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IMPERIUM IP HOLDINGS CAYMAN, LTD. v. Samsung Electronics Co., LTD

United States District Court, E.D. Texas, Sherman Division

April 27, 2017

IMPERIUM IP HOLDINGS CAYMAN, LTD.
v.
SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG TELECOMMUNICATIONS AMERICA, LLC, and SAMSUNG SEMICONDUCTOR, INC. No. 4

          MEMORANDUM OPINION AND ORDER

          AMOS L. MAZZANT UNITED STATES DISTRICT JUDGE

         Pending before the Court is Defendants' Rule 60(b) Motion for Reconsideration of Enhanced Damages (Dkt. #348). After reviewing the relevant pleadings, the Court denies Defendants' motion.

         BACKGROUND

         On June 9, 2014, Plaintiff filed the instant action against Defendants, alleging infringement of United States Patent Nos. 6, 271, 884 (the “'884 Patent), 7, 092, 029 (the “'029 Patent”), and 6, 836, 290 (the “'290 Patent”). On February 8, 2016, the jury returned a verdict in favor of Plaintiff. Particularly, the jury found the following: (1) Defendants infringed Claims 1, 5, 14, and 17 of the '884 Patent; (2) Defendants infringed Claims 1, 6, and 7 of the '029 Patent; (3) Defendants willfully infringed the patents-in-suit; and (4) Claim 10 of the '290 Patent was invalid for obviousness (Dkt. #253). The jury awarded $4, 840, 772 in damages for infringement of the '884 Patent and $2, 129, 608.50 in damages for infringement of the '029 Patent (Dkt. #253). On August 24, 2016, the Court awarded enhanced damages for willful infringement and entered final judgment (Dkt. #329; Dkt. #330).

         On December 13, 2016, Defendants filed their motion for reconsideration regarding the Court's August 24, 2016 Memorandum Opinion and Order (Dkt. #348). On January 6, 2017, Plaintiff filed a response (Dkt. #351). On January 17, 2017, Defendants filed a reply (Dkt. #352). On January 24, 2017, Plaintiff filed a sur-reply (Dkt. #353).

         LEGAL STANDARD

         The Federal Rules of Civil Procedure do not specifically provide for motions for reconsideration. Shepherd v. Int'l Paper Co., 372 F.3d 326, 328 n.1 (5th Cir. 2004). Depending on when a party files such a motion, the Court may construe it under Rule 59(e) as a motion to alter or amend a judgment or under Rule 60(b) as a motion for relief from a final judgment. Id.; Williams v. Thaler, 602 F.3d 291, 303 (5th Cir. 2010) (“When a litigant files a motion seeking a change in judgment, courts typically determine the appropriate motion based on whether the litigant filed the motion within Rule 59(e)'s time limit.”). If a party files a motion within than twenty-eight days from the judgment or order of which the party complains, it is considered a Rule 59(e) motion; otherwise, it is treated as a Rule 60(b) motion. See Hamilton Rothschilds v. Williams Rothschilds, 147 F.3d 367, 371 n.19 (5th Cir. 1998). Here, Defendants' filed their motion for reconsideration more than twenty-eight day after the Court entered final judgment. Thus, the Court will consider the motion under Rule 60(b).

         Rule 60(b) of the Federal Rules of Civil Procedure sets out five specific bases for granting relief from a court's final judgment or order: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence; (3) fraud, misrepresentation or misconduct of an adverse party; (4) the judgment is void; and (5) satisfaction, discharge, or release of the judgment. Fed.R.Civ.P. 60(b)(1)-(5). In addition, Rule 60(b)(6) provides that a court may relieve a party from final judgment for “any other reason justifying relief from the operation of the judgment.” Fed.R.Civ.P. 60(b)(6). Relief under Rule 60(b)(6) is only granted when it is not covered by the five enumerated grounds and when “extraordinary circumstances are present.” Batts v. Tow-Motor Forklift Co., 66 F.3d 743, 747 (5th Cir. 1995) (citation omitted). “The district court enjoys considerable discretion when determining whether the movant has satisfied any of these Rule 60(b) standards.” Teal v. Eagle Fleet, Inc., 933 F.2d 341, 347 (5th Cir. 1991).

         ANALYSIS

         The Federal Circuit has explained that “[w]hen reviewing non-patent issues, ” including some rulings under Rule 60(b), its “general practice is to apply the law of the regional circuit.” Fiskars, Inc. v. Hunt Mfg. Co., 279 F.3d 1378, 1381 (Fed. Cir. 2002). Federal Circuit law applies, however, “when a district court's ruling under Rule 60(b) turns on substantive issues unique to patent law.” Lazare Kaplan Int'l, Inc. v. Photoscribe Techs., Inc., 714 F.3d 1289, 1293 (Fed. Cir. 2013). This provides for “consistent and uniform application by district courts when handling patent cases.” Id. at 1293. Defendants' argument for Rule 60(b) relief hinges on the interpretation of Supreme Court and Federal Circuit law to determine the appropriateness of enhanced damages to punish an infringer for egregious, deliberate, or flagrant patent infringement. The Court will therefore apply Federal Circuit law to the issue of enhanced damages in this patent infringement case.

         Defendants seek relief under Rule 60(b)(2) and Rule 60(b)(6) from the order awarding enhanced damages to Plaintiff and the Court's subsequent entry of judgment. Defendants contend the Court did not consider the objective reasonableness of their invalidity position when awarding enhanced damages.[1] To support this argument, Defendants point to a December 1, 2016 Patent Trial and Appeal Board (“Board”) decision that found all of the asserted claims of the '029 Patent invalid. Defendants argue the Board's decision and its reasoning with respect to the asserted claims should be a factor to mitigate enhanced damages for the '029 Patent.

         To succeed on their motion under Rule 60(b)(2), Defendants must set forth newly discovered evidence and demonstrate “(1) that it exercised due diligence in obtaining the information, and (2) the evidence is material and controlling and clearly would have produced a different result if presented before the original judgment.” Thermacor Process, L.P. v. BASF Corp., 567 F.3d 736, 744 (5th Cir. 2009) (quoting Hesling v. CSX Transp., Inc., 396 F.3d 632, 639 (5th Cir. 2005)). Evidence that is ‘“merely cumulative or impeaching and would not have changed the result'” does not suffice. Id.

         Defendants have not shown that the Board's decision constitutes newly discovered evidence and not just new evidence. This distinction is significant. “‘Newly discovered evidence must have been in existence at the time of the trial and not discovered until after trial.'” Gen. Universal Sys., Inc. v. Lee, 379 F.3d 131, 158 (5th Cir. 2004) (quoting Longden v. Sunderman, 979 F.2d 1095, 1102-03 (5th Cir. 1992)). New evidence makes up everything else. On August 24, 2016, the Court issued its enhanced damages opinion and entered judgment against Defendants, and the Board issued its decision on December 1, 2016. Since the Board's decision was not in existence at the time of the judgment, it is new evidence and cannot form a basis for relief under Rule 60(b)(2).[2]

         Even if the Board's decision constituted newly discovered evidence, Defendants have not demonstrated such evidence was “material and controlling and clearly would have produced a different result if presented before the original judgment.” Thermacor Process, L.P., 567 F.3d at 744. When damages for patent infringement are found, “the court may increase the damages up to three times the amount found or assessed.” 35 U.S.C. § 284. The Supreme Court in Halo Electronics, Inc. v. Pulse Electronics, Inc. rejected the prevailing test for enhanced damages and explained that under § 284, “[d]istrict courts enjoy discretion in deciding whether to award enhanced damages, and in what amount.” 136 S.Ct. 1923, 1932 (2016). The paramount determination bearing on a court's discretion is the egregiousness of the defendant's conduct. Id. The Halo Court described such conduct as “willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or . . . characteristic of a pirate.” Id. “[N]one of this is to say that enhanced damages ...


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