In yet another case, a judge has ruled that an appropriate prejudgment interest rate is the California statutory rate of 7%.
The case in question involved a design patent and an apparatus patent. A jury found the apparatus patent invalid; however, it found the design patent infringed, and those claims not invalid. As a result, the jury awarded the infringer’s profits to the plaintiff, Columbia Sportswear.
After trial and after judgment was rendered, Columbia Sportswear requested the California 7% statutory rate as prejudgment interest, as well as supplemental lost profits. Judge Marco Hernandez from the Southern District of California awarded both, despite defendant Seirus’ arguments that awarding seven percent interest on top of profits would deprive it of more than it originally earned. The justification for the amount was as follows:
“Prejudgment interest removes the incentive to live off of the profits until caught.” This elegant formulation enjoys enormous economic and judicial leverage.
There is, however, a flip-side….
Court’s recourse to a 7% statutory rate set decades ago divorces compensation from the facts of a case, relies on a rate detached from current financial and economic reality, and we would argue is inappropriate for most awards.