United States District Court, E.D. Texas, Sherman Division
IMPERIUM IP HOLDINGS (CAYMAN), LTD.
SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., SAMSUNG TELECOMMUNICATIONS AMERICA, LLC, and SAMSUNG SEMICONDUCTOR, INC.
MEMORANDUM OPINION AND ORDER
L. MAZZANT UNITED STATES DISTRICT JUDGE
before the Court is Imperium IP Holdings (Cayman) Ltd.'s
(“Imperium”) Motion on the Appropriate Ongoing
Royalty (Dkt. #380). After reviewing the relevant pleadings,
the Court grants in part and denies in part Imperium's
9, 2014, Imperium 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 finding 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). The jury's award represents
an implied royalty rate of four cents per product for the
'884 Patent and two cents per product for the '029
Patent. On August 24, 2016, the Court awarded enhanced
damages for willful infringement and entered final judgment
(Dkt. #329; Dkt. #330). The Court also imposed an ongoing
royalty in favor of Imperium and ordered the parties to
negotiate the ongoing royalty rate and the products covered
by that rate. The parties' discussions reached an
impasse. Since the parties were unable to resolve the issue
of ongoing royalties themselves, the Court finds it proper to
address the issue now.
2, 2017, Imperium filed the present motion (Dkt. #380). On
June 9, 2017, Defendants filed a response (Dkt. #385). On
June 14, 2017, Imperium filed a reply (Dkt. #390). On June
19, 2017, Defendants filed a sur-reply (Dkt. #392).
finding of infringement for a patentee, courts have
jurisdiction to “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.” 35 U.S.C. § 283. The Federal Circuit
has clarified that in some cases, where an injunction is
inappropriate, a court may decide to award future royalties
to be paid in light of post-judgment infringement. Paice
LLC v. Toyota Motor Corp., 504 F.3d 1293, 1314 (Fed.
Cir. 2007); see Creative Internet Advert. Corp. v. Yahoo!
Inc., 674 F.Supp.2d 847, 850 (E.D. Tex. 2009). The
Federal Circuit has also given the district court
“broad discretion” in matters concerning an
ongoing royalty rate. See Telcordia Techs., Inc. v. Cisco
Sys., Inc., 612 F.3d 1365, 1378 (Fed. Cir. 2010).
asserts it is entitled to an ongoing royalty rate for
post-judgment infringement at the trebled rates the Court
imposed for any products found to infringe that were no more
than colorable variations of infringing products.
Specifically, Imperium seeks an ongoing royalty rate of
twelve cents per product for the '884 Patent and six
cents per product for the '029 Patent.
contend the appropriate ongoing royalty rate should be 1.3
cents per product for the '884 Patent and 0.3 cents per
product for the '029 Patent. Defendants reduced the
implied jury rate for the '884 Patent by 67% because the
relevant claims of '884 Patent are now subject to
reexamination by the Patent Office and may be found invalid.
Defendants also reduced the implied jury rate for the
'029 Patent by 85% because the Patent Trial and Appeal
Board (“PTAB”) found the relevant claims of the
'029 Patent to be invalid.
starting point for the Court's calculation of an
appropriate ongoing royalty rate is the rate determined by
the jury for pre-verdict infringement. Here, the jury
determined a reasonable royalty rate of four cents per
product for the '884 Patent and two cents per product for
the '029 Patent. The Court will look mainly to any change
in the bargaining positions of the parties and other economic
circumstances occurring between the jury's hypothetical
negotiation and a negotiation conducted after the verdict.
ActiveVideo Networks, Inc. v. Verizon Commc'ns,
Inc., 694 F.3d 1312, 1343 (Fed. Cir. 2012). The burden
is on Imperium to show that it is entitled to a royalty rate
in excess of the rate initially determined by the jury.
Creative Internet, 674 F.Supp.2d at 855.
argues two changed circumstances warrant an upward adjustment
of the jury-determined royalty rate. First, Imperium argues
in a post-verdict hypothetical negotiation, it would be in a
stronger position to negotiate with Defendants than at the
time of the hypothetical negotiation in 2007. Imperium points
to $22.8 million it has received in licensing fees for its
patents in 2013. Imperium states these licensing fees prove
that the patented technology is more of a commercial success
today than it was at the time of the hypothetical negotiation
in 2007. Defendants argue the same 2013 licenses were already
accounted for in the jury's verdict and thus cannot
support an upward modification of the jury-determined royalty
Court agrees with Imperium's characterization of the 2013
licensing fees. In deciding the royalty rate for post-trial
infringement, the Court can properly consider any new
evidence that was not before the jury and any changed
circumstances between the hypothetical negotiation occurring
in 2007 and a hypothetical negotiation that would occur now
after the judgment. Mondis Tech. Ltd. v. Chimei InnoLux
Corp., 822 F.Supp.2d 639, 647 (E.D. Tex. 2011), affd
sub nom. Mondis Tech. Ltd. v. Innolux Corp., 530
Fed.App'x. 959 (Fed. Cir. 2013). Although the jury did
consider the 2013 licensing fees during trial, this does not
change the fact the evidence may be weighed differently in a
hypothetical negotiation occurring today than one in 2007.
For example, the patented technology today is more of a
commercial success than in the 2007, which is evidenced by
the $22.8 million Imperium has received in licensing fees.
This would increase Imperium's bargaining position in a
2017 hypothetical negotiation. However, the Court must
balance Imperium's increased bargaining position with a
December 1, 2016 PTAB decision that invalidated every claim
the jury found Defendants had infringed in the '029
Patent. Taking all of these circumstances together, Imperium
would have a stronger bargaining position with respect to the
'884 Patent but not with the '029 Patent.
Imperium urges the Court to enhance damages for Defendants
continued willful infringement based on several of the
factors set out in Read Corp. v. Portec, Inc., 970
F.2d 816, 827 (Fed. Cir. 1992). Imperium argues the
jury's verdict did not include damages for
Defendants' willful infringement. Thus, Imperium contends
enhancement for Defendants' continued willful
infringement is proper in ...