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Saint Lawrence Communications LLC v. Motorola Mobility LLC

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

December 8, 2017

SAINT LAWRENCE COMMUNICATIONS LLC, Plaintiff,
v.
MOTOROLA MOBILITY LLC, Defendants.

          MEMORANDUM OPINION AND ORDER

          RODNEY GILSTRAP UNITED STATES DISTRICT JUDGE

         Before the Court are the following motions: Plaintiff Saint Lawrence Communications LLC's (“SLC”) Motion for Enhanced Damages (Dkt. No. 75); SLC's Motion for Ongoing Royalty (Dkt. No. 78); and SLC's Motion for Prejudgment Interest, Postjudgment Interest, Taxable Costs, and Supplemental Damages (Dkt. No. 77). On July 17, 2017, the Court held a hearing at which the Parties presented oral argument on said motions. After considering the briefing and argument of the Parties, and for the reasons set forth below, the Court finds that SLC's Motion for Enhanced Damages should be DENIED, that SLC's Motion for Ongoing Royalty should be GRANTED AS MODIFIED, and that SLC's Motion for Prejudgment Interest, Postjudgment Interest, Taxable Costs, and Supplemental Damages should be GRANTED AS MODIFIED.

         I. BACKGROUND

         This is a case for patent infringement brought by SLC against Defendant Motorola Mobility LLC (“Motorola”). The Parties selected a jury on March 3, 2017, and the trial commenced on March 20, 2017. At the conclusion of the trial, the jury returned a unanimous verdict finding infringement and also finding that the claims in suit were not invalid. (Dkt. No. 34.) The jury also found that Motorola's infringement was willful. (Id.) Thereafter, the Court set a briefing schedule on all remaining post trial issues (Dkt. No. 72), and pursuant thereto, SLC filed its Motion for Enhanced Damages (Dkt. No. 75) in addition to its Motion for Ongoing Royalty (Dkt. No. 78) and Motion for Prejudgment Interest, Postjudgment Interest, Taxable Costs, and Supplemental Damages (Dkt. No. 77). On July 17, 2017, the Court held a hearing at which the parties presented oral argument on multiple outstanding post trial issues, including the motions addressed herein, which are now before the Court.

         II. SLC'S MOTION FOR ENHANCED DAMAGES

         Under 35 U.S.C. § 284, “[d]istrict courts enjoy discretion in deciding whether to award enhanced damages, and in what amount.” Halo Elecs., Inc. v. Pulse Elecs, Inc., 136 S.Ct. 1923, 1932 (2016). However, enhanced damages are nevertheless “designed as a ‘punitive' or ‘vindictive' sanction for egregious infringement behavior, ” reserved for cases in which the defendant's conduct is “willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or-indeed-characteristic of a pirate.” Id.

         In exercising this discretion to enhance damages for willfulness, courts frequently look to the eight factors articulated in Read Corp v. Portec, Inc. 970 F.2d 816, 827 (Fed. Cir. 1992). The Read factors consist of: (1) whether the infringer deliberately copied the ideas or design of another; (2) whether the infringer, when he knew of the other's patent protection, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed; (3) the infringer's behavior as a party to the litigation; (4) the defendant's size and financial condition; (5) closeness of the case; (6) duration of the defendant's misconduct; (7) remedial action by the defendant; (8) the defendant's motivation for harm; and (9) whether the defendant attempted to conceal the misconduct. Id.

         Here, unsurprisingly, SLC argues that each of the Read factors weighs in favor of enhancing the jury's award of damages to the full extent permitted under § 284 (Dkt. No. 75 at 4). Motorola, on the other hand, argues the opposite. (Dkt. No. 86 at 1.)

         After considering the totality of the circumstances, including the considerations set forth in Read, the Court finds that enhancement is not appropriate in this case. Ultimately, absent from the record is the type of egregious conduct that is characteristic of cases where enhancement is warranted. For example, Motorola did not deliberately copy SLC's technology. Cf. Imperium IP Holdings (Cayman), Ltd. v. Samsung Elecs. Co., Ltd., 203 F.Supp.3d 755, 763-64 (E.D. Tex. 2016) (enhancing in light of deliberate copying). In fact, the accused products were alleged to infringe because of chips made by Qualcomm, which are used industry-wide, rather than technology created by Motorola. (Dkt. No. 96 at 2.) Indeed, Motorola did not even have access to the infringing source code contained on the Qualcomm chips, which militates against a finding that Motorola deliberately copied SLC's technology. (Id.) There is also no basis to conclude that Motorola had an intent to harm SLC.

         Moreover, many of the facts relied on by SLC in seeking an enhancement are more appropriately considered with respect to its pending Motion for Finding of Exceptional Case Under 35 U.S.C. § 285 (Dkt. No. 76). For example, “forcing SLC to unnecessarily brief disputes, ” and “taking positions contrary to its own evidence and to its own statements in the German proceedings” (Dkt. No. 75 at 2) are facts that, if true, are relevant in determining whether this case is one that “stands out from others with respect to the substantive strength of a party's litigating position . . . or the unreasonable manner in which the case was litigated.” Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S.Ct. 1749, 1756 (2014) (emphasis added). While one of the Read factors is “the infringer's behavior as a party to the litigation, ” the discretionary nature of the enhancement inquiry is not so inflexible as to compel enhancement where it is otherwise not warranted, particularly where a litigant's behavior can be addressed through other forms of sanction. See Halo, 136 S.Ct. at 1932-35; 35 U.S.C. § 285. While this was an extremely hard fought and contentious case, characterized by obstruction and an unwillingness to confer in good faith by both sides, Motorola was not engaged in the type of “willful, wanton, or malicious” conduct which warrants enhancement. Accordingly, SLC's Motion for Enhanced Damages (Dkt. No. 75) is DENIED.

         III. SLC'S MOTION FOR ONGOING ROYALTY

         In its Motion for Ongoing Royalty, SLC requests that the Court award an ongoing royalty in the amount of $0.78 for each of Motorola's AMR-WB products, “including those that were explicitly identified at trial and all other Motorola products that are not ‘colorably different'-that are made or sold between the date the Court enters final judgment and August 24, 2022.” (Dkt. No. 78 at 1.) SLC argues that enhancing the implied royalty rate awarded by the jury (i.e., $0.39) by a factor of two accounts for changed circumstances and Motorola's continued willful infringement. (Id. at 2-3.) Motorola responds by arguing that an ongoing royalty determination is premature and should be stayed pending the conclusion of all appeals. (Dkt. No. 89 at 1.) In the alternative, Motorola argues that “any ongoing royalty should be no higher than the 39-cent-per-unit rate implied by the jury's verdict.” (Id. at 11.)

         A. Staying the Ongoing Royalty Determination is Not Appropriate

         As an initial matter, the Court is persuaded that due to finality concerns, the issue of ongoing royalties should be determined prior to the entry of final judgment. Warsaw Orthopedic, Inc. v. NuVasive, Inc., 515 F. App'x 882 (Fed. Cir. 2012) (“[T]he case is not ‘final' because the district court has not yet determined ongoing royalties. An ongoing royalty is not the same as an accounting for damages.”); see also Cioffi v. Google, Inc., No. 2:13-CV-103, 2017 WL 4011143, at *1 (E.D. Tex. Sept. 12, 2017) (“Although Warsaw Orthopedic is a non-precedential decision, it nonetheless provides some level of guidance as to what issues should be included in a final judgment.”); Catlin v. United States, 324 U.S. 229, 233 (1945) (“A ‘final decision' ...


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