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.
Magistrate Judge Burke granted in part and denied in part John Jarosz’s damages analysis on November 14, 2017. Four months later, Judge Stark adopted the Magistrate’s order.
Judge Stark denied Defendant’s motion to strike Mr. Jarosz’s price-erosion analysis, but granted exclusion of Mr. Jarosz’s market-share apportionment.
Review of the redacted order by Magistrate Judge Burke reveals that the decision to strike – or not to strike – appears to have nothing to do with the actual analysis done, but instead pivots on whether Plaintiffs failed properly to disclose their damages theories. For Mr. Jarosz’s market-share apportionment analysis, Judge Burke and Judge Stark both agree that the late disclosure “could cause prejudice to Defendant.” The footnote excerpted below suggests that even late disclosure is better than no disclosure:
This case affords yet another cautionary tale about timely disclosure.
Judge Guilford of the Central District of California issued an opinion regarding damages, fees and prejudgment interest in this patent infringement case.
Neither plaintiff nor defendants used damages experts, and the court decided that, “Plaintiff essentially relies on attorney argument with minimal analysis” which renders its proffered damages award unsupported. The court specifically notes that even if attorneys want to argue that an established royalty rate exists, they must provide sufficient proof for that rate. In this case, the court held that the plaintiff failed to do that.
A second opinion, regarding legal fees, quotes both former Justice O’Connor and current Justice Kagan when concluding that the fixed sum of $250,000 is reasonable considering “what is happening in the legal profession as hourly billing has become increasingly unpopular and clients prefer to look at aggregate, global numbers”:
Finally, the plaintiff requested statutory prejudgment interest of 7%, compounded quarterly. After finding apparent fault with plaintiff’s lack of basis for its preferred quarterly-compounded 7% rate, the court instead decided that 5% without compounding was the appropriate rate.
Judge Bataillon, Senior District Judge in Delaware, issued a ruling on summary judgment on the eve of trial. Shortly thereafter, the case settled. Prior to this ruling, the judge issued an opinion on several Daubert motions which were filed. The one motion of particular interest involves untimely disclosure, SSPU issues, and use of irrelevant profit information from unrelated, non-practicing, third parties.
The judge granted portions of the motion involving untimely disclosure and failure to tie the profit margin used to infringement. Judge Bataillon seems to be advising that if an infringer wishes to proffer any affirmative opinions (for which it bears the burden of proof) through its experts, those must be timely disclosed.