United States District Court, D. Delaware
MEMORANDUM & ORDER
F. Bataillon, Senior United States District Judge.
matter is before the Court on a motion for post-trial relief
filed by plaintiff Godo Kaisha IP Bridge 1 (“IP
Bridge”) (D.I. 504). This action was tried to a jury
from October 30, 2018, to November 8, 2018, on IP
Bridge's claim that TCL's accused mobile phone
devices infringed claims 9 and 12 of U.S. Patent No. 8, 385,
239 (“the '239 patent”) and claims 15 and 16
of U.S. Patent No. 8, 351, 538 (“the '538
jury found that TCL infringes all four asserted claims, found
all four claims valid, and awarded damages in the amount of
$950, 000 for both patents. D.I. 487, Verdict (sealed) at 4.
The jury rejected IP Bridge's willfulness claim.
Id. at 2.
parties agree that each of the accused products is capable of
connecting to a LTE network in the United States. D.I. 430,
PTO, Ex. 1, Joint Statement of Uncontested Facts ¶ 20.
Evidence adduced at trial, apparently credited by the jury,
established that without practicing the asserted patent
claims, an LTE phone will not work. The jury's verdict in
favor of IP Bridge reflects a finding that products that are
capable of using and communicating over LTE networks infringe
the asserted claims because the asserted claims have been
found to be essential to mandatory portions of the LTE
standard. Thus, the evidence establishes that there is no
colorable difference between other TCL LTE products and the
accused products as they relate to the patent claims at
record shows that IP Bridge sought damages in the form of a
reasonable royalty based on sales data disclosed during
discovery and sought ongoing royalties absent an injunction.
The experts expressed opinions on reasonable royalty rates as
applied to revenue from infringing sales up to March 31,
2018. The jury was instructed: “[i]f you find that IP
Bridge has established infringement, IP Bridge is entitled to
at least a reasonable royalty to compensate it for that
infringement.” D.I. 481, Initial Jury Instructions at
45, Instruction No. 36. The Court further instructed the
A royalty is a payment made to a patent holder in exchange
for the right to make, use, or sell the claimed invention. A
reasonable royalty is the amount of royalty payment that a
patent holder and the alleged infringer would have agreed to
in a hypothetical negotiation taking place at a time prior to
when the infringement first began.
Id., Instruction No. 37. The jury was also
instructed, in determining damages to consider whether the
asserted patent “is a standard essential patent, that
is, the LTE wireless communications standard cannot be
practiced without infringing the patent.” D.I. 483,
closing Jury Instructions at 4, Instruction No. 46. The
verdict form asked: “What has IP Bridge proven, by a
preponderance of the evidence, to be a fair, reasonable, and
non-discriminatory (‘FRAND') royalty for use of the
invention covered by all of the infringed and valid Asserted
Patent(s)?” D.I. 512, Verdict at 4. The verdict form,
without objection from either party, did not require the jury
to determine a per unit royalty rate.
motion for post-trial relief, IP Bridge moves to amend the
judgment under Federal Rule of Civil Procedure 59(e). IP
Bridge seeks: (1) supplemental damages and an accounting of
infringing sales of all adjudicated products through the date
of the verdict; (2) prejudgment interest calculated at the
prime rate, compounded quarterly, and postjudgment interest
at the legal rate on sales of adjudicated
products; (3) ongoing royalties, at three times the
rate found by the jury, for all TCL LTE products, both
adjudicated and non-adjudicated; (4) enhanced (trebled) past
damages due to exceptional circumstances including litigation
misconduct; and (5) fees and costs to make IP Bridge whole.
Bridge argues that it is entitled to supplemental damages to
cover sales between the date of the last produced sales data
(on which the jury based its determination) and the date of
the verdict. It seeks prejudgment interest at the prime rate
as a more appropriate measure of the harm it suffered as a
result of the infringement. Further, it contends it is
entitled to ongoing royalties to account for TCL's
continued infringement of the asserted patents for both the
adjudicated products and other TCL LTE
products. It also argues royalty rate should be
trebled with respect to post-verdict damages to account for
changed circumstances, TCL's pre-complaint
“hold-out, ” and the ongoing infringement. Also,
IP Bridge argues that enhanced (trebled) past damages are
warranted, despite the jury's finding of no willful
infringement, due to TCL conduct in failing to negotiate a
license to SEPs subject to FRAND obligations. Last, IP Bridge
contends that the exceptional nature of this case warrants
the award of attorneys' fees, and nontaxable costs and
expenses under 35 U.S.C. § 285.
response, TCL concedes that IP Bridge is entitled to post
judgment interest at the legal rate under 28 U.S.C. §
1961, but opposes IP Bridge's motion in all other
respects. It challenges IP Bridge's interest arguments,
contending that any award of prejudgment interest should use
the T-bill rate compounded annually, rather than the prime
rate compounded quarterly. It also argues that there is no
legal support for ongoing royalties' damages for
unadjudicated products or for an award of enhanced damages in
the absence of a finding of willful infringement. In its
Answering Brief, TCL includes a request for fees and costs
for preparing its opposition to IP Bridge's motion, under
either 35 U.S.C. § 285 or the Court's inherent
authority. D.I. 514, Brief at 20. TCL contends that IP
Bridge's motion is “exceptional” because it
is meritless and vexatious.
Standard of review
Rule of Civil Procedure 59(e) expressly recognizes a
court's authority to alter or amend its judgments.
Fed.R.Civ.P. 59(e). “Consistently with this original
understanding, the federal courts generally have invoked Rule
59(e) only to support reconsideration of matters properly
encompassed in a decision on the merits[, ]” and legal
issues collateral to the main cause of action. White v.
New Hampshire Dep't of Emp't Sec., 455 U.S. 445,
451 (1982). The principal limitation on that discretion is
that a motion to amend “may not be granted where to do
so would undermine the jury's fact-finding role and
trample on the defendant's Seventh Amendment right to a
jury trial.” Robinson v. Watts Detective Agency, Inc.,
685 F.2d 729, 742 (1st Cir. 1982).
Rule 59(e) has been invoked to correct damage awards that
were improperly calculated, and to include prejudgment
interest to which a party was entitled. See
Lubecki v. Omega Logging, Inc., 674 F.Supp. 501
(W.D. Pa. 1987), aff'd, 865 F.2d 251 (3d Cir.
1988); 11 Wright and Miller, Federal Practice and Procedure,
§ 2817 n. 28- 29.
rule governing motions to alter or amend judgment is the
proper basis for bringing a request for prejudgment interest.
J.A. McDonald, Inc. v. Waste Sys. Int'l Moretown
Landfill, Inc., 247 F.Supp.2d 542, 546 (D. Vt. 2002).
The method used to calculate amount of judgment and
prejudgment interest involves matters of law and is based on
undisputed facts, and therefore is appropriately resolved by
way of a motion to amend judgment. Commercial Assocs. v.
Tilcon Gammino, Inc., 801 F.Supp. 939, 942 (D. R. I.
1992), aff'd998 F.2d 1092 (1st Cir. 1993).
interest on a damages award for patent infringement ‘is
the rule' under 35 U.S.C. § 284[.]”
Sensonics, Inc. v. Aerosonic Corp., 81 F.3d 1566,
1574 (Fed. Cir. 1996). The purpose of prejudgment interest
“to ensure that the patent owner is placed in as good a
position as he would have been had the infringer entered into
a reasonable royalty agreement.” Gen. Motors Corp.
v. Devex Corp., 461 U.S. 648, 655 (1983). An award of
interest from the time that the royalty payments would have
been received merely serves to make the patent owner whole,
since the damages consist not only of the value of the
royalty payments but also of the foregone use of the money
between the time of infringement and the date of the
judgment. Id. at 655-56. “The rate of
prejudgment interest and whether it should be compounded or
uncompounded are matters left largely to the discretion of
the district court” and “must be guided by the
purpose of prejudgment interest, which is to ensure that the
patent owner is placed in as good a position as he would have
been had the infringer entered into a reasonable royalty
agreement.” Bio-Rad Labs., Inc. v. Nicolet
Instrument Corp., 807 F.2d 964, 969 (Fed. Cir. 1986)
(internal quotation marks and citations omitted).
“Courts have recognized that the prime rate best
compensate[s] a patentee for lost revenues during the period
of infringement because the prime rate represents the cost of
borrowing money, which is ‘a better measure of the harm
suffered as a result of the loss of the use of money over
time.'” IMX, Inc. v. LendingTree, LLC, 469
F.Supp.2d 203, 227 (D. Del.) on reconsideration in
part, No. CIV. 03 1067 SLR, 2007 WL 1232184 (D. Del.
Apr. 25, 2007) (quoting Mars, Inc. v. Conlux USA
Corp., 818 F.Supp. 707, 720-21 (D. Del.),
aff'd, 16 F.3d 421 (Fed. Cir. 1993); see
also Amgen Inc. v. Hospira, Inc., 336 F.Supp.3d
333, 364 (D. Del. 2018). “[I]t is not necessary that a
patentee demonstrate that it borrowed at the prime rate in
order to be entitled to prejudgment interest at that
rate.” Uniroyal, Inc. v. Rudkin-Wiley Corp.,
939 F.2d 1540, 1545 (Fed.Cir.1991) (citation omitted).
interest should accrue at the statutory rate as specified in
28 U.S.C. § 1961(a). Amgen Inc., 336 F.Supp.3d
at 364. Section 1961(a) provides, “Interest shall be
allowed on any money judgment in a civil case recovered in a
district court. . . . Such interest shall be calculated from
the date of the entry of the judgment . . . .” 28
U.S.C. § 1961(a). Section 1961(a) does not provide for
interest until a money judgment fixing the amount owed to the
prevailing party. Eaves v. Cty. of Cape May, 239
F.3d 527, 534 (3d Cir. 2001). “The statute does not, by
its terms, mandate that the judgment from which interest is
calculated must be a final judgment.” In re Lower
Lake Erie Iron Ore Antitrust Litig., 998 F.2d 1144,
1177-78 (3d Cir. 1993); see alsoSkretvedt v.
E.I. DuPont De Nemours, 372 F.3d ...