiring that the fringe-effect capacitance between
the external contacts of the capacitors, and not its internal structures, affect the capacitor’s high frequency
performance.3
ATC cannot seek a new claim construction posttrial. ATC did not request a construction of the
asserted claims containing the limitation that the
fringe-effect capacitance between the external contacts,
3
ATC notes that the prior court held that Presidio admitted
that “ ‘insertion loss’ is ‘a property critical to and very specific to
high frequency performance.’ ” (Doc. No. 399-1 at 9 (citing Doc. No.
234 at 5 n.3); see also Doc. No. 432 at 8-9 (citing Doc. No. 235 at
26).) But ATC fails to further explain how this admission necessitates its proposed construction. It does not follow that because insertion loss is critical to high frequency performance and the
claims require that the fringe-effect capacitance be actually measurable such as through insertion loss testing, that the claims then
must require that the fringe-effect capacitance between the capacitor’s external contacts, and not internal structures, affect the
capacitor’s high frequency performance. At best, this means that
if the fringe-effect capacitance is to be measured through insertion loss testing, then it must have some effect on the capacitor’s
high frequency performance; not that the capacitor’s high frequency performance must only be derived from the fringe-effect
capacitance between the external contacts and not from any internal structures. Further, Presidio’s infringement expert, Dr.
Huebner, testified that although the accused products contain
some internal capacitances that help with high frequency performance, the highest frequency performance of the capacitors is
achieved by the fringe-effect capacitance. (Doc. No. 306, Trial Tr.
Vol. III at 162-63; see also id. at 27-29, 38-53, 57-63; Doc. No. 331,
Trial Tr. Vol. V at 222.)
R. App. 16
not internal structures, affect the capacitor’s high frequency performance in its claim construction briefing;
at the claim construction hearing; following the issuance
of the December 8, 2015 reexamination certification; in
its motion for summary judgment on its defense of absolute intervening rights; through a motion for clarification; in its proposed jury instructions; or its Rule
50(a) motion for judgment as a matter of law. (See Doc.
No. 93, 98, 104, 189, 212-1, 227, 296, 307.) Therefore,
ATC waived its argument that the claims should be
construed to contain this limitation, and ATC cannot
raise this argument through post-trial motions. See
Cordis Corp. v. Boston Sci. Corp., 561 F.3d 1319, 1331
(Fed. Cir. 2009) (“[L]itigants waive their right to present new claim construction disputes if they are raised
for the first time after trial.”); GPNE Corp. v. Apple Inc.,
108 F. Supp. 3d 839, 850 (N.D. Cal. 2015) (“[Plaintiff ’s]
two claim construction arguments were not raised at
the Markman stage or in briefing regarding the jury
instructions. [Plaintiff ] provides no citation to prior efforts to raise the latter two arguments, and does not
otherwise argue that it properly preserved those arguments for post-trial consideration. The Court therefore
concludes [plaintiff ]’s arguments with respect to the
purpose of the invention and claim differentiation are
waived. A party may not raise new claim construction
arguments for the first time in post-trial briefing.”
(citations omitted)). In sum, because the Court did not
construe the asserted claims to contain the specific
limitation requiring that the fringe-effect capacitance
between the external contacts of the capacitor, not its
internal structures, affect the capacitor’s high frequency
R. App. 17
performance, the Court rejects ATC’s argument that it
is entitled to judgment as a matter of law on this issue.
ATC also argues that it is entitled to a new trial
on the issue of infringement because the Court admitted Dr. Huebner’s computer simulation evidence at
trial over its objection. (Doc. No. 399-1 at 21-25.) The
Court rejects ATC’s request for a new trial on this
issue. The simulation testing evidence Dr. Huebner
presented at trial was relevant to provide background
and context for his opinions and measurements. The
evidence was admitted to demonstrate that fringe-effect capacitance exists between the external contacts
of the 550 capacitors. That the evidence was used for
this purpose could not have confused the jury because
both Presidio’s and ATC’s experts agreed that fringeeffect capacitance is well known and always exists between the external contacts of a capacitor. (Doc. No.
305, Trial Tr. Vol. II at 261; Doc. No. 306, Trial Tr. Vol.
III at 151; Doc. No. 331, Trial Tr. Vol. V at 78.)
ATC also erroneously argues that it sought to introduce into evidence its own computer simulations.
(Doc. No. 399-1 at 24.) ATC was permitted to present
its simulation evidence to the jury at trial. At trial,
ATC initially only sought to have the exhibits at issue
admitted as demonstratives, and the Court received
them as demonstratives over Presidio’s objections.
(Doc. No. 331, Trial Tr. Vol. V at 50-52.) ATC later
sought to have the exhibits admitted as evidence, and
Presidio objected to the exhibits pursuant to Federal
Rule of Evidence 403 on the grounds that they also contained inadmissible editorial comments. (Id. at 69-70.)
R. App. 18
The Court sustained the objection. (Id.) Presidio stated
that it would be fine to admit the exhibits if the editorial comments were removed, but ATC never sought to
introduce the exhibits into evidence without the editorial comments. (Id. at 70.) Further, ATC has failed to
show that it was prejudiced by the Court’s refusal to
admit the exhibits into evidence. ATC states that the
purpose of these exhibits was to show that non-infringing capacitors have fringing field lines between their
external contacts. (Doc. No. 399-1 at 24.) But this evidence then was cumulative of other evidence in the record because both sides’ experts agreed that fringeeffect capacitance is well known and always exists between the external contacts of a capacitor. (Doc. No.
305, Trial Tr. Vol. II at 261; Doc. No. 306, Trial Tr. Vol.
III at 151; Doc. No. 331, Trial Tr. Vol. V at 78.) Accordingly, the Court rejects ATC’s argument that it is entitled to a new trial based on the computer simulation
evidence that was admitted at trial.4
The jury’s infringement verdict was supported
by substantial evidence and not against the clear
weight of evidence. Presidio’s infringement expert provided testimony, supported by analysis and testing,
4
ATC also argues that it is entitled to a new trial because
the Court allowed Presidio’s witnesses to testify that the December 8, 2015 reexamination certificate did not change the scope of
the asserted claims. (Doc. No. 399-1 at 25 n.12; Doc. No. 432 at 14.)
ATC has failed to explain how it was prejudiced by this testimony.
The Court instructed the jury as to the proper scope of the asserted claims under the Court’s claim construction orders. (Doc.
No. 327 (Court’s Instruction No. 17).) “A jury is presumed to follow
its instructions.” Weeks v. Angelone, 528 U.S. 225, 234 (2000).
R. App. 19
explaining how the accused products satisfied all the
limitations in the asserted claims. (See Doc. No. 305,
Trial Tr. Vol. II at 243-44, 249-65; Doc. No. 306, Trial
Tr. Vol. III at 1-80.) This testimony was more than adequate to allow the jury to reach its finding of infringement. See, e.g., Martek Biosciences Corp. v. Nutrinova,
Inc., 579 F.3d 1363, 1373-74 (Fed. Cir. 2009). Because
the jury’s infringement verdict was supported by substantial evidence, it must be upheld. See Pavao, 307
F.3d at 918. Accordingly, the Court denies ATC’s motion for judgment as a matter of law of no infringement, or in the alternative, for a new trial on the issue
of infringement.
D. Induced Infringement
ATC moves for judgment as a matter of law of no
induced infringement, or in the alternative, for a new
trial on the issue of induced infringement. (Doc. No.
400-1 at 22-24.) ATC argues that the jury’s finding of
active inducement was not supported by substantial
evidence. (Id.)
35 U.S.C. § 271(b) provides: “Whoever actively
induces infringement of a patent shall be liable as
an infringer.” To prove inducement, the patentee must
establish that “the defendant knew of the patent and
that ‘the induced acts constitute patent infringement.’ ”5
5
To prove inducement, the patentee must also establish direct infringement. See Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d
1301, 1322 (Fed. Cir. 2009) (“ ‘[A] finding of inducement requires
a threshold finding of direct infringement—either a finding of specific instances of direct infringement or a finding that the accused
R. App. 20
Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920,
1926 (2015). Intent can be shown through circumstantial evidence. Vita-Mix Corp. v. Basic Holding, Inc., 581
F.3d 1317, 1328 (Fed. Cir. 2009). For example, evidence
of active steps taken to encourage direct infringement
can be found in “ ‘advertising an infringing use or instructing how to engage in an infringing use.’ ” Takeda
Pharm. U.S.A., Inc. v. W.-Ward Pharm. Corp., 785 F.3d
625, 630-31 (Fed. Cir. 2015) (quoting Metro-GoldwynMayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 936
(2005)).
At trial, Presidio presented sufficient evidence to
allow the jury to find that ATC knew about of [sic] the
’356 patent. One of ATC’s engineers, who was involved
in the design of the accused products, testified that he
was aware of the application that later issued as the
’356 patent and the ’356 patent itself. (Doc. No. 305,
Trial Tr. Vol. II at 48-49, 56-57, 81-83.)
Presidio also presented sufficient evidence to allow the jury to find that ATC knew that the induced
acts constituted patent infringement. ATC’s design engineer testified that he not only knew about the ’356
patent, but also the results of the prior litigation. (Id.
at 57.) Further, Presidio presented evidence showing
that ATC actively promoted and sold the 550 capacitors to its customers for use, and provided information
related to the accused products to its customers, such
products necessarily infringe.’ ”). As explained in the prior section,
substantial evidence supports the jury’s finding that the accused
products directly infringe the asserted claims of the ’356 patent.
See supra.
R. App. 21
as data sheets. (Id. at 3, 112-13.) Presidio also presented evidence showing that ATC promoted the 550
capacitors to its customers as a replacement for the
545L capacitor—the capacitor that was found to infringe the ’356 patent in the prior action. (Id. at 56-57,
137-38, 153-54, 167-68.) This evidence was sufficient to
support the jury’s finding of inducement.6 See Takeda,
785 F.3d at 630-31; see, e.g., i4i Ltd. P’ship v. Microsoft
Corp., 598 F.3d 831, 851-52 (Fed. Cir. 2010) (affirming
the jury’s finding of inducement as supported by substantial evidence where the evidence in the record
showed that the defendant provided instructions that
taught users to practice the accused product in a manner the defendant knew would result in an infringing
use).
ATC argues that there was insufficient evidence to
establish its intent to induce infringement of the ’356
patent because by December 8, 2015—the time when
the relevant period of infringement began—ATC had
an objectively reasonable non-infringement defense.
(Doc. No. 400-1 at 23-24.) To the extent ATC is arguing
6
ATC argues that this evidence is insufficient to establish
inducement because these actions occurred prior to the claims being amended through the December 8, 2015 reexamination certificate and during the period when ATC’s sales were determined to
be lawful under the Court’s intervening rights ruling. (Doc. No.
434 at 16.) ATC argues that until December 8, 2015, it knew that
the ’356 patent was invalid and, thus, knew there could be no infringement and there was no corresponding intent to induce. (Id.)
This argument is foreclosed by the Supreme Court’s recent decision in Commil. In Commil, the Supreme Court held that “a belief
as to invalidity cannot negate the scienter required for induced
infringement.” 135 S. Ct. at 1929.
R. App. 22
that an objectively reasonable non-infringement defense negates a finding of inducement, the Federal Circuit has recently rejected this contention. See Unwired
Planet, LLC v. Apple Inc., No. 2015-1725, 2016 WL
3947839, at *8 (Fed. Cir. July 22, 2016) (The Supreme
Court’s cases on inducement “require a showing of the
accused infringer’s subjective knowledge as to the underlying direct infringement. The district court’s reliance on the objective strength of Apple’s non-infringement
arguments as precluding a finding of induced or contributory infringement was erroneous.”). Further, to
the extent ATC is arguing that the non-infringement
defense it presented at trial was sufficient to allow
the jury to find that it lacked the requisite intent
to induce infringement, this argument also fails as
the jury was not required to accept ATC’s evidence
on this issue and was free to reject it. Cf. Harper,
533 F.3d at 1021 (explaining that in reviewing a motion for judgment as a matter of law, the court must
“disregard all evidence favorable to the moving party
that the jury is not required to believe”). Accordingly,
the Court denies ATC’s motion for judgment as a matter of law of no induced infringement, or in the alternative, for a new trial on the issue of induced
infringement.
E. Willful Infringement
ATC moves for judgment as a matter of law of no
willful infringement, or in the alternative, for a new
trial on the issue of willful infringement. (Doc. No. 4001 at 3-22.) At the time the jury rendered its verdict, the
R. App. 23
Federal Circuit had held “that an award of enhanced
damages [under section 284] requires a showing of
willful infringement.” In re Seagate Tech., LLC, 497
F.3d 1360, 1368 (Fed. Cir. 2007) (en banc).
To establish willful infringement, the patentee
has the burden of showing “by clear and
convincing evidence that the infringer acted
despite an objectively high likelihood that its
actions constituted infringement of a valid
patent.” “The state of mind of the accused
infringer is not relevant to this objective inquiry.” Only if the patentee establishes this
“threshold objective standard” does the inquiry
then move on to whether “this objectivelydefined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have
been known to the accused infringer.”
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 776 F.3d 837, 844 (Fed. Cir. 2015) (quoting
Seagate, 497 F.3d at 1371). The Federal Circuit further
held that the objective prong of the willfulness test is
to be decided by the Court as a matter of law; while the
subjective prong of the test is a question of fact. See
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 682 F.3d 1003, 1006-08 (Fed. Cir. 2012).
On June 13, 2016, the Supreme Court issued its
decision in Halo Elecs., Inc. v. Pulse Elecs., Inc., No. 141513, 579 U.S. ___ (June 13, 2016). In Halo, the Supreme Court rejected the Federal Circuit’s two-part
test from Seagate for determining when a district court
R. App. 24
may award enhanced damages as inconsistent with
§ 284. Id., slip op. at 1-2. The Supreme Court explained
that § 284 commits the award of enhanced damages to
the discretion of the district court. See id. at 8, 12-13,
15. The Supreme Court further explained that the
Seagate test is “ ‘unduly rigid’ ” and “ ‘impermissibly
encumbers’ ” a district court’s discretion, particularly
its requirement that there must be a finding of objective recklessness in every case before a district court
may award enhanced damages. Id. at 9. “The subjective willfulness of a patent infringer, intentional or
knowing, may warrant enhanced damages, without regard to whether his infringement was objectively reckless.” Id. at 10. “Section 284 permits district courts to
exercise their discretion in a manner free from the inelastic constraints of the Seagate test.” Id. at 11.
ATC first argues that it is entitled to judgment as
a matter of law on the issue of willfulness because Halo
commits the entire issue of enhanced damages to the
district court’s discretion and a separate factual finding of willfulness by a jury no longer exists under the
standard. (Doc. No. 400-1 at 3-8.) The Court has previously rejected this argument, (Doc. No. 368 at 27),
and this argument has also recently been rejected by
the Federal Circuit. In WBIP, LLC v. Kohler Co., the
Federal Circuit held that Halo does not change “the established law that the factual components of the willfulness question should be resolved by the jury.” No.
2015-1038, 2016 WL 3902668, at *15 (Fed. Cir. July 19,
2016); see also id. at *15 n.13 (Halo “leaves in place our
prior precedent that there is a right to a jury trial on
R. App. 25
the willfulness question.”). ATC may disagree with the
Federal Circuit’s decision in WBIP. (Doc. No. 421 at 2;
Doc. No. 434 at 4-5.) Nevertheless, WBIP represents
binding circuit law, and this Court must follow it.7 See
Yong v. I.N.S., 208 F.3d 1116, 1119 n.2 (9th Cir. 2000)
(“[O]nce a federal circuit court issues a decision, the
district courts within that circuit are bound to follow
it.”). Accordingly, the Court rejects ATC’s contention
that it was an error for the Court to submit the issue
of subjective willfulness to the jury.
ATC also argues that the jury’s willfulness finding
is invalid because there has been no finding as to the
objective reasonableness of ATC’s defenses. (Doc. No.
400-1 at 8-9; Doc. No. 434 at 8-10.) ATC argues that
objective reasonableness remains a factor in any willfulness determination post-Halo. (Doc. No. 400-1 at 8.)
This argument is also foreclosed by the Federal Circuit’s recent decision in WBIP. In WBIP, the Federal
Circuit held that “[p]roof of an objectively reasonable
litigation-inspired defense to infringement is no longer
a defense to willful infringement.” 2016 WL 3902668,
7
ATC characterizes the above statement from WBIP as
dicta. (Doc. No. 421 at 2; Doc. No. 434 at 4.) The Court disagrees.
The statement is not dicta because the panel’s determination that
the factual components of the willfulness question should still be
decided by a jury was necessary to the panel’s ultimate decision
to affirm the district court’s enhanced damages award. See
N.L.R.B. v. Int’l Bhd. of Elec. Workers, Local 340, 481 U.S. 573, 592
n.15 (1987) (describing a statement in a prior case as dicta because it “was unnecessary to the disposition” of the case); Exp.
Grp. v. Reef Indus., Inc., 54 F.3d 1466, 1472 (9th Cir. 1995) (describing dicta as statements that are not “necessary to the decision”).
R. App. 26
at *15 (Fed. Cir. July 19, 2016); see also Halo, 136 S. Ct.
at 1933 (“The subjective willfulness of a patent infringer, intentional or knowing, may warrant enhanced
damages, without regard to whether his infringement
was objectively reckless.”). Accordingly, the Court rejects ATC’s contention that a jury must consider
objective reasonableness when making a willfulness
determination..
ATC next argues that the jury’s willfulness finding
should be vacated because the court’s instructions on
willfulness failed to properly reflect the standard set
forth in Halo. (Doc. No. 400-1 at 9-10; Doc. No. 434 at
5-7.) In support of this argument, ATC relies on the
following language from Halo: “Awards of enhanced
damages . . . are not to be meted out in a typical infringement case, but are instead designed as a ‘punitive’ or ‘vindictive’ sanction for egregious infringement
behavior. The sort of conduct warranting enhanced
damages has been variously described in our cases as
willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic
of a pirate.” Halo, 136 S. Ct. at 1932. But here, the
Supreme Court is discussing the standard that a district court should use when ultimately determining
whether to exercise its discretion and award enhanced
damages, not the standard that should be used by the
factfinder when making a finding as to subjective willfulness. Accordingly, the Court rejects this argument.8
8
In its reply brief, ATC argues for the first time that jury’s
willfulness finding was insufficient because the jury was not
R. App. 27
Finally, ATC argues that it is entitled to judgment as a matter of law as to willfulness because there
was insufficient evidence to support a finding of willfulness even under the standard applied by the jury.9
asked to make specific factual findings by answering special interrogatories in the verdict. (Doc. No. 434 at 7-8.) This argument
is waived because ATC did not object to the verdict form on this
ground at trial. (See Doc. No. 331, Trial Tr. Vol. V at 245-57; Doc.
No. 332, Trial Tr. Vol. VI at 3-4.) This argument is also waived because ATC raised this argument for the first time in a reply brief.
See Bazuaye v. I.N.S., 79 F.3d 118, 120 (9th Cir. 1996) (“Issues
raised for the first time in the reply brief are waived.”); accord
Novosteel SA v. U.S., Bethlehem Steel Corp., 284 F.3d 1261, 1274
(Fed. Cir. 2002).
9
The Court provided the following jury instruction as to willful infringement:
In this case, Presidio also argues that ATC willfully
infringed Presidio the ’356 patent.
To prove willful infringement against ATC, Presidio must first persuade you that ATC infringed a
valid and enforceable claim of Presidio’s asserted patent. The requirements for proving such infringement
were discussed in my prior instructions. In addition, to
prove willful infringement, Presidio must persuade you
by clear and convincing evidence that on or after December 8, 2015, ATC acted with reckless disregard of
the claims of the patent holder’s patent. When a party
has the burden of proving something by clear and convincing evidence, it means you must be persuaded by
the evidence that the claim or defense is highly probable. This is a higher standard of proof than proof by a
preponderance of the evidence.
To demonstrate such “reckless disregard,” Presidio
must persuade you that ATC actually knew, or it was
so obvious that ATC should have known, that its actions constituted infringement of a valid patent. In deciding whether ATC acted with reckless disregard for
Presidio’s asserted patents, you should consider all of
R. App. 28
(Doc. No. 400-1 at 10-22.) The Court disagrees. The
jury’s willfulness finding was supported by substantial
evidence. One of ATC’s engineers who was involved
in the design of the accused products, testified that
he was aware of the application that later issued as
the ’356 patent and the ’356 patent itself. (Doc. No.
305, Trial Tr. Vol. II at 48-49, 56-57, 81-83; see also
Doc. No. 426-6, Ex. F (Trial Ex. 44); Doc. No. 426-7,
Ex. G (Trial Ex. 46); Doc. No. 426-9, Ex. I (Trial Ex.
189).) The engineer testified that he not only knew
about the ’356 patent, but also the results of the prior
litigation. (Doc. No. 305, Trial Tr. Vol. II at 57.) Further,
Presidio presented evidence showing that ATC promoted the 550 capacitors to its customers as a replacement for the 545L capacitor—the capacitor that was
found to infringe the ’356 patent in the prior lawsuit.
the facts surrounding the alleged infringement including, but not limited to, the following factors:
1. Whether ATC acted in a manner consistent
with the standards of commerce for its industry;
2. Whether ATC intentionally copied a product of
Presidio covered by the patents;
3. Whether there is a reasonable basis to believe
that ATC did not infringe or had a reasonable defense
to infringement, including a belief that the patent-insuit is invalid;
4. Whether ATC made a good-faith effort to avoid
infringing the patent, for example, whether ATC attempted to design around the patent;
5. Whether ATC tried to cover up its alleged infringement.
(Doc. No. 327 at 35-36.)
R. App. 29
(Id. at 56-57, 137-38, 153-54, 167-68.)10 Presidio also
presented evidence showing that ATC was aware that
the claims as amended had survived three PTO reexamination proceedings that ATC itself had instituted.
(Doc. No. 304, Trial Tr. Vol. I at 143; Doc. No. 305, Trial
Tr. Vol. II at 192.) This evidence was sufficient for the
jury to find that ATC acted with reckless disregard of
the claims of the ’356 patent.
ATC notes that its corporate secretary, Mr. Evan
Slavitt, testified that as of December 8, 2015—the date
infringement began—he had reason to believe, based
on the expert reports and pleadings in the case, that
ATC was not infringing the ’356 patent. (Doc. No. 4001 (citing Doc. No. 330, Trial Tr. Vol. IV at 216-17; Doc.
No. 331, Trial Tr. Vol. V at 1-2).) But the jury was not
required to credit this testimony. Cf. Harper, 533 F.3d
at 1021 (explaining that in reviewing a motion for
judgment as a matter of law, the court must “disregard
all evidence favorable to the moving party that the jury
is not required to believe”). In addition, the Court notes
that the jury found willful infringement by clear and
convincing evidence—a higher burden of proof than is
10
ATC argues that this evidence is irrelevant because it predates December 8, 2015—the date on which the relevant period of
infringement began under the Court’s intervening rights ruling.
(Doc. No. 400-1 at 10-11.) ATC argues that this evidence can only
establish ATC’s knowledge during the non-infringement period.
(Id.) The Court disagrees. Evidence of what ATC knew prior to
December 8, 2015 is relevant to what ATC knew after December
8, 2015. (Doc. No. 275 at 12-13.) Indeed, it is generally reasonable
to infer that if a person knows about something prior to a certain
date, that person retains that knowledge after that certain date.
R. App. 30
required after Halo. See 136 S. Ct. at 1934. Accordingly,
the jury’s willfulness finding was supported by substantial evidence and was also not against the clear
weight of evidence.
Moreover, the Court notes that ATC’s motion on
this issue is essentially moot because the Court, exercising its sound discretion, ultimately declines to
award Presidio enhanced damages despite the jury’s
finding of willful infringement. See infra. Accordingly,
the Court denies ATC’s motion for judgment as a matter
of law of no willful infringement, or in the alternative,
for a new trial on the issue of willful infringement.
F. Lost Profits
Presidio [sic] moves for judgment as a matter of
law of no lost profits, or in the alternative, for a new
trial on lost profit damages on two grounds. First, ATC
argues that Presidio failed to establish that it was entitled to lost profit damages because it failed to prove
the absence of non-infringing alternatives. (Doc. No.
402-1 at 4-13.) Second, ATC argues that Presidio failed
to establish that it was entitled to lost profit damages
because it failed to properly apportion between the patented and unpatented features of the accused products. (Id. at 13-19.) ATC further argues that because
Presidio failed to prove that it is entitled to lost profit
damages, Presidio is only entitled to damages in the
form of a reasonable royalty of $0.25 per capacitor. (Id.
at 1, 4.)
R. App. 31
35 U.S.C. § 284 provides: “Upon finding for the
claimant the court shall award the claimant damages
adequate to compensate for the infringement, but in no
event less than a reasonable royalty for the use made
of the invention by the infringer.” 35 U.S.C. § 284. “The
phrase ‘damages adequate to compensate’ means full
compensation for any damages the patent owner suffered as a result of the infringement. Full compensation includes any foreseeable lost profits the patent
owner can prove.” Grain Processing Corp. v. Am. MaizeProducts Co., 185 F.3d 1341, 1349 (Fed. Cir. 1999) (internal citations and quotation marks omitted).
“To recover lost profits damages, the patentee
must show a reasonable probability that, ‘but for’ the
infringement, it would have made the sales that were
made by the infringer.” Rite-Hite Corp. v. Kelley Co., 56
F.3d 1538, 1545 (Fed. Cir. 1995) (en banc); accord Grain
Processing, 185 F.3d at 1349 (“To recover lost profits,
the patent owner must show ‘causation in fact.’ ”). “A
showing under the four-factor Panduit test establishes
the required causation.” Versata Software, Inc. v. SAP
Am., Inc., 717 F.3d 1255, 1264 (Fed. Cir. 2013) (citing
Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575
F.2d 1152, 1156 (6th Cir. 1978)). The four-factor Panduit test requires the patentee to show: “(1) demand for
the patented product; (2) absence of acceptable noninfringing substitutes; (3) manufacturing and marketing
capability to exploit the demand; and (4) the amount of
profit that would have been made.” Presidio Components, Inc. v. Am. Tech. Ceramics Corp., 702 F.3d 1351,
R. App. 32
1359-60 (Fed. Cir. 2012). “Causation of lost profits ‘is a
classical jury question.’ ” Versata, 717 F.3d at 1264.
i.
Available Non-Infringing Alternatives
ATC argues that the jury’s finding as to the second
prong of the Panduit test—that there is an absence of
acceptable noninfringing substitutes—was not supported by substantial evidence. (Doc. No. 402-1 at 4.)
Specifically, ATC argues that Presidio failed to bear its
burden of demonstrating that ATC’s 560L capacitor
was not an available and acceptable noninfringing
product during the relevant infringement period. (Id.
at 6.)
“[T]o be an acceptable non-infringing substitute,
the product or process must have been available or on
the market at the time of infringement.” Grain Processing, 185 F.3d at 1349 (emphasis removed). “[M]arket sales of an acceptable noninfringing substitute
often suffice alone to defeat a case for lost profits.” Id.
at 1352. “[A]n available technology not on the market
during the infringement can constitute a noninfringing alternative.” Id. at 1351. But, when the alleged alternative is not on the market during the accounting
period, a factfinder may reasonably infer that it was
not available as a noninfringing substitute, and the
accused infringer bears the burden of overcoming
this inference by showing that the substitute was actually available during the accounting period. Id. at
1353; DePuy Spine, Inc. v. Medtronic Sofamor Danek,
Inc., 567 F.3d 1314, 1331 (Fed. Cir. 2009). Further, “the
R. App. 33
‘[m]ere existence of a competing device does not make
that device an acceptable substitute.’ ” Presidio, 702
F.3d at 1361.
ATC argues that Presidio bears the burden of
demonstrating that the 560L capacitor is not an available noninfringing product because the 560L capacitor
was on the market during the relevant infringement
period. (Doc. No. 402-1 at 6.) The evidence presented at
trial showed that ATC sold 88,000 560L capacitors during the relevant infringement period. (Doc. No. 330,
Trial Tr. Vol. IV at 25, 213; Doc. No. 331, Trial Tr. Vol.
V at 152, 174.) But the evidence in the record showed
that all of these sales were to a single customer, (id.),
and the product is not listed on ATC’s website. (Doc.
No. 331, Trial Tr. Vol. V at 167.) Presidio’s damages expert, Mr. Thomas, testified that these sales were made
on an as needed basis, and that the 560L capacitor was
not widely advertised or touted as a competitive product as to Presidio’s BB capacitor.11 (Id. at 25-27, 29;
11
ATC renews its contention that the Court should have excluded Mr. Thomas from testifying that the 560L capacitor does
not constitute an available noninfringing alternative. (Doc. No.
402-1 at 22-23; see also Doc. No. 251 at 5-11.) The Court again
rejects ATC’s contention that the Court should have excluded this
testimony. Mr. Thomas’s testimony was relevant to Presidio’s assertion of lost profit damages, specifically Panduit factor two: “absence of acceptable noninfringing substitutes.” See Siemens Med.
Sols. USA, Inc. v. Saint-Gobain Ceramics & Plastics, Inc., 637 F.3d
1269, 1288 (Fed. Cir. 2011) (“To be ‘available,’ an acceptable noninfringing substitute must have been ‘available or on the market’
at the time of infringement.”). Further, ATC’s challenges to Mr.
Thomas’ testimony went to the weight of the testimony and its
credibility rather than the admissibility of his opinions. See
Alaska Rent-A-Car, Inc. v. Avis Budget Grp., Inc., 738 F.3d 960, 970
R. App. 34
Doc. No. 306, Trial Tr. Vol. III at 202-03.) ATC did not
present any evidence disputing these assertions. In addition, Mr. Lambert Devoe, Presidio’s product manager
and CFO, testified that he was unaware of the 560L
capacitor and that no Presidio customer or sales representative has ever mentioned the 560L capacitor to
him. (Doc. No. Trial Tr. Vol. II at 10-11.) ATC’s own witness testified that the 560 capacitors are not as good
as the 550 capacitors. (Doc. No. 330, Trial Tr. Vol. IV at
211.) Further, in contrast to the 88,000 560L capacitors
sold during the relevant period, ATC sold over a million 550 capacitors during the relevant period. (See
Doc. No. 330, Trial Tr. Vol. IV at 6.) This evidence in the
record was sufficient to allow the jury to find that the
560L was not an acceptable non-infringing alternative.
ii. Apportionment
ATC argues that Presidio is not entitled to lost
profit damages because it failed to separate or apportion its damages between the patented and unpatented
features of the accused products in its lost profits calculation. (Doc. No. 402-1 at 17.) But ATC has failed to
show that an apportionment of the jury’s damages
award is necessary or appropriate in the present circumstances.
(9th Cir. 2013) (affirming the denial of a motion to exclude where
the movant’s challenges went to “the weight of the testimony and
its credibility, not its admissibility”).
R. App. 35
Here, the jury was instructed on apportionment12
and lost profit damages, including the Panduit test.
(Doc. No. 327 (Court’s Instructions Nos. 30-36, 40).)
The jury found that Presidio established that it should
be awarded lost profit damages. (Doc. No. 328 at 4.)
Substantial evidence supports the jury’s finding as to
the second prong of the Panduit test. ATC does not
challenge the jury’s findings as to the other prongs of
the Panduit test. (See also Doc. No. 306, Trial Tr. Vol.
III at 190-208; Trial Tr. Vol. IV at 1-15 (Mr. Thomas’s
12
The Court’s instruction on apportionment is as follows:
A damages award-either in the form of lost profits
or a reasonable royalty should compensate a patentee
only for the inventive aspects of its patent. Therefore,
if you find that ATC infringed the ’356 patent, your
damages award must reflect the value you find attributable to that patent.
Where the accused products have patented and
non-patented features, you may consider an apportionment of the damages between the patented features
and the unpatented features, so that your award is
based only on the value of the patented technology in
the Accused Products. On the other hand, if Presidio
proves that the patent covers the infringing product as
a whole and that the lost profits it seeks are tied to the
intrinsic value of the patented features, you may award
damages for lost profits attributable to the value of
the invention consistent with the Court’s instructions.
Presidio has the burden of proving damages by a preponderance of the evidence. If Presidio proves infringement of a valid patent, you must award damages in no
event less than a reasonable royalty. Presidio bears the
burden to establish a reasonable royalty attributable to
the patented features.
(Doc. No.327 (Court’s Instruction No. 40).) “A jury is presumed to
follow its instructions.” Weeks, 528 U.S. at 234.
R. App. 36
testimony regarding the four Panduit factors).) Under
Federal Circuit law, “[a] showing under the four-factor
Panduit test establishes the required causation” for
lost profit damages. Versata, 717 F.3d at 1264; accord
Rite-Hite, 56 F.3d at 1545 (“When the patentee establishes the reasonableness of this inference, e.g., by satisfying the Panduit test, it has sustained the burden of
proving entitlement to lost profits due to the infringing
sales.”). Thus, by satisfying the Panduit test, Presidio
met its burden of proving causation and its entitlement to lost profits. See id. ATC fails to cite to any case
holding that, after a party has satisfied Panduit’s fourfactor test and established entitlement to lost profits,
a further apportionment of those profits is required.13
Cf. Brocade Commc’ns Sys., Inc. v. A10 Networks, Inc.,
No. C 10-3428 PSG, 2013 WL 10601009, at *2 n.12
(N.D. Cal. May 15, 2013) (noting that the Federal Circuit has suggested “that apportionment—at least as
consumer demand stands as a way of showing apportionment—is unnecessary under Panduit” (citing Versata, 717 F.3d at 1265 (“[T]he Panduit factors place no
qualitative requirement on the level of demand necessary to show lost profits.”))).
13
ATC cites to a Federal Circuit case generally holding that
“ ‘apportionment is required even for non-royalty forms of damages.’ ” (Doc. No. 402-1 at 15) (quoting Ericsson, Inc. v. D-Link Sys.,
Inc., 773 F.3d 1201, 1226 (Fed. Cir. 2014)). But Ericsson did not
involve lost profit damages, and, importantly, never holds, to [sic]
extent there is an apportionment requirement for all forms of
damages, satisfaction of the Panduit test does not satisfy that
requirement.
R. App. 37
Further, the Federal Circuit has explained that
apportionment principles do not apply where the patentee shows that “ ‘the patented feature creates the
basis for customer demand or substantially creates the
value of the component parts.’ ” Virnetx, Inc. v. Cisco
Sys., Inc., 767 F.3d 1308, 1326 (Fed. Cir. 2014). ATC itself contends that customers for broadband capacitors
seek bulk capacitance and low insertion loss at high
frequencies and those requirements are what drives
customers to buy the accused products. (Doc. No. 433
at 11.) Dr. Huebner, testified that although the accused
products contain some internal capacitances that help
with high frequency performance, the highest frequency performance of the capacitors is achieved by
the claimed fringe-effect capacitance. (Doc. No. 306,
Trial Tr. Vol. III at 162-63; see also id. at 27-29, 38-53,
57-63; Doc. No. 331, Trial Tr. Vol. V at 222; Doc. No. 330,
Trial Tr. Vol. IV at 32-33, 35-37.) Accordingly, there was
sufficient evidence in the record for the jury to find that
the patented feature creates the basis for customer demand or substantially creates the value of the accused
products.
Moreover, the Federal Circuit has held that apportionment principles do not apply when the accused
product is the smallest saleable unit, and the asserted
claims “cover[ ] the infringing product as a whole, not
a single component of a multi-component product.”
AstraZeneca AB v. Apotex Corp., 782 F.3d 1324, 1338
(Fed. Cir. 2015); see Virnetx, Inc. v. Cisco Sys., Inc., 767
F.3d 1308, 1326-27 (Fed. Cir. 2014). ATC does not dispute Presidio’s assertion that the 550 capacitors are
R. App. 38
the smallest saleable units, (see Doc. No. 433 at 9), and
there was substantial evidence supporting the jury’s
finding that the asserted claims of the ’356 patent
cover the accused products as a whole. The asserted
claims cover an entire multilayer capacitor, and the accused products are multilayers capacitors.14 See ’356
Patent at 13:26-28, 14:1-2, 14:9-16; ’356 Patent Dec. 8,
2015 Reexamination Certificate at 1:23-2:9. Presidio’s
infringement expert Dr. Huebner explained how the
components in the accused products satisfy the various
limitations contained in the asserted claims. (See Doc.
No. 305, Trial Tr. Vol. II. at 243-44, 249-65; Doc. No.
306, Trial Tr. Vol. III at 1-80.) ATC argues that the asserted claims do not cover all of the features of the accused products because the accused products contain
internal electrodes that have a unique shape and follow the teachings in U.S. Patent No. 8,446,705. (Doc.
No. 402-1 at 18-19.) But Dr. Huebner testified that the
accused products’ internal electrodes satisfy the ’356
patent’s claim limitations of a “conductive first plate
disposed within the dielectric body” and a “conductive
second plate disposed within the dielectric body and
forming a capacitor with the first plate.” (Doc. No. 306,
Trial Tr. Vol. III at 7-8, 13-14, 16, 18.) Accordingly, there
14
ATC argues that Presidio did not invent the multilayer capacitor. (Doc. No. 433 at 8.) This may be true, but this fact is of no
consequence. In AstraZeneca, the Federal Circuit found that apportionment of the damages base at issue was not necessary because the claims covered the product as a whole—“the drug core,
the enteric coating, and the subcoating.” 782 F.3d at 1338. The
Federal Circuit reached this determination without also finding
that AstraZeneca invented a drug core, enteric coating, or subcoating. See id.
R. App. 39
was sufficient evidence in the record for the jury to determine that the asserted claims cover the accused
products as a whole.
In sum, the Court rejects ATC’s arguments that
the jury’s damages award cannot stand because Presidio failed to properly apportion its requested damages. Cf. Virnetx, 767 F.3d at 1328 (“[W]e have never
required absolute precision in [assigning value to the
patented feature]; on the contrary, it is well-understood that this process may involve some degree of approximation and uncertainty.”). Accordingly, the Court
denies ATC’s motion for judgment as a matter of law
of no lost profits, or in the alternative, for a new trial
on the issue of lost profit damages.
II.
Presidio’s Motion for a Permanent Injunction
Presidio moves for the entry of a permanent injunction, enjoining ATC from marketing, selling, or offering to sell its 550 capacitors. (Doc. No. 373-1.) The
Patent Act provides a patentee with the “right to exclude others from making, using, offering for sale, or
selling the [patented] invention.” 35 U.S.C. § 154(a)(1).
“In furtherance of this right to exclude, district courts
‘may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems
reasonable.’ ” Apple Inc. v. Samsung Elecs. Co., 809 F.3d
633, 638 (Fed. Cir. 2015) (quoting 35 U.S.C. § 283).
R. App. 40
For a permanent injunction to issue, the party requesting an injunction must demonstrate that: (1) it
has suffered an irreparable injury; (2) legal remedies,
such as money damages, are inadequate to compensate
for that injury; (3) the balance of hardships warrants
an injunction; and (4) the public interest would not be
disserved by an injunction. eBay Inc. v. MercExchange,
LLC, 547 U.S. 388, 391 (2006). The Federal Circuit has
explained that “[t]his analysis proceeds with an eye to
the ‘long tradition of equity practice’ granting ‘injunctive relief upon a finding of infringement in the vast
majority of patent cases.’ ” Presidio, 702 F.3d at 1362;
see also Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d
1142, 1149 (Fed. Cir. 2011) (“Although eBay abolishes
our general rule that an injunction normally will issue
when a patent is found to have been valid and infringed, . . . it does not follow that courts should entirely ignore the fundamental nature of patents as
property rights granting the owner the right to exclude.”). “The decision to grant or deny permanent injunctive relief is an act of equitable discretion by the
district court, reviewable on appeal for abuse of discretion.” eBay, 547 U.S. at 391.
A. Irreparable Harm
“To satisfy the first eBay factor, the patentee must
show that it is irreparably harmed by the infringement.” Apple Inc. v. Samsung Elecs. Co., 809 F.3d 633,
639 (Fed. Cir. 2015). “[F]acts relating to the nature of
the competition between the parties undoubtedly are
relevant to the irreparable harm inquiry.” Robert
R. App. 41
Bosch, 659 F.3d at 1150. ATC and Presidio are direct
competitors. ATC’s 550 capacitors directly compete
with Presidio’s BB capacitors.15 (Doc. No. 304, Trial Tr.
Vol. I at 143-44; Doc. No. 305, Trial Tr. Vol. II at 1-2,
119; Doc. No. 306, Trial Tr. Vol. III at 194, 196.) They
are sold in the same market and to the same customers
and potential customers. (See id.) “Direct competition
in the same market is certainly one factor suggesting
strongly the potential for irreparable harm without enforcement of the right to exclude.” Presidio, 702 F.3d at
1363. This is because “[w]here two companies are in
competition against one another, the patentee suffers
the harm—often irreparable—of being forced to compete against products that incorporate and infringe its
own patented inventions.” Douglas Dynamics, LLC v.
Buyers Products Co., 717 F.3d 1336, 1345 (Fed. Cir.
2013).
Further, Presidio has never licensed the ’356 patent to anyone. (Doc. No. 305, Trial Tr. Vol. II at 21-22.)
“Presidio’s unwillingness to license favor[s] finding irreparable injury.”16 Presidio, 702 F.3d at 1363.
15
The Court notes that in finding that Presidio established
entitlement to lost profit damages through the Panduit test, the
jury necessarily found that ATC’s 550 capacitors directly compete
with Presidio’s BB capacitors. See Presidio, 702 F.3d at 1360.
16
ATC argues that Presidio’s failure to license the ’356 patent should be given no weight because the amended claims at
issue only came into existence on December 8, 2015 when the
reexamination certificate for the ’356 patent issued. (Doc. No. 4091.) But even if the Court only considers the period from December
8, 2015 to the present, the evidence in the record shows that Presidio consciously decided not to license the ’356 patent during that
R. App. 42
The jury’s lost profits award also supports a
finding of irreparable injury. In finding that Presidio
established that it is entitled to lost profit damages,
“the jury necessarily found ATC’s [550] capacitor
sales caused Presidio to lose BB capacitor sales. This
squarely supports a finding of irreparable harm.”
Presidio, 702 F.3d at 1363; see Douglas Dynamics, 717
F.3d at 1344 (“Irreparable injury encompasses different types of losses that are often difficult to quantify,
including lost sales. . . .”). In sum, this evidence is sufficient to demonstrate irreparable injury. See Presidio,
702 F.3d at 1363-64; Douglas Dynamics, 717 F.3d at
1344-45.
To satisfy the first eBay factor, the patentee must
not only demonstrate irreparable injury, but also prove
that the harm is caused by the infringement. Apple,
809 F.3d at 639. “This requires proof that a ‘causal
nexus relates the alleged harm to the alleged infringement.’ ” Id. “[P]roving a causal nexus requires the patentee to show ‘some connection’ between the patented
features and the demand for the infringing products.”
Id. at 641 (“The district court should have determined
whether the record established that [the infringing]
feature impacts customers’ purchasing decisions.”).
ATC itself contends that customers for broadband capacitors seek bulk capacitance and low insertion loss
at high frequencies and those requirements are what
drives customers to buy the accused products. (Doc. No.
409-1 at 11; Doc. No. 433 at 11.) Dr. Huebner, testified
period. (Doc. No. 305, Trial Tr. Vol. II at 21-22.) This decision favors a finding of irreparable injury. See Presidio, 702 F.3d at 1363.
R. App. 43
that although the accused products contain some internal capacitances that help with high frequency performance, the highest frequency performance of the
capacitors is achieved by the claimed fringe-effect capacitance.17 (Doc. No. 306, Trial Tr. Vol. III at 162-63;
see also id. at 27-29, 38-53, 57-63; Doc. No. 331, Trial
Tr. Vol. V at 222.) This evidence is sufficient to satisfy
the nexus requirement. Cf. Apple Inc. v. Samsung Elecs.
Co., 735 F.3d 1352, 1362 (Fed. Cir. 2013) (characterizing broadband capacitors as “relatively simple products” and noting that the causal nexus requirement is
more easily satisfied for “simple” products); see also
Broadcom Corp. v. Emulex Corp., 732 F.3d 1325, 1337
(Fed. Cir. 2013) (“As direct competitors in a limited
market, [plaintiff ]’s harm was clearly linked to [defendant]’s infringement of [plaintiff ]’s patent property
rights.”).
ATC argues that Presidio cannot establish a
causal nexus because Presidio’s BB capacitor, which
does not practice the invention claimed in the ’356
patent, competes in the same market as ATC’s 550
17
The Court rejects ATC’s contention that it established at
trial that the high frequency performance of the accused products
is derived solely from their internal electrodes. (Doc. No. 409-1 at
11-14.) Presidio’s expert, Dr. Huebner, never conceded at trial that
the 550 capacitors achieve their high frequency performance
solely from their internal electrodes. (See Doc. No. 306, Trial Tr.
Vol. III at 127, 162-63; Doc. No. 331, Trial Tr. Vol. V at 220-23.) To
the contrary, he specifically testified that although the accused
products contain some internal capacitances that help with high
frequency performance, the highest frequency performance of the
capacitors is achieved by the claimed fringe-effect capacitance.
(Doc. No. 306, Trial Tr. Vol. III at 162-63.)
R. App. 44
capacitors. (Doc. No. 409-1 at 14-15.) But the Federal
Circuit explained in the prior litigation that “[e]ven
without practicing the claimed invention, the patentee
can suffer irreparable injury.” Presidio, 702 F.3d at
1363.
ATC also argues that Presidio has failed to establish irreparable injury because any harm Presidio has
suffered was caused by lawful “design wins” that occurred prior to December 8, 2015. (Doc. No. 409-1 at 1518.) ATC contends that an injunction cannot be entered on account of otherwise lawful competition. (Id.
at 15.) The Court recognizes that under its intervening
rights ruling, ATC is not liable for damages for any
sales of 550 capacitors prior to December 8, 2015. (Doc.
No. 234 at 28.) But those sales and the resulting harm
caused by the sales became infringing and unlawful on
December 8, 2015 once the reexamination certificate
with the amended claims issued. ATC’s ongoing sales
of infringing products, whether resulting from new or
historical design wins, result in irreparable harm to
Presidio. Further, the Federal Circuit has explained
that “[t]he causal nexus requirement ensures that an
injunction is only entered against a defendant on account of a harm resulting from the defendant’s wrongful conduct, [and] that an injunction is not entered on
account of ‘irreparable harm caused by otherwise lawful competition.’ ” Apple, 809 F.3d at 640. Here, Presidio
has satisfied the causal nexus requirement.
ATC next argues that Presidio’s nearly five-year
delay in filing suit against ATC’s 550 capacitors weighs
against a finding of irreparable injury. A period of delay
R. App. 45
is one circumstance that a district court may consider
in the context of the totality of the circumstances when
evaluating irreparable harm. See Hybritech Inc. v. Abbott Labs., 849 F.2d 1446, 1457 (Fed. Cir. 1988); Apple,
Inc. v. Samsung Elecs. Co., 678 F.3d 1314, 1325 (Fed.
Cir. 2012).18 But “a showing of delay does not preclude,
as a matter of law, a determination of irreparable
harm.” Hybritech, 849 F.2d at 1457. Further, the Court
in the prior litigation entered an amended judgment
following the parties’ appeals on September 19, 2013,
and denied Presidio’s motion for relief from judgment
on January 27, 2014. Presidio Components, Inc. v. Am.
Tech. Ceramics Corp., No. 08-cv-335-GPC (Doc. Nos.
480, 490). Presidio filed the present action on September 2, 2014. (Doc. No. 1.) The Court finds that Presidio
acted reasonably in waiting for the prior litigation to
be fully resolved prior to filing the present lawsuit. See
A.C. Aukerman Co. v. R.L. Chaides Const. Co., 960 F.2d
1020, 1033 (Fed. Cir. 1992) (en banc) (listing “other litigation” as a permissible excuse for a delay in filing
suit). Accordingly, any delay in filing the present action
was reasonable and permissible and does not weigh
against a finding of irreparable injury.
Finally, ATC argues that Presidio’s inability or refusal to make certain capacitors or sell its capacitors
to certain customers also shows a lack of irreparable
18
The Court notes that these two cases involved a motion for
a preliminary injunction, not a motion for a permanent injunction.
Cf. Lermer Ger. GmbH v. Lermer Corp., 94 F.3d 1575, 1577 (Fed.
Cir. 1996) (“[Preliminary and permanent injunctions] are distinct
forms of equitable relief that have different prerequisites and
serve entirely different purposes.”).
R. App. 46
harm. (Doc. No. 409-1 at 19-22.) First, ATC argues that
Presidio is not suffering irreparable harm from ATC’s
sales of its 550U (100 nF) and 550S (50 volts rating)
capacitors because Presidio has no competing product
for those specific capacitors and thus could not have
made those sales. (Id. at 19-20.) But this argument is
inconsistent with the jury’s verdict. In awarding Presidio lost profits damages, the jury necessarily found
that Presidio would have made the sales that were
made by ATC for all of the accused products. See RiteHite, 56 F.3d at 1545 (“To recover lost profits damages,
the patentee must show a reasonable probability that,
‘but for’ the infringement, it would have made the sales
that were made by the infringer.”). The jury’s verdict
was not limited to any specific types of accused products. (See Doc. No. 328 at 4.) Second, ATC argues that
Presidio is not suffering harm from ATC’s sales of 550
capacitors to certain customers because either Presidio
has decided not to do business with those customers or
those customers will not buy from Presidio. ATC’s contention that Presidio will not do business with these
customers is not supported by the record. The evidence
presented at trial shows that Presidio is willing to do
business with and sell its capacitors to those specific
customers. (Doc. No. 305, Trial Tr. Vol. II at 15-20; Doc.
No. 415-3, Devoe Decl. ¶¶ 7-9.) Indeed, the evidence
showed that Presidio actively sells its BB capacitors to
two of the identified customers. (Doc. No. 305, Trial Tr.
Vol. II at 15; Doc. No. 415-3, Devoe Decl. ¶ 9.) Further,
the evidence presented by ATC only shows that those
two customers have currently decided not to buy Presidio capacitors and are instead buying ATC’s 550
R. App. 47
capacitors. (Doc. No. 409-11, Ex. 32; Doc. No. 409-14,
Ex. 35; Doc. No. 409-2, Tessaro Decl. ¶¶ 5-6.) The evidence does not show that these customers would still
refuse to buy Presidio’s capacitors if the 550 capacitors
were removed from the market. Accordingly, ATC has
failed to show that Presidio is unable to make sales to
those companies.
In sum, Presidio has shown that it has suffered irreparable harm that is caused by ATC’s infringement.
The Court rejects ATC’s arguments to the contrary. Accordingly, Presidio has satisfied the first eBay factor.
B. Inadequate Remedy at Law
“The second eBay factor is whether ‘remedies
available at law, such as monetary damages, are inadequate to compensate’ for the irreparable harm suffered by the patentee.” Apple, 809 F.3d at 644-45. ATC
itself asserts that the accused products operate within
a “design win” market. (Doc. No. 409-1 at 6-10.) The
Federal Circuit has explained that “the structural nature of a design win market favors a finding that monetary damages are inadequate.” Broadcom Corp. v.
Qualcomm Inc., 543 F.3d 683, 703 (Fed. Cir. 2008) (internal quotation marks omitted); see also, e.g., Broadcom, 732 F.3d at 1336, 1338 (affirming district court’s
finding that “money damages were inadequate to compensate [plaintiff ] largely due to incumbency effects
from the design-win market conditions”).
Presidio’s decision not to license the ’356 patent
also supports a finding that monetary damages are
R. App. 48
inadequate. See Acumed LLC v. Stryker Corp., 551 F.3d
1323, 1328 (Fed. Cir. 2008) (finding whether the patentee has licensed the invention relevant to the determination of whether money damages are adequate).
Further, this factor favors an injunction where “[t]here
is no reason to believe that [the defendant] will stop
infringing, or that the irreparable harms resulting
from its infringement will otherwise cease, absent an
injunction.” Robert Bosch, 659 F.3d at 1155. Presidio
has presented the Court with evidence showing that
ATC continues to offer the accused products for sale
even after the jury’s verdict. (Doc. No. 372-2, Ex. A.)
Further, ATC has represented to the Court that it does
not intend to discontinue the accused products until an
injunction is entered. (Doc. No. 409-1 at 30.) Accordingly, there is no reason to believe that ATC will stop
infringing absent an injunction, and Presidio has established that money damages are insufficient to compensate for the irreparable harm it has suffered.
C. Balance of Hardships
“To satisfy the third eBay factor, the patentee must
show that the balance of hardships weighs in its favor.”
Apple, 809 F.3d at 645. The balance to be “considered
is only between a plaintiff and a defendant.” Acumed
LLC v. Stryker Corp., 551 F.3d 1323, 1330 (Fed. Cir.
2008).
ATC’s infringement harmed Presidio by causing
lost sales and by forcing Presidio to compete against
its own patented invention, which places a substantial
R. App. 49
hardship on Presidio. See Apple, 809 F.3d at 646 (“Samsung’s infringement harmed Apple by causing lost
market share and lost downstream sales and by forcing Apple to compete against its own patented invention, which ‘places a substantial hardship’ on a
patentee, especially here where it is undisputed that it
is essentially a two-horse race.”); Robert Bosch, 659
F.3d at 1156. ATC argues that it will suffer hardships
from a permanent injunction because it has made substantial investments in the development of it [sic] 550
series of capacitors, and an abrupt termination of sales
would cause it to suffer customer alienation and loss of
reputation. (Doc. No. 409-1 at 26-27.) But the Federal
Circuit has explained that the consequences of a defendant’s infringement, such as sunk development
costs or loss of business, is irrelevant to this factor.19
See i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831, 863
(Fed. Cir. 2010); see also Broadcom, 543 F.3d at 704
(“ ‘[O]ne who elects to build a business on a product
found to infringe cannot be heard to complain if an injunction against continuing infringement destroys the
business so elected.’ ”). In addition, the Court further
notes that any potential hardship on ATC would be
mitigated by the Court’s inclusion of a 90-day sunset
provision into the requested injunction. See Broadcom,
543 F.3d at 704 (finding that inclusion of a sunset
19
The Court also rejects ATC’s argument that it will suffer
hardship because it is difficult for ATC to know how to modify its
capacitors to make them non-infringing. (Doc. No. 409-1 at 28-29.)
It has been ATC’s contention throughout this litigation that the
560L capacitor that it already manufactures and sells does not
infringe the ’356 patent. (Doc. No. 202 at 66; Doc. No. 402-1.)
R. App. 50
provision can ameliorate the potential hardships of an
injunction).
“[T]he parties’ sizes, products, and revenue sources”
are also relevant factors for balancing the hardships.
i4i, 598 F.3d at 862. Presidio asserts that ATC and its
parent company AVX have tens of millions of dollars in
cash and a total market cap exceeding two billion,
while Presidio is a small, family-owned company. (Doc.
No. 373-1 at 20 (citing Doc. No. 373-15, Ex. N); Doc. No.
415 at 11; see also Doc. No. 414 at 7-8.) ATC does not
contest these assertions. Accordingly, this factor
weighs in favor of issuing an injunction.
D. Public Interest
“The fourth eBay factor requires the patentee to
show that ‘the public interest would not be disserved
by a permanent injunction.’ ” Apple, 809 F.3d at 646.
“[T]he public is best served by enforcing patents that
are likely valid and infringed.” Abbott Labs. v. Andrx
Pharm., Inc., 452 F.3d 1331, 1348 (Fed. Cir. 2006). “As
a result, the public interest nearly always weighs in
favor of protecting property rights in the absence of
countervailing factors.” Apple, 809 F.3d at 647.
ATC argues that the public interest would be disserved by an injunction because the accused products
provide unusual societal benefits to critical government, military, space, and infrastructure applications.
(Doc. No. 409-1 at 29-30.) ATC argues that enjoining
the 550 capacitors would cause important government,
military, space, and infrastructure projects to suffer.
R. App. 51
(Id.) The Court rejects ATC’s contention that its products provide unusual societal benefits. Cf. Apple, 809
F.3d at 647 (“[The patentee] does not seek to enjoin the
sale of lifesaving drugs.”). The evidence ATC presented
in support of this contention only shows that ATC has
certain government and infrastructure clients that
have purchased 550 capacitors and would prefer to be
able to continue to purchase them in the future. (Doc.
No. 409-3, Rabe Decl. ¶¶ 10-14; Doc. No. 409-2, Tessaro
Decl. ¶¶ 5-6.) ATC and its evidence fails to specifically
identify any government, military, space or infrastructure projects that would actually suffer if the 550 capacitors were removed from the market. ATC has not
established that these unnamed projects could not continue with the use of other products.20 Further, the
Court notes that any potential harm to the public
would be mitigated by the inclusion of a 90-day sunset
provision into the requested injunction. See Broadcom,
543 F.3d at 704 (“[T]he sunset provisions mitigate the
harm to the public.”). Accordingly, this factor favors entry of a permanent injunction.
20
The Court finds ATC’s inability to specifically identify any
concrete harm that would occur significant in light of the fact that
ATC previously discontinued its 545L capacitor after that capacitor was found to infringe the ’356 patent in the prior litigation.
Yet ATC cannot identify any concrete harm that resulted from the
discontinuance of that product, particularly in light of counsel’s
prior representations to the Court that the 545L capacitors performed better than the 550 capacitors. (Doc. No. 211 at 29-30.)
R. App. 52
E. Conclusion
Weighing the above factors and the equities in this
case, the Court, exercising its sound discretion, concludes that a permanent injunction is appropriate. Accordingly, the Court grants Presidio’s motion for a
permanent injunction. The Court will enter the permanent injunction in a separate order.
i.
Presidio’s Proposed Injunction
Presidio has submitted a proposed permanent injunction. (Doc. No. 373-16, Ex. O.) In paragraph three
of its proposed permanent injunction, Presidio proposes the following language:
It is hereby Ordered that ATC and its successors, assigns, officers, agents, servants, employees, and persons in active concert or
participation with them, including any parent
and subsidiary entities during the period commencing on the date hereof and through the
date of expiration of the ’356 patent are
hereby enjoined and restrained from infringing Claims 1-5, 16, and 18-19 of the ’356 patent and are further hereby enjoined and
restrained from making, using, selling, or offering to sell in the United States, or importing into the United States: the 550L, 550Z,
550S, and 550U capacitors; any other product
that is only colorably different from the 550L,
550Z, 550S, and 550U capacitors.
(Id.)
R. App. 53
The Court adopts the majority of the language
contained in Presidio’s proposed permanent injunction. The Court rejects Presidio’s inclusion of ATC’s
“successors, assigns,” and “parent and subsidiary entities” into the language of the injunction. The Federal
Circuit has explained that “Rule 65(d) of the Federal
Rules of Civil Procedure specifies the proper form and
scope of an injunction issued by a district court.” Int’l
Rectifier Corp. v. IXYS Corp., 383 F.3d 1312, 1315 (Fed.
Cir. 2004). Rule 65(d)(2) provides: Every order granting
an injunction “binds only the following . . . : (A) the parties; (B) the parties’ officers, agents, servants, employees, and attorneys; and (C) other persons who are in
active concert or participation with anyone described
in Rule 65(d)(2)(A) or (B).” Rule 65(d) does not list successors, assigns, parents, and subsidiaries as those
among whom an injunction may be made binding
upon. See Eli Lilly & Co. v. Premo Pharm. Labs., Inc.,
843 F.2d 1378, 1381 (Fed. Cir. 1988) (“Rule 65(d) . . .
does not include successors and assigns as among
those whom an injunction is ‘binding only upon.’ ”).
The Court also excludes from the injunction the
language stating that ATC is “enjoined and restrained
from infringing Claims 1-5, 16, and 18-19 of the ’356
patent.” “In the patent infringement context, [the Federal Circuit] has rejected as overly broad a permanent
injunction that simply prohibits future infringement of
a patent.” Int’l Rectifier, 383 F.3d at 1316. The Federal
Circuit has explained that “the only acts the injunction
may prohibit are infringement of the patent by the adjudicated devices and infringement by devices not
R. App. 54
more than colorably different from the adjudicated devices.” Id.; see also, e.g., Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc., 986 F.2d 476, 479-80
(Fed. Cir. 1993) (rejecting permanent injunction where
the order did “not state which acts of [defendant] constitute infringement of the . . . patent” and the order
did “not limit its prohibition to the manufacture, use,
or sale of the specific infringing device, or to infringing
devices no more than colorably different from the infringing device”). In addition, the Court notes that similar modifications were made to Presidio’s proposed
permanent injunction in the prior litigation on these
same grounds. See Presidio Components, Inc. v. Am.
Tech. Ceramics Corp., No. 08-cv-335-GPC (Doc. No. 473
at 17-19).
ii. ATC’s Request for a Stay Pending Appeal
and a Sunset Provision
ATC argues that in the event the Court grants
Presidio’s motion for a permanent injunction, the
Court should stay the injunction pending an appeal
and provide a one-year sunset provision in the injunction. (Doc. No. 409-1 at 31.) In deciding whether to
grant a stay pending appeal, the Court “assesses the
movant’s chances of success on the merits and weighs
the equities as they affect the parties and the public.”
E.I. du Pont de Nemours & Co. v. Phillips Petroleum
Co., 835 F.2d 277, 278 (Fed. Cir. 1987); accord Standard
Havens Prods. v. Gencor Indus., 897 F.2d 511 (Fed. Cir.
1990). Exercising its sound discretion, the Court declines to stay the injunction pending appeal. Based on
R. App. 55
the Court’s review of the record and the totality of the
circumstances in this case, the Court concludes that
ATC has failed to demonstrate a likelihood of success
on appeal. Indeed, in its request, ATC fails to even address this factor. Further, the Court concludes that the
equities do not weigh in favor of granting a stay.
Exercising its sound discretion, the Court declines
to include the requested one-year sunset provision into
the permanent injunction, but will include a 90-day
sunset provision. ATC has had ample time and notice
to prepare for the possibility that this Court would enter a permanent injunction in this action. A permanent
injunction was entered in the prior litigation. Presidio
Components, Inc. v. Am. Tech. Ceramics Corp., No. 08cv-335-GPC (Doc. No. 473 at 19); see also Presidio, 702
F.3d at 1362-63. The jury rendered its infringement
verdict and awarded Presidio lost profit damages on
April 18, 2016—several months ago. (Doc. No. 328.)
The Court issued its memorandum decision rejecting
ATC’s invalidity and equitable defenses on June 17,
2016—two months ago. (Doc. No. 368.) The Court concludes that under the totality of the circumstances a
one-year sunset provision is unnecessary and, instead,
a 90-day sunset provision is appropriate.21 Accordingly,
the Court includes a 90-day sunset provision into its
permanent injunction.
21
At the hearing, Presidio stated that it would not object to
the inclusion of a 90-day sunset provision into the permanent injunction.
R. App. 56
IV. [sic] Presidio’s Motion for Enhanced Damages
Presidio moves for an award of enhanced damages
pursuant to 28 U.S.C. § 284. (Doc. No. 377-1 at 3-24.)
Section 284 provides that a court “may increase the
damages up to three times the amount found or assessed.” 35 U.S.C. § 284. In Halo Elecs., Inc. v. Pulse Elecs., Inc., the Supreme Court held that “[s]ection 284
gives district courts the discretion to award enhanced
damages against those guilty of patent infringement.”22 136 S. Ct. at 1935. But the Supreme Court further explained that although “[d]istrict courts enjoy
discretion in deciding whether to award enhanced
damages, and in what amount”, that discretion is not
without limits. Id. at 1932.
Enhanced damages are generally appropriate under § 284 only in “egregious cases” of misconduct beyond typical infringement and should not be awarded
in “garden-variety cases.” Id. at 1932, 1934-35. “The
sort of conduct warranting enhanced damages has
been variously described . . . as willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a pirate.” Id. at
1932. The culpability of the infringer should be “measured against the knowledge of the actor at the time of
22
In Halo, the Supreme Court rejected the Federal Circuit’s
Seagate test for determining whether enhanced damages are appropriate as “ ‘unduly rigid,’ ” as “ ‘it impermissibly encumbers
[section 284’s] grant of discretion to district courts.’ ” 136 S. Ct. at
1932; see also id. at 1933-34 (“Section 284 permits district courts
to exercise their discretion in a manner free from the inelastic
constraints of the Seagate test.”).
R. App. 57
the challenged conduct.” Id. at 1933. In determining
whether enhanced damages are appropriate, “courts
should . . . take into account the particular circumstances of each case.” Id.; see also id. at 1935 (“In applying this discretion, district courts are ‘to be guided
by [the] sound legal principles’ developed over nearly
two centuries of application and interpretation of the
Patent Act.”).
In Halo, the Supreme Court also explained that
entitlement to enhanced damages need only be proven
by a preponderance of the evidence. Id. at 1934. And a
district court’s determination of whether to award enhanced damages is reviewed for abuse of discretion on
appeal. Id.
After reviewing the particular circumstances in
this case, including the record and the parties’ arguments, the Court, exercising its sound discretion, declines to award Presidio enhanced damages. The Court
begins by noting that the jury found that ATC willfully
infringed the ’356 patent, (Doc. No. 328 at 4), and the
Court has denied ATC’s post-trial motion challenging
the jury’s willfulness finding. See supra. But both the
Supreme Court in Halo and the Federal Circuit in
WBIP have held an award of enhanced damages need
not follow a finding of willful infringement. See Halo,
136 S. Ct. at 1933 (“[N]one of this is to say that enhanced damages must follow a finding of egregious
misconduct.”); WBIP, 2016 WL 3902668, at *15 n.13
(“[T]his is not to say that a jury verdict of willful infringement ought to result in enhanced damages.”).
Thus, the Court may still exercise its discretion and
R. App. 58
decline to award enhanced damages based on the particular circumstances in this case even though there
has been a finding of willful infringement.23 See id.; see,
e.g., Trustees of Boston Univ. v. Everlight Elecs. Co., No.
12-11935-PBS, 2016 WL 3976617, at *3 (D. Mass. July
22, 2016) (finding, in its discretion, that the case did
not warrant an award of enhanced damages even
though the jury found willful infringement).
Here, the unique circumstances of this case do not
warrant an award of enhanced damages. At the summary judgment stage, the Court granted ATC’s motion
for summary judgment in its favor on its defense of absolute intervening rights. (Doc. No. 234.) In that order,
the Court held that due to Presidio narrowing the asserted claims during reexamination proceedings, Presidio is only entitled to infringement damages for the
23
Presidio argues that a jury’s finding of willful infringement
creates a presumption in favor of an award of enhanced damages.
The Court rejects Presidio’s contention. First, Halo itself contains
no mention of a presumption in favor of enhanced damages upon
a finding of willful infringement. Second, and more importantly,
the case Presidio cites in support of its argument does not mention a presumption in favor of enhanced damages upon a finding
of willful infringement. (See Doc. No. 377-1 at 5 (citing Jurgens v.
CBK, Ltd., 80 F.3d 1566, 1572 (Fed. Cir. 1996)).) The Federal Circuit’s decision in Jurgens never refers to a presumption in favor
of an award of enhanced damages. The Jurgens court only held
that “[u]pon a finding of willful infringement, a trial court should
provide reasons for not increasing a damages award or for not
finding a case exceptional for the purpose of awarding attorneys
fees.” 80 F.3d at 1572. Thus, even assuming the Jurgens standard
still applies post-Halo, this Court’s decision complies with Jurgens as the Court provides its reasoning for not awarding enhanced damages.
R. App. 59
time period following the issuance of the December 8,
2015 reexamination certificate. (Id. at 28.) Thus, the
period of infringement in the present case began on
December 8, 2015.
This fact is important to the Court’s analysis because, in Halo, the Supreme Court explained that an
infringer’s culpability should be measured at the time
of the challenged conduct. 136 S. Ct. at 1933; see also
WBIP, 2016 WL 3902668, at *15 (“[A]s the Supreme
Court explained in Halo, timing does matter.”). ATC
began selling the accused products in January 2010.
Under the Court’s intervening rights ruling, ATC is not
liable for any sales of 550 capacitors that occurred
prior to December 8, 2015. Therefore, at the time infringement of the asserted claims began on December
8, 2015, ATC had already been permissibly selling the
accused products without being subject to damages liability for almost six years. Moreover, at the time infringement began, Presidio and ATC were well into the
present litigation. Specifically, by December 8, 2015,
ATC had received the Court’s claim construction order,
developed noninfringement and invalidity theories
that were supported by expert reports, and filed motions for summary judgment on several issues. (Doc.
No. 149.) By December 8, 2015, ATC had also just succeeded in causing Presidio to substantively narrow the
scope of the asserted claims in reexamination proceedings that ATC instituted. Thus, under the unique circumstances of the present case, the Court declines to
find that the willful infringement that occurred in the
case after December 8, 2015 constitutes an “egregious”
R. App. 60
case of misconduct warranting an award of enhanced
damages. Rather, the present action was a “gardenvariety” hard-fought patent infringement action between two competitors.
Moreover, the Court notes that Presidio’s invalidity defense at trial, although ultimately rejected by the
Court, was not meritless. The Court also notes that
there was no evidence of bad faith or litigation misconduct by ATC in this action. Accordingly, the Court, exercising its sound discretion, declines to award
enhanced damages. The Court denies Presidio’s motion
for enhanced damages.
V. [sic] Presidio’s Motion for Attorney’s Fees
Presidio also moves for attorney’s fees pursuant to
35 U.S.C. § 285. (Doc. No.377-1 at 25-30.) “Section 285
of the Patent Act authorizes a district court to award
attorney’s fees in patent litigation.” Octane Fitness,
LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749,
1752 (2014). Section 285 provides: “The court in exceptional cases may award reasonable attorney fees to
the prevailing party.” 35 U.S.C. § 285. “When deciding
whether to award attorney fees under § 285, a district
court engages in a two-step inquiry.” MarcTec, LLC v.
Johnson & Johnson, 664 F.3d 907, 915 (Fed. Cir. 2012).
The court first determines whether the prevailing
party has proven that the case is “exceptional,” and, if
so, the court then determines whether an award of attorney’s fees is justified. Id. at 1915-16.
R. App. 61
The Supreme Court has held that “an ‘exceptional’
case is simply one that stands out from others with respect to the substantive strength of a party’s litigating
position (considering both the governing law and the
facts of the case) or the unreasonable manner in which
the case was litigated.” Octane Fitness, 134 S. Ct. at
1756 (stating that “exceptional” means “ ‘uncommon,’
‘rare,’ or ‘not ordinary’ ”). “District courts may determine whether a case is ‘exceptional’ in the case-by-case
exercise of their discretion, considering the totality
of the circumstances.” Id. In determining whether to
award fees, district courts may consider a nonexclusive
list of factors, including “ ‘frivolousness, motivation, objective unreasonableness (both in the factual and legal
components of the case) and the need in particular circumstances to advance considerations of compensation
and deterrence.’ ” Id. at 1756 n.6. “[A] case presenting
either subjective bad faith or exceptionally meritless
claims may sufficiently set itself apart from mine-run
cases to warrant a fee award.” Id. at 1757. There is no
precise rule or formula for determining whether to
award attorney’s fees, but instead equitable discretion
should be exercised in light of the above considerations. Id. at 1756.
Entitlement to fees under § 285 must be shown by
a preponderance of the evidence. See Octane Fitness,
134 S. Ct. at 1758. A district court’s determination of
whether to award attorney’s fees under 35 U.S.C. § 285
is reviewed for abuse of discretion. Highmark Inc. v.
Allcare Health Mgmt. Sys., 134 S. Ct. 1744, 1749 (2014)
R. App. 62
(“[T]he determination of whether a case is ‘exceptional’
under § 285 is a matter of discretion.”).
After reviewing the totality of the circumstances
including the record in this action and the parties’ arguments, the Court declines to find that the present
case is “exceptional” and declines to award Presidio attorney’s fees. In the present action, Presidio accused
ATC’s 550 capacitors of infringing the ’356 patent, asserting a period of infringement beginning in January
2010 when Presidio began selling the accused products. (Doc. No. 285-1, Thomas Expert Report at 14, 2831.) Based on this asserted period of infringement, Presidio initially sought over $16 million in lost profit
damages for the period of first quarter of 2010 through
September 13, 2015. (Id.) At the summary judgment
stage, ATC successfully obtained summary judgment
in its favor on its affirmative defense of absolute intervening rights based on Presidio’s narrowing of the
scope of the asserted claims during ex parte reexamination proceedings that were instituted by ATC. (Doc.
No. 234.) Because of this substantive change to the
scope [sic] the asserted claims, the Court held that Presidio is only entitled to infringement damages in this
case for the time period following the issuance of the
December 8, 2015 reexamination certificate. (Id. at 28.)
Thus, although Presidio ultimately prevailed at trial
on the issues of infringement, willful infringement,
and validity of the ’356 patent and was awarded over
$2 million in lost profits damages, prior to the trial,
ATC prevailed on its absolute intervening rights defense, thereby substantially limiting the period of
R. App. 63
infringement at issue in the case and the damages Presidio could seek. Thus, the present case was not a onesided victory by Presidio.
Moreover, the Court notes that Presidio’s invalidity defense at trial, although ultimately rejected by the
Court, was not meritless. The Court also notes that
there was no evidence of bad faith or litigation misconduct by ATC in this action. The present action was a
garden-variety hard-fought patent infringement action between two competitors. Accordingly, the Court,
exercising its sound discretion, declines to find the present case “exceptional” and declines to award Presidio
attorney’s fees. The Court denies Presidio’s motion for
attorney’s fees.
VI. [sic] Presidio’s Motion for Supplemental
Damages
Presidio moves for an award of supplemental damages for any sales of accused products occurring on and
after February 21, 2016—the date on which ATC last
provided sales information for the accused products.
(Doc. No. 372-1 at 1-3.) Specifically, Presidio requests
(1) that the Court order ATC to account for all 550
capacitor sales made subsequent to the latest sales data
ATC provided and that was utilized at trial, and (2)
that the Court award it supplement [sic] damages on
R. App. 64
those as yet unaccounted for sales at the lost profits
rate adopted by the jury—$1.58 per unit.24 (Id. at 2.)
28 U.S.C. § 284 provides: “Upon finding for the
claimant the court shall award the claimant damages
adequate to compensate for the infringement, but in no
event less than a reasonable royalty for the use made
of the invention by the infringer, together with interest
and costs as fixed by the court. When the damages are
not found by a jury, the court shall assess them.” The
Federal Circuit has explained that a patentee is not
fully compensated if the damages award does not include future lost sales. Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197, 1213 (Fed. Cir. 2010); see also
Fresenius USA, Inc. v. Baxter Int’l, Inc., 582 F.3d 1288,
1303 (Fed. Cir. 2009) (“A damages award for pre-verdict sales of the infringing product does not fully compensate the patentee because it fails to account for
post-verdict sales of repair parts.”). Therefore, a district court should award compensation for any infringing sales not assessed by the jury. See Finjan, 626 F.3d
at 1213; Apple, Inc. v. Samsung Elecs. Co., 67 F. Supp.
3d 1100, 1117-18 (N.D. Cal. 2014), aff ’d, 816 F.3d 788
(Fed. Cir. 2016). In addition, “[c]ourts routinely grant
motions for a further accounting where the jury did not
consider certain periods of infringing activity post-verdict.” Metso Minerals, Inc. v. Powerscreen Int’l Distribution Ltd., 833 F. Supp. 2d 333, 347 (E.D.N.Y. 2011);
24
Presidio asserts that the jury awarded Presidio lost profits
damages in the amount of $2,166,654 based on ATC’s sale of
1,371,300 units. (Doc. No. 372-1 at 2 (citing Doc. No. 328 at 4).)
$2,166,654 divided by 1,371,300 units equals $1.58 per unit.
R. App. 65
accord Apple, 67 F. Supp. 3d at 1118. “Courts have
[also] applied this reasoning to the situation in which
an infringer provides sales data that does not cover
all sales made prior to trial.” Sealant Sys. Int’l, Inc. v.
TEK Glob. S.R.L., No. 5:11-CV-00774-PSG, 2014 WL
1008183, at *5 (N.D. Cal. Mar. 7, 2014). An award
of supplemental damages should be calculated consistent with the damages awarded in the jury’s verdict.
ActiveVideo Networks, Inc. v. Verizon Commc’ns, Inc.,
No. 2:10CV248, 2011 WL 4899922, at *2 (E.D. Va. Oct.
14, 2011); see, e.g., Sealant Sys., 2014 WL 1008183, at
*5; Mondis Tech. Ltd. v. Chimei InnoLux Corp., 822
F. Supp. 2d 639, 643 (E.D. Tex. 2011).
Presidio has presented the Court with evidence
showing that ATC continues to offer the accused products for sale even after the jury’s verdict. (Doc. No. 3722, Ex. A.) Further, ATC has represented to the Court
that it does not intend to discontinue the accused products until an injunction is entered. (Doc. No. 409-1 at
30.) Accordingly, Presidio is entitled to an accounting
of and supplemental damages on any sales of infringing products not assessed by the jury. See Finjan, 626
F.3d at 1213; Apple, 67 F. Supp. 3d at 1117-18; Sealant
Sys., 2014 WL 1008183, at *5.
In response, ATC does not dispute Presidio’s contention that it is entitled to supplemental damages for
sales of accused products made on or after February
21, 2016 at a rate of $1.58 per unit. Rather, ATC only
argues that Presidio’s motion is premature because
ATC’s motions for judgment as a matter of law are still
pending. (Doc. No. 409-24 at 11.) The Court rejects this
R. App. 66
argument. ATC fails to explain why the Court cannot
concurrently rule on both ATC’s post-trial motions and
Presidio’s motion for supplemental damages. Moreover, the Court has ruled on and denied ATC’s posttrial motions, and, therefore, the motions are no longer
pending. See supra. Accordingly, the Court grants Presidio’s motion for supplemental damages. The Court
orders ATC to account for all 550 capacitor sales made
subsequent to the latest sales data it provided to Presidio and that was utilized at trial and prior to the entry of the Court’s permanent injunction. Further, the
Court awards Presidio supplemental damages on those
as yet unaccounted for sales at the rate of $1.58 per
unit.
VII. [sic] Presidio’s Motion for Interest
A. Prejudgment Interest
Presidio moves for an award of prejudgment
interest on its damages award. (Doc. No. 372-1 at 3-6.)
Specifically, Presidio requests a prejudgment interest
rate of 7 percent. (Id. at 4.) 28 U.S.C. § 284 provides:
“the court shall award the claimant damages adequate
to compensate for the infringement . . . together with
interest and costs as fixed by the court.” The Supreme
Court has interpreted section 284 to require that
“prejudgment interest should ordinarily be awarded
absent some justification for withholding such an
award[.]” Gen. Motors Corp. v. Devex Corp., 461 U.S. 648,
657 (1983); see also Sensonics, Inc. v. Aerosonic Corp.,
81 F.3d 1566, 1574 (Fed. Cir. 1996) (“[P]rejudgment
R. App. 67
interest is the rule, not the exception.”). The purpose of
prejudgment interest is to “compensate[ ] the patent
owner for the use of its money between the date of injury and the date of judgment.” Oiness v. Walgreen Co.,
88 F.3d 1025, 1033 (Fed. Cir. 1996). “Generally, prejudgment interest should be awarded from the date of
infringement to the date of judgment.” Nickson Indus.,
Inc. v. Rol Mfg. Co., 847 F.2d 795, 800 (Fed. Cir. 1988).
In response, ATC argues that the Court should
deny Presidio’s request for prejudgment interest based
on Presidio’s undue delay in filing the present action.
(Doc. No. 409-24 at 2-7.) The Court rejects ATC’s contention. “District courts have discretion to limit prejudgment interest where, for example, the patent
owner has caused undue delay in the lawsuit, but there
must be justification bearing a relationship to the
award.” Nickson, 847 F.2d at 800 (citations omitted);
see Gen. Motors Corp., 461 U.S. at 657 (“[I]t may be appropriate to limit prejudgment interest, or perhaps
even deny it altogether, where the patent owner has
been responsible for undue delay in prosecuting the
lawsuit.”). But here there was no undue delay in filing
the action. Presidio filed the present action on September 2, 2014. (Doc. No. 1.) In granting ATC’s motion for
summary judgment of its affirmative defense of absolute intervening rights, the Court held that Presidio is
entitled to infringement damages only for the time period following the issuance of the December 8, 2015
reexamination certificate. (Doc. No. 234 at 28.) Thus,
Presidio initiated the present action prior to the entire
period of infringement at issue in this case. Indeed,
R. App. 68
Presidio is only seeking prejudgment interest from December 8, 2015 through June 17, 2016. (Doc. No. 412 at
3.) Moreover, even if the Court were to consider the relevant period to have begun in 2010 when ATC began
selling the accused products, the Court finds that Presidio acted reasonably in waiting for the prior litigation to be fully resolved prior to filing the present
lawsuit. See A.C. Aukerman, 960 F.2d at 1033 (listing
“other litigation” as a permissible excuse for a delay in
filing suit).
ATC also argues that if the Court awards prejudgment interest, it should be at the three-month U.S.
Treasury Bill rate. The Court agrees with ATC on this
point. “A trial court is afforded wide latitude in the selection of interest rates” for prejudgment interest. Uniroyal, Inc. v. Rudkin-Wiley Corp., 939 F.2d 1540, 1545
(Fed. Cir. 1991); accord Bio-Rad Labs., Inc. v. Nicolet
Instrument Corp., 807 F.2d 964, 969 (Fed. Cir. 1986).
“Courts may use the prime rate, the prime rate plus a
percentage, the U.S. Treasury Bill rate, state statutory
rate, corporate bond rate, or whatever rate the court
deems appropriate.” Apple, 67 F. Supp. 3d at 1121 (N.D.
Cal. 2014); see also ActiveVideo Networks, Inc. v. Verizon Commc’ns, Inc., No. 2:10-CV-248, 2011 WL
4899922, at *3 (E.D. Va. Oct. 14, 2011) (“[W]hile courts
have selected different rates, courts most often award
either the prime rate or the U.S. Treasury rate.”). In
patent cases, courts typically only award prejudgment
interest at the prime rate or higher where there is evidence that the patent owner would have been spared
from borrowing money at the prime rate during the
R. App. 69
infringement period had the infringer been paying royalties. See Finjan, Inc. v. Blue Coat Sys., Inc., No. 13CV-03999-BLF, 2016 WL 3880774, at *18 (N.D. Cal.
July 18, 2016); Apple, 67 F. Supp. 3d at 1121-22; Mars,
Inc. v. Coin Acceptors, Inc., 513 F. Supp. 2d 128, 133 (D.
N.J. May 22, 2007). Here, Presidio has not put forth any
evidence showing that it borrowed any money during
the infringement period at the prime rate or higher.
Accordingly, the Court concludes that the appropriate
rate is the U.S. Treasury Bill rate. See, e.g., Laitram
Corp. v. NEC Corp., 115 F.3d 947, 955 (Fed. Cir. 1997)
(finding no abuse of discretion where “the district
court, in exercises of its discretion, awarded prejudgment interest and set the rate at the U.S. Treasury bill
rate, compounded annually”); see also Apple, 67
F. Supp. 3d at 1122 (“The Treasury Bill rate has been
accepted and employed by many courts in patent cases
as a reasonable method of placing a patent owner in a
position equivalent to where it would have been had
there been no infringement.”). Accordingly, the Court
grants Presidio’s motion and awards Presidio prejudgment interest at the 3-month U.S. Treasury Bill rate,
compounded monthly.25
25
Whether the prejudgment interest “should be compounded
or uncompounded [is] left largely to the discretion of the district
court.” Bio-Rad Labs., 807 F.2d at 969. “Courts ‘have recognized
that compounding is necessary to fully compensate the patentee.’ ” Apple, 67 F. Supp. 3d at 1122; see also Finjan, 2016 WL
3880774, at *18 (“ ‘[M]ost [courts] apply some form of compounding.’ ”). The Court, exercising its discretion, agrees with Presidio
that the prejudgment interest should be compounded monthly.
R. App. 70
B. Postjudgment Interest
Presidio also moves for an award of postjudgment
interest pursuant to 28 U.S.C. § 1961. (Doc. No. 372-1
at 6-7.) An “award of postjudgment interest is governed by 28 U.S.C. § 1961.” Tinsley v. Sea-Land Corp.,
979 F.2d 1382, 1383 (9th Cir. 1992). Section 1961 provides “[i]nterest shall be allowed on any money judgment in a civil case recovered in a district court” and
“shall be calculated from the date of the entry of the
judgment.” “Under the provisions of 28 U.S.C. § 1961,
postjudgment interest on a district court judgment is
mandatory.” Air Separation, Inc. v. Underwriters at
Lloyd’s of London, 45 F.3d 288, 290 (9th Cir. 1995).
ATC concedes that Presidio is entitled to postjudgment interest at the rate provided in 28 U.S.C.
§ 1961(a) from the date of the entry of judgment, June
17, 2016. (Doc. No. 409-24 at 11.) Accordingly, the Court
grants Presidio’s motion and awards Presidio postjudgment interest pursuant to 28 U.S.C. § 1961 at the
statutory rate from the date of the entry of judgment,
June 17, 2016.
Conclusion
For the reasons above, the Court:
1. Denies ATC’s Rule 50(b) motions for judgment as
matter of law and Rule 59(e) motions for new trial;
See, e.g., Stryker Corp. v. Zimmer Inc., No. 1:10-CV-1223, 2013 WL
6231533, at *30 (W.D. Mich. Aug. 7, 2013).
R. App. 71
2. Grants Presidio’s motion for a permanent injunction;
3. Denies Presidio’s motion for enhanced damages
and attorney’s fees; and
4. Grants Presidio’s motion for an award of supplemental damages and interest.
IT IS SO ORDERED.
DATED: August 17, 2016.
/s/ Marilyn L. Huff
MARILYN L. HUFF,
District Judge
UNITED STATES
DISTRICT COURT
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