United States District Court, E.D. Texas, Marshall Division
MEMORANDUM OPINION AND ORDER
GILSTRAP UNITED STATES DISTRICT JUDGE.
the Court is Defendants NetScout Systems, Inc. and NetScout
Systems Texas, LLC's (f/k/a Tektronix Texas, LLC d/b/a
Tektronix Communications) (collectively,
“NetScout”) Motion for Judgment as a Matter of
Law of No. Pre-Suit Damages Pursuant to Fed.R.Civ.P. 50(b)
(Dkt. No. 315) and Renewed Motion for Judgment as a Matter of
Law of No. Willful Infringement Pursuant to Fed.R.Civ.P.
50(b) (Dkt. No. 316). The Court heard oral argument on the
motions on May 21, 2019. (Dkt. No. 339.) Having considered
the parties' motions, briefing, oral arguments, and trial
record, the Court is of the opinion that each motion should
be and hereby is DENIED.
Packet Intelligence LLC (“PI”) sued NetScout for
patent infringement on March 15, 2016. (Dkt. No. 1.) PI
alleged that NetScout's GeoProbe 10 (“G10”)
and GeoBlade (collectively, the “Accused
Products”) literally infringe Claims 10 and 17 of U.S.
Patent No. 6, 665, 725 (the “'725 Patent”);
Claims 1 and 5 of U.S. Patent No. 6, 839, 751 (the
“'751 Patent”); and Claims 19 and 20 of U.S.
Patent No. 6, 954, 789 (the “'789 Patent”)
(collectively, the “Asserted Claims” or
“Patents-in-Suit”). (Id.) PI also alleged
willful infringement and sought pre-suit damages.
(Id.) NetScout asserted several defenses, including
invalidity under 35 U.S.C. §§ 101, 102, 103, and
112; failure to properly name all inventors under 35 U.S.C.
§ 102(f); inequitable conduct; and unclean hands. (Dkt.
No. 205 at 9-11.) The case proceeded to trial, and the jury
returned a verdict in favor of PI, finding that the Asserted
Claims were willfully infringed, none of the Asserted Claims
were invalid, and that PI was entitled to damages in the
amount of $5.75 million as a running royalty. (Dkt. No. 237.)
Following submission of the evidence to the jury, the Court
conducted a bench trial as to the equitable issues and
concluded that NetScout had failed to show that PI's
claims were barred under the doctrines of unclean hands or
inequitable conduct. (Dkt. Nos. 242, 306.) The Court entered
final judgment on September 7, 2018, designating PI as the
prevailing party. (Dkt. No. 307 at 2.)
now moves pursuant to Federal Rule of Civil Procedure 50(b)
for an order that vacates (1) the jury's award of $3.5
million in pre-suit damages (Dkt. No. 315) and (2) the
jury's finding of willful infringement (Dkt. No. 316).
Federal Rule of Civil Procedure 50(b)
as a matter of law is appropriate if “the court finds
that a reasonable jury would not have a legally sufficient
evidentiary basis to find for [a] party” on an issue.
Fed.R.Civ.P. 50(a)(1). “The grant or denial of a motion
for judgment as a matter of law is a procedural issue not
unique to patent law, reviewed under the law of the regional
circuit in which the appeal from the district would usually
lie.” Finisar Corp. v. DirectTV Grp., Inc.,
523 F.3d 1323, 1332 (Fed. Cir. 2008). The Fifth Circuit
“uses the same standard to review the verdict that the
district court used in first passing on the motion.”
Hiltgen v. Sumrall, 47 F.3d 695, 699 (5th Cir.
1995). Thus, “a jury verdict must be upheld unless
‘there is no legally sufficient evidentiary basis for a
reasonable jury to find as the jury did.'”
Id. at 700 (quoting Fed.R.Civ.P. 50(a)(1)). The
jury's verdict must be supported by “substantial
evidence” for each claim. Am. Home Assurance Co. v.
United Space All., 378 F.3d 482, 487 (5th Cir. 2004).
Fifth Circuit law, the court is to be “especially
deferential” to a jury's verdict and must not
reverse the jury's findings unless they are not supported
by substantial evidence. Baisden v. I'm Ready Prods.,
Inc., 693 F.3d 491, 499 (5th Cir. 2012).
“Substantial evidence is defined as evidence of such
quality and weight that reasonable and fair-minded men [and
women] in the exercise of impartial judgment might reach
different conclusions.” Threlkeld v. Total
Petroleum, Inc., 211 F.3d 887, 891 (5th Cir. 2000). The
moving party is entitled to judgment as a matter of law
unless “the evidence points so strongly and so
overwhelmingly in favor of the nonmoving party that no
reasonable juror could return a contrary verdict.”
Int'l Ins. Co. v. RSR Corp., 426 F.3d 281, 296
(5th Cir. 2005) (citing Cousin v. Tran Union Corp.,
246 F.3d 359, 366 (5th Cir. 2001)). However, “[t]here
must be more than a mere scintilla of evidence in the record
to prevent judgment as a matter of law in favor of the
movant.” Arismendez v. Nightingale Home Health
Care, Inc., 493 F.3d 602, 606 (5th Cir. 2007).
evaluating a motion under Rule 50, the court must “draw
all reasonable inferences in the light most favorable to the
verdict and cannot substitute other inferences that [the
court] might regard as more reasonable.” E.E.O.C.
v. Boh Bros. Const. Co., L.L.C., 731 F.3d 444, 451 (5th
Cir. 2013) (internal citation omitted). “[T]he court
must give credence to the evidence favoring the nonmovant as
well as that ‘evidence supporting the moving party that
is uncontradicted and unimpeached, at least to the extent
that that evidence comes from disinterested
witnesses.'” See Ellis v. Weasler Eng'g
Inc., 258 F.3d 326, 337 (5th Cir. 2001) (quoting 9A
Wright & Miller § 2529). However, in doing so, the
court may not make credibility determinations or weigh the
evidence, as those are solely functions of the jury. See
Id. (quoting Reeves v. Sanderson Plumbing Prods.,
Inc., 530 U.S. 133, 150-51 (2000)).
obtain pre-suit damages, a patent owner must show either that
it (1) provided the accused infringer with actual notice of
infringement or (2) complied with the marking requirements of
35 U.S.C. § 287(a). If a patent owner fails to comply
with the marking statute, then it may only recover damages
from the time it provided actual notice of the alleged
infringement. 35 U.S.C. §287(a).
marking statute provides:
Patentees, and persons making, offering for sale, or selling
within the United States any patented article for or under
them, or importing any patented article into the United
States, may give notice to the public that the same is
patented, either by  fixing thereon the word
“patent” or the abbreviation “pat.”,
together with the number of the patent, or  by fixing
thereon the word “patent” or the abbreviation
“pat.” together with an address of a posting on
the Internet, accessible to the public without charge for
accessing the address, that associates the patented article
with the number of the patent, or when, from the character of
the article, this cannot be done, by fixing to it, or to the
package wherein one or more of them is contained, a label
containing a like notice. In the event of failure so
to mark, no damages shall be recovered by the patentee in any
action for infringement, except on proof that the infringer
was notified of the infringement and continued to infringe
thereafter, in which event damages may be recovered only for
infringement occurring after such notice. Filing of an action
for infringement shall constitute such notice.
35 U.S.C. § 287(a).
marking statute applies to both the patentee and those who
make and sell patented articles under the patentee's
authorization. Maxwell v. J. Baker, Inc., 86 F.3d
1098, 1111 (Fed. Cir. 1996). “[W]ith third parties
unrelated to the patentee, it is often more difficult for a
patentee to ensure compliance with the marking provisions. A
‘rule of reason' approach is justified in such a
case and substantial compliance may be found to satisfy the
statute.” Id. Thus, “[w]hen the failure
to mark is caused by someone other than the patentee, the
court may consider whether the patentee made reasonable
efforts to ensure compliance with the marking requirements.
The rule of reason is consistent with the purpose of the
constructive notice provision-to encourage patentees to mark
their products in order to provide notice to the public of
the existence of the patent and to prevent innocent
infringement.” Id. at 1111-12.
alleged infringer who challenges the patentee's
compliance with § 287 bears an initial burden of
production to articulate the products it believes are
unmarked ‘patented articles' subject to §
287.” Arctic Cat Inc. v. Bombardier Recreational
Prods. Inc., 876 F.3d 1350, 1368 (Fed. Cir. 2017). This
initial burden is a “low bar” and “the
alleged infringer need only put the patentee on notice that
he or his authorized licensees sold specific unmarked
products which the alleged infringer believes practice the
patent. The alleged infringer's burden is a burden of
production, not one of persuasion or proof.”
Id. “Once the alleged infringer meets its
burden of production, however, the patentee bears the burden
to prove the products identified do not practice the patented
invention.” Id. The patentee bears the
ultimate burden of proving compliance with marking.
284 of the Patent Act provides that, in the case of
infringement, courts “may increase the damages up to
three times the amount found or assessed.” 35 U.S.C.
§ 284. Whether enhanced damages are warranted and in
what amount are within the sound discretion of the trial
court. Halo Elects., Inc. v. Pulse Elects., Inc.,
136 S.Ct. 1923, 1932 (2016). The Supreme Court has explained
that such 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.” Id. at 1932.
Conduct warranting enhancement has been variously described
as “willful, wanton, malicious, bad-faith, deliberate,
consciously wrongful, flagrant, or-indeed-characteristic of a
infringement may justify, but does not mandate, an award of
enhanced damages. Read Corp. v. Protec, Inc., 970
F.2d 816, 816 (Fed. Cir. 1992). “To willfully infringe
a patent, the patent must exist and one must have knowledge
of it.” State Indus., Inc. v. A.O. Smith
Corp., 751 F.2d 1226, 1236 (Fed. Cir. 1985); see
also WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341 (Fed.
Cir. 2016) (“Knowledge of the patent alleged to be
willfully infringed continues to be a prerequisite to
enhanced damages.”). Willful infringement requires some
sort of intentional conduct-whether it be subjective or
objective. Halo, 136 S.Ct. at 1932; see also
Arctic Cat, 876 F.3d at 137 (explaining that
“Halo emphasized that subjective willfulness
alone-i.e., proof that the defendant acted despite a risk of
infringement that was ‘either known or so obvious that
it should have been known to the accused infringer,' can
support an award of enhanced damages”).
infringement is a question of fact reviewed for substantial
evidence. WBIP, 829 at 1341-42. It is
“generally measured against the knowledge of the actor
at the time of the challenged conduct” and “can
arise pre- or post-suit.” Huawei Techs. Co. v.
T-Mobile U.S., Inc., No. 2:16-cv-00052-JRG-RSP, 2017 WL
1129951, at *4 (E.D. Tex. Feb. 21, 2017), report and
recommendation adopted, No. 2:16-cv-00052-JRG-RSP, 2017
WL 1109875 (E.D. Tex. Mar. 24, 2018) (quoting Halo,
136 S.Ct. at 1933). “Whether an act is
‘willful' is by definition a question of the
actor's intent, the answer to which must be inferred from
all the circumstances.” Indus., Inc. v.
IPS Corp., 721 Fed.Appx. 959, 970 (Fed. Cir. 2018)
(quoting Gustafson, Inc. v. Intersystems Indus. Prods.,
Inc., 897 F.2d 508, 510-511 (Fed. Cir. 1990) (emphasis
trial, PI alleged, and the jury found, that PI was entitled
to $3.5 million for NetScout's pre-suit infringement of
the Asserted Claims. (Dkt. No. 237 at 5.) NetScout moves to
vacate that finding. (Dkt. No. ...