Whirlpool v. TST Water (Judgment March 29, 2018)

Eastern District of Texas Judge Gilstrap denied TST’s motion for Judgment as a Matter of Law in this patent infringement case. The jury award of $7.6 million stands.

Mr. Bruce McFarlene, Whirpool’s damages expert, offered the opinion that damages for infringement of the ‘894 patent should be $8.7 million. TST sought to exclude Mr. McFarlene for violation of the entire market value rule; however, prior to the ruling, the parties had stipulated that a filter at issue was the smallest saleable unit.

When TST moved for judgment as a matter of law based upon for Mr. McFarlene’s failure to apportion, Judge Gilstrap reminded the parties of their stipulation and concluded that Mr. McFarlene “did engage in the proper apportionment required by the law, beginning with an appropriate rate.”

Rembrandt Wireless Technologies, LP v. Samsung Electronics Co. Ltd., et al. (Final Judgment March 28, 2018)

The long-running dispute between Rembrandt and Samsung may be over. Eastern District of Texas Judge Gilstrap issued final judgment in which he determined that Samsung owes Rembrandt $11,111,920 as damages for Samsung’s infringement of the ‘580 and ‘228 patents. This judgment came after years of litigation, after a February 2015 jury verdict, after a ruling on a JMOL, and after an appeal to the Federal Circuit.

In February 2015, a jury determined that Samsung infringed both patents and that the patent claims were not invalid. The jury awarded Rembrandt a lump sum of $15.7 million. Judge Gilstrap determined that this award fell within the range offered by Mr. Roy Weinstein (Rembrandt’s damages expert), who had suggested a damages range of $14.5 million to $31.9 million. Judge Gilstrap denied the JMOL on damages, and Samsung appealed to the Federal Circuit.

The Federal Circuit agreed with Judge Gilstrap’s opinions regarding infringement and damages, but it questioned his decision to allow Rembrandt to recover pre-notice damages. In its defensive case, it appears Samsung argued that a licensee of Rembrandt’s practiced claim 40 of the ‘580 patent, but that Rembrandt did not require said-licensee to mark those products. In response, Rembrandt disclaimed said-claim 40 which Samsung argued said-licensee practiced. Rembrandt then successfully argued to the district court that, because it disclaimed said-claim 40 of the ‘580 patent, there was no marking requirement for the Rembrandt licensee, who did not practice any other claim of the ‘580 patent. On appeal, the Federal Circuit questioned the district court’s allowance of pre-notice damages based upon disclaiming a claim, and remanded the case for adjustment of the damages award.

The Federal Circuit was interested in discussing whether the marking statute should be on a patent-by-patent basis – or instead, a claim-by-claim basis. But it did not offer any definitive determination and instead left decision on the matter to the district court. Ultimately, Rembrandt dropped its pre-notice damages award request, and accordingly, Judge Gilstrap left the patent-by-patent/claim-by-claim marking issue for another day.

The only remaining issue was how best to interpret the jury verdict in order to remove pre-notice damages. Both parties volunteered competing guidance to Judge Gilstrap concerning how best to remove the pre-notice damages:

Ultimately, Judge Gilstrap decided Rembrandt’s method made more sense and that damages should be $11,111,920, to reflect the jury award minus the pre-notice time period.

Which all leads us to proclaim that the strategy of seeking to reclaim pre-notice damages by disclaiming a claimed claim is one meritorious of some acclaim….

Precision Fabrics Group, Inc. v. Tietex International, Ltd. (Jury Verdict March 8, 2018)

Precision Fabrics (“PFG”) lost its patent infringement case against competitor Tietex. The jury found that Tietex did not infringe the two patents in suit. South Carolina District Judge Schroeder rendered judgment in favor of Defendant Tietex just one day after the jury verdict. The week before trial, Judge Schroeder had disallowed untimely-provided non-infringing substitute considerations. Months before, the judge granted in part and denied in part multiple motions in limine regarding lost profits. His opinions are interesting in that they are well referenced and very specific.

In an order issued in late February, Judge Schroeder granted in part PFG’s Motion to Strike Tietex’s Supplemental Interrogatory Response. Citing to Ziilabs v. Samsung, the judge denied the motion for products “whose sales are referenced in Dr. Alford’s expert report or deposition testimony, but otherwise granted as to other non-infringing alternatives sold by competitors apart from PFG and Tietex.”

In the earlier order on motions to strike, Tietex sought to preclude Joel Wacek’s opinions on lost profits. Mr. Wacek opined that the market for the infringing mattress fabric was divided into high-end and low-end products; and that PFG would have captured 100% of the high-end market, 90% of the low-end market, and 100% of sales to A. Lava & Sons (a purchaser of low-end product). The judge found all of these percentages grounded in a relatively sparse, but sufficiently acceptable measure of evidence, except for those sales to A. Lava & Sons. Citing to BIC Leisure Products, the court granted the motion to strike use of 100% lost profits for A. Lava & Sons based upon the existence and availability of non-infringing substitutes.

Finally, PFG sought to exclude the opinions of Dr. Charles Alford on lost profits. Dr. Alford opined that the percentages relied upon by Mr. Wacek were wrong. The judge decided to reserve judgment on this motion until after he heard Dr. Alford’s testimony.

The attached orders provide many interesting case citations. Ultimately, Judge Schroeder determined that if there was some evidence (albeit, weak), that made the damages expert’s opinion admissible.

Greatbatch Ltd. v. AVX Corp. and AVX Filters Corp. Court Grants Motion to Set Aside Verdict (March 30, 2018)

Delaware District Court Judge Stark granted AVX’s motion to set aside the damages verdict. The reason for the set aside was solely because the jury verdict form did not separate damages for each patent accused, and thus constituted a damages award for all patents and all products.

Judge Stark himself observes this case possesses “a convoluted history.” It seems that Judge Stark sanctioned AVX because of its late production of core technical documents relevant to the infringement issues on one of the four patents in suit (i.e., the ‘715 patent). The sanctions levied involved the judge granting a motion for summary judgment that all of AVX’s Ingenio products infringed the ‘715 patent. When the case proceeded to trial concerning the three other patents in suit, the jury returned a damages award in the form of a lump sum of $37.5 million for infringement of all four patents by all of AVX’s accused products. After the jury trial, the court granted a motion for reconsideration of the sanctions. A new trial for the ‘715 patent was held and the result was that the jury found no infringement concerning some of AVX’s Ingenio products, while finding infringement with regard to a smaller subset of Ingenio products.

The reason for the jury award set-aside is attributed to the jury verdict form, which failed to request damages figures on a patent-specific and product-specific basis. Citing two Federal Circuit cases (Verizon Services Corporation v. Vonage Holdings Corp. and DDR Holdings, LLC v. Hotels.com, L.P.), the judge’s opinion seems to provide the only solution – a new trial on damages.

Important to note, AVX initially requested that the verdict form offer a damages line on a patent-by-patent basis; however, Greatbatch prevailed with its insistence for the general verdict form ultimately provided to the jury. Note in this instance, however, that because not all accused Ingenio products were found to infringe the ‘715 patent, a patent-by-patent jury verdict form might not have obviated the need for a new trial on damages under these specific circumstances.

GlaxoSmithKline LLC and SmithKline Beecham Ltd. v. Teva Pharmaceuticals USA, Inc. (JMOL granted March 28, 2018)

The jury verdict states that Teva infringed the ‘000 patent and owes GlaxoSmithKline (“GSK”) $234,110,000 in lost profits and $1,400,000 in reasonable royalty damages. District Court Judge Stark granted-in-part Teva’s JMOL motion and determined that Teva did not induce infringement. Consequently, the jury verdict was vacated.

While largely an issue of liability, this opinion collides with issues of damages. The damages analysis was focused on lost profits, and the lost profits construct requires that a damages expert conceive a but-for world where infringement does not occur. Conceptualization of that but-for world proved critical for Judge Stark.

A little history: It appears that GSK determined that a drug (carvedilol) which was already used to treat high blood pressure and left ventricular dysfunction (“LVD”) after a heart attack, was also effective for treatment of congestive heart failure (“CHF”). Glaxo applied for, and received a patent (namely, the ‘000 patent at issue) for the method of using carvedilol for CHF treatment.

Meanwhile, Teva and other generic manufacturers had been marketing and selling generic carvedilol for treatment of high blood pressure and LVD; but not explicitly for treatment of CHF. Four years after Teva entered the generic carvedilol market, the FDA instructed Teva to add CHF treatment indication to its labels. (The ‘000 patent had been delisted from the Orange Book.)

The question facing GSK’s damages expert, Dr. Robert Maness, and defendants’ experts, Dr. DeForest McDuff and Dr. Sumanth Addanki, was whether in the but-for world where GSK is entitled to lost profits, are generic carvedilol products (which are not indicated for practicing the patented method) on the market? Given the generic’s prior & ongoing availability for non-accused indications (i.e., high blood pressure and LVD), the answer is not self-evident. The experts answered the question differently and forced Judge Stark to decide.

Judge Stark’s pre-trial determination to exclude defendants’ experts, portions of which are reproduced below, seems to recognize when damages analysis diverges from liability, while also seeming to foreshadow his ruling on the post-trial JMOL motions. Ultimately, Judge Stark granted the motions to strike defendant experts Dr. McDuff and Dr. Addanki based upon their misapplication of the law when formulating a but-for world of lost profit damages. Their failure in this instance was to assume the existence of non-party generics, available for non-accused indications, and therefore available to satisfy the but-for demand. (Dr. Maness’ reliance upon a survey expert who determined what portion of the Teva users likely used the product in an infringing manner was allowed.)

With respect to vacating the jury award, Judge Stark pointed to the fact that GSK failed to establish a causal nexus between the purchase of accused Teva product and actual infringement of the patented method. Documents did not support Teva’s inducement; so there was no proof that Teva induced infringement. That is, product was sold, but toward what use, no one could provide the necessary evidence.

A physician, who provided testimony, claimed that when he prescribed the Teva generic for CHF, he did not look at the label first to determine whether the generic product was indicated for the infringing use. Absent that link between Teva and infringement, Judge Stark concluded the jury award could not stand.

Finally, in his footnote 16, Judge Stark offers insight into broader policy implications of this matter which is well worth the read. He notes, however, that those implications “have not impacted the Court’s ruling on the pending motions.”