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Nox Medical EHF v. Natus Neurology Inc.

United States District Court, D. Delaware

December 7, 2018

NOX MEDICAL EHF, Plaintiff,
v.
NATUS NEUROLOGY INC., Defendant.

          MEMORANDUM ORDER

         Presently before me is Plaintiffs Motion for Reconsideration on Enhancement of Damages. (D.I. 332). The Parties have fully briefed the issues. (D.I. 333, 337, 343). Because I did not previously appreciate the differences between the related U.S. and European patents, I will GRANT Plaintiffs motion.

         The Parties are familiar with the facts of this case. The subject of the present motion is whether I erred by inferring that Defendant had a good faith belief in the invalidity of U.S. Pat. No. 9, 059, 532 ('"532 Patent") based on Defendant's invalidity challenge to the '532 Patent's European counterpart. Because my inference was erroneous, I must also consider what impact, if any, that error has on my decision not to enhance damages.

         I. Legal Standard

         A. Reargument

         The purpose of a motion for reargument or reconsideration is to "correct manifest errors of law or fact or to present newly discovered evidence." Max's Seafood Cafe ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 611 (3d Cir. 1999). "[M]otions for reconsideration 'should not be used to rehash arguments already briefed.'" BP Amoco Chem. Co. v. Sun Oil Co., 200 F.Supp.2d 429, 432 (D. Del. 2002) (quoting Schering Corp. v. Amgen, Inc., 25 F.Supp.2d 293, 295 (D. Del. 1998)). To succeed on a motion for reconsideration, a party must demonstrate one of the following: "(1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court [issued its order]; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice." Max's Seafood Cafe, 176 F.3d at 677.

         B. Enhanced Damages

         The Patent Act gives the Court discretion to "increase the damages up to three times the amount found or assessed." 35 U.S.C. § 284. The Court's discretion "should be exercised in light of the considerations underlying the grant of that discretion." Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S.Ct. 1923, 1926 (2016). Enhanced damages are "designed as a 'punitive' or 'vindictive' sanction for egregious infringement behavior," which is "willful, wanton, malicious, bad-faith, deliberate, consciously wrong, flagrant, or-indeed-characteristic of a pirate." Id. at 1932. Enhanced damages are "not to be meted out in a typical infringement case." Id. A jury's finding of willful infringement is a prerequisite to enhancement of damages but is not by itself sufficient. Id.

         Where an infringer's behavior is willful, the Court may evaluate a set of "non-exclusive" factors set forth in Read Corp. v. Portec, Inc., to determine if damages should be enhanced and the extent to which they should be enhanced. 970 F.2d 816, 826-27 (Fed. Cir. 1992); Presidio Components, Inc. v. Am. Tech. Ceramics Corp., 875 F.3d 1369, 1382-83 (Fed. Cir. 2017). The Read factors include:

(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) defendant's size and financial condition; (5) closeness of the case; (6) duration of defendant's misconduct; (7) remedial action by the defendant; (8) defendant's motivation for harm; and (9) whether defendant attempted to conceal its misconduct.

Spectralytics, Inc. v. Cordis Corp., 649 F.3d 1336, 1348 (Fed. Cir. 2011) (citing Read Corp., 970 F.2d at 826-27).

         A movant must establish its entitlement to enhanced damages under Section 284 by a preponderance of the evidence. Halo, 136 S.Ct. at 1934.

         II. Discussion

         A. Significance of Defendant's Challenge to the European Counterpart of the '532 Patent

         In my Memorandum Opinion, which addressed the Parties' post-trial motions, I considered the Read factors to determine whether Plaintiff is entitled to enhanced damages. (D.I. 329 at 7-13). Plaintiff has identified an issue with my analysis of the second Read factor which considers Defendant's good faith belief in invalidity. 970 F.2d at 827. When deciding whether Defendant had a good faith belief that the '532 Patent was invalid I noted (1) Defendant's failure to present evidence of a good faith belief of invalidity during the jury trial, and (2) Defendant's introduction of evidence during the inequitable conduct trial of its pre-issuance challenge to the European counterpart to the '532 Patent. (D.I. 329 at 8). I concluded, "[E]ven though Defendant knew that it was copying the commercial embodiment of the ...


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