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Whirlpool Corp. v. TST Water, LLC

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

March 29, 2018

WHIRLPOOL CORPORATION, Plaintiff,
v.
TST WATER, LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

          RODNEY GILSTRAP UNITED STATES DISTRICT JUDGE.

         Before the Court is Whirlpool Corporation's (“Whirlpool”) Motion for Judgment, for an Order Designating Whirlpool the Prevailing Party, for Enhanced Damages, for an Exceptional Case Finding, and for an Order Awarding Pre- and Post-judgment Interest (Dkt. No. 175). Having considered the Motion, the Court is of the opinion the Motion should be and hereby is GRANTED-IN-PART and DENIED-IN-PART, as set forth herein.

         I. Whirlpool is Entitled to Judgment in Its Favor and a Declaration That It Is the Prevailing Party

         TST Water, LLC (“TST”) does not dispute this portion of Whirlpool's Motion. (See generally Dkt. No. 178; id. at 1 (“That Whirlpool . . . prevailed overall, is hardly noteworthy.”)). Under Rule 54(c) of the Federal Rules of Civil Procedure, the Court's judgment should “grant the relief to which each party is entitled.” Accordingly, and consistent with the jury's verdict (Dkt. No. 148), Whirlpool is entitled to a Judgment that:

(i) TST infringed claims 1, 4, 10, 15, 17, 20, and 27;
(ii) those claims are not invalid;
(iii) TST's infringement was willful; and
(iv) Whirlpool's damages through the verdict's date (excluding interest, any enhancement, and any attorney's fees award) are $7.6 million.

(Id.)

         A prevailing party must have “received at least some relief on the merits, ” and “[t]hat relief must materially alter the legal relationship between the parties by modifying one party's behavior in a way that ‘directly benefits' the opposing party.” Shum v. Intel Corp., 629 F.3d 1360, 1367 (Fed. Cir. 2010) (citations omitted). Here, Whirlpool has “received at least some relief on the merits” which “modifie[s]” TST's behavior and “directly benefits” Whirlpool. Accordingly, Whirlpool is properly designated the prevailing party for purposes of Rule 54(d).

         As the prevailing party, Whirlpool is entitled to costs under Rule 54(d), 28 U.S.C. §1920, Local Rule CV-54, and this Court's Standing Order Regarding Bill of Costs. The Parties are ORDERED to meet and confer to resolve any disputes regarding Whirlpool's taxable costs and submit any unresolved disputes to the Court as necessary. For the reasons set forth above, Whirlpool's Motion is hereby GRANTED with respect to prevailing party status. (Dkt. No. 175 at 2).

         II. Enhanced Damages

         The jury found that TST's infringement of the asserted claims was willful. (Dkt. No. 148, Jury Verdict at 4). Such a finding “invites the Court to exercise its discretion to determine whether enhanced damages are appropriate under 35 U.S.C. § 284.” Core Wireless Licensing S.A.R.L. v. LG Elecs., Inc., No. 14-cv-912-JRG, Final Judgment Order, Dkt. No. 47 at 1 (E.D. Tex. Nov. 1, 2016). In addition to determining whether to award enhanced damages, courts also have discretion as to the amount of damages to be awarded. Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S.Ct. 1923, 1932 (2016) (“District courts enjoy discretion in deciding whether to award enhanced damages, and in what amount.”); see also id. at 1926 (“§ 284 allows district courts to punish the full range of culpable behavior.”). The Court may increase damages up to three times the damages assessed by the Jury. See Jurgens v. CBK, Ltd., 80 F.3d 1566, 1570 (Fed. Cir. 1996). To determine whether and how much to enhance damages, courts consider the “Read factors:”

(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) “[d]efendant's size and financial condition”;
(5) “[c]loseness of the case, ”
(6) “[d]uration of defendant's misconduct”;
(7) “[r]emedial action by the defendant”;
(8) “[d]efendant's motivation for harm”; and
(9) “[w]hether defendant attempted to conceal its misconduct.”

Read Corp. v. Portec Inc., 970 F.2d 816, 826-27 (Fed. Cir. 1992), abrogated in part on other grounds by Markman v. Westview Instr. Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc). The Court addresses each factor in turn.

         II. A. Copying [Read Factor 1]

         Whirlpool submits that “direct evidence shows TST deliberately copied Whirlpool's patented design.” (Dkt. No. 175 at 3). Specifically, Whirlpool points to the following:

• TST's President, Michael Baird, was aware of the '894 patent as early as 2010 and studied it. (Dkt. No. 162, Mar. 8, 2017 A.M. Tr. at 69:3-13);
• TST knew that Whirlpool's patented Filter 3 was one of the “best selling replacement filters in the market.” (Id. at 74:25-75:2; Dkt. No. 175, Ex. 9 at 58258 (TST noting Filter 3 is “one of the highest-sellers for everyone in retail”));
• TST bought more than 150 Filter 3 filters and several of their corresponding head assemblies. (Dkt. No. 163, Mar. 8, 2017 P.M. Tr. at 36:9-14);
• TST's internal design files for the W-5 and its computer-aided design (“CAD”) files contained:
o Whirlpool website printouts relating to the Filter 3 (Dkt. No. 175, Ex. 10 at 3711-12);
o Schematic renderings of the Filter 3 (id. at 3708-10; Dkt. No. 163 Mar. 8, 2017 P.M. Tr. at 49:4-12, 133:9-13 (admissions re: Filter 3 rendering and CAD files)); and
o Schematic renderings of the Filter 3 specifically of the head assembly (id. at 3633-39).

(Dkt. No. 175 at 3-4). Whirlpool argues that “TST [] made cosmetic changes to Whirlpool's Filter 3 design to arrive at the W-5. As Whirlpool's expert, Joseph Beaman, explained, TST effectively ‘carved away' portions of Filter 3's dome to make it appear ‘sunk down.'” (Id. at 4 (quoting Dkt. No. 159, Mar. 7, 2017 A.M. Tr. at 27:5-28:1, 28:16-21)). “TST even ‘superimposed' the end piece of Whirlpool's Filter 3 onto its own W-5 product to ensure its compatibility:” (Image Omitted.) (Id. at 5 citing Dkt. No. 175, Ex. 10 at 3642; see also id. at 3643-44; Dkt. No. 163, Mar. 8, 2017 P.M. Tr. at 49:13-50:5 (Baird explaining that a TST employee “superimposed the Whirlpool product on top of [his] design” to “understand whether he got it right on those areas that needed to be compatible”)). In addition, “no witness testified that TST independently developed its design.” (Dkt. No. 175 at 6).

         In response, TST argues that “There was no evidence at trial that TST simply copied the Filter 3, as did so many others. Rather . . . TST presented abundant evidence that [] Mr. Baird spent years and tens of thousands of dollars carefully studying the '894 patent and developing a different, noninfringing design.” (Dkt. No. 178 at 20). TST also points to “Mr. Baird [being] so confident that his design was different and an improvement over Whirlpool's that he filed multiple patent applications describing his improvements.” (Id.) Further, “TST refused Home Depot's request to sell a replacement for the Filter 3 in 2014 because Mr. Baird was not completely satisfied that the then-existing design would not ...


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